PRECISION BIOSCIENCES INC

Previous wording

We are an advanced gene editing company dedicated to improving life by developingin vivo therapies for genetic and infectious diseases with the application of our wholly-owned proprietary ARCUS genome editing platform. The foundation of ARCUS is a natural homing endonuclease which allows us to replicate precise gene editing as it evolved in nature for sophisticated gene edits, including gene insertion, excision, and elimination. ARCUS is also unique in its relatively small size which potentially allows delivery to a wider range of cells and tissues using viral and non-viral gene delivery methods.

Current wording

We are a clinical stage gene editing company dedicated to improving life by developingin vivo therapies for genetic and infectious diseases with the application of our wholly-owned proprietary ARCUS genome editing platform. The foundation of ARCUS is a natural homing endonuclease which allows us to replicate precise gene editing as it evolved in nature for sophisticated gene edits, including gene insertion, excision, and elimination. ARCUS is also unique in its relatively small size which potentially allows delivery to a wider range of cells and tissues using viral and non-viral gene delivery methods.

Previous wording

As of mid-2023, we are solely focused on leveraging our proprietary ARCUS genome editing platform to advancein vivo gene editing programs that go beyond gene knockouts in the liver and carry out more sophisticated edits such as gene insertions, gene excision, and gene elimination, unlocking a broader potential for ARCUS in vivo gene editing in human therapeutics.

Current wording

Since mid-2023, we have solely focused on leveraging our proprietary ARCUS genome editing platform to advancein vivo gene editing programs that go beyond gene knockouts in the liver and carry out more sophisticated edits such as gene insertions, gene excision, and gene elimination, unlocking a broader potential for ARCUS in vivo gene editing in human therapeutics.

Previous wording

In January 2024, we entered into a license agreement with TG Cell Therapy, Inc. (“TG Subsidiary”) and its parent company TG Therapeutics, Inc. (“TG Parent” and, together with TG Subsidiary, “TG Therapeutics”) for non-oncological applications of azercabtagene zapreleucel (“azer-cel”) (the “TG License Agreement”). In connection with the TG License Agreement, we received upfront, and are also entitled to receive potential near-term, economics valued in the aggregate at $17.5 million. We are also entitled to receive additional payments upon the achievement of additional specified milestones of up to $288.6 million. If a licensed product under the TG License Agreement is approved and sold, TG Therapeutics is also required to pay us tiered royalties ranging from high-single-digit to low-double-digit percentages on net sales of the licensed product.

Current wording

In January 2024 we entered into a license agreement with TG Cell Therapy, Inc. (“TG Subsidiary”) and its parent company TG Therapeutics, Inc. (“TG Parent” and, together with TG Subsidiary, “TG Therapeutics”) for non-oncological applications of azercabtagene zapreleucel (“azer-cel”) (the “TG License Agreement”) in January 2024. In connection with the TG License Agreement, we received upfront, and are also entitled to receive potential near-term, economics valued in the aggregate at $17.5 million. We are also entitled to receive additional payments upon the achievement of additional specified milestones of up to $288.6 million. If a licensed product under the TG License Agreement is approved and sold, TG Therapeutics is also required to pay us tiered royalties ranging from high-single-digit to low-double-digit percentages on net sales of the licensed product. In August 2024, we announced TG Therapeutics received U.S. Food and Drug Administration (“FDA”) clearance for its investigational new drug (“IND”) application to investigate azer-cel in human clinical trials for the treatment of progressive forms of multiple sclerosis. TG Therapeutics anticipates commencing a phase 1 clinical trial in 2024.

Previous wording

On April 11, 2024, the Company received written notice from Prevail Therapeutics, Inc. ("Prevail"), a wholly-owned subsidiary of Eli Lilly and Company, of its termination of the amended and restated development and license agreement between the Company and Prevail (the "Prevail Agreement"). Prevail’s notice informed the Company that Prevail was exercising its right pursuant to Section 15.3.2 of the Prevail Agreement to terminate the Prevail Agreement in its entirety without cause upon 90 days’ prior written notice to the Company. The Company subsequently exercised its rights to the return of the three programs. We are continuing to evaluate these returned programs to determine the appropriate next steps with each of them, including a novel gene excision approach for treatment of Duchenne Muscular Dystrophy (“DMD”), a liver target for gene insertion, and a gene editing program targeting neurons to address a disease of the central nervous system.

Current wording

In April 2024, we received written notice from Prevail Therapeutics, Inc. (“Prevail”), a wholly-owned subsidiary of Eli Lilly and Company, of its termination of the amended and restated development and license agreement between the Company and Prevail (the “Prevail Agreement”). Prevail’s notice informed us that Prevail was exercising its right pursuant to Section 15.3.2 of the Prevail Agreement to terminate the Prevail Agreement in its entirety without cause upon 90 days’ prior written notice to us. We subsequently exercised our rights to the return of the three programs. We are continuing to evaluate these returned programs to determine the appropriate next steps with each of them, including a novel gene excision approach for treatment of Duchenne Muscular Dystrophy (“DMD”), a liver target for gene insertion, and a gene editing program targeting neurons to address a disease of the central nervous system.

Previous wording

HBV causes inflammation and damage to the liver, leading to chronic infection and increased risk of death from liver cancer or cirrhosis. There is no cure for chronic hepatitis B and current treatments rarely result in functional cure, primarily due to persistence of viral DNA in the liver. In patients with chronic HBV, genetic material of the virus is converted within infected liver cells into covalently closed circular DNA (“cccDNA”) that acts as a template to make HBV copies. HBV also inserts its DNA into the human genome of infected liver cells. This integrated HBV DNA produces the viral protein, hepatitis B surface antigen (“HBsAg”), which is secreted in the blood. Presence of HBsAg is associated with poorer outcomes and elimination of HBsAg is necessary for functional cure of chronic hepatitis B.

Current wording

HBV causes inflammation and damage to the liver, leading to chronic infection and increased risk of death from liver cancer or cirrhosis. There is no cure for chronic hepatitis B and current treatments rarely result in functional cure, primarily due to persistence of viral DNA in the liver. In patients with chronic HBV, genetic material of the virus is converted within infected liver cells into cccDNA that acts as a template to make HBV copies. HBV also inserts its DNA into the human genome of infected liver cells. This integrated HBV DNA produces the viral protein, hepatitis B surface antigen (“HBsAg”), which is secreted in the blood. Presence of HBsAg is associated with poorer outcomes and suppression of HBsAg is necessary for functional cure of chronic hepatitis B.

Previous wording

PBGENE-HBV is designed to inactivate cccDNA with direct cuts and edits as well as to inactivate integrated HBV DNA with the goal of long-lasting reductions in HBsAg. We believe specificity is of particular importance for developing a safe gene editing approach to eliminating HBV, as a lack of nuclease specificity can lead to unfavorable off-target results including increased integrations of HBV genomes into the human genome, as well as translocations between integrations. Preclinical data from the PBGENE-HBV program was presented in June 2024 at a poster presentation and panel discussion at the European Association for the Study of the Liver Congress, highlighting the ability of ARCUS to make efficient, durable, and targeted elimination edits. Data presented further supported the ability of PBGENE-HBV to specifically target and cut HBV DNA, leading to the elimination of cccDNA and inactivation of integrated HBV DNA. The data also demonstrated a lack of detectable off-target editing for PBGENE-HBV at therapeutically relevant doses, including no editing-associated translocations in HBV infected primary human hepatocytes. PBGENE-HBV was well-tolerated in non-human primates (“NHP”) across multiple dose administrations. Preclinical safety data supports the advancement of PBGENE-HBV to clinical trials as a potentially curative treatment for chronic hepatitis B.

Current wording

PBGENE-HBV is designed to eliminate cccDNA with direct edits as well as to inactivate integrated HBV DNA with the goal of long-lasting reductions in HBsAg. We believe specificity is of particular importance for developing a safe gene editing approach to eliminating HBV, as a lack of nuclease specificity can lead to unfavorable off-target results including increased integrations of HBV genomes into the human genome, as well as translocations between integrations. Preclinical data from the PBGENE-HBV program was presented in June 2024 at a poster presentation and panel discussion at the European Association for the Study of the Liver Congress, highlighting the ability of ARCUS to make efficient, durable, and targeted elimination edits. Data presented further supported the ability of PBGENE-HBV to specifically target and eliminate cccDNA and inactivate integrated HBV DNA. The data also demonstrated a lack of detectable off-target editing for PBGENE-HBV at therapeutically relevant doses, including no editing-associated translocations in HBV infected primary human hepatocytes. PBGENE-HBV was well-tolerated in non-human primates (“NHP”) across multiple dose administrations. Preclinical safety data supports the advancement of PBGENE-HBV to clinical trials as a potentially curative treatment for chronic hepatitis B.

Previous wording

PBGENE-PMM is our wholly owned, first of its kind treatment for m.3243 associated mitochondrial disease. Mitochondrial diseases are the most common hereditary metabolic disorder, affecting 1 in 4,300 people. The highly specific and single component nature of our mitochondria-targeted ARCUS nucleases are designed to shift heteroplasmy by editing and eliminating mutant mitochondrial DNA while allowing normal (wild-type) mitochondrial DNA to repopulate in the mitochondria, thus improving cellular function. Preclinical data from the PBGENE-PMM program presented in June 2024 at the United Mitochondrial Disease Foundation’s Mitochondrial Medicine 2024 Conference and in March 2024 at a poster presentation at the Mitochondrial Medicine – Therapeutic Development Annual Conference demonstrated ARCUS’ ability to efficiently eliminate mutant mitochondrial DNA without nuclear off-target editing. We expect to submit an IND and/or CTA application in 2025 with respect to PBGENE-PMM.

Current wording

The PBGENE-3243 program, previously known as PBGENE-PMM, is our wholly-owned, first of its kind potential treatment for m.3243 associated mitochondrial disease. The program's updated nomenclature more accurately describes its intended target patient population – those who have the m.3243 mutation and muscle-related symptoms. Mitochondrial diseases are the most common hereditary metabolic disorder, affecting 1 in 4,300 people. In particular, the m.3243 associated mitochondrial disease that our program intends to address affects about 20,000 people in the United States alone. The highly specific mitochondria-targeted ARCUS nucleases are designed to shift heteroplasmy by editing and eliminating mutant mitochondrial DNA while allowing normal (wild-type) mitochondrial DNA to repopulate in the mitochondria, thus improving cellular function. Preclinical data from the PBGENE-3243 program presented in June 2024 at the United Mitochondrial Disease Foundation’s Mitochondrial Medicine 2024 Conference and in March 2024 at a poster presentation at the Mitochondrial Medicine – Therapeutic Development Annual Conference demonstrated ARCUS’ ability to efficiently eliminate mutant mitochondrial DNA without nuclear off-target editing. We expect to submit an IND and/or CTA application in 2025 with respect to PBGENE-3243.

Previous wording

In partnership with iECURE, Inc. (“iECURE”), an ARCUS-mediated gene insertion approach is being pursued as a potential treatment option for neonatal onset ornithine transcarbamylase (“OTC”) deficiency. NHP data presented by researchers from the University of Pennsylvania’s Gene Therapy Program demonstrated sustained gene insertion of a therapeutic OTC transgene one-year post-dosing in newborn and infant NHPs with high efficiency. iECURE has received regulatory approvals in the United States, the United Kingdom, and Australia for initiation of the OTC-HOPE study, a first-in-human Phase 1/2 trial evaluating ECUR-506 as a potential treatment for OTC deficiency, and has begun recruiting patients at two sites in the United Kingdom. In May 2024, iECURE announced that it had received Fast Track designation from the FDA for ECUR-506 and expects initial data from this trial to be available in late 2024 or in 2025.

Current wording

In partnership with iECURE, Inc. (“iECURE”), an ARCUS-mediated gene insertion approach is being pursued as a potential treatment option for neonatal onset ornithine transcarbamylase (“OTC”) deficiency. NHP data presented by researchers from the University of Pennsylvania’s Gene Therapy Program demonstrated sustained gene insertion of a therapeutic OTC transgene one-year post-dosing in newborn and infant NHPs with high efficiency. iECURE has received regulatory approvals in the United States, the United Kingdom, Spain, and Australia for initiation of the OTC-HOPE study, a first-in-human Phase 1/2 trial evaluating ECUR-506 as a potential treatment for OTC deficiency, and has begun recruiting patients. In May 2024, iECURE announced that it had received Fast Track designation from the FDA for ECUR-506 and expects initial data from this trial to be available in 2025.

Previous wording

During the three and six months ended June 30, 2024, we recognized revenue under the TG License Agreement of $0.9 million and $8.0 million, respectively. A contract asset related to the TG License Agreement amounted to $1.4 million as of June 30, 2024.

Current wording

During the nine months ended September 30, 2024, we recognized revenue under the TG License Agreement of $8.0 million. There was no revenue recognized under the TG License Agreement in the three months ended September 30, 2024. A contract asset related to the TG License Agreement amounted to $1.4 million as of September 30, 2024.

Previous wording

As of June 30, 2024, management has constrained all variable consideration related to milestone payments in the Imugene License Agreement given the level of uncertainty associated with achievement of the milestone payments. Accordingly, no revenue was recognized under the Imugene License Agreement during the three and six months ended June 30, 2024.

Current wording

As of September 30, 2024, management has constrained all variable consideration related to milestone payments in the Imugene License Agreement given the level of uncertainty associated with achievement of the milestone payments. Accordingly, no revenue was recognized under the Imugene License Agreement during the three and nine months ended September 30, 2024.

Previous wording

During the three months ended June 30, 2024 and 2023, we recognized revenue under the Novartis Agreement of $0.8 million and $4.8 million, respectively. During the six months ended June 30, 2024 and 2023, we recognized revenue under the Novartis Agreement of $5.3 million and $10.6 million, respectively. Deferred revenue related to the Novartis Agreement amounted to $27.3 million and $32.4 million as of June 30, 2024 and December 31, 2023, respectively, of which $0.5 million and $7.4 million, respectively, was included in current liabilities within the condensed balance sheets.

Current wording

During the three months ended September 30, 2024 and 2023, we recognized revenue under the Novartis Agreement of $0.6 million and $7.6 million, respectively. During the nine months ended September 30, 2024 and 2023, we recognized revenue under the Novartis Agreement of $5.9 million and $18.2 million, respectively. Deferred revenue related to the Novartis Agreement amounted to $26.6 million and $32.4 million as of September 30, 2024 and December 31, 2023, respectively, of which $0.2 million and $7.4 million, respectively, was included in current liabilities within the condensed balance sheets.

Previous wording

During the three months ended June 30, 2024 and 2023, we recognized revenue under the Prevail Agreement of $48.2 million and $15.0 million, respectively. During the six months ended June 30, 2024 and 2023, we recognized revenue under the Prevail Agreement of $52.7 million and $17.9 million, respectively. There was no deferred revenue related to the Prevail Agreement as of June 30, 2024. Deferred revenue related to the Prevail Agreement amounted to $52.7 million as of December 31, 2023, of which $4.7 million was included in current liabilities within the condensed balance sheet.

Current wording

For the three months ended September 30, 2024, we did not recognize any revenue under the Prevail Agreement as it was terminated in the prior quarter. We recognized revenue of $5.5 million for the three months ended September 30, 2023. During the nine months ended September 30, 2024 and 2023, we recognized revenue under the Prevail Agreement of $52.7 million and $23.4 million, respectively.We have no deferred revenue related to the Prevail Agreement as of September 30, 2024 due to termination of the agreement. Deferred revenue related to the Prevail Agreement amounted to $52.7 million as of December 31, 2023, of which $4.7 million was included in current liabilities within the condensed balance sheet.

Previous wording

We adjust the carrying value of the iECURE equity to fair value each reporting period with any changes in fair value recorded to other income (expense).

Current wording

We adjust the carrying value of the ordinary shares issued under the Imugene Convertible Note to its fair value each reporting period with any changes in fair value recorded to other income (expense).

Previous wording

Loss from discontinued operations represents the gain on the sale of our CAR T infrastructure to Imugene and the results of operations of our historical cell therapy operations.

Current wording

Gain from discontinued operations represents the gain on the sale of our CAR T infrastructure to Imugene and the results of operations of our historical cell therapy operations.

Previous wording

Partially offsetting the increases in research and development expenses was a $1.6 million decrease in outsourced research and development costs, a $1.3 million decrease in laboratory supplies and services expenses, and a $0.7 million decrease in employee-related costs and share based compensation expense.

Current wording

Contributing to the decrease in platform development and development expenses was a $0.9 million decrease in outsourced research and development costs, a $0.7 million decrease in laboratory supplies and services expenses, and a $0.4 million decrease in share based compensation expense. Direct expenses increased due to a $2.4 million increase in PBGENE-3243 development costs as it continues to advance toward an IND and/or CTA in 2025, partially offset by a $2.7 million decrease in PBGENE-HBV primarily due to a decrease in expenses for nonclinical studies.

Previous wording

Loss from equity method investment was $1.0 million during the three months ended June 30, 2024 compared to $1.4 million during the three months ended June 30, 2023, which represented our proportionate share of Elo’s net loss in each period.

Current wording

Loss from equity method investment was $0.9 million during the three months ended September 30, 2024 compared to $1.4 million during the three months ended September 30, 2023, which represented our proportionate share of Elo’s net loss in each period.

Previous wording

Gain from changes in fair value was $0.7 million for the three months ended June 30, 2024 which was primarily attributed to an increase in the fair value of the Imugene Convertible Note in such period. There was no change in fair value for the three months ended June 30, 2023.

Current wording

Gain on changes in fair value was $0.6 million for the three months ended September 30, 2024, which was primarily attributed to an increase during such period in the fair value of the Imugene Convertible Note and the ordinary shares issued thereunder and still held by us at the end of the period. Gain on changes in fair value was $0.3 million for the three months ended September 30, 2023, which was primarily attributable to an increase during such period in the fair value of the Imugene Convertible Note.

Previous wording

Change in fair value of the warrant liability of $7.8 million for the three months ended June 30, 2024 represents the mark-to-market fair value adjustment to the outstanding warrants issued in connection with the March 2024 Public Offering. There was no warrant liability in the three months ended June 30, 2023.

Current wording

Gain from change in fair value of the warrant liability of $3.6 million for the three months ended September 30, 2024 represents the mark-to-market fair value adjustment to the outstanding warrants issued in connection with the March 2024 Public Offering. There was no warrant liability in the three months ended September 30, 2023.

Previous wording

Interest income was $1.8 million during the three months ended June 30, 2024 compared to $1.9 million during the three months ended June 30, 2023. The $0.1 million decrease in interest income was the result of a lower cash balance during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023.

Current wording

Interest income was $1.8 million during the three months ended September 30, 2024 compared to $1.9 million during the three months ended September 30, 2023. The $0.1 million decrease in interest income was the result of lower interest rates during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.

Previous wording

There was no loss from discontinued operations during the six months ended June 30, 2024 compared to a loss of $20.0 million during the six months ended June 30, 2023. The $20.0 million loss during the six months ended June 30, 2023 consisted of research and development expenses for our historical cell therapy operations.

Current wording

There was no income from discontinued operations during the three months ended September 30, 2024 compared to income of $4.0 million during the three months ended September 30, 2023. The $4.0 million of income during the three months ended September 30, 2023 consisted of the $8.4 million gain on disposal of our CAR T infrastructure to Imugene, partially offset by research and development expenses for our historical cell therapy operations.

Previous wording

The following table summarizes our results of operations for the six months ended June 30, 2024 and June 30, 2023, together with the changes in those items:

Current wording

The following table summarizes our results of operations for the nine months ended September 30, 2024 and September 30, 2023, together with the changes in those items:

Previous wording

Revenue for the six months ended June 30, 2024 was $67.5 million, compared to $28.6 million for the six months ended June 30, 2023. The increase of $38.9 million in revenue during the six months ended June 30, 2023 was primarily the result of a $34.8 million increase in revenue related to the Prevail Agreement as the remaining revenue under the agreement was recognized during the six months ended June 30, 2024 due to the termination of the agreement. Additionally, there was a $9.5 million increase in revenue in the six months ended June 30, 2024 as a result of the TG License Agreement and the license agreement with Caribou. Partially offsetting the increase was a $5.3 million decrease in revenue recognized under the Novartis Agreement during the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Current wording

Revenue for the nine months ended September 30, 2024 was $68.1 million, compared to $41.7 million for the nine months ended September 30, 2023. The increase of $26.4 million in revenue during the nine months ended September 30, 2023 was primarily the result of a $29.3 million increase in revenue related to the Prevail Agreement as the remaining revenue under the agreement was recognized during the nine months ended September 30, 2024 following conclusion of the collaboration in April 2024. Additionally, there was a $9.5 million increase in revenue in the nine months ended September 30, 2024 as a result of the TG License Agreement and the license agreement with Caribou. Partially offsetting the increase was a $12.4 million decrease in revenue recognized under the Novartis Agreement during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 as we near the completion of our pre-clinical workplan.

Previous wording

Research and development expenses for the three months ended June 30, 2024 were $17.2 million, compared to $13.1 million for the three months ended June 30, 2023. The increase of $4.1 million was primarily due to a $6.9 million increase in PBGENE-HBV external development costs and a $1.0 million increase in PBGENE-PMM external development costs as the programs continue to advance towards the clinic.

Current wording

Research and development expenses for the nine months ended September 30, 2024 were $43.7 million, compared to $40.0 million for the nine months ended September 30, 2023. The increase of $3.7 million was primarily due a $7.1 million increase in PBGENE-HBV external development costs and a $4.6 million increase in PBGENE-3243 external development costs as the programs continue to advance towards the clinic. The increase in direct research and development expenses was offset by an $8.0 million decrease in platform development and unallocated expenses, including a $2.9 million decrease in laboratory supplies and services expenses, a $2.8 million decrease in outsourced research and development costs, and a $2.1 million decrease in employee-related costs and share based compensation expense.

Previous wording

General and administrative expenses were $17.0 million for the six months ended June 30, 2024 compared to $20.9 million for the six months ended June 30, 2023. The decrease of $3.9 million was primarily due to a $2.4 million decrease in employee-related costs and share based compensation expense as a result of a reduced headcount, a $0.7 million decrease in consulting fees, and decreases in insurance expense and legal fees.

Current wording

General and administrative expenses were $25.7 million for the nine months ended September 30, 2024 compared to $30.5 million for the nine months ended September 30, 2023. The decrease of $4.8 million was primarily due to a $2.1 million decrease in employee-related costs and share based compensation expense as a result of a reduced headcount, a $1.0 million decrease in consulting fees, and decreases in insurance expense and legal fees.

Previous wording

Gain from equity method investment was $0.8 million during the six months ended June 30, 2024. Loss from equity method investment was $2.7 million during the six months ended June 30, 2023, which represented our proportionate share of Elo’s net loss for such periods.

Current wording

Loss from equity method investment was $0.1 million during the nine months ended September 30, 2024. Loss from equity method investment was $4.1 million during the nine months ended September 30, 2023, which represented our proportionate share of Elo’s net loss for such periods.

Previous wording

Gain from changes in fair value was $0.3 million for the six months ended June 30, 2024 which was primarily attributed to an increase in the fair value of the Imugene Convertible Note in such period. Loss on changes in fair value was $0.8 million for the six months ended June 30, 2023 which was attributed to a decrease in the assessed fair value of our equity investment in iECURE as a result of dilution from iECURE’s Series A-1 equity raise in such period.

Current wording

Gain on changes in fair value was $0.9 million for the nine months ended September 30, 2024, which was primarily attributed to an increase during such period in the fair value of the Imugene Convertible Note and the ordinary shares issued thereunder and still held by us at the end of the period. Loss on changes in fair value was $0.5 million for the nine months ended September 30, 2023, which was attributed to a decrease in the assessed fair value of our equity investment in iECURE as a result of dilution from iECURE’s Series A-1 equity raise in such period, partially offset by an increase in the fair value of the Imugene Convertible Note.

Previous wording

Change in fair value of the warrant liability of $18.2 million for the six months ended June 30, 2024 represents the mark-to-market fair value adjustment to the outstanding warrants issued in connection with the March 2024 Public Offering. There was no warrant liability in the six months ended June 30, 2023.

Current wording

Gain from change in fair value of the warrant liability of $21.8 million for the nine months ended September 30, 2024 represents the mark-to-market fair value adjustment to the outstanding warrants issued in connection with the March 2024 Public Offering. There was no warrant liability in the nine months ended September 30, 2023.

Previous wording

Interest income was $3.5 million during the six months ended June 30, 2024 compared to $4.0 million during the six months ended June 30, 2023. The $0.5 million decrease in interest income was the result of a lower cash balance during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.

Current wording

Interest income was $5.3 million during the nine months ended September 30, 2024 compared to $5.9 million during the nine months ended September 30, 2023. The $0.6 million decrease in interest income was the result of lower interest rates during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

Previous wording

Loss on disposal of assets was $0.3 million during the six months ended June 30, 2024 compared to a gain of less than $0.1 million during the six months ended June 30, 2023.

Current wording

Loss on disposal of assets was $0.3 million during the nine months ended September 30, 2024 compared to a gain of less than $0.1 million during the nine months ended September 30, 2023.

Previous wording

There was no loss from discontinued operations during the three months ended June 30, 2024 compared to a loss of $8.9 million during the three months ended June 30, 2023. The $8.9 million loss during the three months ended June 30, 2023 consisted of research and development expenses for our historical cell therapy operations.

Current wording

There was no loss from discontinued operations during the nine months ended September 30, 2024 compared to a loss of $15.9 million during the nine months ended September 30, 2023. The $15.9 million loss during the nine months ended September 30, 2023 consisted of the $8.4 million gain on disposal of our CAR T infrastructure to Imugene, partially offset by research and development expenses for our historical cell therapy operations.

Previous wording

We have incurred significant operating losses since our inception and have not generated any revenue from the sale of products. Our ability to generate any product revenue or product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our product candidates or the product candidates of our collaborators or other licensees for which we may receive milestone payments or royalties. As of June 30, 2024, we had an accumulated deficit of $448.3 million.

Current wording

We have incurred significant operating losses since our inception and have not generated any revenue from the sale of products. Our ability to generate any product revenue or product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our product candidates or the product candidates of our collaborators or other licensees for which we may receive milestone payments or royalties. As of September 30, 2024, we had an accumulated deficit of $464.7 million.

Previous wording

As of June 30, 2024, we had cash and cash equivalents of $123.6 million and available borrowings under our loan and security agreement with Banc of California (formerly known as Pacific Western Bank) (as amended from time to time, the “Revolving Line”) of $7.5 million. On July 31. 2024, we entered into an amended and restated loan and security agreement with Banc of California (the “2024 Loan and Security Agreement”), pursuant to which we refinanced the Revolving Line with a new term loan (the “2024 Term Loan”). Pursuant to the terms of the 2024 Loan and Security Agreement, we are not entitled to borrow any additional amounts under the 2024 Term Loan and are required to maintain an aggregate balance in a cash security account with Banc of California (the “Cash Security Account”) at least equal to the outstanding principal amount of the 2024 Term Loan then outstanding. Our sources of funding to finance our cash needs include proceeds from third parties through a combination of financings including our initial public offering (“IPO”), preferred stock and convertible note financings, underwritten offerings of our common stock and warrants, at-the-market (“ATM”) offerings of our common stock as part of our shelf registration statement, upfront and milestone payments from partners, borrowings under bank facilities and funding from other strategic alliances and grants.

Current wording

As of September 30, 2024, we had cash and cash equivalents of $98.8 million and $22.6 million in restricted cash under the 2024 Term Loan, which replaced our Revolving Line on July 31, 2024. Pursuant to our July 31, 2024 amended and restated loan and security agreement with Banc of California (the “2024 Loan and Security Agreement”), we are not entitled to borrow any additional amounts under the 2024 Term Loan and are required to maintain an aggregate balance in a cash security account with Banc of California (the “Cash Security Account”) at least equal to the outstanding principal amount of the 2024 Term Loan then outstanding.

Previous wording

Our primary use of cash is to fund operating expenses, which consist primarily of research and development and general and administrative costs. The use of cash in operating activities during the six months ended June 30, 2024 and June 30, 2023 resulted from our net loss adjusted for non-cash items and changes in operating assets and liabilities.

Current wording

Our primary use of cash is to fund operating expenses, which consist primarily of research and development and general and administrative costs.

Previous wording

Cash used in investing activities primarily relates to cash expenditures to acquire leasehold additions, equipment, software and intangible assets. Net cash used in investing activities during the six months ended June 30, 2024 was less than $0.1 million, compared to $1.8 million in the six months ended June 30, 2023. The $1.7 million decrease in cash used in investing activities was primarily driven by a decrease in cash expenditures for purchases of property, equipment and software during the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Current wording

Cash used in investing activities primarily relates to cash expenditures to acquire leasehold additions, equipment, software and intangible assets. Net cash used in investing activities during the nine months ended September 30, 2024 was $0.1 million, compared to $5.8 million provided by investing activities in the nine months ended September 30, 2023. The $5.9 million decrease in cash provided by investing activities was primarily the result of the $8.0 million proceeds from the disposal of CAR T infrastructure, partially offset by $2.0 million of property, equipment, and software purchases during the nine months ended September 30, 2023.

Previous wording

Net cash provided by financing activities during the six months ended June 30, 2024 was $40.8 million, compared to $2.6 million during the six months ended June 30, 2023. The $38.2 million increase in cash provided by financing activities during the six months ended June 30, 2024 was primarily due to a $37.5 million increase in net proceeds from offerings of common stock in the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 and $0.9 million in net proceeds from the issuance of common stock to TG Therapeutics in the six months ended June 30, 2024.

Current wording

Net cash provided by financing activities during the nine months ended September 30, 2024 was $44.5 million, compared to $2.6 million during the nine months ended September 30, 2023. The $41.9 million increase in cash provided by financing activities during the nine months ended September 30, 2024 was primarily due to a $41.2 million increase in net proceeds from offerings of common stock in the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 and $0.9 million in net proceeds from the issuance of common stock to TG Therapeutics in the nine months ended September 30, 2024.

Previous wording

On July 31, 2024, we replaced the Revolving Line with the 2024 Term Loan with an aggregate principal amount of $22.5 million. The stated interest rate under the 2024 Term Loan is equal to the greater of 1.50% below the Prime Rate or 4.5%. As of July 31, 2024, the stated interest rate was 7.00%.

Current wording

On July 31, 2024, we replaced the Revolving Line with the 2024 Term Loan with an aggregate principal amount of $22.5 million. The stated interest rate under the 2024 Term Loan is equal to the greater of 1.50% below the Prime Rate or 4.5%. As of July 31, 2024, the stated interest rate was 7.00%. As of September 30, 2024, the outstanding principal balance on the 2024 Term Loan was $22.5 million, the stated interest rate was 6.5% and the effective interest rate was 6.99%.

Previous wording

We believe that, as of the date of this Quarterly Report on Form 10-Q, existing cash and cash equivalents, expected operational receipts, including near-term consideration to be received from licensees, operational efficiencies gained from divestment of our historical CAR T operations, and availability of our ATM facility will be sufficient to fund our operating expenses and capital expenditure requirements into the second half of 2026. We expect our cash runway to be sufficient to achieve first-in-human Phase 1 clinical data for our leadin vivo gene editing programs. We have based these estimates on assumptions that may prove to be imprecise, and we could utilize our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, it is difficult to estimate with certainty the amount of our working capital requirements. Our future funding requirements will depend on many factors, including:

Current wording

We believe that, as of the date of this Quarterly Report on Form 10-Q, existing cash and cash equivalents, expected operational receipts, including upfront and potential near-term consideration to be received from licensees, operational efficiencies gained from divestment of our historical CAR T operations, and availability of our ATM facility will be sufficient to fund our operating expenses and capital expenditure requirements into the second half of 2026. We expect our cash runway to be sufficient to achieve first-in-human Phase 1 clinical data for two wholly-ownedin vivo gene editing programs. We have based these estimates on assumptions that may prove to be imprecise, and we could utilize our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, it is difficult to estimate with certainty the amount of our working capital requirements. Our future funding requirements will depend on many factors, including:

Previous wording

Our critical accounting policies and estimates are described in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Use of Estimates” in our Annual Report on Form 10-K. We have reviewed those critical accounting policies and estimates for the six months ended June 30, 2024. Other than the derivative financial instruments basis of accounting outlined in Note 1, there have been no significant changes in our critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Current wording

Our critical accounting policies and estimates are described in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Use of Estimates” in our Annual Report on Form 10-K. We have reviewed those critical accounting policies and estimates for the nine months ended September 30, 2024. Other than the derivative financial instruments basis of accounting outlined in Note 1, there have been no significant changes in our critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.