SEC Filing | Editas Medicine

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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 September 30, 2022

☐	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)

(617) 401-9000

(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 October 28, 2022 was 68,762,960.

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Editas Medicine, Inc.

TABLE OF CONTENTS


		Page

PART I. FINANCIAL INFORMATION		3

Item 1.	Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	3
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021	4
	Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2022 and 2021	5
	Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2022 and 2021	6
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	29

PART II. OTHER INFORMATION		30

Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 6.	Exhibits	33

Signatures		34

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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)


	September 30,		December 31,
	2022		2021
ASSETS
Current assets:
Cash and cash equivalents	$	210,704	$	203,519
Marketable securities		208,913		296,326
Accounts receivable		120		267
Prepaid expenses and other current assets		6,892		7,198
Total current assets		426,629		507,310
Marketable securities		58,844		120,071
Property and equipment, net		15,494		17,118
Right-of-use assets		22,532		26,173
Restricted cash and other non-current assets		7,530		6,811
Total assets	$	531,029	$	677,483
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	6,836	$	5,050
Accrued expenses		19,259		20,192
Deferred revenue, current		4,221		11,333
Operating lease liabilities		11,973		10,309
Total current liabilities		42,289		46,884
Operating lease liabilities, net of current portion		9,328		16,069
Deferred revenue, net of current portion		64,667		60,888
Total liabilities		116,284		123,841
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; 68,761,729 and 68,489,257 shares issued, and 68,761,729 and 68,435,257 shares outstanding at September 30, 2022 and December 31, 2021, respectively		7		7
Additional paid-in capital		1,436,422		1,411,827
Accumulated other comprehensive loss		(4,291)		(493)
Accumulated deficit		(1,017,393)		(857,699)
Total stockholders’ equity		414,745		553,642
Total liabilities and stockholders’ equity	$	531,029	$	677,483

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

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Editas Medicine, Inc.

Condensed Consolidated Statements of Operations

(unaudited)

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


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Collaboration and other research and development revenues	$	42	$	6,197	$	13,176	$	13,075
Operating expenses:
Research and development		41,326		29,265		122,960		104,954
General and administrative		16,236		16,185		52,720		59,657
Total operating expenses		57,562		45,450		175,680		164,611
Operating loss		(57,520)		(39,253)		(162,504)		(151,536)
Other income, net:
Other income, net		1		19		4		38
Interest income, net		1,793		152		2,806		432
Total other income, net		1,794		171		2,810		470
Net loss	$	(55,726)	$	(39,082)	$	(159,694)	$	(151,066)
Net loss per share, basic and diluted	$	(0.81)	$	(0.57)	$	(2.33)	$	(2.24)
Weighted-average common shares outstanding, basic and diluted		68,736,125		68,219,742		68,621,574		67,371,246

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

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Editas Medicine, Inc.

Condensed Consolidated Statements of Comprehensive (Loss) Income

(unaudited)

(amounts in thousands)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Net loss	$	(55,726)	$	(39,082)	$	(159,694)	$	(151,066)
Other comprehensive (loss) income:
Unrealized (loss) gain on marketable debt securities		(904)		7		(3,798)		(18)
Comprehensive loss	$	(56,630)	$	(39,075)	$	(163,492)	$	(151,084)

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

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Editas Medicine, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(unaudited)

(amounts in thousands, except share data)


						Accumulated
				Additional		Other				Total
	Common Stock			Paid-In		Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Capital		Loss		Deficit		Equity
Balance at December 31, 2021	68,435,257	$	7	$	1,411,827	$	(493)	$	(857,699)	$	553,642
Exercise of stock options	12,573		—		218		—		—		218
Vesting of restricted common stock awards	154,834		—		—		—		—		—
Stock-based compensation expense	—		—		11,431		—		—		11,431
Unrealized loss on marketable debt securities	—		—		—		(2,016)		—		(2,016)
Net loss	—		—		—		—		(50,515)		(50,515)
Balance at March 31, 2022	68,602,664	$	7	$	1,423,476	$	(2,509)	$	(908,214)	$	512,760
Exercise of stock options	20		—		—		—		—		—
Vesting of restricted common stock awards	77,884		—		—		—		—		—
Stock-based compensation expense	—		—		6,618		—		—		6,618
Purchase of common stock under benefit plans	37,866		—		367		—		—		367
Unrealized loss on marketable debt securities	—		—		—		(878)		—		(878)
Net loss	—		—		—		—		(53,453)		(53,453)
Balance at June 30, 2022	68,718,434	$	7	$	1,430,461	$	(3,387)	$	(961,667)	$	465,414
Exercise of stock options	4,976		—		80		—		—		80
Vesting of restricted common stock awards	38,319		—		—		—		—		—
Stock-based compensation expense	—		—		5,881		—		—		5,881
Unrealized loss on marketable debt securities	—		—		—		(904)		—		(904)
Net loss	—		—		—		—		(55,726)		(55,726)
Balance at September 30, 2022	68,761,729	$	7	$	1,436,422	$	(4,291)	$	(1,017,393)	$	414,745

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						Accumulated
				Additional		Other				Total
	Common Stock			Paid-In		Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Capital		(Loss) Gain		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
Exercise of stock options	86,985		—		2,496		—		—		2,496
Vesting of restricted common stock awards	73,888		—		—		—		—		—
Stock-based compensation expense	—		—		10,012		—		—		10,012
Purchase of common stock under benefit plans	—		—		—		—		—		—
Unrealized gain on marketable debt securities	—		—		—		7		—		7
Net loss	—		—		—		—		(39,082)		(39,082)
Balance at September 30, 2021	68,320,659	$	7	$	1,403,114	$	(64)	$	(816,263)	$	586,794

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

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Editas Medicine, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

(amounts in thousands)


	Nine Months Ended
	September 30,
	2022		2021
Cash flow from operating activities
Net loss	$	(159,694)	$	(151,066)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		23,930		35,742
Depreciation		4,760		3,542
Other non-cash items, net		(226)		1,332
Changes in operating assets and liabilities:
Accounts receivable		147		5,797
Prepaid expenses and other current assets		307		1,414
Right-of-use assets		3,641		7,080
Other non-current assets		(719)		(2,077)
Accounts payable		1,674		(2,978)
Accrued expenses		(485)		(9,439)
Deferred revenue		(3,333)		(11,372)
Operating lease liabilities		(5,078)		(7,196)
Net cash used in operating activities		(135,076)		(129,221)
Cash flow from investing activities
Purchases of property and equipment		(3,494)		(5,132)
Proceeds from the sale of equipment		18		—
Purchases of marketable securities		(209,782)		(304,570)
Proceeds from maturities of marketable securities		354,854		278,076
Net cash provided by (used in) investing activities		141,596		(31,626)
Cash flow from financing activities
Proceeds from offering of common stock, net of issuance costs		—		249,458
Proceeds from exercise of stock options		298		31,065
Issuance of common stock under benefit plans		367		526
Net cash provided by financing activities		665		281,049
Net increase in cash, cash equivalents, and restricted cash		7,185		120,202
Cash, cash equivalents, and restricted cash, beginning of period		207,396		143,559
Cash, cash equivalents, and restricted cash, end of period	$	214,581	$	263,761
Supplemental disclosure of cash and non-cash activities:
Fixed asset additions included in accounts payable and accrued expenses	$	413	$	597
Cash paid in connection with operating lease liabilities		11,894		8,918
Right-of-use assets obtained in exchange of operating lease obligations		4,708		9,753

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

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Editas Medicine, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Nature of Business

Editas Medicine, Inc. (the “Company”) is a 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, Inc., a wholly-owned subsidiary of the Bristol-Myers Squibb Company (“BMS”), and payments received under a strategic alliance and option agreement with Allergan Pharmaceuticals International Limited, 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 September 30, 2022, the Company has not sold any shares of its 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 September 30, 2022 will enable it to fund its operating expenses and capital expenditure requirements into 2024. The Company had an accumulated deficit of $1.0 billion at September 30, 2022, 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, 2021 (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 September 30, 2022 and 2021 are referred to as the third quarter of 2022 and 2021, 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 September 30, 2022 (in thousands):


			Allowance		Gross		Gross
	Amortized		for Credit		Unrealized		Unrealized		Fair
September 30, 2022	Cost		Losses		Gains		Losses		Value
Cash equivalents and marketable securities:
Money market funds	$	210,705	$	—	$	—	$	—	$	210,705
Government agency securities		126,455		—		2		(2,911)		123,546
U.S. Treasuries		68,568		—		9		(425)		68,152
Commercial paper		42,134		—		—		(100)		42,034
Corporate notes/bonds		34,890		—		—		(866)		34,024
Total	$	482,752	$	—	$	11	$	(4,302)	$	478,461

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Cash equivalents and marketable securities consisted of the following at December 31, 2021 (in thousands):


			Allowance		Gross		Gross
	Amortized		for Credit		Unrealized		Unrealized		Fair
December 31, 2021	Cost		Losses		Gains		Losses		Value
Cash equivalents and marketable securities:
Money market funds	$	203,519	$	—	$	—	$	—	$	203,519
U.S. Treasuries		124,016		—		1		(84)		123,933
Government agency securities		126,927		—		—		(228)		126,699
Commercial paper		89,699		—		1		(13)		89,687
Corporate notes/bonds		76,248		—		—		(170)		76,078
Total	$	620,409	$	—	$	2	$	(495)	$	619,916

As of September 30, 2022, the Company held three marketable securities that were in a continuous unrealized loss position. The Company neither intends to sell these marketable securities, nor does it believe that it is more-likely-than-not to conclude it will have to sell them before recovery of their carrying values. The Company also believes that it will be able to collect both principal and interest amounts due to it at maturity. Furthermore, the Company has determined that there were no material changes in the credit risk of the debt securities. As of September 30, 2022, the Company holds 25 securities with an aggregate fair value of $58.8 million that had remaining maturities between one and two years.

There were no realized gains or losses on available-for-sale securities during the nine months ended September 30, 2022 or 2021.

4. Fair Value Measurements

Assets measured at fair value on a recurring basis as of September 30, 2022 were as follows (in thousands):


			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
	September 30,		Identical Assets		Inputs		Inputs
Financial Assets	2022		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market funds	$	210,705	$	210,705	$	—	$	—
Marketable securities:
Government agency securities		123,546		—		123,546		—
U.S. Treasuries		68,152		68,152		—		—
Commercial paper		42,034		—		42,034		—
Corporate notes/bonds		34,024		—		34,024		—
Restricted cash and other non-current assets:
Money market funds		3,877		3,877		—		—
Total financial assets	$	482,338	$	282,734	$	199,604	$	—

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Assets measured at fair value on a recurring basis as of December 31, 2021 were as follows (in thousands):


			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
	December 31,		Identical Assets		Inputs		Inputs
Financial Assets	2021		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market funds	$	203,519	$	203,519	$	—	$	—
Marketable securities:
U.S. Treasuries		123,933		123,933		—		—
Government agency securities		126,699		—		126,699		—
Commercial paper		89,687		—		89,687		—
Corporate bonds		76,078		—		76,078		—
Restricted cash and other non-current assets:
Money market funds		3,877		3,877		—		—
Total financial assets	$	623,793	$	331,329	$	292,464	$	—

5. Accrued Expenses

Accrued expenses consisted of the following (in thousands):


	As of
	September 30,		December 31,
	2022		2021
Employee related expenses	$	9,388	$	10,159
External research and development expenses		7,176		5,614
Intellectual property and patent related fees		1,304		1,408
Professional service expenses		1,098		2,345
Other expenses		293		666
Total accrued expenses	$	19,259	$	20,192

6. Property and Equipment, net

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


	As of
	September 30,		December 31,
	2022		2021
Laboratory equipment	$	24,223	$	21,579
Leasehold improvements		8,834		8,162
Construction-in-progress		1,202		1,529
Computer equipment		875		876
Furniture and office equipment		264		264
Software		215		215
Total property and equipment		35,613		32,625
Less: accumulated depreciation		(20,119)		(15,507)
Property and equipment, net	$	15,494