Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2018	Aug. 03, 2018
Document and Entity Information
Entity Registrant Name	Editas Medicine, Inc.
Entity Central Index Key	0001650664
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		47,675,644
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 131,924	$ 146,630
Marketable securities	212,156	182,509
Accounts receivable	362	679
Prepaid expenses and other current assets	3,795	2,381
Total current assets	348,237	332,199
Property and equipment, net	39,915	39,442
Restricted cash and other non-current assets	5,378	1,619
Total assets	393,530	373,260
Current liabilities:
Accounts payable	4,661	4,020
Accrued expenses	11,029	11,049
Notes payable		7,500
Deferred revenue, current	7,386	13,238
Other current liabilities	944	900
Total current liabilities	24,020	36,707
Deferred revenue, net of current portion	104,929	94,725
Construction financing lease obligation, net of current portion	32,944	33,431
Other non-current liabilities	305	317
Total liabilities	162,198	165,180
Commitments and contingencies (see note 7)
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; 47,658,753 and 45,025,448 shares issued, and 47,352,753 and 44,507,960 shares outstanding at June 30, 2018 and December 31, 2017, respectively	5	4
Additional paid-in capital	607,311	514,002
Accumulated other comprehensive gain (loss)	1	(76)
Accumulated deficit	(375,985)	(305,850)
Total stockholders’ equity	231,332	208,080
Total liabilities and stockholders’ equity	$ 393,530	$ 373,260

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Condensed Consolidated Balance Sheets
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	195,000,000	195,000,000
Common stock, shares issued	47,658,753	45,025,448
Common stock, shares outstanding	47,352,753	44,507,960

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Condensed Consolidated Statements of Operations
Collaboration and other research and development revenues	$ 7,372	$ 3,097	$ 11,299	$ 3,779
Operating expenses:
Research and development	32,718	17,318	54,017	36,339
General and administrative	14,311	11,894	28,498	24,182
Total operating expenses	47,029	29,212	82,515	60,521
Operating loss	(39,657)	(26,115)	(71,216)	(56,742)
Other income (expense), net:
Other income, net	154	122	336	262
Interest income (expense), net	780	(446)	1,219	(1,056)
Total other income (expense), net	934	(324)	1,555	(794)
Net loss	$ (38,723)	$ (26,439)	$ (69,661)	$ (57,536)
Net loss per share attributable to common stockholders, basic and diluted	$ (0.82)	$ (0.65)	$ (1.50)	$ (1.49)
Weighted-average common shares outstanding, basic and diluted	46,952,059	40,830,161	46,474,685	38,669,793

Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Condensed Consolidated Statements of Comprehensive Loss
Net loss	$ (38,723)	$ (26,439)	$ (69,661)	$ (57,536)
Other comprehensive gain (loss):
Unrealized gain (loss) on marketable debt securities	54	(67)	77	(67)
Comprehensive loss	$ (38,669)	$ (26,506)	$ (69,584)	$ (57,603)

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flow from operating activities
Net loss	$ (69,661)	$ (57,536)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Stock-based compensation expense	13,552	10,820
Depreciation	1,535	1,282
Non-cash research and development expense	14,442	5,000
Non-cash investment in equity securities	(3,667)
Other non-cash items, net	(1,098)	176
Changes in operating assets and liabilities:
Accounts receivable	317	(732)
Prepaid expenses and other current assets	(1,414)	(486)
Other non-current assets	(92)	2
Accounts payable	984	3,366
Accrued expenses	2,032	(6,200)
Deferred revenue	3,877	87,937
Net cash (used in) provided by operating activities	(39,193)	43,629
Cash flow from investing activities
Purchases of property and equipment	(2,401)	(1,018)
Proceeds from the sale of equipment	5
Purchases of marketable securities	(224,465)	(180,623)
Proceeds from maturities of marketable securities	196,000
Net cash used in investing activities	(30,861)	(181,641)
Cash flow from financing activities
Proceeds from offering of common stock, net of issuance costs	48,471	96,685
Proceeds from exercise of stock options	6,925	490
Issuances of common stock under benefit plans	362
Payments on construction financing lease obligation	(410)	(390)
Net cash provided by financing activities	55,348	96,785
Net decrease in cash and cash equivalents	(14,706)	(41,227)
Cash, cash equivalents and restricted cash, beginning of period	148,249	186,942
Cash, cash equivalents and restricted cash, end of period	133,543	145,715
Supplemental disclosure of cash and non-cash activities:
Fixed asset additions included in accounts payable and accrued expenses	371	91
Reclassification of liability for common stock subject to repurchase	4	$ 6
Issuance of common stock for settlement of success payments (see note 7)	9,530
Issuance of common stock for asset acquisition	1,942
Issuance of common stock for settlement of notes payable (see note 7)	12,500
Offering costs included in accounts payable and accrued expenses	$ 22

Nature of Business	6 Months Ended
Nature of Business	Jun. 30, 2018
Nature of Business
Nature of Business	1. Nature of Business Editas Medicine, Inc. (the “Company”) is a research stage company dedicated to treating patients with genetically defined diseases by correcting their disease‑causing genes. 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 and debt financings, including the initial public offering of its common stock (the “IPO”), its follow-on public offerings of its common stock in March 2017 and December 2017, its at-the-market offering of its common stock in January 2018, and private placements of preferred stock, payments received under a research collaboration with Juno Therapeutics, Inc., a Celgene company that is a wholly-owned subsidiary of Celgene Corporation (“Juno Therapeutics”), and from payments received under a strategic alliance and option agreement with Allergan Pharmaceuticals International Limited (“Allergan”). 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 February 2016, the Company completed its IPO and received aggregate net proceeds of approximately $97.5 million, after deducting underwriting discounts and commissions and other offering expenses payable by the Company. In March 2017, the Company completed a follow-on offering and received net proceeds of approximately $96.7 million, after deducting underwriting discounts and commissions and other offering expenses payable by the Company (the “2017 March Offering”). In December 2017, the Company completed another follow-on offering and received net proceeds of approximately $57.2 million, after deducting underwriting discounts and other offering expenses payable by the Company (the “2017 December Offering”). During January 2018, the Company completed at-the-market offerings and received net proceeds of approximately $48.5 million (the “2018 January Offerings”). 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, 2018, anticipated interest income, and anticipated research support under the Company’s collaboration agreement with Juno Therapeutics will enable it to fund its operating expenses and capital expenditure requirements for at least the next 24 months following the date of this Quarterly Report on Form 10-Q. The Company had an accumulated deficit of $376.0 million at June 30, 2018, 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.

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2018

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

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 accounting principles generally accepted 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, 2017 (the “Annual Report”).

The unaudited condensed consolidated financial statements include the accounts of Editas Medicine, Inc. 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, 2018 and 2017 are referred to as the second quarter of 2018 and 2017, 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.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. On an ongoing basis, the Company’s management evaluates its estimates, which include, but are not limited to, estimates related to revenue recognition, accrued expenses, stock-based compensation expense and deferred tax valuation allowances. The Company bases its estimates on historical experience and other market-specific or relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions.

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 other than as noted below.

Revenue Recognition

Effective January 1, 2018, the Company adopted the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), using the modified retrospective transition method. Under this method, the Company recorded the cumulative effect of initially applying the new standard to all contracts as of the date of adoption.

The Company enters into collaboration agreements and certain other agreements that are within the scope of ASC 606, under which the Company licenses, may license or grants an option to license rights to certain of the Company’s product candidates and performs research and development services in connection with such arrangements. The terms of these arrangements typically include payment of one or more of the following: non-refundable, up-front fees; reimbursement of research and development costs; development, clinical, regulatory and commercial sales milestone payments, and royalties on net sales of licensed products.

Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine the appropriate amount of revenue to be recognized for arrangements determined to be within the scope of ASC 606, the Company performs the following five steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect consideration it is entitled to in exchange for the goods or services it transfers to the customer.

The promised good or services in the Company’s arrangements typically consist of a license, or option to license, rights to the Company’s intellectual property or research and development services. The Company provides options to additional items in such arrangements, which are accounted for as separate contracts when the customer elects to exercise such options, unless the option provides a material right to the customer. Performance obligations are promised goods or services in a contract to transfer a distinct good or service to the customer and are considered distinct when (i) the customer can benefit from the good or service on its own or together with other readily available resources and (ii) the promised good or service is separately identifiable from other promises in the contract. In assessing whether promised good or services are distinct, the Company considers factors such as the stage of development of the underlying intellectual property, the capabilities of the customer to develop the intellectual property on its own or whether the required expertise is readily available and whether the goods or services are integral or dependent to other goods or services in the contract.

The Company estimates the transaction price based on the amount expected to be received for transferring the promised goods or services in the contract. The consideration may include fixed consideration or variable consideration. At the inception of each arrangement that includes variable consideration, the Company evaluates the amount of potential payment and the likelihood that the payments will be received. The Company utilizes either the most likely amount method or expected value method to estimate the amount expected to be received based on which method best predicts the amount expected to be received. The amount of variable consideration that is included in the transaction price may be constrained and is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period.

The Company’s contracts often include development and regulatory milestone payments that are as assessed under the most likely amount method and constrained if it is probable that a significant revenue reversal would occur. Milestone payments that are not within the Company’s control or the licensee’s control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. At the end of each reporting period, the Company re-evaluates the probability of achievement of such development and clinical milestones and any related constraint, and if necessary, adjust its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect collaboration and other research and development revenues in the period of adjustment.

For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue resulting from any of the Company’s collaboration or strategic alliance arrangements.

The Company allocates the transaction price based on the estimated standalone selling price. The Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The Company utilizes key assumptions to determine the stand-alone selling price, which may include other comparable transactions, pricing considered in negotiating the transaction and the estimated costs. Variable consideration is allocated specifically to one or more performance obligations in a contract when the terms of the variable consideration relate to the satisfaction of the performance obligation and the resulting amounts allocated are consistent with the amounts the Company would expect to receive for the satisfaction of each performance obligation.

The consideration allocated to each performance obligation is recognized as revenue when control is transferred for the related goods or services. For performance obligations which consist of licenses and other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

The Company receives payments from its customers based on billing schedules established in each contract. Up-front payments and fees are recorded as deferred revenue upon receipt or when due until the Company performs its obligations under these arrangements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional.

Equity Securities

The Company records investments in privately issued corporate equity securities that do not have readily determinable fair values, at cost, and adjusts for changes in observable prices minus impairment. Each reporting period the Company adjusts the carrying value of these investments if it observes that additional shares have been issued in an orderly transaction between market participants resulting in a price increase or decrease per share. Additionally, each reporting period the Company reviews these investments for impairment considering all available information to conclude whether an impairment exists. Changes in measurement for all corporate equity investments are recognized in “Other income (expense), net.”

Recent Accounting Pronouncements –Adopted

In October 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-18, Restricted Cash (“ASU 2016-18”), which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash or restricted cash equivalents. Therefore, amounts described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 was effective for fiscal years beginning after December 15, 2017, and interim periods within those years. The guidance is effective on a retrospective basis. The Company adopted this guidance as of October 1, 2017. The Company reclassified restricted cash in the statements of cash flows to be included in the cash and cash equivalents balance. The reclassification was not material to the periods presented. The following table presents cash, cash equivalents and restricted cash as reported on the condensed consolidated balance sheets that equal the total amounts on the condensed consolidated statements of cash flows (in thousands):



	June 30,
	2018		2017
Cash and cash equivalents	$	131,924	$	144,096
Restricted cash included in "Restricted cash and other non-current assets"		1,619		1,619
Total	$	133,543	$	145,715

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which supersedes the revenue recognition requirements in FASB ASC Topic 605, Revenue Recognition (“ASC 605”), and most industry-specific guidance. The Company adopted the new standard effective January 1, 2018 using the modified retrospective approach. As part of the adoption, the Company reviewed all contracts that were not yet completed as of the date of initial application in determining the cumulative-effect impact related to the adoption of ASC 606. The adoption of ASC 606 resulted in the changes to (i) the allocation of arrangement consideration, including the determination of estimated selling price and the allocation of variable consideration to specific performance obligations for the Company’s collaboration agreement with Juno Therapeutics, and (ii) the application of proportional performance as a measure of progress on service related deliverables for the Company’s strategic alliance with Allergan.

Effective January 1, 2018, the Company’s adoption of ASC 606 resulted in increases of $0.5 million in deferred revenue and accumulated deficit, which was primarily due to an adjustment for two milestone payments previously earned that will now be recognized over time, partially offset by acceleration of proportional performance revenue.

The following table presents changes in the Company’s deferred revenue balance as of January 1, 2018 resulting from adoption of ASC 606 (in thousands):


	Balance at December 31, 2017		Adjustments		Balance at January 1, 2018
Contract liabilities:
Deferred revenue	$	(107,963)	$	(474)	$	(108,437)

As of June 30, 2018, the Company’s account receivable and contract liabilities were primarily related to the Company’s agreements with Juno Therapeutics and Allergan. The following table presents changes in the Company’s accounts receivable and contract liabilities for the six months ended June 30, 2018 (in thousands):


For the six months ended June 30, 2018	Balance at December 31, 2017		Additions		Deductions		Balance at June 30, 2018
Accounts receivable	$	679	$	362	$	(679)	$	362
Contract liabilities:
Deferred revenue	$	(107,963)	$	(8,122)	$	3,770	$	(112,315)

During the three and six months ended June 30, 2018, the Company recognized revenue as a result of the following (in thousands):


		Three Months Ended		Six Months Ended
Revenue recognized in the period from:	June 30, 2018
Amounts included in deferred revenue at the beginning of the period	$	875	$	3,770
Performance obligations satisfied in previous periods	$	2,566	$	2,566

For additional information regarding revenue recognition from contracts with customers, refer to Note 8.

The Company has included the following financial statement line items for comparability purposes as of and for the three and six months ended June 30, 2018 (in thousands):


		Three Months Ended June 30, 2018
	As reported under Topic 606		Balances without adoption of ASC 606		Effect of Change
Collaboration and other research and development revenues	$	7,372	$	6,107	$	1,265
Operating loss	$	(39,657)	$	(40,922)	$	1,265
Net loss attributable to common stockholders	$	(38,723)	$	(39,988)	$	1,265
Net loss per share attributable to common stockholders, basic and diluted	$	(0.82)	$	(0.85)	$	0.03


		Six Months Ended June 30, 2018
	As reported under Topic 606		Balances without adoption of ASC 606		Effect of Change
Collaboration and other research and development revenues	$	11,299	$	9,959	$	1,340
Operating loss	$	(71,216)	$	(72,556)	$	1,340
Net loss attributable to common stockholders	$	(69,661)	$	(71,001)	$	1,340
Net loss per share attributable to common stockholders, basic and diluted	$	(1.50)	$	(1.53)	$	0.03


		As of June 30, 2018
	As reported under Topic 606		Balances without adoption of ASC 606		Effect of Change
Deferred revenue, current	$	7,386	$	13,431	$	(6,045)
Deferred revenue, net of current portion	$	104,929	$	89,972	$	14,957
Accumulated deficit	$	(375,985)	$	(377,325)	$	1,340

In 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). ASU 2016-01 amended guidance related to the recording of financial assets and liabilities. Under the amended guidance, equity investments that are not accounted for under the equity method or those that result in the consolidation of an investee, are to be measured at fair value with changes in fair value recognized in net income (loss). An entity has the option to measure equity investments without readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transaction for the identical or similar investments. The amended guidance became effective January 1, 2018. As of June 30, 2018, the Company held an equity investment in Beam Therapeutics Inc. (“Beam”), a privately held company, that it accounted for under the cost method. The equity investment does not have a readily determinable fair value. The Company measured the investment at cost adjusted for impairment or observable price changes. During the three and six months ended June 30, 2018, the Company did not adjust the value of the Company’s investment in Beam as a result of impairment or based on observable price changes.

Recent Accounting Pronouncements – Issued But Not Yet Adopted

In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”), which applies to all leases and will require lessees to record most leases on the balance sheet, but recognize expense in a manner similar to the current standard. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods within those years. Entities are required to use a modified retrospective approach of adoption for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited. The Company is evaluating the potential impact that the adoption of ASU 2016-02 will have on the Company’s consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”) to simplify the accounting for share-based payments to non-employees by aligning it with the accounting for share-based payments to employees, with certain exceptions. The new guidance expands the scope of ASC 718, Compensation – Stock Compensation, to include share-based payments granted to non-employees in exchange for goods or services used or consumed in an entity’s own operations and supersedes the guidance in ASC Topic 505-50, Equity-Based Payments to Non-Employees. The guidance is effective for public business entities in annual periods beginning after December 15, 2018 and interim periods within those years. Early adoption is permitted. The Company is currently evaluating the effect of this guidance on the Company’s consolidated financial statements and disclosures.

Cash Equivalents, Marketable Securities and Equity Securities

6 Months Ended

Jun. 30, 2018

Cash Equivalents, Marketable Securities and Equity Securities

Cash Equivalents, Marketable Securities and Equity Securities

3. Cash Equivalents, Marketable Securities and Equity Securities

Cash equivalents, marketable securities and equity securities consisted of the following at June 30, 2018 (in thousands):


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
June 30, 2018	Cost		Gains		Losses		Value
Cash equivalents and marketable securities:
Money market funds	$	120,683	$	—	$	—	$	120,683
U.S. Treasuries		175,254		5		—		175,259
Government agency securities		47,896		—		(4)		47,892
Equity securities included in other non-current assets:
Corporate equity securities		3,667		—		—		3,667
Total	$	347,500	$	5	$	(4)	$	347,501

Cash equivalents and marketable securities consisted of the following at December 31, 2017 (in thousands):


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2017	Cost		Gains		Losses		Value
Cash equivalents and marketable securities:
Money market funds	$	134,635	$	—	$	—	$	134,635
U.S. Treasuries		135,601		—		(47)		135,554
Government agency securities		58,979		—		(29)		58,950
Total	$	329,215	$	—	$	(76)	$	329,139

At June 30, 2018, the Company held 15 securities that were in an unrealized loss position. The aggregate fair value of securities held by the Company in an unrealized loss position for less than 12 months at June 30, 2018 was $86.6 million, and there were no securities held by the Company in an unrealized loss position for more than 12 months. Pursuant to the adoption of ASU 2016-01, the Company records changes in the fair value of its investments in corporate equity securities to “Other income (expense), net” in the Company’s condensed consolidated statements of operations. The Company records unrealized gains (losses) on available-for-sale debt securities as a component of accumulated other comprehensive income (loss) until such gains and losses are realized.

As of June 30, 2018, the Company did not intend to sell, and would not be more likely than not required to sell, the debt securities in an unrealized loss position before recovery of their amortized cost bases. Furthermore, the Company has determined that there were no material changes in the credit risk of the debt securities. As a result, the Company determined it did not hold any marketable securities with any other-than-temporary impairment as of June 30, 2018.

There were no realized gains or losses on available-for-sale securities during the six months ended June 30, 2018 or 2017.

Fair Value Measurements

6 Months Ended

Jun. 30, 2018

Fair Value Measurements

Fair Value Measurements

4. Fair Value Measurements

Assets measured at fair value on a recurring basis as of June 30, 2018 were as follows (in thousands):


			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
	June 30,		Identical Assets		Inputs		Inputs
Financial Assets	2018		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market funds	$	120,683	$	120,683	$	—	$	—
U.S. Treasuries		10,995		10,995		—		—
Marketable securities:
U.S. Treasuries		164,264		164,264		—		—
Government agency securities		47,892		47,892		—		—
Restricted cash and other non-current assets:
Corporate equity securities		3,667		—		3,667		—
Money market funds		1,619		1,619		—		—
Total financial assets	$	349,120	$	345,453	$	3,667	$	—

Assets measured at fair value on a recurring basis as of December 31, 2017 were as follows (in thousands):


			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
	December 31,		Identical Assets		Inputs		Inputs
Financial Assets	2017		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents
Money market funds	$	134,635	$	134,635	$	—	$	—
U.S. Treasuries		11,995		11,995		—		—
Marketable securities:
U.S. Treasuries		123,559		123,559		—		—
Government agency securities		58,950		58,950		—		—
Money market funds, included in restricted cash		1,619		1,619		—		—
Total financial assets	$	330,758	$	330,758	$	—	$	—

There were no transfers between fair value measurement levels during the six months ended June 30, 2018.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Accrued Expenses

6 Months Ended

Jun. 30, 2018

Accrued Expenses

Accrued Expenses

5. Accrued Expenses

Accrued expenses consisted of the following (in thousands):


	As of
	June 30,		December 31,
	2018		2017
Employee related expenses	$	2,882	$	3,708
Process and platform development expenses		2,786		2,301
Intellectual property and patent related fees		2,630		2,370
Sublicensing and success payment expenses		2,177		2,000
Other expenses		554		670
Total	$	11,029	$	11,049

Property and Equipment, net

6 Months Ended

Jun. 30, 2018

Property and Equipment, net

Property and Equipment, net

6. Property and Equipment, net

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


	As of
	June 30,		December 31,
	2018		2017
Building	$	35,167	$	35,167
Laboratory equipment		9,009		7,415
Computer equipment		733		550
Leasehold improvements		177		177
Furniture and office equipment		145		95
Software		118		96
Total property and equipment		45,349		43,500
Less: accumulated depreciation		(5,434)		(4,058)
Property and equipment, net	$	39,915	$	39,442

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jun. 30, 2018
Commitments and Contingencies
Commitments and Contingencies	7. Commitments and Contingencies Hurley Street Lease In February 2016, the Company entered into a lease agreement for 59,783 square feet of office and laboratory space located on Hurley Street in Cambridge, Massachusetts. The term of the lease began on October 1, 2016. In connection with the lease and as a security deposit, the Company deposited with the landlord a letter of credit in the amount of approximately $1.6 million. Subject to the terms of the lease and certain reduction requirements specified therein, the $1.6 million security deposit may decrease over time. The letter of credit, which is collateralized by the Company with cash held in a money market account, is recorded in restricted cash and other non-current assets in the accompanying condensed consolidated financial statements as of June 30, 2018 and December 31, 2017. In connection with this lease, the landlord provided a tenant improvement allowance for costs associated with the design, engineering, and construction of tenant improvements for the leased facility. For accounting purposes, the Company was deemed the owner of the building during the construction period due to the fact that the Company was involved in the construction project, including having responsibilities for cost overruns for planned tenant improvements that did not qualify as “normal tenant improvements” under the lease accounting guidance. Throughout the construction period, the Company recorded the project construction costs incurred as an asset, along with a corresponding facility lease obligation, on its balance sheet for the total amount of the project costs incurred whether funded by the Company or the landlord. Construction was completed in October 2016, and the Company considered the requirements for sale-leaseback accounting treatment, which included an evaluation of whether all risks of ownership had transferred back to the landlord, as evidenced by a lack of continuing involvement in the leased property. The Company determined that the arrangement did not qualify for sale-leaseback accounting treatment, the building asset would remain on the Company’s balance sheet at its historical cost, and such asset would be depreciated over its estimated useful life of 30 years. The Company bifurcates its future lease payments pursuant to the Hurley Street lease into (i) a portion that is allocated to the building and (ii) a portion that is allocated to the land on which the building is located, which is recorded as rental expense. Although the Company did not begin making lease payments pursuant to the Hurley Street lease until November 2016, the portion of the lease obligation allocated to the land is treated for accounting purposes as an operating lease that commenced upon execution of the Hurley Street lease in February 2016. The lease will continue until October 2023. The Company has the option to extend the lease for an additional five year term at market-based rates. The Company began using this space as its headquarters in October 2016 and rental payments for this property began in November 2016. The base rent is subject to increases over the term of the lease. In February 2017, the Company subleased approximately 10,000 square feet of the Hurley Street premises pursuant to a sublease (the “Sublease”). The Sublease commenced in February 2017 and was terminated in June 2018. 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. During the three and six months ended June 30, 2018, the Company recognized $3.5 million and $8.0 million in expense for such reimbursement, respectively. During the three and six months ended June 30, 2017, the Company recognized $3.9 million and $7.9 million in expense for such reimbursement, respectively. Success Payments In 2016, the Company entered into patent license agreements with each of The General Hospital Corporation, d/b/a Massachusetts General Hospital (“MGH”), and Broad (collectively, the “2016 License Agreements”). Pursuant to the terms of the 2016 License Agreements, the Company is required to make certain success payments to MGH, Broad and Wageningen University (“Wageningen” and such payments, collectively, the “Success Payments”), payable in cash or, at the Company’s election, common stock in the case of MGH or, in the case of Broad and Wageningen, promissory notes payable in cash or, at the Company’s election subject to certain conditions, common stock of the Company. The Success Payments are payable, if and when, the Company’s market capitalization reaches specified thresholds for a specific period of time or upon a sale of the Company for consideration in excess of those thresholds, as discussed more fully in Note 8 (collectively, the “Payment Conditions”). The Success Payments were accounted for under the provisions of FASB ASC, Topic 505-50, Equity-Based Payments to Non-Employees. The Company has the right to terminate any of the 2016 License Agreements at will upon written notice. Absent any of the Payment Conditions being achieved prior to termination, the Company would not be obligated to pay any Success Payments. As such, the Company will recognize the expense and liability associated with each Success Payment upon achievement of the associated Payment Conditions, if ever. The Company records this expense as a research and development expense in its statements of operations. The Company triggered the first Success Payment under one of the 2016 License Agreements during the first quarter of 2017 when the Company’s market capitalization reached $750 million. In March 2017, the Company issued promissory notes for an aggregate principal amount of $5.0 million to Broad and Wageningen and the Company settled such notes in August 2017. The Company triggered another Success Payment under one of the 2016 License Agreements during the fourth quarter of 2017 when the Company’s market capitalization reached $1.0 billion. In December 2017, the Company issued promissory notes for an aggregate principal amount of $7.5 million to Broad and settled such notes in January 2018. The Company triggered a Success Payment under the MGH license agreement during the fourth quarter of 2017 when the Company’s market capitalization reached $1.0 billion. The Company accrued $2.0 million relating to the such Success Payment owed to MGH which is included in accrued expense on the condensed consolidated balance sheet for the year ended December 31, 2017. In January 2018, the Company settled this liability through the issuance of shares of its common stock to MGH. The Success Payments issued to Broad and Wageningen are discussed more fully within the Notes Payable section below. Research Funding Payments In June 2018, the Company entered into a sponsored research agreement (the “Sponsored Research Agreement”) with Broad, which is described more fully in Note 8. Pursuant to the terms of the Sponsored Research Agreement, the Company is required to make certain research funding payments to Broad, payable by promissory note, cash or common stock. Under the Sponsored Research Agreement, the Company is obligated to make payments of research funding to Broad in the event the Company’s market capitalization reaches specified thresholds ranging from a mid-nine digit dollar amount to a low-eleven digit dollar amount (“Market Cap Research Funding”) or a Company sale for consideration ranging from a mid-nine digit dollar amount to a low-eleven digit dollar amount (“Company Sale Research Funding” and, collectively with the Market Cap Research Funding, the “Research Funding Payments”). In connection with entering into the Sponsored Research Agreement, the Company confirmed that the first two Research Funding Payments of $5.0 million and $7.5 million were due and payable to Broad (the “Initial Research Payments”). In June 2018, the Company issued promissory notes for an aggregate principal balance of $12.5 million to Broad, which were settled by the issuance of shares of common stock, and are described more fully in the Notes Payable section. The Research Funding Payments were accounted for under the provisions of FASB ASC, Topic 505-50, Equity-Based Payments to Non-Employees. Other than the Initial Research Payments, the Company is not required to make additional Research Funding Payments if the Company, whether directly or through its affiliates or sublicensees, is not researching, developing, or commercializing products based on or incorporating inventions developed under the Sponsored Research Agreement and exclusively licensed to the Company from Broad or based on or incorporating CRISPR technology owned, co-owned, or controlled by Broad and otherwise licensed to the Company, subject to certain exclusions. As such, the Company will recognize the expenses and liability associated with each Research Funding Payment upon achievement of the associated Research Funding Payment conditions, if ever. The Company records this expense as a research and development expense in its statements of operations. Notes Payable In December 2016, in connection with the Company’s entry into the Cpf1 license agreement with Broad (the “Cpf1 License Agreement”), one of the 2016 License Agreements, the Company issued promissory notes in an aggregate principal amount of $10.0 million to Broad and Wageningen (the “Initial Notes”). Outstanding principal and accrued interest on the Initial Notes were due and payable on the earlier of December 2017 or a specified period of time following a Company sale or change of control event. The Initial Notes accrued interest at a rate of 4.8% per annum. The Company fully settled the outstanding principal and accrued interest on the Initial Notes by paying $0.2 million in cash to Wageningen in August 2017 and issuing 108,104 shares and 371,166 shares of common stock to Broad in August 2017 and September 2017, respectively. In March 2017, a $5.0 million Success Payment under the Cpf1 License Agreement became due upon the market capitalization of the Company’s common stock reaching $750 million. The Company issued a promissory note to each of Broad and Wageningen in an aggregate original principal amount of $5.0 million (collectively, the “March Success Payment Notes”). Outstanding principal and accrued interest on the March Success Payment Notes were due and payable in August 2017. The March Success Payment Notes were subject to the same interest and terms as the Initial Notes, other than the maturity date. The Company settled the outstanding principal and accrued interest on the March Success Payment Notes in August 2017 by paying $0.4 million in cash to Wageningen and issuing 271,347 shares of common stock to Broad in August 2017. In September 2017, Wageningen designated Broad as the recipient of any future promissory notes that are owed to Wageningen pursuant to the Cpf1 License Agreement. In December 2017, $7.5 million in Success Payments under the Cpf1 License Agreement and the Cas9-II license agreement with Broad (the “Cas9-II License Agreement”), one of the 2016 License Agreements, became due upon the Company’s market capitalization reaching $1.0 billion. The Company issued promissory notes to Broad in an aggregate original principal amount of $7.5 million (collectively, the “December Success Payment Notes”). Outstanding principal and accrued interest on the December Success Payment Notes were due and payable in May 2018. The December Success Payment Notes were subject to the same interest and terms as the Initial Notes, other than the maturity date. The Company fully settled the outstanding principal and accrued interest on the December Success Payment Notes by issuing 225,909 shares of common stock to Broad in January 2018. In June 2018, in connection with the Company’s entry into the Sponsored Research Agreement with Broad and the trigger of the Initial Research Payments, the Company issued promissory notes in an aggregate principal amount of $12.5 million to Broad (the “Initial Research Notes”) bearing interest at a rate of 4.8% annum, except with respect to $7.5 million of the principal, which would not start accruing interest until November 2018. The Company fully settled the outstanding principal and accrued interest on the Initial Research Notes by issuing 330,617 shares of common stock to Broad in June 2018. Litigation The Company is not a party to any litigation and did not have contingency reserves established for any litigation liabilities as of June 30, 2018 or December 31, 2017.

Significant Agreements	6 Months Ended
Significant Agreements	Jun. 30, 2018
Significant Agreements.
Significant Agreements	8. Significant Agreements Juno Therapeutics Collaboration Agreement Summary of Agreement In May 2015, the Company entered into a collaboration and license agreement (the “Collaboration Agreement”) with Juno Therapeutics and in May 2018 the Company and Juno Therapeutics entered into an amended and restated collaboration and license agreement (the Collaboration Agreement, as amended and restated, the “Amended Collaboration Agreement”). The collaboration is focused on the research and development of engineered T cells with chimeric antigen receptors (“CARs”) and T cell receptors (“TCRs”) that have been genetically modified to recognize and kill other cells. Pursuant to the Collaboration Agreement, the parties were pursuing the research and development of CAR and TCR engineered T cell products utilizing the Company’s genome editing technologies with Juno Therapeutics’ CAR and TCR technologies across three research areas, which was increased to four research areas under the Amended Collaboration Agreement. The collaborative program of research to be undertaken by the parties pursuant to the Amended Collaboration Agreement will be conducted in accordance with a mutually agreed upon research plan which outlines each party’s research and development responsibilities across the four research areas. The Company’s research and development responsibilities under the research plan are related to generating genome editing reagents that modify gene targets selected by Juno Therapeutics. Juno Therapeutics is responsible for evaluating and selecting for further research and development CAR and TCR engineered T cell products modified with the Company’s genome editing reagents. Except with respect to the Company’s obligations under the mutually agreed upon research plan, Juno Therapeutics has sole responsibility, at its own cost, for the worldwide research, development, manufacturing and commercialization of products within each of the four research areas for the diagnosis, treatment or prevention of any cancer in humans through the use of engineered T cells, excluding the diagnosis, treatment or prevention of medullary cystic kidney disease 1 (the “Exclusive Field”). The initial term of the research program commenced on May 26, 2015 and continues for five years ending on May 26, 2020 (the “Initial Research Program Term”). Juno Therapeutics may extend the Initial Research Program Term for up to two additional one year periods upon the payment of extension fees for each one year extension period, assuming the Company has agreed to the extension request(s) (together, the initial term and any extension period(s) are referred to as the “Research Program Term”). The Research Program Term and the optional extensions were not changed by the Amended Collaboration Agreement. Under the terms of the Collaboration Agreement, the Company granted to Juno Therapeutics during the Research Program Term a nonexclusive, worldwide, royalty‑free, non-sublicensable license under certain of the intellectual property controlled by the Company solely for the purpose of conducting the following activities required under the specified research under the Collaboration Agreement: (i) conduct activities assigned to Juno Therapeutics under the research plan, (ii) conduct activities assigned to the Company under the research plan that the Company fails or refuses to conduct in a timely manner, (iii) research, evaluate and conduct preclinical testing and development of certain engineered T cells relating to the three research areas that were originally the subject of the arrangement and (iv) evaluate the data developed in the conduct of activities under the research plan. Pursuant to the terms of the Amended Collaboration Agreement, the license rights granted to Juno Therapeutics were expanded to include, during the Research Program Term, a nonexclusive, worldwide, royalty‑free, non-sublicensable license under certain of the intellectual property controlled by the Company to: (i) research, evaluate and conduct preclinical testing and development of certain engineered T cells relating to the fourth research area and (ii) research, develop and use certain research tools (together, the initial research license granted per the terms of the Collaboration Agreement and the incremental research license granted per the terms of the Amended Collaboration Agreement are referred to as the “Research License”). As it relates to two of the three research areas that were originally the subject of the arrangement, under the terms of the Collaboration Agreement, the Company granted to Juno Therapeutics an exclusive, milestone and royalty‑bearing, sublicensable license under certain of the intellectual property controlled by the Company to research, develop, make and have made, use, offer for sale, sell, import and export selected CAR and TCR engineered T cell products in the Exclusive Field on a worldwide basis, specifically as it relates to certain targets selected by Juno Therapeutics pursuant to the research program. Furthermore, as it relates to the same two research areas, under the terms of the Collaboration Agreement, the Company granted to Juno Therapeutics a non‑exclusive, milestone and royalty‑bearing, sublicensable license under certain of the intellectual property controlled by the Company to use genome editing reagents generated under the research program that are used in the creation of certain CAR or TCR engineered T cell products on which Juno Therapeutics has filed an investigational new drug (“IND”) application in the Exclusive Field for the treatment or prevention of a cancer in humans to research, develop, make and have made, use, offer for sale, sell, import and export those CAR or TCR engineered T cell products in all fields outside of the Exclusive Field (the “Non‑Exclusive Field”) on a worldwide basis, specifically as it relates to certain targets selected by Juno Therapeutics pursuant to the research program (together, the license in the Exclusive Field and the license in the Non‑Exclusive Field are referred to as the “Development and Commercialization License” for each particular research area). Additionally, as it relates to the third research area that was originally the subject of the arrangement, under the terms of the Collaboration Agreement, the Company granted to Juno Therapeutics a milestone and royalty‑bearing, sublicensable license under certain of the intellectual property controlled by the Company to research, develop, make and have made, use, offer for sale, sell, import or export selected CAR and TCR engineered T cell products that utilize the genome editing reagents generated under the research program associated with those CAR and TCR engineered T cell products in the Exclusive Field on a worldwide basis, specifically as it relates to certain products selected by Juno Therapeutics pursuant to the research program. The license associated with the third research area is exclusive as it relates to CAR or TCR engineered T cell products directed to certain targets as selected by Juno Therapeutics, but is otherwise non‑exclusive (referred to as the “Development and Commercialization License” for the third research area). Pursuant to the terms of the Amended Collaboration Agreement, as it relates to the fourth area of research that was added to the collaboration, the Company granted to Juno Therapeutics a milestone and royalty‑bearing, sublicensable license under certain of the intellectual property controlled by the Company to research, develop, make and have made, use, offer for sale, sell, import or export selected CAR and TCR engineered T cell products that utilize the genome editing reagents generated under the research program associated with those CAR and TCR engineered T cell products in the Exclusive Field on a worldwide basis, specifically as it relates to certain products selected by Juno Therapeutics pursuant to the research program. The license associated with the fourth research area is exclusive as it relates to CAR or TCR engineered T cell products directed to certain targets as selected by Juno Therapeutics, but is otherwise non‑exclusive (referred to as the “Development and Commercialization License” for the fourth research area). The Amended Collaboration Agreement is being managed on an overall basis by a project leader from each of the Company and Juno Therapeutics. The project leaders serve as the contact point between the parties with respect to the research program and are primarily responsible for facilitating the flow of information, interaction, and collaboration between the parties. In addition, the research and development activities under the Amended Collaboration Agreement during the Research Program Term are governed by a joint research committee (“JRC”) formed by an equal number of representatives from the Company and Juno Therapeutics. The JRC oversees, reviews and recommends direction of the research program. Among other responsibilities, the JRC monitors and reports research progress and ensures open and frequent exchange between the parties regarding research program activities. The Amended Collaboration Agreement did not alter the governance provisions in the Collaboration Agreement. Under the terms of the Collaboration Agreement, the Company received a $25.0 million up‑front, non‑refundable, non‑creditable cash payment. In connection with the entry into the Amended Collaboration Agreement, the Company received an additional $5.0 million up-front, non-refundable, non-creditable cash payment. Moreover, the Company became entitled to receive two $2.5 million milestones related to technical progress in one of the research areas upon the execution of the Amended Collaboration Agreement. In addition, Juno Therapeutics is obligated to pay to the Company an aggregate of up to $22.0 million in research and development funding over the Initial Research Program Term across the four research areas consisting primarily of funding for up to a specified maximum number of full time equivalents personnel each year over the Initial Research Program Term across four research areas. Consistent with the terms of the Collaboration Agreement, under the terms of the Amended Collaboration Agreement, there is no incremental compensation due to the Company with respect to the Development and Commercialization License granted to Juno Therapeutics associated with the first target or product, as applicable, designated by Juno Therapeutics within each of the four research areas. However, for two of the three research areas that were originally the subject of the arrangement, Juno Therapeutics continues to have the option to purchase up to three additional Development and Commercialization Licenses associated with other gene targets for an additional fee of approximately $2.5 million per target. In addition, Juno Therapeutics is required to make certain milestone payments to the Company upon the achievement of specified development, regulatory and commercial events. More specifically, for the first product to achieve the associated event in each of the three research areas that were originally the subject of the arrangement, the Company is eligible to receive up to $77.5 million in development milestone payments and up to $80.0 million in regulatory milestone payments, while the Company is eligible to receive up to $80.0 million in development milestone payments and up to $80.0 million in regulatory milestone payments for the first product to achieve the associated event in the fourth area of research that was added to the collaboration. In addition, the Company is eligible to receive additional development and regulatory milestone payments for subsequent products developed within each of the four research areas. Moreover, the Company is eligible for up to $75.0 million in commercial milestone payments associated with aggregate sales of all products within each of the four research areas. Development milestone payments are generally triggered upon the achievement of certain specified development criteria or upon initiation of a defined phase of clinical research for a product candidate. Regulatory milestone payments are triggered upon approval to market a product candidate by the United States Food and Drug Administration (“FDA”) or other global regulatory authorities. Commercial milestone payments are triggered when an approved pharmaceutical product reaches certain defined levels of net sales by the licensee. The milestone payments and related triggering events associated with the three research areas that were originally the subject of the Collaboration Agreement were not modified in the Amended Collaboration Agreement. In addition, to the extent any of the product candidates covered by the licenses conveyed to Juno Therapeutics under the Amended Collaboration Agreement are commercialized, the Company would be entitled to receive tiered royalty payments of low double digits based on a percentage of net sales. Similar to the milestones, pursuant to the Amended Collaboration Agreement, the Company is eligible to receive an independent royalty stream associated with the fourth area of research that was added to the collaboration. Royalty payments are subject to certain reductions, including for any royalty payments required to be made by Juno Therapeutics related to a third‑party’s intellectual property rights, subject to an aggregate minimum floor. Royalties are due on a licensed product‑by‑licensed product and country‑by‑country basis from the date of the first commercial sale of each product in a country until the later of: (i) the tenth anniversary of the first commercial sale of such licensed product in such country and (ii) the expiration date in such country of the last to expire valid claim within the licensed intellectual property covering the manufacture, use or sale of such licensed product in such country. The Company achieved $2.5 million development milestones under the Collaboration Agreement resulting from technical progress in a research program in each of May 2016 and July 2017. The Company achieved two additional $2.5 million development milestones under the Amended Collaboration Agreement resulting from technical progress in a research program in May 2018. Due to the uncertainty of pharmaceutical development and the high historical failure rates generally associated with drug development, no additional milestone or royalty payments may ever be received from Juno Therapeutics. As of June 30, 2018, the next potential milestone payment that the Company may be entitled to receive under the Amended Collaboration Agreement is a milestone payment of $2.5 million for the achievement of certain development criteria. There are no cancellation, termination or refund provisions in the Amended Collaboration Agreement that contain material financial consequences to the Company. Unless earlier terminated, the Amended Collaboration Agreement will continue in full force and effect, on a licensed product‑by‑licensed product and country‑by‑country basis until the date no further payments are due to the Company from Juno Therapeutics. Either party may terminate the Amended Collaboration Agreement if the other party has materially breached or defaulted in the performance of any of its material obligations and such breach or default continues after the specified cure period. Either party may terminate the Amended Collaboration Agreement in the event of the commencement of any proceeding in or for bankruptcy, insolvency, dissolution or winding up by or against the other party that is not dismissed or otherwise disposed of within a specified time period. Juno Therapeutics may terminate the Amended Collaboration Agreement for convenience upon not less than six months prior written notice to the Company. The Company may terminate the Amended Collaboration Agreement in the event that Juno Therapeutics brings, assumes, or participates in, or knowingly, willfully or recklessly assists in bringing a dispute or challenge against the Company related to its intellectual property. Termination of the Amended Collaboration Agreement for any reason does not release either party from any liability which, at the time of such termination, has already accrued to the other party or which is attributable to a period prior to such termination nor preclude either party from pursuing any rights and remedies it may have under the agreement or at law or in equity with respect to any breach of the Amended Collaboration Agreement. If Juno Therapeutics terminates the Amended Collaboration Agreement as a result of the Company’s uncured material breach or default, then: (i) the licenses and rights conveyed to Juno Therapeutics will continue as set forth in the agreement, (ii) Juno Therapeutics’ obligations related to milestones and royalties will continue as set forth in the agreement and (iii) Juno Therapeutics’ rights to prosecute, maintain and enforce certain intellectual property rights will continue as set forth in the agreement. If Juno Therapeutics terminates the Amended Collaboration Agreement for convenience or if the Company terminates the Amended Collaboration Agreement as a result of Juno Therapeutics’ uncured material breach or default, then the licenses conveyed to Juno Therapeutics will terminate. The Amended Collaboration Agreement did not modify the termination provisions in the Collaboration Agreement. Accounting Analysis The Company evaluated the Amended Collaboration Agreement in accordance with the provisions of ASC 606. The Company has accounted for the amendment resulting from the Amended Collaboration Agreement as a modification to the original contract and not as a separate contract. The Company combined the Amended Collaboration Agreement with the Collaboration Agreement because the scope of the arrangement did not solely increase due to the addition of distinct promised goods or services with pricing that reflects the associated standalone selling prices. For the remaining goods and services that are distinct from the goods and services that were transferred on or before the date of the effectiveness of the Amended Collaboration Agreement, the Company has accounted for the modification on a prospective basis as if it were a termination of the existing contract and the creation of a new contract. Conversely, the remaining goods and services that are not distinct from the goods and services that were transferred on or before the date of the effectiveness of the Amended Collaboration Agreement were deemed to form part of a single performance obligation that is partially satisfied so they have been accounted for as part of the existing contract for which an adjustment was recorded on a cumulative catch-up basis at the date of the modification. The Company has identified the following performance obligations under the combined arrangement: (i) Research License and the related research and development services during the Initial Research Program Term (the “Research License and Related Services”), (ii) four material rights related to the first Development and Commercialization Licenses related to each of the four research areas (each, a “First Development and Commercialization License Material Right”) and (iii) six material rights related to the option to purchase up to three additional Development and Commercialization Licenses for two of the research areas (each, an “Additional Development and Commercialization License Material Right”). Upon exercise of the option to obtain a Development and Commercialization License under any of the four research areas, the Company will provide Juno Therapeutics with a license covering the further development and potential commercialization of the underlying target or product, as applicable. The Company has determined that the ability to obtain Development and Commercialization Licenses under the arrangement represents a material right because Juno Therapeutics is entitled to incremental licenses for additional consideration that represents a significant discount from amounts that would otherwise be offered for the related goods to comparable customers outside of the contract. The Company has concluded that the Research License is not distinct from the research and development services during the Initial Research Program Term as Juno Therapeutics cannot obtain the benefit of the Research License without the Company performing the research and development services. The services incorporate proprietary technology, unique skills and specialized expertise, particularly as it relates to genome editing technology that is not available in the marketplace. As a result, the Research License, inclusive of the incremental license granted in connection with the Amended Collaboration Agreement, has been combined with the research and development services into a bundled performance obligation. The Company has concluded that the First Development and Commercialization License Material Rights for each respective research area and the Additional Development and Commercialization License Material Rights for the two research areas to which they relate are each a separate performance obligation. These material rights, of which there are ten in total, are distinct from the other performance obligations in the arrangement as they are options in the contract that are not required for Juno Therapeutics to obtain the benefit of the other promised goods and services in the arrangement. Accordingly, in accounting for the modification resulting from the Amended Collaboration Agreement, the Research License and Related Services performance obligation was treated as part of the existing contract, whereas the material right performance obligations were treated as a termination of the existing contract and the creation of a new contract. As of May 3, 2018, the date of the modification and the Amended Collaboration Agreement, the total transaction price associated with the remaining consideration was determined to be $47.5 million, consisting of: (i) $25.0 million upfront non-refundable, non-creditable cash payment associated with the Collaboration Agreement, (ii) $5.0 million upfront non-refundable, non-creditable cash payment associated with the Amended Collaboration Agreement, (iii) $9.8 million of remaining research and development funding, (iv) $2.7 million of milestone payments received by the Company under the Collaboration Agreement that were not yet recognized as revenue and (v) $5.0 million of milestone payments due to the Company upon execution of the Amended Collaboration Agreement. The research and development funding is being paid by Juno Therapeutic to the Company based on the number of the Company’s full time equivalents of its personnel conducting the research under the Amended Collaboration Agreement. The Company utilizes the most likely amount method to determine the amount of research and development funding to be received. The Company also utilizes the most likely amount method to estimate any development and regulatory milestone payments to be received. As of June 30, 2018, there were no milestones that had not been earned and received included in the transaction price. The Company considers the stage of development and the risks associated with the remaining development required to achieve the milestone, as well as whether the achievement of the milestone is outside the control of the Company or Juno Therapeutics. The outstanding milestone payments were fully constrained as of June 30, 2018, as a result of the uncertainty whether any of the milestones will be achieved. The Company has determined that any commercial milestones and sales-based royalties will be recognized when the related sales occur as they were determined to relate predominantly to the license(s) to be granted and therefore have also been excluded from the transaction price. The Company reevaluates the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur. Through the date of the Amended Collaboration Agreement, the Company had recognized approximately $12.3 million of revenue associated with the Research License and Related Services which was excluded from the modification date transaction price. The modification date transaction price was allocated to the performance obligations based on the relative estimated standalone selling prices of each performance obligation or, in the case of certain variable consideration, to one or more performance obligations. The estimated standalone selling price for the Research License and Related Services is primarily based on the nature of the services to be performed and estimates of the associated effort and costs of the services, adjusted for a reasonable profit margin that would be expected to be realized under similar contracts. The Company developed the estimated standalone selling price for the material rights based on the difference between the value of the license granted and any additional consideration to be received upon exercise of the underlying option, adjusted for the probability of exercise. The value of the license granted was determined based on the probability-weighted present value of expected future cash flows associated with each license related to each specific research area. In developing such estimate, the Company also considered applicable market conditions and relevant entity-specific factors, including those factors contemplated in negotiating the agreement, probability of success and the time needed to commercialize a product candidate pursuant to the associated license. The modification date transaction price allocated to each performance obligation was as follows: (i) Research License and Related Services: $17.5 million, (ii) First Development and Commercialization License Material Right related to the first research area: $3.6 million, (iii) First Development and Commercialization License Material Right related to the second research area: $6.0 million, (iv) First Development and Commercialization License Material Right related to the third research area: $0.1 million, (v) First Development and Commercialization License Material Right related to the fourth research area: $18.3 million, (vi) the first Additional Development and Commercialization License Material Right for the first research area: $0.3 million, (vii) the second Additional Development and Commercialization License Material Right for the first research area: $0.2 million, (viii) the third Additional Development and Commercialization License Material Right for the first research area: $0.1 million, (ix) the first Additional Development and Commercialization License Material Right for the second research area: $0.8 million, (x) the second Additional Development and Commercialization License Material Right for the second research area: $0.5 million, and (xi) the third Additional Development and Commercialization License Material Right for the second research area: $0.3 million. The Company recognizes revenue related to amounts allocated to the Research License and Related Services as the underlying services are performed using a proportional performance model. The Company measures proportional performance based on full time employee hours relative to projected full time employee hours to complete the research services which best reflects the progress towards satisfaction of the performance obligation. Revenue related to each of the material rights will be recognized upon the earlier of when the respective options are exercised and the Company transfers control of the related license or when the respective options lapse. The rights to be conveyed to Juno Therapeutics pursuant to each of the Development and Commercialization Licenses extend exclusively to an individual target or product, as applicable; therefore, control is deemed to be transferred upon the designation by Juno Therapeutics of the specific target or product, as applicable, whereupon the license becomes effective upon Juno Therapeutics exercising their option. None of the options associated with the material rights had been exercised or had lapsed as of June 30, 2018. During the three months ended June 30, 2018 and 2017, the Company recognized revenue under the Collaboration Agreement and the Amended Collaboration Agreement totaling approximately $3.5 million and $0.7 million, respectively. During the six months ended June 30, 2018 and 2017, the Company recognized revenue under the Collaboration Agreement and the Amended Collaboration Agreement totaling approximately $4.5 million and $1.4 million, respectively. Included in the revenue recognized during the three months ended June 30, 2018 is approximately $3.0 million of additional revenue related to a cumulative catch-up adjustment. No revenue had been recognized through the date of the Amended Collaboration Agreement for the material rights performance obligations and there were no cumulative catch-up adjustments recorded for such performance obligations as a result of the modification. Amounts allocated to each of the material rights will be recognized as revenue prospectively when the material right has been exercised or when the respective option has lapsed. The revenue is classified as collaboration and other research and development revenue in the accompanying condensed consolidated statements of operations. As of June 30, 2018 and December 31, 2017, there was approximately $33.9 million and $26.4 million of deferred revenue, respectively, related to the Amended Collaboration Agreement and the Collaboration Agreement, respectively, of which $33.2 million and $26.4 million was classified as long term, respectively, in the accompanying condensed consolidated balance sheets. In addition, as of June 30, 2018 and December 31, 2017, the Company has recorded accounts receivable of $0.3 million and $0.5 million, respectively, related to reimbursable research and development costs under the Amended Collaboration Agreement and the Collaboration Agreement, respectively, for activities performed during the second quarter of 2018 and fourth quarter of 2017, respectively. During the three months ended June 30, 2018, the Company accrued $1.7 million in sublicense fees that were owed to certain of the Company’s licensors in connection with the Amended Collaboration Agreement, which the Company recorded as accrued expenses and research and development expenses during such period. The Company did not pay any sublicense fees during the three or six months ended June 30, 2017 related to the Amended Collaboration Agreement. Allergan Pharmaceuticals Strategic Alliance and Option Agreement Summary of Agreement In March 2017, the Company entered into a Strategic Alliance and Option Agreement with Allergan to discover, develop, and commercialize new gene editing medicines for a range of ocular disorders (the “Allergan Agreement”). Over a seven-year research term, Allergan will have an exclusive option to exclusively license from the Company up to five collaboration development programs for the treatment of ocular disorders (each a “CDP”), including the Company’s Leber Congenital Amaurosis type 10 program (the “LCA10 Program”). Under the Allergan Agreement, the Company will use commercially reasonable efforts to develop at least five CDPs and deliver preclinical results and data meeting specified criteria with respect to each CDP (each, an “Option Package” and such criteria, the “Option Package Criteria”) to Allergan. The list of proposed targets that may be subject to a CDP may be amended from time to time by mutual agreement of the Company and Allergan. The Company is responsible for the preparation and delivery of a written development plan for each particular CDP setting forth the discovery and research activities to be conducted which is subject to the approval of the alliance steering committee that was formed under the Allergan Agreement, comprised of three members from each of the Company and Allergan (the “Steering Committee”). The Company will maintain primary responsibility for the development efforts under each CDP. The Company is responsible for all research and development costs prior to the achievement of the Option Package Criteria. Allergan will have the ability for a defined period of time (“Initial Option Period”) to exercise an option (each, an “Option”) to obtain a world-wide right and license to the Company’s background intellectual property and the Company’s interest in the CDP intellectual property to develop, commercialize, make, have made, use, offer for sale, sell, and import any gene editing therapy product that results from such CDP during the term of the Allergan Agreement (a “Licensed Product”) in any category of human diseases and conditions other than the diagnosis, treatment or prevention of any cancer in humans through the use of engineered T-cells and subject to specified other limitations. Allergan has the option to extend the Initial Option Period and require the Company to perform additional research and development services, subject to the payment of additional consideration. After exercise of an Option with respect to a CDP, with the exception of any CDP’s where the Company has exercised its profit-sharing option, Allergan will be responsible for all development, manufacturing, and commercialization activities in connection with licensed products arising from such CDP, other than with respect to the LCA10 Program, if LCA10 is designated as a CDP, for which the Company has retained the right to develop that program through the acceptance for filing of the first IND with respect to the LCA10 Program. Upon achievement of IND approval for LCA10, unless the Company has exercised its profit sharing option on LCA10, Allergan will be responsible for all development, manufacturing, and commercialization activities. The initial term of the Allergan Agreement commenced on March 14, 2017 and continues for seven years ending on March 14, 2024 (the “Research Term”). If the Company has not delivered an Option Package, which includes the results and data from the CDP, for five CDPs that satisfy the Option Package Criteria, then the Research Term will automatically extend by one-year increments until such obligation is satisfied, up to a maximum of ten years from March 2017. The activities under the Allergan Agreement during the Research Term will be governed by the Steering Committee. The Steering Committee will review and monitor the direction of the development plan, evaluate and determine which targets are selected to become CDP, establish the Option Package Criteria for each CDP and evaluate the achievement of such criteria as well as oversee the development and commercialization activities after Allergan has licensed a CDP. Under the terms of the Allergan Agreement, the Company received a $90.0 million up‑front, non‑refundable, non‑creditable cash payment (the “Allergan Upfront”) related to the Company’s research and development costs for Option Packages for at least five CDPs and for reimbursement of the Company’s past out of pocket costs with respect to the prosecution and defense of patents that it owns and in-licenses. Allergan has the option to purchase at least five development and commercialization licenses associated CDP that have satisfied the Option Package Criteria. The option exercise fee during the Initial Option Period is $15.0 million per CDP. If Allergan elects to extend the Initial Option Period, Allergan is required to pay an additional fee of $5.0 million to extend the option, at which point the Company is required to perform additional research services. If Allergan elects to exercise its option to a development and commercialization license after extending the Initial Option Period, Allergan must pay the Company the option exercise fee of $22.5 million, plus specified costs incurred by the Company in connection with the additional development work. Following the exercise by Allergan of an Option with respect to a CDP, Allergan would be required to make certain milestone payments to the Company upon the achievement of specified development, product approval and launch and commercial events, on a CDP by CDP basis. On a CDP by CDP basis, for the first product in the first field to achieve the associated event, the Company is eligible to receive up to an aggregate of $42 million for development milestone payments and $75.0 million for product approval and launch milestone payments, in each case, for an indication in the field per CDP. In addition, the Company is eligible to receive additional development and product approval and launch milestone payments for subsequent products developed within two additional fields. The Company is also eligible for up to $90 million in sales milestone payments on a CDP by CDP basis, associated with aggregate worldwide sales. Certain product approval milestones are subject to certain reductions under specified circumstances, including for payments required to be made by Allergan to obtain certain third party intellectual property rights. In addition, within 45 days of the acceptance by the applicable regulatory authority of the Company’s submission of an IND application with respect to the LCA10 Program, Allergan is required to pay the Company a one-time payment of $25.0 million (the “LCA10 IND Payment”), whether or not Allergan exercises its option under the Allergan Agreement to acquire an exclusive license with respect to the LCA10 Program. As of June 30, 2018, the next potential milestone payment that the Company may be entitled to receive under the Allergan Agreement is a milestone payment of $8.0 million for the achievement of certain development criteria. With respect to the LCA10 Program and up to one other CDP of the Company’s choosing, following the exercise by Allergan of its Option to such programs, the Company will have the right to elect to participate in a profit-sharing arrangement with Allergan in the United States, on terms mutually agreed by the Company and Allergan and subject to a right of Allergan to reject such election under certain circumstances, under which the Company and Allergan would share equally in net profits and losses on specific terms to be agreed between the Company and Allergan, in lieu of Allergan paying royalties on net sales of any applicable Licensed Products in the United States, and in such event Allergan’s milestone payment obligations would be reduced, with the Company being eligible to receive development and product approval and launch milestone payments up to a low nine-digit amount in the aggregate and further sales milestone payments up to a high-eight digit amount in the aggregate, subject to reduction under certain circumstances. If the Company elects to participate in a profit-sharing arrangement, the Company is obligated to reimburse Allergan for half of the development costs incurred by Allergan with respect to the applicable CDP, and Allergan will retain control of all development and commercialization activities for the applicable Licensed Products. In addition, to the extent there is any Licensed Product, the Company would be entitled to receive tiered royalty payments of high single digits based on a percentage of net sales of such Licensed Product, subject to certain reductions under specified circumstances, and the Company will remain obligated to pay all license fees, milestone payments, and royalties due to its upstream licensors based on Allergan’s exercise of its license rights with respect to Licensed Products. However, if a Licensed Product is subject to a profit sharing agreement the royalties will only be paid on ex-U.S. net sales. Royalties are due on a Licensed Product‑by‑Licensed Product and country‑by‑country basis from the date of the first commercial sale of each Licensed Product in a country until the later of: (i) the tenth anniversary of the first commercial sale of such Licensed Product in such country, (ii) the expiration date in such country of the last to expire valid claim within the licensed intellectual property covering the manufacture, use or sale of such Licensed Product in such country and (iii) the expiration of an exclusive legal right granted by the regulatory authority in such country to market and sell such Licensed Product. Unless earlier terminated, the Allergan Agreement will terminate upon (i) the expiration of the Research Term, if Allergan does not exercise an Option, (ii) on a Licensed Product-by-Licensed Product and country-by-country basis, on the date of the expiration of all payment obligations under the Allergan Agreement with respect to such Licensed Product in such country or (iii) in its entirety upon the expiration of all payment obligations with respect to the last Licensed Product in all countries, unless terminated earlier due to the early termination provisions. Either party may terminate the Allergan Agreement if the other party has materially breached or defaulted in the performance of any of its material obligations and such breach or default continues after the specified cure period. During the Research Term, Allergan will have the right to terminate the Allergan Agreement on a CDP by CDP basis in the event of a change in control of the Company or for all CDPs, provided that Allergan will not have any right to exercise an Option for any CDPs following such termination. After the exercise of an Option, Allergan will have the right, at its sole discretion, to terminate the Allergan Agreement, on a CDP by CDP basis, upon 90 days’ written notice. The Company may terminate the Allergan Agreement in the event that Allergan brings, assumes, or participates in, or knowingly, willfully or recklessly assists in bringing a dispute or challenge against the Company related to its intellectual property. Lastly, Allergan may terminate the Allergan Agreement with respect to a CDP if a safety concern, as specified in the Allergan Agreement, arises. Termination of the Allergan Agreement for any reason will not release either party from any liability which, at the time of such termination, has already accrued to the other party or which is attributable to a period prior to such termination. In addition, termination of the Allergan Agreement will not preclude either party from pursuing any rights and remedies it may have under the agreement or at law or in equity with respect to any breach of the Allergan Agreement. If Allergan terminates the Allergan Agreement as a result of the Company’s uncured material breach or default, then: (i) the licenses and rights conveyed to Allergan will continue as set forth in the agreement for any CDP Allergan has already licensed and (ii) Allergan’s obligations related to milestones and royalties will continue as set forth in the agreement. If the Allergan Agreement is terminated for any other reason, then the options and licenses conveyed to Allergan under the agreement will terminate. Accounting Analysis Under the Allergan Agreement, the Company has identified a single performance obligation that includes (i) the research and development services during the Research Term (the “Allergan R&D Services”), and (ii) Steering Committee services during the Research Term (the “ASC Services”). The Company has concluded that the Allergan R&D Services is not distinct from the ASC Services during the Research Term. The Steering Committee provides oversight and management of the overall Allergan Agreement, and the members of the Steering Committee from the Company have specialized industry knowledge, particularly as it relates to genome editing technology. The Steering Committee is meant to facilitate the early stage research being performed and coordinate the activities of both the Company and Allergan. Further, the Steering Committee services are critical to the selection of a CDP, the ongoing evaluation of a CDP and the development and evaluation of the Option Package Criteria. Accordingly, the Company’s participation on the Steering Committee is essential to Allergan receiving value from the Allergan R&D Services and as such, the ASC Services along with the Allergan R&D Services are considered one performance obligation (the “CDP Services”). In addition, the Company has concluded that the option to purchase five development and commercialization licenses is considered a marketing offer as the options did not provide any discounts or other rights that would be considered a material right in the arrangement. As of January 1, 2018, the date of the initial application of ASC 606 by the Company, the total transaction price was determined to be $90.0 million, consisting solely of the upfront non-refundable, non-creditable cash payment. The Company also utilized the most likely amount method to estimate any development and regulatory milestone payments to be received. As of January 1, 2018, there were no milestones included in the transaction price. The Company considered the stage of development and the risks associated with the remaining development required to achieve the milestone, as well as whether the achievement of the milestone is outside the control of the Company or Allergan. The LCA10 IND Payment and outstanding milestone payments were fully constrained, as a result of the uncertainty whether any of the milestones would be achieved. The Company has determined that any commercial milestones and sales-based royalties will be recognized when the related sales occur and therefore have also been excluded from the transaction price. The Company will re-evaluate the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur. There were no changes to the transaction price during the six months ended June 30, 2018. The Company will recognize revenue related to the CDP Services as the underlying services are performed using a proportional performance model. The Company measures proportional performance based on full time employee hours relative to projected full time employee hours to complete the research service. During the three and six months ended June 30, 2018, the Company recognized revenue totaling approximately $2.9 million with respect to the Allergan Agreement. During the three and six months ended June 30, 2017, the Company recognized revenue totaling approximately $2.4 million with respect to the Allergan Agreement. As of June 30, 2018 and December 31, 2017, there was $77.8 million and $81.2 million of deferred revenue related to the Allergan Agreement, respectively, of which $71.7 million and $68.3 million is classified as long-term on the condensed consolidated balance sheet, respectively. During the three and six months ended June 30, 2017, the Company recorded $5.1 million and $7.3 million, respectively, in sublicense fees that were owed to certain of the Company’s licensors in connection with the Allergan Upfront, which the Company recorded as research and development expenses during such period. The Company did not pay any sublicense fees related to the Allergan Agreement during the three or six months ended June 30, 2018. Broad Sponsored Research Agreement Summary of Agreement The Sponsored Research Agreement provides for Broad to conduct research useful or relevant to genome editing in the field of genomic medicines for the prevention or treatment of human disease with funding from the Company. Under the Sponsored Research Agreement, Broad granted to the Company an exclusive right of first negotiation for licenses from Broad with respect to patentable inventions developed by Broad in the course of the sponsored research, subject to certain limitations and retained rights (“Sponsored Invention Licenses”). Under the Sponsored Research Agreement, the Company is obligated to make Market Cap Research Funding payments in the event the Company’s market capitalization reaches specified thresholds ranging from a mid-nine digit dollar amount to a low-eleven digit dollar amount or Company Sale Research Funding payments in the event of a Company sale for consideration ranging from a mid-nine digit dollar amount to a low-eleven digit dollar amount. In connection with entering into the Sponsored Research Agreement, the Company confirmed that the first two research payments of $5.0 million and $7.5 million, respectively, were due and payable to Broad. In connection with the Initial Research Payments, the Company issued promissory notes to Broad that it settled in common stock in June 2018 as discussed more fully in Note 7. The $12.5 million in research funding expense was recorded to research and development expenses during the three months ended June 30, 2018. Other than the Initial Research Payments, the Company is not required to make additional Research Funding Payments if the Company, whether directly or through its affiliates or sublicensees, is not researching, developing, or commercializing products based on or incorporating inventions exclusively licensed to the Company from Broad under Sponsored Invention Licenses or based on or incorporating CRISPR technology owned, co-owned, or controlled by Broad and otherwise licensed to the Company, subject to certain exclusions (an “Applicable Product” and such exemption from payment, the “Funding Exemption”). In the event that the Company, whether directly or through its affiliates or sublicensees, later resumes research, development, or commercialization of an Applicable Product within a specified period of time, any Research Funding Payment that was not paid to Broad as a result of the Funding Exemption shall become payable. Under the Sponsored Research Agreement, the Company is obligated to pay up to $125.0 million to Broad in Research Funding, inclusive of the Initial Research Payments, and in no event shall the aggregate amount of all Research Funding Payments exceed such amount. Unless the Company has undergone a change in control, Market Cap Research Funding is payable by the Company in cash, common stock, or in the form of promissory notes, which may be settled in shares of common stock at the election of the Company, as discussed more fully in Note 7. Following a change in control of the Company, Company Sale Research Funding is required to be made in cash. The Sponsored Research Agreement is terminable by each party upon the occurrence of specified bankruptcy events of the other party and otherwise will continue in effect until the later of the expenditure of all Research Funding Payments by Broad and such time as the Company has no further rights of first negotiation for Sponsored Invention Licenses, unless otherwise mutually agreed between the parties. Beam Therapeutics License Agreement Summary of Agreement In May 2018, the Company entered into a license agreement with Beam (the “Beam License Agreement”). Beam is a biotechnology company focused on developing precision genetic medicines using technology that converts a single nucleobase into a different nucleobase (“Base Editing”). Pursuant to the Beam License Agreement, the Company granted to Beam licenses and options to acquire licenses to certain intellectual property rights owned or controlled by the Company, for specified uses. More specifically, the Company granted to Beam a worldwide, exclusive (subject to certain exceptions), sublicensable (subject to certain conditions), license under certain intellectual property controlled by the Company for the use of Base Editing therapies for the treatment of any field of human diseases and conditions, subject to certain exceptions (the “Beam Field,” and the licenses granted or to be granted under the Beam License Agreement, the “Beam Development and Commercialization License”). Additionally, the Company granted to Beam a royalty-free, non-exclusive license under certain intellectual property owned or controlled by the Company to perform research activities in the Beam Field (the “Beam Research License”). The Company provided Beam with an exclusive option to obtain a Beam Development and Commercialization License to three additional groups of intellectual property owned or controlled by the Company, on a group by group basis, during the specified option period, subject to certain exceptions. Pursuant to the Beam License Agreement, Beam will use commercially reasonable efforts to develop a product that includes the rights licensed to Beam within a specified period of time and to commercialize any such product that have received regulatory approval in certain specified countries. As consideration for the license and option rights granted to Beam, the Company received a nominal one-time, non-refundable, non-creditable upfront cash payment. The Company also received non-cash consideration, consisting of a low to mid-single digit million number of shares of Beam Series A-1 and A-2 preferred stock, having an aggregate fair value of approximately $3.6 million. The Company is eligible to receive additional consideration if Beam elects to exercise its option to obtain a Beam Development and Commercialization License to the three categories of intellectual property underlying the Research License, for a fee ranging from a mid-teen million dollar amount to a low to mid-eight digit dollar amount per group, depending on the timing of the option exercise. Additionally, Beam is required to reimburse the Company for certain payments the Company may be obligated to make under the Company’s existing license agreements related to the intellectual property being licensed to Beam, including (i) development, regulatory and commercial milestone payments and certain sublicense income payments due as a result of the Beam License Agreement and (ii) a percentage of the annual maintenance fees and patent fees due to certain of the Company’s licensors. In addition, to the extent any products are commercialized under a Beam Development and Commercialization License, the Company would be entitled to receive royalty payments equivalent to the royalties that would be due from the Company to any applicable licensors of the Company related to the sales of such licensed products, plus an additional low single-digit percentage royalty. Additionally, if Beam exercises its right to obtain a Beam Development and Commercialization License to one of the categories of optioned intellectual property comprising Company-owned intellectual property and any related licensed products that are commercialized, the Company would be entitled to tiered low single-digit royalty payments related to sales of such licensed products. The license rights and option rights granted to Beam are subject to the terms and conditions of the underlying license agreements that the Company is a party to and under which the Company licensed rights or option rights to Beam and the termination of such in-licenses, as applicable. Unless earlier terminated by either party pursuant to the terms of the agreement, the Beam License Agreement will continue in full force and effect and will expire on a licensed product-by-licensed product and country-by-country basis upon the expiration of the royalty term with respect to such licensed product in such country. Beam has the right, at its sole discretion, at any time to terminate the Beam License Agreement in its entirety or on a group-by-group of intellectual property basis, upon ninety days written notice to the Company. Upon termination of the Beam License Agreement, all rights and licenses granted by the Company to Beam (including the rights to exercise options and obtain such licenses) will immediately terminate and patents within a group of patents will no longer be deemed licensed patents. Expiration or termination of the Beam License Agreement for any reason does not release either party of any obligation or liability which had accrued or which is attributable to a period prior to such expiration or termination. Accounting Analysis The Company has identified the following performance obligations (i) the Beam Development and Commercialization License and (ii) the Beam Research License. In addition, the Company has concluded the option to obtain additional Beam Development and Commercialization Licenses to up to three additional groups of patents in the future is considered a marketing offer as the options did not provide any discounts or other rights that would be considered a material right in the arrangement. The total transaction price at the inception of the arrangement was determined to be approximately $3.8 million, consisting of the upfront cash payment and non-cash consideration related to the shares of Beam preferred stock. The Company determined the fair value based on the price paid by other unrelated investors for such shares. The consideration associated with the exercise of the option(s) will be accounted for if and when Beam elects to purchase the additional licenses. The other forms of consideration, including the development and regulatory milestone reimbursement, the sublicense income reimbursement, the maintenance fee reimbursement and the patent costs reimbursement were estimated based on the most-likely amount and were excluded from the initial transaction price as the most-likely amount was estimated to be zero or the amount was otherwise fully constrained due to the significant uncertainties surrounding such payments. The commercial-based milestone reimbursement and the sales-based royalty payments will be recognized when the related sales occur as they were determined to relate predominantly to the licenses granted and therefore have also been excluded from the transaction price. The total transaction price at the inception of the arrangement was allocated to the performance obligations in the aggregate, as the Beam Development and Commercialization License and the Beam Research License were delivered simultaneously with one another, at inception of the arrangement, when the licenses were made available for Beam’s use and benefit. Accordingly, the satisfaction of each performance obligation occurs at inception of the arrangement and the transaction price at the inception of the arrangement is recognized in its entirety at such time. The Company will re-evaluate the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur. There were no changes to the transaction price during the three or six months ended June 30, 2018. During the three and six months ended June 30, 2018, the Company recognized revenue under the Beam License Agreement of approximately $3.9 million. The revenue is classified as collaboration and other research and development revenue in the accompanying condensed consolidated statement of operations and the Beam preferred stock is classified in restricted cash and other non-current assets. Other Agreements Licensing Agreements 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. The following is a summary of such in-license agreements that are significant to the Company’s business. Massachusetts General Hospital Agreements In August 2014, the Company entered into an agreement to license certain patent rights owned or co‑owned by MGH. Consideration for the granting of the license included the payment of an upfront license fee of $0.1 million, the issuance of 66,848 shares of the Company’s common stock, which was based on 0.5% of the Company’s outstanding stock on a fully diluted basis, and the right to receive future issuances of shares of common stock to maintain MGH’s ownership following the third tranche of the Company’s Series A redeemable convertible preferred stock financing (i.e. anti‑dilution protection liability), which was settled in June 2015. MGH is entitled to receive nominal annual license fees and future clinical, regulatory and commercial milestone payments in an aggregate maximum amount of $3.7 million and an aggregate amount of $1.8 million upon the occurrence of certain sales milestones. The Company is also obligated to pay MGH low single digit percentage royalties on net sales of products for the prevention or treatment of human disease and ranging from low single digit to low double digit percentage royalties on net sales of other products and services made by the Company, its affiliates or its sublicenses. The royalty percentage depends on the product and service, and whether such licensed product or licensed service is covered by a valid claim within the certain patent rights that the Company licenses from MGH. In August 2016, the Company entered into a license agreement with MGH (the “2016 MGH Agreement”) to license certain patent rights owned or co-owned by MGH (the “Additional MGH Patent Rights”). Consideration for granting the license included the payment of an upfront nonrefundable license fee of $0.8 million, which the Company recorded as research and development expense in 2016. Under the 2016 MGH Agreement, MGH is entitled to nominal annual license fees, clinical and regulatory milestone payments totaling less than $1.0 million in the aggregate per licensed product up to four licensed products or processes to achieve the specified clinical and regulatory milestones, and commercial sales milestone payments totaling up to $4.9 million in the aggregate, consisting of milestone payments due upon the first commercial sales for up to four licensed products or processes and milestone payments due upon annual net sales of products or processes meeting specified thresholds. The Company is also obligated to pay MGH royalties of less than 1% on net sales of products and processes for the prevention or treatment of human disease, and royalties of a low single-digit percentage on net sales of products and processes for the prevention or treatment of a non-human animal disease, made by the Company, its affiliates, or its sublicensees. The royalty percentages that the Company is obligated to pay are subject to reduction if at the time of sale the applicable product or process is not covered by a valid claim within the Additional MGH Patent Rights. Under the 2016 MGH Agreement, the Company is obligated to reimburse MGH for all patent costs and future reasonable costs associated with the prosecution, filing, and maintenance of the licensed patents. MGH is also entitled under the 2016 MGH Agreement to receive payments of up to $6.0 million in the event the Company’s market capitalization reaches specified thresholds meeting or exceeding $1.0 billion, on or prior to the expiration or termination of the 2016 MGH Agreement (or if earlier, a Company sale) (“MGH Market Cap Success Payments”) or a Company sale for consideration in excess of those thresholds (“MGH Company Sale Success Payments”). Additional MGH Market Cap Success Payments become payable, and the amount of potential MGH Company Sale Success Payments would increase further, if the Company’s market capitalization reaches additional higher thresholds and the Company has at least one product candidate that is covered by a claim of an Additional MGH Patent Right and that (i) is the subject of a Phase 1 clinical trial of which the Company or an affiliate or sublicensee of the Company is the sponsor, (ii) was the subject of a Phase 1 clinical trial of which the Company or an affiliate or sublicensee of the Company was the sponsor with the Company having determined to conduct a subsequent clinical trial with respect to such product candidate, or (iii) has been approved for sale in either the United States or European Union. MGH Market Cap Success Payments are payable in cash or shares of Company common stock at the Company’s discretion, and MGH Company Sale Success Payments are payable solely in cash. The Company triggered the first MGH Market Cap Success Payment under the 2016 MGH Agreement during the fourth quarter of 2017 when the Company’s market capitalization reached $1.0 billion, as discussed more fully in Note 7. Cas9-I License Agreement In October 2014, the Company entered into an agreement (the “Cas9-I License Agreement”) with Broad and Harvard to license certain patent rights owned or co‑owned by, or among, Broad, the Massachusetts Institute of Technology (“MIT”), and Harvard (collectively, the “Institutions”). Consideration for the granting of the license included the payment of an upfront license issuance fee of $0.2 million and the issuance of 561,531 shares of the Company’s common stock. The Institutions are collectively entitled to receive clinical and regulatory milestone payments totaling up to $14.8 million in the aggregate per licensed product approved in the United States, European Union, and Japan for the treatment of a human disease that afflicts at least a specified number of patients in the aggregate in the United States. If the Company undergoes a change of control during the term of the license agreement, the clinical and regulatory milestone payments will be increased by a certain percentage in the mid‑double digits. The Company is also obligated to make additional payments to the Institutions, collectively, of up to an aggregate of $54.0 million upon the occurrence of certain sales milestones per licensed product for the treatment of a human disease that afflicts at least a specified number of patients in the aggregate in the United States. The Institutions are collectively entitled to receive clinical and regulatory milestone payments totaling up to $4.1 million in the aggregate per licensed product approved in the U.S. and at least one jurisdiction outside the U.S. for the treatment of a human disease based on certain criteria. The Company is also obligated to make additional payments to the Institutions, collectively, of up to an aggregate of $36.0 million upon the occurrence of certain sales milestones per licensed product for the treatment of a rare disease meeting certain criteria. The Institutions are entitled to receive from the Company nominal annual license fees and a mid‑single digit percentage royalties on net sales of products for the prevention or treatment of human disease and ranging from low single digit to high single digit percentage royalties on net sales of other products and services, made by the Company, its affiliates, or its sublicensees. The royalty percentage depends on the product and service, and whether such licensed product or licensed service is covered by a valid claim within the certain patent rights that the Company licenses from the Institutions. In December 2016, the Company entered into the Cpf1 License Agreement with Broad, for specified patent rights (the “Cpf1 Patent Rights”) related primarily to Cpf1 compositions of matter and their use for gene editing. Concurrently with entering into the Cpf1 License Agreement, the Company, Broad, and Harvard amended and restated the Cas9-I License Agreement as described below and the Company and Broad entered into the Cas9‑II License Agreement for specified patent rights (the “Cas9-II Patent Rights”) related primarily to certain Cas9 compositions of matter and their use for genome editing. The Company paid an upfront fee in aggregate of $16.5 million, which included the Initial Notes, under these agreements which was recorded in research and development expenses during 2016. Cpf1 License Agreement Pursuant to the Cpf1 License Agreement, Broad, on behalf of itself, Harvard, MIT, Wageningen, and the University of Tokyo (“UTokyo” and, together with Broad, Harvard, MIT, and Wageningen, the “Cpf1 Institutions”) granted the Company an exclusive, worldwide, royalty‑bearing, sublicensable license to the Cpf1 Patent Rights, to make, have made, use, have used, sell, offer for sale, have sold, export and import products in the field of the prevention or treatment of human disease using gene therapy, editing of genetic material, or targeting of genetic material, subject to certain limitations and retained rights (collectively, the “Cpf1 Exclusive Field”), as well as a non‑exclusive, worldwide, royalty‑bearing sublicensable license to the Cpf1 Patent Rights for all other purposes, subject to certain limitations and retained rights. The Company is obligated to use commercially reasonable efforts to research, develop, and commercialize products in the Cpf1 Exclusive Field. The Company is also required to achieve certain development milestones within specified time periods for products covered by the Cpf1 Patent Rights, with Broad having the right to terminate the Cpf1 License Agreement if the Company fails to achieve these milestones within the required time periods. Broad and Wageningen are collectively entitled to receive clinical and regulatory milestone payments totaling up to $20.0 million in the aggregate per licensed product approved in the United States, European Union, and Japan for the prevention or treatment of a human disease that afflicts at least a specified number of patients in the aggregate in the United States. The Company is also obligated to make additional payments to Broad and Wageningen, collectively, of up to an aggregate of $54.0 million upon the occurrence of certain sales milestones per licensed product for the prevention or treatment of a human disease that afflicts at least a specified number of patients in the aggregate in the United States. Broad and Wageningen are collectively entitled to receive clinical and regulatory milestone payments totaling up to $6.0 million in the aggregate per licensed product approved in the United States, European Union and Japan for the prevention or treatment of a human disease that afflicts fewer than a specified number of patients in the aggregate in the United States or a specified number of patients per year in the United States (an “Ultra‑Orphan Disease”). The Company is also obligated to make additional payments to Broad and Wageningen, collectively, of up to an aggregate of $36.0 million upon the occurrence of certain sales milestones per licensed product for the prevention or treatment of an Ultra‑Orphan Disease. Broad and Wageningen, collectively, are entitled to receive, on a product‑by‑product and country‑by‑country basis, mid single‑digit percentage royalty on net sales of licensed products for the prevention or treatment of human disease, and royalties on net sales of other licensed products and licensed services, made by the Company, its affiliates, or its sublicensees. The royalty percentage depends on the product and service, and whether such licensed product or licensed service is covered by a valid claim within the Cpf1 Patent Rights. If the Company is legally required to pay royalties to a third party on net sales of the Company’s products because such third party holds patent rights that cover such licensed product, then the Company can credit up to a specified percentage of the amount paid to such third party against the royalties due to Broad and Wageningen in the same period. Such credit may not exceed 50% of the applicable royalties paid by the Company to the applicable third party. The Company’s obligation to pay royalties will expire on a product‑by‑product and country‑by‑country basis upon the later of the expiration of the last to expire valid claim of the Cpf1 Patent Rights that covers each licensed product or service in each country or the tenth anniversary of the date of the first commercial sale of the licensed product or licensed service. If the Company sublicenses any of the Cpf1 Patent Rights to a third party, Broad and Wageningen, collectively, have the right to receive sublicense income, depending on the stage of development of the products or services in question at the time of the sublicense. Under the Cpf1 License Agreement, Broad and Wageningen are also entitled, collectively, to receive success payments in the event the Company’s market capitalization reaches specified thresholds (the “Cpf1 Market Cap Success Payments”) or a Company sale for consideration in excess of those thresholds (the “Cpf1 Company Sale Success Payments” and, collectively with the Cpf1 Market Cap Success Payments, the “Cpf1 Success Payments”). The Cpf1 Success Payments payable to Broad and Wageningen are triggered when the Company’s market capitalization reaches certain amounts ranging from $750.0 million to $10.0 billion for a specified period of time, and collectively the Cpf1 Success Payments will not exceed, in aggregate, $125.0 million, which maximum amount would be payable only if the Company reaches a market capitalization threshold of $10.0 billion and has at least one product candidate covered by a claim of a patent right licensed to the Company under either the Cpf1 License Agreement or the Cas9‑I License Agreement that is or was the subject of a clinical trial pursuant to development efforts by the Company or any Company affiliate or sublicensee. The Cpf1 Market Cap Success Payments are payable by the Company in cash or in the form of promissory notes on substantially the same terms and conditions as the Initial Notes, as described more fully in Note 7, except that the maturity date of such notes will, subject to certain exceptions, be 150 days following issuance. Following a change in control of the Company, Cpf1 Market Cap Success Payments are required to be made in cash. Cpf1 Company Sale Success Payments are payable solely in cash. The Company triggered the first and second Cpf1 Success Payments during 2017 when the Company’s market capitalization reached $750 million and $1.0 billion, respectively, as described more fully in Note 7. Unless terminated earlier, the term of the Cpf1 License Agreement will expire on a country‑by‑country basis, upon the expiration of the last to expire valid claim of the Cpf1 Patent Rights in such country. The Company has the right to terminate the Cpf1 License Agreement at will upon four months’ written notice to Broad. Either party may terminate the Cpf1 License Agreement upon a specified period of notice in the event of the other party’s uncured material breach of a material obligation, such notice period varying depending on the nature of the breach. Broad may terminate the Cpf1 License Agreement immediately if the Company challenges the enforceability, validity, or scope of any Cpf1 Patent Right or assist a third party to do so, or in the event of the Company’s bankruptcy or insolvency. Amendment and Restatement of Cas9-I License Agreement In December 2016, the Company amended and restated the Cas9‑I License Agreement (such agreement, as amended, the “Amended and Restated Cas9-I License Agreement”) to exclude additional fields from the scope of the exclusive license previously granted to the Company, to make the exclusive license to three targets become non‑exclusive, subject to the limitation that each of Broad and Harvard would only be permitted to grant a license to only one third party at a time with respect to each such target within the field of the exclusive license, and to revise certain provisions relating to the rights of Harvard and Broad to grant further licenses under specified circumstances to third parties that wish to develop and commercialize products that target a particular gene and that otherwise would fall within the scope of the exclusive license under this agreement, so that Harvard and Broad together would have rights substantially similar to the equivalent rights possessed by Broad under the Cpf1 License Agreement to designate gene targets for which the designating institution, whether alone or together with an affiliate or third party, has an interest in researching and developing products that would otherwise be covered by rights licensed by Harvard and/or Broad to the Company under this agreement, the Cpf1 License Agreement or the Cas9‑II License Agreement. In March 2017, the Company and Harvard and Broad further amended the Amended and Restated Cas9-I License Agreement to (i) grant an exclusive license from Broad to the Company with respect to certain patent rights that The Rockefeller University (“Rockefeller”) has or may have rights in and to and for which Rockefeller has, under a certain inter-institutional agreement that Broad and Rockefeller entered into in February 2017, appointed Broad as sole and exclusive agent for the purposes of licensing and (ii) provide to Rockefeller certain rights, including with respect to patent enforcement, indemnification, insurance, confidentiality, reservation of certain rights, and publicity, that are generally consistent with those granted to Broad, Harvard, MIT and the Howard Hughes Medical Institute under the Amended and Restated Cas9-I License Agreement. Cas9‑II License Agreement Pursuant to the Cas9‑II License Agreement, Broad, on behalf of itself, MIT, Harvard, and the University of Iowa Research Foundation, granted the Company an exclusive, worldwide, royalty bearing sublicensable license to certain of the Cas9‑II Patent Rights as well as a non‑exclusive, worldwide, royalty‑bearing sublicensable license to all of the Cas9‑II Patent Rights, in each case on terms substantially similar to the licenses granted to the Company under the Cpf1 License Agreement except, among other things, for the following commitment amounts. Under the Cas9‑II License Agreement, the Company will pay an upfront license fee in a low seven digit dollar amount and will have to pay an annual license maintenance fee. The Company is obligated to pay clinical and regulatory milestone payments per licensed product approved in the United States, European Union and Japan for the prevention or treatment of a human disease that afflicts at least a specified number of patients in the aggregate in the United States totaling up to $3.7 million in the aggregate, and sales milestone payments for any such licensed product totaling up to $13.5 million in the aggregate. In addition, the Company is obligated to pay clinical and regulatory milestone payments totaling up to $1.1 million in the aggregate per licensed product approved in the United States and the European Union or Japan for the prevention or treatment of a human disease that afflicts fewer than a specified number of patients in the United States, plus sales milestone payments of up to $9.0 million for any such licensed product. Consistent with the Cpf1 License Agreement, the licensors are entitled to royalties on net sales of products for the prevention or treatment of human disease and other products and services made by the Company, its affiliates, or its sublicensees. Royalties due under other license agreements are creditable against these royalties up to a specified amount in the same period. Lastly, Broad is entitled to receive success payments if the Company’s market capitalization reaches specified thresholds ascending from $1.0 billion to $9.0 billion or upon a sale of the Company for consideration in excess of those thresholds. The potential success payments range from a low seven digit dollar amount to a low eight digit dollar amount and will not exceed, in aggregate, $30.0 million, which maximum amount would be owed only if the Company reaches a market capitalization threshold of $9.0 billion and has at least one product candidate covered by a claim of a patent right licensed to the Company under either the Cas9-I License Agreement or the Cas9-II License Agreement that is or was the subject of a clinical trial pursuant to development efforts by the Company or any Company affiliate or sublicensee. The Company triggered the first Success Payment under the Cas9-II Agreement during the fourth quarter of 2017 when the Company’s market capitalization reached $1.0 billion, which the Company settled in January 2018, as more fully described in Note 7.

Stock-based Compensation

6 Months Ended

Jun. 30, 2018

Stock-based Compensation

Stock-based Compensation

9. Stock‑based Compensation

Total compensation cost recognized for all stock‑based compensation awards in the Company’s condensed consolidated statements of operations was as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Research and development	$	3,996	$	3,086	$	7,906	$	6,699
General and administrative		3,028		1,930		5,646		4,120
Total stock-compensation expense	$	7,024	$	5,016	$	13,552	$	10,820

Restricted Stock

From time to time, upon approval by the Company’s board of directors, certain employees and advisors have been granted restricted shares of common stock. These shares of restricted stock are subject to repurchase rights. Accordingly, the Company has recorded the proceeds from the issuance of restricted stock as a liability in the condensed consolidated balance sheets included as a liability. The restricted stock liability is reclassified into stockholders’ equity as the restricted stock vests. A summary of the status of and changes in unvested restricted stock as of December 31, 2017 and June 30, 2018 is as follows:


		Weighted
		Average
		Grant Date
		Fair Value
	Shares	Per Share
Unvested Restricted Common Stock as of December 31, 2017	513,225	$	18.70
Issued	—		—
Vested	(207,225)	$	4.90
Forfeited	—		—
Unvested Restricted Common Stock as of June 30, 2018	306,000	$	28.05

For the six months ended June 30, 2018, the expense for restricted stock awards related to non-employees and employees was $1.3 million and $0, respectively.

As of June 30, 2018, the Company had no unrecognized stock‑based compensation expense related to its employee unvested restricted stock awards and $10.8 million in unrecognized stock-based compensation expense related to its non-employee unvested restricted stock awards.

Stock Options

Certain of the Company’s stock option agreements allow for the exercise of unvested awards. During 2014, options to purchase 75,304 shares of common stock for $0.03 per share were exercised prior to their vesting. The unvested shares are subject to repurchase by the Company if the employees cease to provide service to the Company, with or without cause. As such, the Company does not treat the exercise of unvested options as a substantive exercise. The Company recorded the proceeds from the exercise of unvested stock options as a liability in the condensed consolidated balance sheets. The liability for unvested common stock subject to repurchase was reclassified into stockholders’ equity as the shares vested. As of June 30, 2018, the early exercise stock options were fully vested.

The following is a summary of stock option activity for the six months ended June 30, 2018:


		Weighted Average		Remaining	Aggregate Intrinsic
	Shares	Exercise Price		Contractual Life (years)	Value (in thousands)
Outstanding at December 31, 2017	4,372,136	$	17.28	8.5	$	60,591
Granted	1,563,735	$	36.55	—		—
Exercised	(501,475)	$	13.90	—		—
Cancelled	(332,717)	$	24.59	—		—
Outstanding at June 30, 2018	5,101,679	$	23.07	8.2	$	67,289
Exercisable at June 30, 2018	1,724,036	$	17.00	7.6	$	32,982

The table above reflects restricted stock issued upon exercise of unvested stock options as exercised on the dates that the shares are no longer subject to repurchase. The Company had no unvested restricted common stock outstanding at June 30, 2018 and had 4,572 shares of unvested restricted common stock outstanding at December 31, 2017, resulting from the exercise of unvested stock options.

Using the Black‑Scholes option pricing model, the weighted average fair value of options granted to employees and directors during the six months ended June 30, 2018 and 2017 was $25.85 and $16.67, respectively. The expense related to options granted to employees and directors was $9.7 million and $5.9 million for the six months ended June 30, 2018 and 2017, respectively.

The fair value of each option issued to employees and directors was estimated at the date of grant using the Black‑Scholes option pricing model with the following weighted‑average assumptions:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Risk free interest rate	2.8	%	2.0	%	2.6	%	2.1	%
Expected dividend yield	—		—		—		—
Expected term (in years)	6.25		6.25		6.25		6.25
Expected volatility	78.3	%	77.0	%	79.9	%	77.9	%

There were no options issued to persons other than employees and directors during the six months ended June 30, 2018. As of June 30, 2018, the Company had unrecognized stock‑based compensation expense related to its employee and director stock options of $58.6 million which the Company expects to recognize over the remaining weighted average vesting period of 2.67 years.

Net Loss per Share

6 Months Ended

Jun. 30, 2018

Net Loss per Share

Net Loss per Share

10. Net Loss per Share

Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of common shares and potentially dilutive securities outstanding for the period determined using the treasury stock and if converted methods. Contingently issuable shares are included in the calculation of basic loss per share as of the beginning of the period in which all the necessary conditions have been satisfied. Contingently issuable shares are included in diluted loss per share based on the number of shares, if any, that would be issuable under the terms of the arrangement if the end of the reporting period was the end of the contingency period, if the results are dilutive.

For purposes of the diluted net loss per share calculation, stock options are considered to be common stock equivalents, but they were excluded from the Company’s calculation of diluted net loss per share allocable to common stockholders because their inclusion would have been anti-dilutive. Therefore, basic and diluted net loss per share applicable to common stockholders was the same for all periods presented.

Upon the closing of the 2018 January Offerings, the 2017 December Offering and the 2017 March Offering, the Company sold 1,429,205 shares, 2,265,500 shares and 4,600,000 shares of common stock, respectively. The issuance of these shares resulted in a significant increase in the Company’s weighted-average shares outstanding for the six months ended June 30, 2018 and 2017 and is expected to continue to impact the year-over-year comparability of the Company’s net loss per share calculations for the next six months.

The following common stock equivalents were excluded from the calculation of diluted net loss per share allocable to common stockholders because their inclusion would have been anti-dilutive:


	As of June 30,
	2018	2017
Unvested restricted common stock	306,000	428,153
Outstanding stock options	5,101,679	4,444,708
Estimated number of shares issuable for convertible notes (1)	—	913,115
Total	5,407,679	5,785,976

Represents the number of shares that would have been issued if the Company had elected to pay the Initial Notes and March Success Payment Notes, as discussed more fully in Note 7, in shares of the Company’s common stock, based on the closing price of the common stock on June 30, 2017. The number of shares issued, for purposes of this presentation, is calculated by dividing the principal of the notes payable, including accrued interest, by such closing price.

The table above reflects restricted stock issued upon exercise of unvested stock options as exercised on the dates that the shares are no longer subject to repurchase.

Related-party Transactions	6 Months Ended
Related-party Transactions	Jun. 30, 2018
Related-party Transactions
Related-party Transactions	11. Related‑Party Transactions The Company received $0.4 million and $0.4 million in rent and facility-related fees from a related party in the six months ended June 30, 2018 and 2017, respectively.

Subsequent Events	6 Months Ended
Subsequent Events	Jun. 30, 2018
Subsequent Events
Subsequent Events	12. Subsequent Events In July 2018, Allergan exercised its Option with respect to the LCA10 Program and paid the Company $15.0 million in connection with such exercise. Following Allergan’s exercise of such Option, the Company elected to exercise its U.S. profit sharing option with respect to the LCA10 Program.

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2018

Summary of Significant Accounting Policies

Unaudited Interim Financial Information

Use of Estimates

Revenue Recognition

Equity Securities

Recent Accounting Pronouncements

Recent Accounting Pronouncements –Adopted



	June 30,
	2018		2017
Cash and cash equivalents	$	131,924	$	144,096
Restricted cash included in "Restricted cash and other non-current assets"		1,619		1,619
Total	$	133,543	$	145,715

The following table presents changes in the Company’s deferred revenue balance as of January 1, 2018 resulting from adoption of ASC 606 (in thousands):


	Balance at December 31, 2017		Adjustments		Balance at January 1, 2018
Contract liabilities:
Deferred revenue	$	(107,963)	$	(474)	$	(108,437)


For the six months ended June 30, 2018	Balance at December 31, 2017		Additions		Deductions		Balance at June 30, 2018
Accounts receivable	$	679	$	362	$	(679)	$	362
Contract liabilities:
Deferred revenue	$	(107,963)	$	(8,122)	$	3,770	$	(112,315)

During the three and six months ended June 30, 2018, the Company recognized revenue as a result of the following (in thousands):


		Three Months Ended		Six Months Ended
Revenue recognized in the period from:	June 30, 2018
Amounts included in deferred revenue at the beginning of the period	$	875	$	3,770
Performance obligations satisfied in previous periods	$	2,566	$	2,566

For additional information regarding revenue recognition from contracts with customers, refer to Note 8.

The Company has included the following financial statement line items for comparability purposes as of and for the three and six months ended June 30, 2018 (in thousands):


		Three Months Ended June 30, 2018
	As reported under Topic 606		Balances without adoption of ASC 606		Effect of Change
Collaboration and other research and development revenues	$	7,372	$	6,107	$	1,265
Operating loss	$	(39,657)	$	(40,922)	$	1,265
Net loss attributable to common stockholders	$	(38,723)	$	(39,988)	$	1,265
Net loss per share attributable to common stockholders, basic and diluted	$	(0.82)	$	(0.85)	$	0.03


		Six Months Ended June 30, 2018
	As reported under Topic 606		Balances without adoption of ASC 606		Effect of Change
Collaboration and other research and development revenues	$	11,299	$	9,959	$	1,340
Operating loss	$	(71,216)	$	(72,556)	$	1,340
Net loss attributable to common stockholders	$	(69,661)	$	(71,001)	$	1,340
Net loss per share attributable to common stockholders, basic and diluted	$	(1.50)	$	(1.53)	$	0.03


		As of June 30, 2018
	As reported under Topic 606		Balances without adoption of ASC 606		Effect of Change
Deferred revenue, current	$	7,386	$	13,431	$	(6,045)
Deferred revenue, net of current portion	$	104,929	$	89,972	$	14,957
Accumulated deficit	$	(375,985)	$	(377,325)	$	1,340

Recent Accounting Pronouncements – Issued But Not Yet Adopted

Summary of significant accounting policies (Tables)

6 Months Ended

Jun. 30, 2018

Summary of Significant Accounting Policies

Schedule of cash, cash equivalents, and restricted cash

The following table presents cash, cash equivalents and restricted cash as reported on the condensed consolidated balance sheets that equal the total amounts on the condensed consolidated statements of cash flows (in thousands):



	June 30,
	2018		2017
Cash and cash equivalents	$	131,924	$	144,096
Restricted cash included in "Restricted cash and other non-current assets"		1,619		1,619
Total	$	133,543	$	145,715

Schedule of contract assets and liabilities

The following table presents changes in the Company’s deferred revenue balance as of January 1, 2018 resulting from adoption of ASC 606 (in thousands):


	Balance at December 31, 2017		Adjustments		Balance at January 1, 2018
Contract liabilities:
Deferred revenue	$	(107,963)	$	(474)	$	(108,437)

Schedule of accounts receivable and contract liabilities

The following table presents changes in the Company’s accounts receivable and contract liabilities for the six months ended June 30, 2018 (in thousands):


For the six months ended June 30, 2018	Balance at December 31, 2017		Additions		Deductions		Balance at June 30, 2018
Accounts receivable	$	679	$	362	$	(679)	$	362
Contract liabilities:
Deferred revenue	$	(107,963)	$	(8,122)	$	3,770	$	(112,315)

Schedule of change in contract assets and contract liabilities

During the three and six months ended June 30, 2018, the Company recognized revenue as a result of the following (in thousands):


		Three Months Ended		Six Months Ended
Revenue recognized in the period from:	June 30, 2018
Amounts included in deferred revenue at the beginning of the period	$	875	$	3,770
Performance obligations satisfied in previous periods	$	2,566	$	2,566

Schedule of financial statement line items for comparability purposes

The Company has included the following financial statement line items for comparability purposes as of and for the three and six months ended June 30, 2018 (in thousands):


		Three Months Ended June 30, 2018
	As reported under Topic 606		Balances without adoption of ASC 606		Effect of Change
Collaboration and other research and development revenues	$	7,372	$	6,107	$	1,265
Operating loss	$	(39,657)	$	(40,922)	$	1,265
Net loss attributable to common stockholders	$	(38,723)	$	(39,988)	$	1,265
Net loss per share attributable to common stockholders, basic and diluted	$	(0.82)	$	(0.85)	$	0.03


		Six Months Ended June 30, 2018
	As reported under Topic 606		Balances without adoption of ASC 606		Effect of Change
Collaboration and other research and development revenues	$	11,299	$	9,959	$	1,340
Operating loss	$	(71,216)	$	(72,556)	$	1,340
Net loss attributable to common stockholders	$	(69,661)	$	(71,001)	$	1,340
Net loss per share attributable to common stockholders, basic and diluted	$	(1.50)	$	(1.53)	$	0.03


		As of June 30, 2018
	As reported under Topic 606		Balances without adoption of ASC 606		Effect of Change
Deferred revenue, current	$	7,386	$	13,431	$	(6,045)
Deferred revenue, net of current portion	$	104,929	$	89,972	$	14,957
Accumulated deficit	$	(375,985)	$	(377,325)	$	1,340

Cash Equivalents, Marketable Securities and Equity Securities (Tables)

6 Months Ended

Jun. 30, 2018

Cash Equivalents, Marketable Securities and Equity Securities

Cash Equivalents, Marketable Securities and Equity Securities

Cash equivalents, marketable securities and equity securities consisted of the following at June 30, 2018 (in thousands):


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
June 30, 2018	Cost		Gains		Losses		Value
Cash equivalents and marketable securities:
Money market funds	$	120,683	$	—	$	—	$	120,683
U.S. Treasuries		175,254		5		—		175,259
Government agency securities		47,896		—		(4)		47,892
Equity securities included in other non-current assets:
Corporate equity securities		3,667		—		—		3,667
Total	$	347,500	$	5	$	(4)	$	347,501

Cash equivalents and marketable securities consisted of the following at December 31, 2017 (in thousands):


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2017	Cost		Gains		Losses		Value
Cash equivalents and marketable securities:
Money market funds	$	134,635	$	—	$	—	$	134,635
U.S. Treasuries		135,601		—		(47)		135,554
Government agency securities		58,979		—		(29)		58,950
Total	$	329,215	$	—	$	(76)	$	329,139

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2018

Fair Value Measurements

Schedule of assets measured at fair value on a recurring basis

Assets measured at fair value on a recurring basis as of June 30, 2018 were as follows (in thousands):


			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
	June 30,		Identical Assets		Inputs		Inputs
Financial Assets	2018		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market funds	$	120,683	$	120,683	$	—	$	—
U.S. Treasuries		10,995		10,995		—		—
Marketable securities:
U.S. Treasuries		164,264		164,264		—		—
Government agency securities		47,892		47,892		—		—
Restricted cash and other non-current assets:
Corporate equity securities		3,667		—		3,667		—
Money market funds		1,619		1,619		—		—
Total financial assets	$	349,120	$	345,453	$	3,667	$	—

Assets measured at fair value on a recurring basis as of December 31, 2017 were as follows (in thousands):


			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
	December 31,		Identical Assets		Inputs		Inputs
Financial Assets	2017		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents
Money market funds	$	134,635	$	134,635	$	—	$	—
U.S. Treasuries		11,995		11,995		—		—
Marketable securities:
U.S. Treasuries		123,559		123,559		—		—
Government agency securities		58,950		58,950		—		—
Money market funds, included in restricted cash		1,619		1,619		—		—
Total financial assets	$	330,758	$	330,758	$	—	$	—

Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2018

Accrued Expenses

Schedule of accrued expenses

Accrued expenses consisted of the following (in thousands):


	As of
	June 30,		December 31,
	2018		2017
Employee related expenses	$	2,882	$	3,708
Process and platform development expenses		2,786		2,301
Intellectual property and patent related fees		2,630		2,370
Sublicensing and success payment expenses		2,177		2,000
Other expenses		554		670
Total	$	11,029	$	11,049

Property and Equipment, net (Tables)

6 Months Ended

Jun. 30, 2018

Property and Equipment, net

Schedule of property and equipment, net

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


	As of
	June 30,		December 31,
	2018		2017
Building	$	35,167	$	35,167
Laboratory equipment		9,009		7,415
Computer equipment		733		550
Leasehold improvements		177		177
Furniture and office equipment		145		95
Software		118		96
Total property and equipment		45,349		43,500
Less: accumulated depreciation		(5,434)		(4,058)
Property and equipment, net	$	39,915	$	39,442

Stock-based Compensation (Tables)

6 Months Ended

Jun. 30, 2018

Stock-based Compensation

Schedule of stock-based compensation expense

Total compensation cost recognized for all stock‑based compensation awards in the Company’s condensed consolidated statements of operations was as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Research and development	$	3,996	$	3,086	$	7,906	$	6,699
General and administrative		3,028		1,930		5,646		4,120
Total stock-compensation expense	$	7,024	$	5,016	$	13,552	$	10,820

Schedule of changes in unvested restricted stock


		Weighted
		Average
		Grant Date
		Fair Value
	Shares	Per Share
Unvested Restricted Common Stock as of December 31, 2017	513,225	$	18.70
Issued	—		—
Vested	(207,225)	$	4.90
Forfeited	—		—
Unvested Restricted Common Stock as of June 30, 2018	306,000	$	28.05

Schedule of stock option activity


		Weighted Average		Remaining	Aggregate Intrinsic
	Shares	Exercise Price		Contractual Life (years)	Value (in thousands)
Outstanding at December 31, 2017	4,372,136	$	17.28	8.5	$	60,591
Granted	1,563,735	$	36.55	—		—
Exercised	(501,475)	$	13.90	—		—
Cancelled	(332,717)	$	24.59	—		—
Outstanding at June 30, 2018	5,101,679	$	23.07	8.2	$	67,289
Exercisable at June 30, 2018	1,724,036	$	17.00	7.6	$	32,982

Schedule of assumptions used to value stock options


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Risk free interest rate	2.8	%	2.0	%	2.6	%	2.1	%
Expected dividend yield	—		—		—		—
Expected term (in years)	6.25		6.25		6.25		6.25
Expected volatility	78.3	%	77.0	%	79.9	%	77.9	%

Net Loss per Share (Tables)

6 Months Ended

Jun. 30, 2018

Net Loss per Share

Schedule of anti-dilutive common stock equivalents


	As of June 30,
	2018	2017
Unvested restricted common stock	306,000	428,153
Outstanding stock options	5,101,679	4,444,708
Estimated number of shares issuable for convertible notes (1)	—	913,115
Total	5,407,679	5,785,976

Nature of Business (Details) - USD ($) $ in Thousands	1 Months Ended
Nature of Business (Details) - USD ($) $ in Thousands	Jan. 31, 2018	Dec. 31, 2017	Mar. 31, 2017	Feb. 29, 2016	Jun. 30, 2018
Liquidity
Accumulated deficit		$ (305,850)			$ (375,985)
Initial Public Offering
Liquidity
Aggregate net proceeds				$ 97,500
2017 March Offering
Liquidity
Aggregate net proceeds			$ 96,700
2017 December Offering
Liquidity
Aggregate net proceeds		$ 57,200
2018 January Offerings
Liquidity
Aggregate net proceeds	$ 48,500

Summary Of Significant Accounting Policies - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017	Dec. 31, 2016
Cash, Cash Equivalents, and Restricted Cash
Cash and cash equivalents	$ 131,924	$ 146,630	$ 144,096
Restricted cash included in "Restricted cash and other non-current assets"	1,619		1,619
Total	$ 133,543	$ 148,249	$ 145,715	$ 186,942

Summary Of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands		6 Months Ended
	Jan. 01, 2018	Jun. 30, 2018
Accounts receivable
Accounts receivable, Balance at Beginning of Period	$ 679	$ 679
Accounts Receivable, Additions		362
Accounts Receivable, Deductions		(679)
Accounts receivable, Balance at End of Period		362
Contract liabilities, deferred Revenue:
Deferred revenue, Balance at Beginning of Period	(107,963)	(107,963)
Deferred revenue, Additions		(8,122)
Deferred revenue, Deductions		3,770
Deferred revenue, Balance at End of Period		(112,315)
Effect of Change \| ASU 2014-09
Contract liabilities, deferred Revenue:
Deferred revenue, Balance at Beginning of Period	(107,963)	$ (107,963)
Deferred revenue, Adjustments	(474)
Deferred revenue, Balance at End of Period	$ (108,437)

Summary Of Significant Accounting Policies - Contract asset and liability (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018
Change in contract asset and contract liability balances
Amounts included in the contract liability at the beginning of the period	$ 875	$ 3,770
Performance obligations satisfied in previous periods	$ 2,566	$ 2,566

Summary Of Significant Accounting Policies - Financial statements (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Collaboration and other research and development revenues	$ 7,372		$ 11,299
Operating loss	(39,657)	$ (26,115)	(71,216)	$ (56,742)
Net loss attributable to common stockholders	$ (38,723)	$ (26,439)	$ (69,661)	$ (57,536)
Net loss per share attributable to common stockholders, basic and diluted	$ (0.82)	$ (0.65)	$ (1.50)	$ (1.49)
Deferred revenue, current	$ 7,386		$ 7,386		$ 13,238
Deferred revenue, net of current portion	104,929		104,929		94,725
Accumulated deficit	(375,985)		(375,985)		$ (305,850)
As originally reported under Topic 606 \| ASU 2014-09
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Collaboration and other research and development revenues	6,107		9,959
Operating loss	(40,922)		(72,556)
Net loss attributable to common stockholders	$ (39,988)		$ (71,001)
Net loss per share attributable to common stockholders, basic and diluted	$ (0.85)		$ (1.53)
Deferred revenue, current	$ 13,431		$ 13,431
Deferred revenue, net of current portion	89,972		89,972
Accumulated deficit	(377,325)		(377,325)
Effect of Change \| ASU 2014-09
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Collaboration and other research and development revenues	1,265		1,340
Operating loss	1,265		1,340
Net loss attributable to common stockholders	$ 1,265		$ 1,340
Net loss per share attributable to common stockholders, basic and diluted	$ 0.03		$ 0.03
Deferred revenue, current	$ (6,045)		$ (6,045)
Deferred revenue, net of current portion	14,957		14,957
Accumulated deficit	$ 1,340		$ 1,340

Cash Equivalents, Marketable Securities and Equity Securities (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2018 USD ($) item	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Cash Equivalents, Marketable Securities and Equity Securities
Amortized Cost	$ 347,500		$ 329,215
Gross Unrealized Gains	5
Gross Unrealized Losses	(4)		(76)
Fair Value	$ 347,501		329,139
Equity securities included in other non-current assets:
Number of securities in an unrealized loss position \| item	15
Securities held by the Company in an unrealized loss position for less than 12 months	$ 86,600
Number of securities in an unrealized loss position for more than 12 months \| item	0
Realized gains (losses) on available-for-sale securities	$ 0	$ 0
Government agency securities
Cash Equivalents, Marketable Securities and Equity Securities
Amortized Cost	47,896		58,979
Gross Unrealized Losses	(4)		(29)
Fair Value	47,892		58,950
Corporate equity securities
Equity securities included in other non-current assets:
Amortized Cost	3,667
Fair Value	3,667
Money market funds
Cash Equivalents, Marketable Securities and Equity Securities
Amortized Cost	120,683		134,635
Fair Value	120,683		134,635
U.S. Treasuries
Cash Equivalents, Marketable Securities and Equity Securities
Amortized Cost	175,254		135,601
Gross Unrealized Gains	5
Gross Unrealized Losses			(47)
Fair Value	$ 175,259		$ 135,554

Fair Value Measurements - Recurring Basis (Details) $ in Thousands, item in Millions	6 Months Ended
	Jun. 30, 2018 USD ($) item	Dec. 31, 2017 USD ($)
Financial Assets
Marketable securities	$ 347,501	$ 329,139
Transfers between levels \| item	0.0
Government agency securities
Financial Assets
Marketable securities	$ 47,892	58,950
Corporate equity securities
Financial Assets
Amortized Cost	3,667
Money market funds
Financial Assets
Marketable securities	120,683	134,635
U.S. Treasuries
Financial Assets
Marketable securities	175,259	135,554
Recurring
Financial Assets
Total financial assets	349,120	330,758
Recurring \| U.S. Treasuries
Financial Assets
Marketable securities	164,264	123,559
Recurring \| Government agency securities
Financial Assets
Marketable securities	47,892	58,950
Recurring \| Corporate equity securities
Financial Assets
Amortized Cost	3,667
Recurring \| Money market funds
Financial Assets
Cash and cash equivalents	120,683	134,635
Restricted cash	1,619	1,619
Recurring \| U.S. Treasuries
Financial Assets
Cash and cash equivalents	10,995	11,995
Recurring \| Level 1
Financial Assets
Total financial assets	345,453	330,758
Recurring \| Level 1 \| U.S. Treasuries
Financial Assets
Marketable securities	164,264	123,559
Recurring \| Level 1 \| Government agency securities
Financial Assets
Marketable securities	47,892	58,950
Recurring \| Level 1 \| Money market funds
Financial Assets
Cash and cash equivalents	120,683	134,635
Restricted cash	1,619	1,619
Recurring \| Level 1 \| U.S. Treasuries
Financial Assets
Cash and cash equivalents	10,995	$ 11,995
Recurring \| Level 2
Financial Assets
Total financial assets	3,667
Recurring \| Level 2 \| Corporate equity securities
Financial Assets
Amortized Cost	$ 3,667

Accrued Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Accrued Expenses
Employee related expenses	$ 2,882	$ 3,708
Process and platform development expenses	2,786	2,301
Intellectual property and patent related fees	2,630	2,370
Sublicensing and success payment expenses	2,177	2,000
Other expenses	554	670
Total	$ 11,029	$ 11,049

Property and Equipment, net (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Property and equipment disclosures
Total property and equipment	$ 45,349	$ 43,500
Less: accumulated depreciation	(5,434)	(4,058)
Property and equipment, net	39,915	39,442
Building
Property and equipment disclosures
Total property and equipment	35,167	35,167
Laboratory equipment
Property and equipment disclosures
Total property and equipment	9,009	7,415
Computer equipment
Property and equipment disclosures
Total property and equipment	733	550
Leasehold improvements
Property and equipment disclosures
Total property and equipment	177	177
Software
Property and equipment disclosures
Total property and equipment	118	96
Furniture and office equipment
Property and equipment disclosures
Total property and equipment	$ 145	$ 95

Commitments and Contingencies - Operating Leases (Details) $ in Millions	6 Months Ended
	Jun. 30, 2018	Feb. 28, 2017 ft²	Feb. 29, 2016 USD ($) ft²
Hurley Street Lease
Commitments and contingencies
Leased space ( in square feet)			59,783
Security deposit \| $			$ 1.6
Estimated useful life	30 years
Extended lease option (in years)	5 years
Facility Sublease Arrangement
Commitments and contingencies
Leased space ( in square feet)		10,000

Commitments and Contingencies - Research Funding Payments (Details) - Sponsored Research Agreement - Broad $ in Millions	1 Months Ended
	Jun. 30, 2018 USD ($)
Commitments and contingencies
First research funding amount due and payable	$ 5.0
Second research funding amount due and payable	7.5
Promissory notes issued	12.5
Research Funding Payments
Commitments and contingencies
First research funding amount due and payable	5.0
Second research funding amount due and payable	$ 7.5

Commitments and Contingencies - Notes Payable (Details) - USD ($) $ in Millions	1 Months Ended								3 Months Ended
	Jun. 30, 2018	Mar. 31, 2018	Jan. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Aug. 31, 2017	Mar. 31, 2017	Dec. 31, 2016	Dec. 31, 2017
2016 License Agreements
Commitments and contingencies
Market Capitalization				$ 1,000.0			$ 750.0		$ 1,000.0
Broad and Wageningen University \| 2016 License Agreements
Notes Payable
Promissory notes issued		$ 5.0
Broad and Wageningen University \| Cpf1 License Agreement
Notes Payable
Promissory notes issued								$ 10.0
Interest rate (as a percentage)								4.80%
Success Payments							5.0
Broad and Wageningen University \| Cpf1 License Agreement \| Success Payment Notes
Notes Payable
Promissory notes issued							$ 5.0
Broad \| 2016 License Agreements
Notes Payable
Promissory notes issued				7.5
Broad \| Cpf1 License Agreement
Notes Payable
Common stock issued					371,166	108,104
Broad \| Cpf1 License Agreement \| Success Payment Notes
Notes Payable
Promissory notes issued				7.5
Common stock issued			225,909			271,347
Success Payments				$ 7.5
Broad \| Sponsored Research Agreement
Notes Payable
Promissory notes issued	$ 12.5
Common stock issued	330,617
Broad \| Sponsored Research Agreement \| Initial Notes
Notes Payable
Promissory notes issued	$ 12.5
Interest rate (as a percentage)	4.80%
Wageningen University \| Cpf1 License Agreement
Notes Payable
Notes paid in cash						$ 0.2
Wageningen University \| Cpf1 License Agreement \| Success Payment Notes
Notes Payable
Notes paid in cash						$ 0.4
The General Hospital (MGH) \| 2016 License Agreements
Notes Payable
Success Payments									$ 2.0

Significant Agreements - Summary of Agreement (Details) $ in Thousands	1 Months Ended					2 Months Ended	3 Months Ended		6 Months Ended
	May 31, 2018 USD ($) item	Jul. 31, 2017 USD ($)	Mar. 31, 2017 USD ($) item	May 31, 2016 USD ($)	May 31, 2015 USD ($) item	Jun. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($) item	Jun. 30, 2017 USD ($)	May 03, 2018 USD ($)	Dec. 31, 2017 USD ($)
Collaboration and other research and development revenues							$ 7,372		$ 11,299
Research and development							32,718	$ 17,318	54,017	$ 36,339
Deferred revenue						$ 112,315	112,315		112,315			$ 107,963
Deferred revenue, long-term						104,929	104,929		104,929			94,725
Accounts receivable						362	362		362			679
Juno Therapeutics
Allocable arrangement consideration - R&D Services Unit of Accounting											$ 17,500
Allocable arrangement consideration - Development and Commercialization License for the first research area											3,600
Allocable arrangement consideration - Development and Commercialization License for the second research area											6,000
Allocable arrangement consideration - Development and Commercialization License for the third research area											100
Allocable arrangement consideration - Development and Commercialization License for the fourth research area											18,300
Allocable arrangement consideration - First additional Development and Commercialization License for the first research area											300
Allocable arrangement consideration - Second additional Development and commercialization license for the first research area											200
Allocable arrangement consideration - Third additional Development and commercialization license for the first research area											100
Allocable arrangement consideration - First additional Development and commercialization license for the second research area											800
Allocable arrangement consideration - Second additional Development and commercialization license for the second research area											500
Allocable arrangement consideration - Third additional Development and commercialization license for the second research area											$ 300
Collaboration and other research and development revenues							3,500	700	4,500	1,400
Additional revenue related to cumulative catch-up adjustments							3,000
Deferred revenue						33,900	33,900		33,900			26,400
Deferred revenue, long-term						33,200	33,200		33,200			26,400
Accounts receivable						300	300		$ 300			500
Allergan
Number of additional licenses \| item									2
Potential development milestone payments						8,000	8,000		$ 8,000
One time payment to acquire the license						25,000	25,000		$ 25,000
Number of days in which payment to be made									45 days
Allergan \| Maximum
Potential development milestone payments						42,000	42,000		$ 42,000
Potential regulatory and commercial milestone payments						75,000	75,000		75,000
Potential commercial milestone payments						90,000	90,000		90,000
Collaboration and License Agreement \| Juno Therapeutics
Number of research areas \| item					3
Agreement term					5 years
Extensions \| item					2
Extension period					1 year
Upfront fee received					$ 25,000
Potential research and development funding					$ 22,000
Number of additional licenses \| item					3
Potential fee receivable for each gene target licensed					$ 2,500
Potential development milestone payments					77,500
Potential regulatory milestone payments					80,000
Potential commercial milestone payments					$ 75,000
Milestone payment received under license agreement		$ 2,500		$ 2,500
Amended Collaboration and License Agreement \| Juno Therapeutics
Number of research areas \| item	4
Additional upfront fee received	$ 5,000
Number of milestones related to technical progress \| item	2
Milestone payment receivable related to technical progress	$ 2,500
Potential development milestone payments	80,000
Potential regulatory milestone payments	$ 80,000
Number of milestone payment received \| item	2
Milestone payment received under license agreement	$ 2,500
Next possible milestone payment						2,500	2,500		2,500
Collaboration and other research and development revenues						0
Additional revenue related to cumulative catch-up adjustments						0
Research and development							1,700
Strategic Alliance \| Allergan
Agreement term			7 years
Extension period			1 year
Upfront fee received			$ 90,000
Number of Collaboration Development Programs \| item			5
Number of Committee Members \| item			3
Option exercise price per CDP			$ 15,000
Extension fee for Initial Option Period			5,000
Option exercise price for development and commercialization license			$ 22,500
Collaboration and other research and development revenues							2,900	$ 2,400	2,900	$ 2,400
Research and development							5,100		7,300
Deferred revenue						77,800	77,800		77,800			81,200
Deferred revenue, long-term						71,700	71,700		$ 71,700			$ 68,300
Contract termination notice									90 days
Strategic Alliance \| Allergan \| Maximum
Extension period			10 years
Sponsored Research Agreement \| Broad
First research funding amount due and payable						5,000	5,000		$ 5,000
Second research funding amount due and payable						7,500	7,500		7,500
Research and development									12,500
Sponsored Research Agreement \| Broad \| Maximum
Research funding amount due and payable						$ 125,000	125,000		125,000
License Agreement \| Beam Therapeutics, Inc
Collaboration and other research and development revenues							$ 3,900		$ 3,900
Non-cash consideration aggregate fair value received	$ 3,600
Contract termination notice	90 days

Significant Agreements - Accounting Analysis (Details) $ in Millions			1 Months Ended	2 Months Ended
	May 03, 2018 USD ($)	Jan. 01, 2018 item	May 31, 2018 USD ($)	Jun. 30, 2018 USD ($)
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Number of development and commercialization licenses \| item		5
Juno Therapeutics
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total transaction price	$ 47.5			$ 12.3
Collaboration and License Agreement \| Juno Therapeutics
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Transaction price upfront fee received	25.0
Transaction price research and development expenses funding	9.8
Milestone payments received	2.7
Amended Collaboration and License Agreement \| Juno Therapeutics
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Transaction price upfront fee received	5.0
Milestone payments received	$ 5.0
License Agreement \| Beam Therapeutics, Inc
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total transaction price			$ 3.8

Significant Agreements - Other Agreements (Details) $ in Thousands	1 Months Ended			3 Months Ended		6 Months Ended		12 Months Ended
	Aug. 31, 2016 USD ($) item	Oct. 31, 2014 USD ($) shares	Aug. 31, 2014 USD ($) shares	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2017 USD ($)
Notes payable									$ 7,500
Research and development				$ 32,718	$ 17,318	$ 54,017	$ 36,339
The General Hospital (MGH) \| License Patent Rights
Upfront fee			$ 100
Stock issued to licensors \| shares			66,848
Percentage of outstanding shares issued			0.50%
Research and development	$ 800
Market capitalization threshold	1,000,000
Market capitalization									1,000,000
The General Hospital (MGH) \| Maximum \| License Patent Rights
Potential liability for future clinical, regulatory and commercial milestone payments related to product approval	1,000		$ 3,700
Potential liability for future sales milestone payments			$ 1,800
Potential liability for future clinical and regulatory milestone payments related to product approval	$ 4,900
Percentage of net sales threshold for potential milestone payments to be made	1.00%
Number of licensed products \| item	4
Success Payments	$ 6,000
Broad, Massachusetts Institute of Technology, or MIT, and Harvard (Institutions) \| License Patent Rights
Upfront fee		$ 200
Stock issued to licensors \| shares		561,531
Broad, Massachusetts Institute of Technology, or MIT, and Harvard (Institutions) \| Cpf1 License Agreement
Research and development								$ 16,500
License Agreement Contract Termination Term						4 months
Broad, Massachusetts Institute of Technology, or MIT, and Harvard (Institutions) \| Cpf1 Market Cap Success Payments
Notes payable payment terms						150 days
Broad, Massachusetts Institute of Technology, or MIT, and Harvard (Institutions) \| Cas9-II License Agreement
Market capitalization									$ 1,000,000
Broad, Massachusetts Institute of Technology, or MIT, and Harvard (Institutions) \| Maximum \| Cpf1 License Agreement
Royalties credit paid to third party (as a percent)						50.00%
Broad, Massachusetts Institute of Technology, or MIT, and Harvard (Institutions) \| Maximum \| Cpf1 Success Payments
Success Payments						$ 10,000,000
Broad, Massachusetts Institute of Technology, or MIT, and Harvard (Institutions) \| Maximum \| Cpf1 Market Cap Success Payments
Success Payments						125,000
Market capitalization threshold				10,000,000		10,000,000
Broad, Massachusetts Institute of Technology, or MIT, and Harvard (Institutions) \| Maximum \| Cas9-II License Agreement
Success Payments						30,000
Market capitalization threshold				9,000,000		9,000,000
Broad, Massachusetts Institute of Technology, or MIT, and Harvard (Institutions) \| Minimum \| Cpf1 Success Payments
Success Payments						750,000
Broad, Massachusetts Institute of Technology, or MIT, and Harvard (Institutions) \| Minimum \| Cas9-II License Agreement
Market capitalization threshold				1,000,000		1,000,000
Broad, Massachusetts Institute of Technology, or MIT, and Harvard (Institutions) \| Rare disease \| Maximum
Potential liability for future sales milestone payments		$ 36,000
Broad, Massachusetts Institute of Technology, or MIT, and Harvard (Institutions) \| Rare disease \| Maximum \| Cpf1 License Agreement
Potential liability for future sales milestone payments				36,000		36,000
Broad, Massachusetts Institute of Technology, or MIT, and Harvard (Institutions) \| United States Europe And Japan \| Maximum \| License Patent Rights
Potential liability for future clinical and regulatory milestone payments related to product approval		14,800
Broad, Massachusetts Institute of Technology, or MIT, and Harvard (Institutions) \| United States Europe And Japan \| Human disease \| Maximum \| Cpf1 License Agreement
Potential liability for future clinical and regulatory milestone payments related to product approval				20,000		20,000
Broad, Massachusetts Institute of Technology, or MIT, and Harvard (Institutions) \| United States Europe And Japan \| Human disease \| Maximum \| Cas9-II License Agreement
Potential liability for future sales milestone payments				13,500		13,500
Potential liability for future clinical and regulatory milestone payments related to product approval								$ 3,700
Broad, Massachusetts Institute of Technology, or MIT, and Harvard (Institutions) \| United States Europe And Japan \| Rare disease \| Maximum \| Cpf1 License Agreement
Potential liability for future clinical and regulatory milestone payments related to product approval				6,000		6,000
Broad, Massachusetts Institute of Technology, or MIT, and Harvard (Institutions) \| United States Europe And Japan \| Rare disease \| Maximum \| Cas9-II License Agreement
Potential liability for future sales milestone payments				9,000		9,000
Potential liability for future clinical and regulatory milestone payments related to product approval				$ 1,100		$ 1,100
Broad, Massachusetts Institute of Technology, or MIT, and Harvard (Institutions) \| United States and one other \| Human disease \| Maximum \| License Patent Rights
Potential liability for future clinical and regulatory milestone payments related to product approval		4,100
Broad, Massachusetts Institute of Technology, or MIT, and Harvard (Institutions) \| UNITED STATES \| Human disease \| Maximum \| License Patent Rights
Potential liability for future sales milestone payments		$ 54,000

Stock-based Compensation - Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Stock-based compensation disclosures
Compensation expense	$ 7,024	$ 5,016	$ 13,552	$ 10,820
Research and development.
Stock-based compensation disclosures
Compensation expense	3,996	3,086	7,906	6,699
General and administrative
Stock-based compensation disclosures
Compensation expense	$ 3,028	$ 1,930	$ 5,646	$ 4,120

Stock-based Compensation - Restricted Stock and Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017	Dec. 31, 2014
Changes in unvested restricted stock
Unvested restricted common stock, beginning of period (in shares)			513,225
Vested (in shares)			(207,225)
Unvested restricted common stock, end of period(in shares)	306,000		306,000		513,225
Weighted Average Grant Date Fair Value
Balance, beginning of period			$ 18.70
Vested (in dollars per share)			4.90
Balance, ending of period	$ 28.05		$ 28.05		$ 18.70
Changes in unvested stock options
Compensation expense	$ 7,024	$ 5,016	$ 13,552	$ 10,820
Options exercised prior to vesting (in shares)						75,304
Options exercised prior to vesting , exercise price per share						$ 0.03
Outstanding, beginning of period (in shares)			4,372,136
Granted (in shares)			1,563,735
Exercised (in shares)			(501,475)
Cancelled (in shares)			(332,717)
Outstanding, end of period (in shares)	5,101,679		5,101,679		4,372,136
Exercisable (in shares)	1,724,036		1,724,036
Outstanding, beginning of period (in dollars per share)			$ 17.28
Granted (in dollars per share)			36.55
Exercised (in dollars per share)			13.90
Cancelled (in dollars per share)			24.59
Outstanding, end of period (in dollars per share)	$ 23.07		23.07		$ 17.28
Exercisable (in dollar per share)	$ 17.00		$ 17.00
Remaining contractual life			8 years 2 months 12 days		8 years 6 months
Exercisable, remaining contractual life			7 years 7 months 6 days
Aggregate intrinsic value	$ 67,289		$ 67,289		$ 60,591
Exercisable, aggregated intrinsic value	$ 32,982		$ 32,982
Unvested stock options (in shares)	0		0		4,572
Employees and directors
Changes in unvested stock options
Compensation expense			$ 9,700	$ 5,900
Unrecognized stock-based compensation expense	$ 58,600		$ 58,600
Weighted average fair value of options granted (per share)			$ 25.85	$ 16.67
Restricted Stock \| Employees
Changes in unvested stock options
Compensation expense			$ 0
Unrecognized stock-based compensation expense	0		0
Restricted Stock \| Non-employees
Changes in unvested stock options
Compensation expense			1,300
Unrecognized stock-based compensation expense	$ 10,800		$ 10,800

Stock-based Compensation - Assumptions (Details) - Employees and directors - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Assumptions
Risk free interest rate	2.80%	2.00%	2.60%	2.10%
Expected term (in years)	6 years 3 months	6 years 3 months	6 years 3 months	6 years 3 months
Expected volatility	78.30%	77.00%	79.90%	77.90%
Unrecognized stock-based compensation expense	$ 58.6		$ 58.6
Period for recognition			2 years 8 months 1 day

Net Loss per Share (Details) - shares	1 Months Ended			6 Months Ended
Net Loss per Share (Details) - shares	Jan. 31, 2018	Dec. 31, 2017	Mar. 31, 2017	Jun. 30, 2018	Jun. 30, 2017
Potentially dilutive securities
Anti-dilutive common stock equivalent shares				5,407,679	5,785,976
Restricted Stock
Potentially dilutive securities
Anti-dilutive common stock equivalent shares				306,000	428,153
Outstanding stock options
Potentially dilutive securities
Anti-dilutive common stock equivalent shares				5,101,679	4,444,708
Convertible notes
Potentially dilutive securities
Anti-dilutive common stock equivalent shares					913,115
2018 January Offerings
Potentially dilutive securities
Number of common stock issued	1,429,205
2017 December Offering
Potentially dilutive securities
Number of common stock issued		2,265,500
2017 March Offering
Potentially dilutive securities
Number of common stock issued			4,600,000

Related-party Transactions (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Rent and facility related fees
Related Party Transaction [Line Items]
Fees received from related party	$ 0.4	$ 0.4

Subsequent Events (Details) $ in Millions	1 Months Ended
Subsequent Events (Details) $ in Millions	Jul. 31, 2018 USD ($)
Subsequent Event \| Strategic Alliance \| Allergan
Subsequent Event [Line Items]
Cash received from exercise of option	$ 15.0