Prime Medicine Inc
For the period ended Dec 31, 2024. Filed Feb 28, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 28, 2025
PRME$4.65+4.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-01.
0001628280-24-008116
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-28.
0001628280-25-008884
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 116 previous paragraphs and 124 current paragraphs.
66 unchanged; 31 reworded; 24 added; 18 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (24)
Current report
In September 2024, we announced that we are strategically focusing our pipeline on a set of high value programs organized around the following core areas of focus: hematology, immunology and oncology, liver, and lung. Each program is targeting a disease with well-understood biology and a clearly defined clinical development and regulatory path and the programs are expected to provide the foundation for expansion into additional opportunities. Each prioritized program is also intended to serve as a beachhead, in that the modularity of the Prime Editing platform is expected to allow Prime Medicine to generate follow-on candidates rapidly and efficiently. In addition, we are identifying partnership opportunities to advance other programs.
Current report
Revenues
Current report
Our revenues to date have been generated through research collaboration and license agreements. We recognize revenue over the expected performance period under each agreement. We expect that our revenue for the next several years will be derived primarily from our current collaboration agreements and any additional collaborations that we may enter into in the future. To date, we have not generated any revenue from product sales or royalties and do not expect to generate any revenue from the sale of products or royalties for the foreseeable future.
Current report
•$4.1 million increase in clinical expenses related to PM359, our candidate to treat chronic granulomatous disease; and
Current report
•$1.9 million increase in license fees for amounts due to the Broad resulting from the BMS Collaboration Agreement.
Current report
This is offset by a $17.9 million decrease in lab supplies expense as materials used in the current year for our ongoing Phase 1 clinical trial were purchased in advance in 2023.
Current report
•$9.5 million increase in personnel expense, a majority of which was an increase in non-cash stock-based compensation expense of $7.4 million; and
Current report
This was offset by a $4.2 million decrease in professional and consultant fees for legal services.
Current report
Accretion of investments
Current report
Accretion (amortization) of investments for each of the periods presented is a result of the price at which our investments are purchased. If the investments are purchased at a price different from their par value, the difference is accreted, if lower than par, or amortized, if higher than par, until the investment matures or is sold.
Current report
Going Concern
Current report
Since our inception, we have incurred substantial losses. As of December 31, 2024, we had an accumulated deficit of $687.2 million and we expect to generate operating losses and negative operating cash flows for the foreseeable future. As stated above, as of December 31, 2024, we maintained cash, cash equivalents, short-term investments, and related party short-term investments of $190.4 million.
Current report
In accordance with Accounting Standards Codification, or ASC, 205-40, Going Concern, or ASC 205-40, we evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date on which this Annual Report on Form 10-K is filed. Based on the our cash, cash equivalents, short-term investments, and related party short-term investments as of December 31, 2024, our current and forecasted level of operations and forecasted cash flows, our ability to continue as a going concern is dependent upon our ability to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Management plans to provide for capital requirements through financing or other transactions, and selling shares under our “at the market offering” program. There can be no assurance that we will be able to raise additional capital to fund operations with terms acceptable to us, or at all. Because certain elements of our plans to mitigate the conditions that raised substantial doubt about our ability to continue as a going concern are outside of our control, including the ability to raise capital through an equity or other financing, those elements cannot be considered probable according to ASC 205-40, and therefore cannot be considered in the evaluation of mitigating factors. As a result, we concluded that substantial doubt exists about our ability to continue as a going concern for 12 months from the date these consolidated financial statements are issued.
Current report
The consolidated financial statements as of December 31, 2024 have been prepared under the assumption that we will continue as a going concern for the next 12 months and that contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. Our ability to continue as a going concern is dependent upon our uncertain ability to obtain additional capital, reduce expenditures and/or execute on its business plan. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Current report
•$195.9 million net loss;
Current report
•$70.3 million change in deferred revenue;
Current report
•$132.1 million of proceeds from issuances of common stock with our February 2024 public offering;
Current report
•$38.1 million of proceeds from issuance of common stock to BMS in September 2024;
Current report
•$18.8 million of proceeds from issuance of pre-funded warrants contemporaneous with our February 2024 public offering; and
Current report
•$6.0 million of proceeds received under our agreement with Cystic Fibrosis Foundation.
Current report
Revenues from contracts
Current report
We account for our revenue in accordance with ASC, 606, Revenue from Contracts with Customers, or ASC 606. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, we perform the following five steps at inception of the agreement or upon material modification of the agreement: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
Current report
We consider the pattern of satisfaction of the performance obligations under step (v) above to be a critical accounting estimate. More specifically, the determination of the level of achievement of research and development service performance obligations, whose pattern of satisfaction is measured using costs incurred to date as compared to total costs incurred and expected to be incurred in the future is driven by a critical accounting estimate.
Current report
In estimating the costs expected to be incurred in the future, we use our most recent budget and long-range plan, adjusted for any pertinent information. While this is our best estimate as of the reporting period, costs expected to be incurred in the future require management judgment as the scope and timing of research and development activities may change significantly over time. Change in our estimate of the scope and timing of research and development services performed relative to the actual scope and timing may have a significant impact on revenue recognition.
Removed paragraphs (18)
Previous report
To maximize the potential of our Prime Editing technology, we have built a diversified portfolio of investigational therapeutic programs organized around core areas of focus: hematology and immunology, liver, lung, ocular, and neuromuscular. We are advancing additional programs as potential partnership opportunities.
Previous report
Programs within our other areas of focus are in earlier stages of preclinical development and include:
Previous report
•Liver programs: Wilson’s disease and glycogen storage disease 1b
Previous report
•Lung program: Cystic fibrosis
Previous report
•Ocular program: Retinitis pigmentosa caused by Rhodopsin mutations.
Previous report
•Neuromuscular programs: Friedreich’s ataxia and myotonic dystrophy type 1
Previous report
•Additional program: CAR-T
Previous report
•$29.0 million increase in lab supplies expense due to continued discovery efforts and expansion of our research and development activities, including ongoing IND-enabling activities, and increased personnel in our R&D function;
Previous report
•$4.6 million increase in professional and consultant fees and $6.0 million increase in personnel expenses, which includes an increase in stock-based compensation expense of $3.9 million, both driven by growth in personnel as we operate as a public company and to support our growing research and development function; and
Previous report
Other Income (Expense), Net
Previous report
For all periods presented, the amount of other income, net, net primarily consists of interest income from short-term investments.
Previous report
•$121.8 million net loss;
Previous report
•$1.7 million change in prepaid and other current assets.
Previous report
Net cash used in investing activities for the year ended December 31, 2022 was driven primarily by the following:
Previous report
•$185.3 million of net proceeds from the sale of our common stock in our IPO; offset by
Previous report
•$4.0 million payment of deferred offering costs.
Previous report
Determination of the Fair Value of Our Common Stock Issued Prior to Our IPO
Previous report
Prior to our IPO in October 2022, there was no public market for our common stock. As a result, prior to our IPO, the estimated fair value of our common stock was determined by our board of directors as of the date of each option grant, 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 may have changed from the date of the most recent valuation through the date of grant.
Reworded paragraphs (31)
Previous wording
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. We are deploying Prime Editing technology, which we believe is a versatile, precise, and efficient gene editing technology.
Current wording
We are a biotechnology company committed to delivering a new class of differentiated one-time curative genetic therapies. We are deploying Prime Editing technology, which we believe is a versatile, precise, and efficient gene editing technology.
Previous wording
Chronic granulomatous disease, is our most advanced blood program, and we have designated PM359 as our development candidate. We plan to submit an investigational new drug application with the U.S. Food and Drug Administration in the first half of 2024.
Current wording
CGD, is our most advanced blood program, and we have designated PM359 as our candidate in the treatment of this disease.
Previous wording
•expenses incurred in connection with continuing our current research programs and preclinical development of any product candidates we may identify, including under agreements with third parties, such as consultants and contractors;
Current wording
•expenses incurred in connection with continuing our current research programs and preclinical and clinical development of any product candidates we may identify, including under agreements with third parties, such as consultants and contractors;
Previous wording
•the cost of developing and validating our manufacturing process for use in our preclinical studies and future clinical trials;
Current wording
•the cost of developing and validating our manufacturing process for use in our preclinical and clinical studies;
Previous wording
•laboratory supplies and research materials; and
Current wording
•laboratory supplies and research materials;
Previous wording
•the cost allocated to acquire in-process research and development, with no alternative future use associated with asset acquisitions or transactions to license intellectual property, such as our Broad License Agreement;
Current wording
•the cost allocated to acquire in-process research and development, with no alternative future use associated with asset acquisitions or transactions to license intellectual property, such as our Broad License Agreement; and
Previous wording
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. 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.
Current wording
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. External research and development costs for any individual product candidate will be tracked upon the FDA’s clearance of the IND application for that product candidate. 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.
Previous wording
We expect our research and development expenses to continue to increase substantially for the foreseeable future with our planned 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.
Current wording
We expect our research and development expenses to continue to increase substantially for the foreseeable future with our planned 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 conduct clinical trials, and with our obligations under the BMS Collaboration Agreement.
Previous wording
•the change in the fair value of our short-term investment in Beam Therapeutics Inc. (“Beam”), a related party, in connection with the Beam Collaboration Agreement, which is discussed in greater detail in Item 1. Business, of this Annual Report on Form 10-K.
Current wording
•the change in the fair value of our short-term investment in Beam Therapeutics Inc., or Beam, a related party, in connection with the Beam Collaboration Agreement, which is discussed in greater detail in Item 1. Business, of this Annual Report on Form 10-K.
Previous wording
The $61.2 million increase in research and development expense for the year ended December 31, 2023 as compared to the year ended December 31, 2022 is primarily driven by:
Current wording
The $7.4 million increase in research and development expense for the year ended December 31, 2024 as compared to the year ended December 31, 2023 is primarily driven by:
Previous wording
•$8.1 million increase in facility-related expense primarily due to the expansion and build out of our office and laboratory space.
Current wording
•$11.3 million increase in facility-related expense primarily due to the expansion and build out of our laboratory space.
Previous wording
•$19.5 million increase in personnel expense, including an increase in stock-based compensation expense of $3.5 million, and $4.7 million increase in professional and consultant fees, both driven by our increased headcount as we continue to build out our research and development function; and
Current wording
•$8.9 million increase in personnel expense, including an increase in stock-based compensation expense of $4.8 million, driven by the higher headcount of our research and development function as compared to the prior year;
Previous wording
In January 2024, we entered into a settlement agreement with Myeloid to resolve two arbitration proceedings. Under the terms of the agreement, the parties agreed to resolve and settle all disputes between the parties and release all claims between them relating to the parties’ license agreement and the arbitrations in exchange for our payment to Myeloid of $13.5 million, certain mutual covenants, and other consideration.
Current wording
In January 2024, we entered into a settlement agreement with Myeloid Therapeutics, Inc., or Myeloid, to resolve two arbitration proceedings. Under the terms of the agreement, the parties agreed to resolve and settle all disputes between the parties and release all claims between them relating to the parties’ license agreement and the arbitrations in exchange for our payment to Myeloid of $13.5 million, certain mutual covenants, and other consideration.
Previous wording
The $13.6 million increase in general and administrative expense for the year ended December 31, 2023 as compared to the year ended December 31, 2022 is primarily driven by:
Current wording
The $6.8 million increase in general and administrative expense for the year ended December 31, 2024 as compared to the year ended December 31, 2023 is primarily driven by:
Previous wording
•$3.0 million increase in facility related expenses primarily due to the expansion and build out of our office space.
Current wording
•$1.5 million increase in facility related and other primarily related to the ongoing build out of our facility at 60 First Street.
Previous wording
For all periods presented, the change in fair value of related party short-term investment for each of the periods presented is a result of Beam’s stock price movement from the start of each respective year to the end of each respective year.
Current wording
The change in fair value of related party short-term investment for each of the periods presented is a result of Beam’s stock price movement.
Previous wording
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.
Current wording
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 sales of preferred stock, public offerings of our common stock, and through payments from our collaboration partners. As of December 31, 2024, we had cash and cash equivalents, short-term investments, and related party short-term investments of $190.4 million, excluding our restricted cash, or $204.5 million, including restricted cash.
Previous wording
In November 2023, we entered into an Open Market Sale Agreement SM (the “Sales Agreement”) with Jefferies LLC (“Jefferies”) under which we may, from time to time, issue and sell shares of our common stock having aggregate sales proceeds of up to $300.0 million, in a series of one or more at-the-market equity offerings (the “2023 ATM Program”). Jefferies is not required to sell any specific share amounts but acts as our sales agent, using commercially reasonable efforts consistent with its normal trading and sales practices. We will pay Jefferies a commission equal to 3.0% of the aggregate gross proceeds we receive from each sale of our shares of common stock. Pursuant to the Sales Agreement, any shares will be sold pursuant to our shelf registration statement on Form S-3 (File No. 333-275321) filed with the SEC on November 3, 2023, including the base prospectus contained therein, as declared effective by the SEC on November 13, 2023. Our common stock will be sold at prevailing market prices at the time of the sale, and as a result, prices may vary. As of December 31, 2023, we have not sold any shares of common stock under the 2023 ATM program.
Current wording
In November 2023, we entered into an Open Market Sale Agreement SM, or the Sales Agreement, with Jefferies LLC, or Jefferies, under which we may, from time to time, issue and sell shares of our common stock having an aggregate sales proceeds of up to $300.0 million, in a series of one or more at-the-market equity offerings, or the 2023 ATM Program. Jefferies is not required to sell any specific share amounts but acts as our sales agent, using commercially reasonable efforts consistent with its normal trading and sales practices. We will pay Jefferies a commission equal to 3.0% of the aggregate gross proceeds we receive from each sale of our shares of common stock. Pursuant to the Sales Agreement, any shares will be sold pursuant to our shelf registration statement on Form S-3 (File No. 333-275321) filed with the SEC on November 3, 2023, including the base prospectus contained therein, as declared effective by the SEC on November 13, 2023. Our common stock will be sold at prevailing market prices at the time of the sale, and as a result, prices may vary. As of December 31, 2024, we have not sold any shares of common stock under the 2023 ATM Program.
Previous wording
•$10.2 million change in lease liabilities; and
Current wording
•$6.5 million change in lease liabilities; and
Previous wording
•$2.5 million change in accounts payable.
Current wording
•$5.3 million change in accounts payable.
Previous wording
•$30.1 million of non-cash amounts included in net loss, which consisted primarily of stock-based compensation expense, non-cash lease expense, depreciation and amortization expense, and change in fair value of short-term investment — related party;
Current wording
•$41.9 million of non-cash amounts included in net loss, which consisted primarily of stock-based compensation expense, non-cash lease expense, depreciation and amortization expense, and change in fair value of short-term investment — related party; and
Previous wording
•$9.5 million change in prepaid and other current assets.
Current wording
•$9.5 million change in prepaid expenses and other current assets.
Previous wording
•$25.4 million of non-cash amounts included in net loss, which primarily consisted of change in non-cash lease expense, fair value of short-term investment — related party, and stock-based compensation expense; and
Current wording
•$30.1 million of non-cash amounts included in net loss, which primarily consisted of change in non-cash lease expense, fair value of short-term investment — related party, and stock-based compensation expense;
Previous wording
•$25.9 million change in accrued expenses and other current liabilities;
Current wording
•$1.8 million change in accrued expenses and other current liabilities.
Previous wording
•$27.6 million of maturities of short-term investments, net of purchases; offset by
Current wording
•$74.8 million of maturities of short-term investments, net of purchases; offset by
Previous wording
•$16.1 million of purchases of property and equipment.
Current wording
•$7.3 million of purchases of property and equipment.
Previous wording
•$30.3 million of purchases of short-term investments, net of maturities; and
Current wording
•$27.6 million of maturities of short-term investments, net of purchases; and
Previous wording
We believe our existing cash, cash equivalents, and investments will be sufficient to fund our operating expenses and capital expenditure requirements into the third quarter of 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:
Current wording
We believe our existing cash, cash equivalents, and investments will be sufficient to fund our operating expenses and capital expenditure requirements into the first half of 2026. 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:
Previous wording
As of December 31, 2023, we have future remaining operating lease payments of $14.6 million relating to leases we have recognized on our consolidated balance sheet. In addition, we have one lease that has been entered into but has not yet commenced, as of December 31, 2023, for which we expect to pay approximately $208.7 million over the 10 year lease term. Refer to Note 10, Leases, to our consolidated financial statements appearing within this Annual Report on Form 10-K for more information on our lease obligations.
Current wording
Refer to Note 6, Leases, to our consolidated financial statements appearing within this Annual Report on Form 10-K for information on our lease obligations.
Previous wording
Subsequent to our IPO, 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. Compensation expense for those awards is recognized over the requisite service period, which is generally the vesting period of the respective award, using the straight-line method. We account for forfeitures of stock-based awards as they occur.
Current wording
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. Compensation expense for those awards is recognized over the requisite service period, which is generally the vesting period of the respective award, using the straight-line method. We account for forfeitures of stock-based awards as they occur.
Previous wording
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 “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company. As a result of this election, our consolidated financial statements may not be comparable to 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.
Current wording
The JOBS Act 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 “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company. As a result of this election, our consolidated financial statements may not be comparable to 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.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
•$15.9 million change in prepaid expenses and other current assets;
Current report — wording carried from elsewhere
•$13.5 million change in accrued settlement payment — related party;
Current report — wording carried from elsewhere
Net cash provided by investing activities for the year ended December 31, 2023 was driven primarily by the following:
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
To date, we have funded our operations primarily with proceeds from sales of preferred stock and public offerings of our common stock. As of December 31, 2023, we had cash and cash equivalents, short-term investments, and related party short-term investments of $121.7 million, excluding our restricted cash, or $135.2 million, including restricted cash.