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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ________

Commission File Number 001-37687

EDITAS MEDICINE, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

46-4097528
(I.R.S. Employer
Identification No.)

11 Hurley Street
Cambridge, Massachusetts
(Address of principal executive offices)

02141
(Zip Code)

(617401-9000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

EDIT

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer 

Non-accelerated filer

  

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 

The number of shares of Common Stock outstanding as of July 30, 2021 was 68,261,255.

Table of Contents

Editas Medicine, Inc.

TABLE OF CONTENTS

    

    

Page

PART I. FINANCIAL INFORMATION

3

Item 1.

Financial Statements (unaudited)

3

Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020

3

Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2021 and 2020

4

Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2021 and 2020

5

Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2021 and 2020

6

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020

7

Notes to Condensed Consolidated Financial Statements

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

15

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

28

Item 4.

Controls and Procedures

28

PART II. OTHER INFORMATION

29

Item 1.

Legal Proceedings

29

Item 1A.

Risk Factors

29

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

31

Item 6.

Exhibits

32

Signatures

33

2

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1.    Financial Statements.

Editas Medicine, Inc.

Condensed Consolidated Balance Sheets

(unaudited)

(amounts in thousands, except share and per share data)

    

June 30, 

    

December 31, 

2021

2020

ASSETS

Current assets:

Cash and cash equivalents

$

337,834

$

139,682

Marketable securities

272,719

262,428

Accounts receivable

 

331

 

6,048

Prepaid expenses and other current assets

 

5,408

 

10,929

Total current assets

 

616,292

 

419,087

Marketable securities

87,584

109,664

Property and equipment, net

 

14,910

 

14,020

Right-of-use assets

30,314

25,128

Restricted cash and other non-current assets

 

6,780

 

4,703

Total assets

$

755,880

$

572,602

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

4,415

$

6,408

Accrued expenses

 

18,627

 

24,046

Deferred revenue, current

34,000

20,943

Operating lease liabilities

8,974

6,811

Total current liabilities

 

66,016

 

58,208

Operating lease liabilities, net of current portion

21,282

19,324

Deferred revenue, net of current portion

55,221

73,984

Other non-current liabilities

 

 

27,500

Total liabilities

142,519

179,016

Stockholders’ equity

Preferred stock, $0.0001 par value per share: 5,000,000 shares authorized; no shares issued or outstanding

 

 

Common stock, $0.0001 par value per share: 195,000,000 shares authorized; 68,249,786 and 62,689,457 shares issued, and 68,159,786 and 62,563,457 shares outstanding at June 30, 2021 and December 31, 2020, respectively

 

7

 

6

Additional paid-in capital

 

1,390,606

 

1,058,823

Accumulated other comprehensive loss

(71)

(46)

Accumulated deficit

 

(777,181)

 

(665,197)

Total stockholders’ equity

613,361

393,586

Total liabilities and stockholders’ equity

$

755,880

$

572,602

The accompanying notes are an integral part of the condensed consolidated financial statements.

3

Table of Contents

Editas Medicine, Inc.

Condensed Consolidated Statements of Operations

(unaudited)

(amounts in thousands, except per share and share data)

    

    

Three Months Ended

Six Months Ended

June 30, 

June 30, 

2021

2020

2021

2020

Collaboration and other research and development revenues

$

379

$

10,749

$

6,878

$

16,472

Operating expenses:

Research and development

 

33,753

 

28,007

 

75,690

 

62,576

General and administrative

 

22,027

 

14,081

 

43,471

 

31,852

Total operating expenses

 

55,780

 

42,088

 

119,161

94,428

Operating loss

 

(55,401)

 

(31,339)

 

(112,283)

 

(77,956)

Other income, net:

Other (expense) income, net

 

(1)

 

7,175

 

19

 

14,509

Interest income, net

146

592

280

2,151

Total other income, net

 

145

 

7,767

 

299

 

16,660

Net loss

$

(55,256)

$

(23,572)

$

(111,984)

$

(61,296)

Net loss per share, basic and diluted

$

(0.81)

$

(0.43)

$

(1.67)

$

(1.12)

Weighted-average common shares outstanding, basic and diluted

 

67,877,126

 

55,346,052

 

66,939,967

 

54,968,123

The accompanying notes are an integral part of the condensed consolidated financial statements.

4

Table of Contents

Editas Medicine, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(unaudited)

(amounts in thousands)

Three Months Ended

Six Months Ended

June 30, 

June 30, 

2021

2020

2021

2020

Net loss

$

(55,256)

$

(23,572)

$

(111,984)

$

(61,296)

Other comprehensive loss:

Unrealized gain (loss) on marketable debt securities

 

2

 

(511)

 

(25)

 

76

Comprehensive loss

$

(55,254)

$

(24,083)

$

(112,009)

$

(61,220)

The accompanying notes are an integral part of the condensed consolidated financial statements.

5

Table of Contents

Editas Medicine, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(unaudited)

(amounts in thousands, except share data)

    

    

Accumulated

    

    

Additional

Other

Other

Total

Common Stock

Paid-In

Comprehensive

Accumulated

Stockholders’

Shares

    

Amount

Capital

Loss

Deficit

Equity

Balance at December 31, 2020

62,563,457

$

6

$

1,058,823

$

(46)

$

(665,197)

$

393,586

Issuance of common stock for public offering

4,025,000

1

249,458

249,459

Issuance of common stock for success payment

303,599

27,500

27,500

Exercise of stock options

501,162

12,002

12,002

Vesting of restricted common stock awards

79,397

Stock-based compensation expense

12,204

12,204

Unrealized loss on marketable debt securities

(27)

(27)

Net loss

(56,728)

(56,728)

Balance at March 31, 2021

67,472,615

$

7

$

1,359,987

$

(73)

$

(721,925)

$

637,996

Exercise of stock options

629,973

16,567

16,567

Stock-based compensation expense

13,526

13,526

Vesting of restricted common stock awards

37,790

Purchase of common stock under benefit plans

19,408

526

526

Unrealized gain on marketable debt securities

2

2

Net loss

(55,256)

(55,256)

Balance at June 30, 2021

68,159,786

$

7

$

1,390,606

$

(71)

$

(777,181)

$

613,361

    

    

    

    

    

    

Accumulated

    

    

Additional

Other

Other

Total

Common Stock

Paid-In

Comprehensive

Accumulated

Stockholders’

Shares

    

Amount

Capital

Income

Deficit

Equity

Balance at December 31, 2019

54,355,798

$​

5

$​

811,546

$​

107

$​

(549,221)

$

262,437

Exercise of stock options

233,208

3,047

3,047

Vesting of restricted common stock awards

213,393

Stock-based compensation expense

6,220

6,220

Unrealized gain on marketable debt securities

587

587

Net loss

(37,724)

(37,724)

Balance at March 31, 2020

54,802,399

$

5

$

820,813

$

694

$

(586,945)

$

234,567

Exercise of stock options

355,812

6,839

6,839

Issuance of common stock for public offering

6,900,000

1

203,681

203,682

Stock-based compensation expense

5,417

5,417

Vesting of restricted common stock awards

30,194

Purchase of common stock under benefit plans

15,244

350

350

Unrealized loss on marketable debt securities

(511)

(511)

Net loss

(23,572)

(23,572)

Balance at June 30, 2020

62,103,649

$

6

$

1,037,100

$

183

$

(610,517)

$

426,772

6

Table of Contents

The accompanying notes are an integral part of the condensed consolidated financial statements.

Editas Medicine, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

(amounts in thousands)

Six Months Ended

June 30, 

    

2021

    

2020

Cash flow from operating activities

Net loss

$

(111,984)

$

(61,296)

Adjustments to reconcile net loss to net cash used in operating activities:

Stock-based compensation expense

 

25,730

 

11,637

Depreciation

 

2,352

 

1,669

Unrealized gain on corporate equity securities

(14,525)

Other non-cash items, net

 

910

 

(289)

Changes in operating assets and liabilities:

 

 

Accounts receivable

5,717

(1,447)

Prepaid expenses and other current assets

5,521

(3,254)

Right-of-use assets

4,567

192

Other non-current assets

(2,077)

93

Accounts payable

(1,818)

1,026

Accrued expenses

(6,016)

(12,439)

Deferred revenue

 

(5,706)

 

(7,375)

Operating lease liabilities

 

(5,632)

 

(278)

Other current and non-current liabilities

1,344

Net cash used in operating activities

 

(88,436)

 

(84,942)

Cash flow from investing activities

Purchases of property and equipment

 

(2,788)

(3,993)

Proceeds from the sale of equipment

14

Purchases of marketable securities

(194,127)

(66,384)

Proceeds from maturities of marketable securities

204,950

191,000

Net cash provided by investing activities

 

8,035

 

120,637

Cash flow from financing activities

Proceeds from offering of common stock, net of issuance costs

249,458

203,964

Proceeds from exercise of stock options

28,569

9,886

Issuance of common stock under benefit plans

526

350

Net cash provided by financing activities

 

278,553

 

214,200

Net increase in cash, cash equivalents, and restricted cash

 

198,152

249,895

Cash, cash equivalents, and restricted cash, beginning of period

 

143,559

239,802

Cash, cash equivalents, and restricted cash, end of period

$

341,711

$

489,697

Supplemental disclosure of cash and non-cash activities:

Fixed asset additions included in accounts payable and accrued expenses

$

1,079

$

429

Cash paid in connection with operating lease liabilities

6,731

5,125

Offering costs included in accounts payable and accrued expenses

282

Right-of-use assets obtained in exchange of operating lease obligations

9,753

3,319


The accompanying notes are an integral part of the condensed consolidated financial statements.

7

Table of Contents

Editas Medicine, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Nature of Business

Editas Medicine, Inc. (the “Company”) is a leading, clinical stage genome editing company dedicated to developing potentially transformative genomic medicines to treat a broad range of serious diseases. The Company was incorporated in the state of Delaware in September 2013. Its principal offices are in Cambridge, Massachusetts.

Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, and raising capital. The Company has primarily financed its operations through various equity financings, payments received under a research collaboration with Juno Therapeutics, a wholly-owned subsidiary of the Bristol-Myers Squibb Company (“Juno Therapeutics”), and payments received under a strategic alliance and option agreement with Allergan Pharmaceuticals International Limited (together with its affiliates, “Allergan”), which was terminated in August 2020.

The Company is subject to risks common to companies in the biotechnology industry, including but not limited to, risks of failure of preclinical studies and clinical trials, the need to obtain marketing approval for any drug product candidate that it may identify and develop, the need to successfully commercialize and gain market acceptance of its product candidates, dependence on key personnel, protection of proprietary technology, compliance with government regulations, development by competitors of technological innovations and ability to transition from pilot-scale manufacturing to large-scale production of products.

Liquidity

In May 2021, the Company entered into a common stock sales agreement with Cowen and Company, LLC (“Cowen”), under which the Company from time to time can issue and sell shares of its common stock through Cowen in at-the-market offerings for aggregate gross sale proceeds of up to $300.0 million (the “ATM Facility”). As of June 30, 2021, the Company has not sold any shares of our common stock under the ATM Facility.

In January 2021, the Company completed a public offering whereby it sold 3,500,000 shares of its common stock and received net proceeds of approximately $216.9 million. In February 2021, the underwriters in the public offering exercised their option to purchase an additional 525,000 shares, resulting in additional net proceeds to the Company of approximately $32.6 million.

The Company has incurred annual net operating losses in every year since its inception. The Company expects that its existing cash, cash equivalents and marketable securities at June 30, 2021 and anticipated interest income will enable it to fund its operating expenses and capital expenditure requirements well into 2023. The Company had an accumulated deficit of $777.2 million at June 30, 2021, and will require substantial additional capital to fund its operations. The Company has never generated any product revenue. There can be no assurance that the Company will be able to obtain additional debt or equity financing or generate product revenue or revenues from collaborative partners, on terms acceptable to the Company, on a timely basis or at all. The failure of the Company to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on the Company’s business, results of operations, and financial condition.

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2. Summary of Significant Accounting Policies

Unaudited Interim Financial Information

The condensed consolidated financial statements of the Company included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (the “Annual Report”).

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Editas Securities Corporation. All intercompany transactions and balances of the subsidiary have been eliminated in consolidation. In the opinion of management, the information furnished reflects all adjustments, all of which are of a normal and recurring nature, necessary for a fair presentation of the results for the reported interim periods. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The three months ended June 30, 2021 and 2020 are referred to as the second quarter of 2021 and 2020, respectively. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period.

Summary of Significant Accounting Policies

The Company’s significant accounting policies are described in Note 2, “Summary of significant accounting policies,” to the consolidated financial statements included in the Annual Report. There have been no material changes to the significant accounting policies previously disclosed in the Annual Report.

3. Cash Equivalents and Marketable Securities

Cash equivalents and marketable securities consisted of the following at June 30, 2021 (in thousands):

Allowance

Gross

Gross

Amortized

for Credit

Unrealized

Unrealized

Fair

June 30, 2021

Cost

Losses

Gains

Losses

Value

Cash equivalents and marketable securities:

Money market funds

$

337,834

$

$

$

$

337,834

U.S. Treasuries

55,119

3

(10)

55,112

Government agency securities

142,367

4

(48)

142,323

Commercial Paper

100,659

4

100,663

Corporate notes/bonds

62,229

2

(26)

62,205

Total

$

698,208

$

$

13

$

(84)

$

698,137

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Cash equivalents and marketable securities consisted of the following at December 31, 2020 (in thousands):

Allowance

Gross

Gross

Amortized

for Credit

Unrealized

Unrealized

Fair

December 31, 2020

Cost

Losses

Gains

Losses

Value

Cash equivalents and marketable securities:

Money market funds

$

139,682

$

$

$

$

139,682

U.S. Treasuries

180,376

8

(11)

180,373

Government agency securities

107,665

(20)

107,645

Commercial paper

41,912

(8)

41,904

Corporate notes/bonds

42,185

10

(25)

42,170

Total

$

511,820

$

$

18

$

(64)

$

511,774

As of June 30, 2021, the Company did not hold any marketable securities that had been in an unrealized loss position for more than twelve months. Furthermore, the Company has determined that there were no material changes in the credit risk of the debt securities. As of June 30, 2021, the Company holds 30 securities with an aggregate fair value of $87.6 million that had remaining maturities between one and two years.

There were no realized gains or losses on available-for-sale securities during the six months ended June 30, 2021 or 2020.

4. Fair Value Measurements

Assets measured at fair value on a recurring basis as of June 30, 2021 were as follows (in thousands):

    

    

Quoted Prices

    

Significant

    

in Active

Other

Significant

Markets for

Observable

Unobservable

June 30, 

Identical Assets

Inputs

Inputs

Financial Assets

2021

(Level 1)

(Level 2)

(Level 3)

Cash equivalents:

Money market funds

$

337,834

$

337,834

$

$

Marketable securities:

U.S. Treasuries

55,112

55,112

Government agency securities

142,323

142,323

Commercial paper

100,663

100,663

Corporate notes/bonds

62,205

62,205

Restricted cash and other non-current assets:

Money market funds

3,877

3,877

Total financial assets

$

702,014

$

396,823

$

305,191

$

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Assets measured at fair value on a recurring basis as of December 31, 2020 were as follows (in thousands):

    

    

Quoted Prices

    

Significant

    

in Active

Other

Significant

Markets for

Observable

Unobservable

December 31, 

Identical Assets

Inputs

Inputs

Financial Assets

2020

(Level 1)

(Level 2)

(Level 3)

Cash equivalents:

Money market funds

$

139,682

$

139,682

$

$

Marketable securities:

U.S. Treasuries

180,373

180,373

Government agency securities

107,645

107,645

Commercial paper

41,904

41,904

Corporate notes/bonds

42,170

42,170

Restricted cash and other non-current assets:

Money market funds

3,877

3,877

Total financial assets

$

515,651

$

323,932

$

191,719

$

5. Accrued Expenses

Accrued expenses consisted of the following (in thousands):

As of

June 30, 

December 31, 

    

2021

    

2020

External research and development expenses

$

6,510

$

12,820

Employee related expenses

5,546

 

5,323

Intellectual property and patent related fees

5,116

4,240

Other expenses

914

359

Professional service expenses

541

533

Sublicensing expenses

771

Total accrued expenses

$

18,627

$

24,046

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6. Property and Equipment, net

Property and equipment, net consisted of the following (in thousands):

    

As of

June 30, 

December 31, 

    

2021

    

2020

Laboratory equipment

$

19,431

$

18,433

Leasehold improvements

5,400

4,967

Construction-in-progress

 

2,040

 

500

Computer equipment

858

858

Furniture and office equipment

239

239

Software

 

118

 

118

Total property and equipment

 

28,086

 

25,115

Less: accumulated depreciation

 

(13,176)

 

(11,095)

Property and equipment, net

$

14,910

$

14,020

7. Commitments and Contingencies

The Company is a party to a number of license agreements under which the Company licenses patents, patent applications and other intellectual property from third parties. As such, the Company is obligated to pay licensors for various costs including upfront licenses fees, annual license fees, certain licensor expense reimbursements, success payments, research funding payments, and milestones triggerable upon certain development, regulatory, and commercial events as well as royalties on future products. These contracts are generally cancellable, with notice, at the Company’s option and do not have significant cancellation penalties. The terms and conditions as well as the accounting analysis for the Company’s significant commitments and contingencies are described in Note 8, “Commitments and Contingencies” to the consolidated financial statements included in the Annual Report. There have been no material changes to the terms and conditions, or the accounting conclusions previously disclosed in the Annual Report.

Licensor Expense Reimbursement

The Company is obligated to reimburse The Broad Institute, Inc. (“Broad”) and the President and Fellows of Harvard College (“Harvard”) for expenses incurred by each of them associated with the prosecution and maintenance of the patent rights that the Company licenses from them pursuant to the license agreement by and among the Company, Broad and Harvard, including the interference and opposition proceedings involving patents licensed to the Company under the license agreement, and other license agreements between the Company and Broad. As such, the Company anticipates that it has a substantial commitment in connection with these proceedings until such time as these proceedings have been resolved, but the amount of such commitment is not determinable. The Company incurred an aggregate of $3.4 million and $7.2 million in expense during the three and six months ended June 30, 2021, respectively, for such reimbursement. The Company incurred an aggregate of $2.8 million and $6.6 million in expense during the three and six months ended June 30, 2020, respectively, for such reimbursement.

8. Collaboration and Profit-Sharing Agreements

The Company has entered into multiple collaborations, out-licenses and strategic alliances with third parties that typically involve payments to or from the Company, including up-front payments, payments for research and development services, option payments, milestone payments and royalty payments to or from the Company. The terms and conditions as well as the accounting analysis for the Company’s significant collaborations, out-licenses and strategic alliances are described in Note 9, “Collaboration and Profit-Sharing Agreements” to the consolidated financial statements included in the Annual Report. There have been no material changes to the terms and conditions, or the accounting conclusions previously disclosed in the Annual Report.

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Collaboration Revenue

As of June 30, 2021, the Company’s contract liabilities were primarily related to the Company’s collaboration with Juno Therapeutics. The following table presents changes in the Company’s accounts receivable and contract liabilities for the six months ended June 30, 2021 (in thousands):

For the six months ended June 30, 2021

Balance at December 31, 2020

Additions

Deductions

Balance at June 30, 2021

Accounts receivable

$

6,048

$

360

$

(6,077)

$

331

Contract liabilities:

Deferred revenue

$

94,927

$

$

(5,706)

$

89,221

During the three and six months ended June 30, 2021, the Company recognized the following collaboration revenue (in thousands):

Three Months Ended

Six Months Ended

Revenue recognized in the period from:

June 30, 2021

Amounts included in deferred revenue at the beginning of the period

$

$

5,706

Performance obligations satisfied in previous periods

$

$