10-Q

通过勾选标记标明注册人是否（1）在过去12个月内（或在注册人被要求提交此类报告的较短期限内）提交了1934年证券交易法第13或15（d）条要求提交的所有报告，以及（2）在过去90天内是否已遵守此类提交要求。是的 ☒ 没有 ☐

通过勾选标记检查注册人是否已在过去12个月内（或在注册人被要求提交此类文件的较短期限内）以电子方式提交了根据S-t法规第405条（本章第232.405条）要求提交的所有交互数据文件。是的 ☒ 没有 ☐

通过复选标记来确定注册人是大型加速申报人、加速申报人、非加速申报人、小型报告公司还是新兴成长型公司。请参阅《交易法》第120条第2条中「大型加速申报人」、「加速申报人」、「小型报告公司」和「新兴成长型公司」的定义。

如果是新兴成长型公司，请通过勾选标记表明注册人是否选择不利用延长的过渡期来遵守根据《交易法》第13（a）条规定的任何新的或修订的财务会计准则。 ☐

通过勾选标记检查注册人是否是空壳公司（定义见《交易法》第120条第2款）。是的 ☐ 没有 ☒

截至2024年10月31日，登记人有 223,268,889 普通股，每股面值0.0001美金，已发行。

本季度报告10-Q表格（季度报告）包含涉及重大风险和不确定性的前瞻性陈述。除本季度报告中包含的历史事实陈述之外的所有陈述均可被视为前瞻性陈述，包括下文强调的陈述。在某些情况下，您可以通过前瞻性词语来识别这些陈述，例如「目标」、「预期」、「相信」、「继续」、「可能」、「估计」、「预期」、「意图」、「可能」、「可能」、「计划」、「潜在」、「预测」、「应该」、「会」或「将会」、这些术语的否定以及其他类似术语。这些前瞻性陈述存在风险，包括但不限于有关以下方面的陈述：

这些前瞻性陈述主要基于我们目前对未来事件、我们的业务、我们经营的行业以及我们认为可能影响我们的财务状况、经营结果、业务战略和财务需求的财务趋势的预期、估计、预测和预测。鉴于这些前瞻性陈述中存在重大不确定性，您不应依赖前瞻性陈述作为对未来事件的预测。尽管我们认为本季度报告中包含的每个前瞻性陈述都有合理的基础，但我们不能保证前瞻性陈述中反映的未来结果、活动水准、业绩或事件和情况将及时或根本不会实现或发生。您应该参考“风险因素”和“管理层对财务状况和经营结果的讨论和分析”一节，了解可能导致我们的实际结果与我们的前瞻性陈述中明示或暗示的结果大不相同的重要因素。本季度报告的其他部分可能包括可能损害我们的业务和财务业绩的其他因素。新的风险因素可能会不时出现，我们的管理层无法预测所有风险因素，也无法评估所有因素对我们业务的影响，或任何因素或因素组合可能导致实际结果与任何前瞻性陈述中包含或暗示的结果大不相同的程度。除非法律要求，我们没有义务公开更新任何前瞻性陈述，无论是由于新资讯、未来事件或其他原因。

此外，「我们相信」的声明和类似声明反映了我们对相关主题的信念和观点。这些声明基于截至本季度报告之日我们可用的信息，虽然我们相信此类信息构成了此类声明的合理基础，但此类信息可能是有限的或不完整的，并且我们的声明不应被解读为表明我们已经对所有潜在可用的相关信息进行了详尽的调查或审查。这些陈述本质上是不确定的，您不应过度依赖这些陈述。

6.公平值计量

下表总结了公司基于三层公允价值层级的经常性按公允价值计量的金融资产和负债：


		2024年9月30日
	估值层次结构	摊余成本		毛未实现持有收益		毛未实现持有损失			估计公平值
		(in数千）
金融资产：
现金等值物：
货币市场基金	1级	$	62,053	$	-	$	-		$	62,053
美国政府和机构证券	2级		40,605		11		-			40,616
公司债务证券	2级		386		-		-			386
现金等值物总额			103,044		11		-			103,055
短期有价证券：
美国政府和机构证券	2级		65,209		36		(1	)		65,244
公司债务证券	2级		6,759		8		-			6,767
短期有价证券总额			71,968		44		(1	)		72,011
金融资产总额		$	175,012	$	55	$	(1	)	$	175,066
金融负债：
长期金融负债：
或然代价	3级		111,856		-		-			111,856
成功付款负债	3级		15,115		-		-			15,115
长期金融负债总额			126,971		-		-			126,971
总金融负债		$	126,971	$	-	$	-		$	126,971


		2023年12月31日
	估值层次结构	摊余成本		毛未实现持有收益		毛未实现持有损失			估计公平值
		(in数千）
金融资产：
现金等值物：
货币市场基金	1级	$	70,315	$	-	$	-		$	70,315
美国政府和机构证券	2级		33,091		3		-			33,094
公司债务证券	2级		1,062		-		-			1,062
现金等值物总额			104,468		3		-			104,471
短期有价证券：
美国政府和机构证券	2级		57,924		7		(78	)		57,853
公司债务证券	2级		13,817		9		(1	)		13,825
短期有价证券总额			71,741		16		(79	)		71,678
其他资产	3级		359		-		-			359
金融资产总额		$	176,568	$	19	$	(79	)	$	176,508
金融负债：
长期金融负债：
或然代价	3级		109,606		-		-			109,606
成功付款负债	3级		12,799		-		-			12,799
长期金融负债总额			122,405		-		-			122,405
总金融负债		$	122,405	$	-	$	-		$	122,405

公司根据相同资产或负债在活跃市场的报价衡量货币市场基金的公允价值。2级有价证券包括美国政府和机构证券以及公司债务证券，其估值基于非活跃市场的证券最近交易或类似工具的市场报价以及源自或证实的其他重要输入数据。

下表总结了所示期间内连续未实现亏损状况少于和多于十二个月的可供出售债务证券：


	少于12个月					12个月或更长					总
	公平值		未实现亏损			公平值		未实现亏损			公平值		未实现亏损
	(in数千）
2024年9月30日
美国政府和机构证券	$	9,125	$	(1	)	$	-	$	-		$	9,125	$	(1	)
公司债务证券		-		-			-		-			-		-
总	$	9,125	$	(1	)	$	-	$	-		$	9,125	$	(1	)
2023年12月31日
美国政府和机构证券	$	9,186	$	(3	)	$	10,386	$	(75	)	$	19,572	$	(78	)
公司债务证券		1,396		(1	)		-		-			1,396		(1	)
总	$	10,582	$	(4	)	$	10,386	$	(75	)	$	20,968	$	(79	)

公司确定，截至2024年9月30日的三个月和九个月内，上述投资的信用风险没有重大变化。因此，尚未确认信用损失拨备。截至2024年9月30日，公司无意出售此类证券，并且公司不太可能被要求在收回摊销成本基础之前出售这些证券。

截至2024年9月30日，所有有价证券的有效到期日为两年或更少。对到期日以下证券的投资一年，或管理层打算用于为当前运营提供资金的资产，均计入易变现资产并分类为可供出售。截至2024年9月30日，累计其他全面损失余额包括与公司可供出售债务证券相关的未实现净收益。

下表汇总了该公司3级财务负债的公允价值变化：


	特遣队审议			钴成功付款责任			哈佛成功付款负债
	(in数千）
截至2023年12月31日余额	$	109,606		$	11,160		$	1,639
公允价值变动--费用		5,384			27,920			4,703
截至2024年3月31日余额		114,990			39,080			6,342
公允价值变动--收益		(3,369	)		(20,687	)		(3,888	)
截至2024年6月30日余额		111,621			18,393			2,454
公允价值变动--费用(收益)		235			(4,909	)		(823	)
截至2024年9月30日余额	$	111,856		$	13,484		$	1,631

或然代价

本公司采用其相信由市场参与者作出的重大估计及假设，以厘定每一结算日的钴或有代价的估计公允价值。钴或有对价的公允价值是根据对实现里程碑的可能性和估计时间以及适用的贴现率的评估，通过计算预先指定的发展里程碑付款的概率加权估计值来确定的。贴现率反映了在赚取和到期时支付或有对价时的信用风险。随著获得更多影响假设的数据，公司将持续评估这些估计。

钴或有对价的公允价值是使用以下不可观察的投入计算的：


	2024年9月30日		2023年12月31日
不可观察输入数据	范围	加权平均	范围	加权平均
贴现率	10.7% – 11.7%	11.3%	11.7% – 12.4%	11.9%
取得里程碑成就的概率	5.0% –55.0%	25.7%	5.0% – 55.0%	25.7%

加权平均不可观测投入是根据预先确定的发展里程碑的相对值计算的。钴或有对价的估计公允价值可能会随著开发进展和获得更多数据而发生重大变化，影响有关成功实现用于估计负债公允价值的里程碑的概率的假设以及预期实现这些里程碑的时间。在评估公允价值假设时，需要判断以解读用于制定估计的市场数据。对公允价值的估计可能不能反映在当前市场交易中能够实现的金额。因此，使用不同的市场假设、投入和/或不同的估值方法可能导致公允价值估计的重大差异。

成功付款

本公司采用重大估计及假设来厘定成功付款负债的估计公允价值及于每个资产负债表日的相关开支或收益。Cobalt Success付款和哈佛Success付款负债的估计公允价值是使用蒙特卡洛类比方法确定的，该方法根据几个关键假设对负债的估计公允价值进行建模，这些假设包括预期波动率、剩余期限、无风险利率、可能触发付款的估值计量日期的估计数量和时间，对于Cobalt Success付款，是公司的市值，对于哈佛成功付款，是公司普通股的每股公允价值。

Cobalt Success Payments和哈佛Success Payments的公允价值是使用以下不可观察的输入计算的：


	2024年9月30日		2023年12月31日
不可观察输入数据	钴	哈佛	钴	哈佛
预期股价波幅	75.0%	75.0%	72.5%	72.5%
预期期限(年)	14.4	6.5	15.1	7.2

8.应计负债

应计报酬和应计费用以及其他流动负债包括以下内容：


	2024年9月30日		2023年12月31日
	(in数千）
应计报酬：
累积花红	$	8,813	$	14,379
应计带薪休假		4,570		4,731
应计薪酬		4,131		3,936
其他应计报酬		536		676
应计报酬总额	$	18,050	$	23,722
应计费用和其他流动负债：
应计研发服务	$	9,733	$	10,110
应计专业费用		1,725		1,470
应计财产和设备		199		9,200
其他应计流动负债		3,705		2,682
应计费用和其他流动负债总额	$	15,362	$	23,462

2024年4月，该公司修改了其位于麻萨诸塞州剑桥和加利福尼亚州南旧金山的动物园空间的某些协议的条款，导致这些协议不再需要在资产负债表上得到认可。2024年第二季度，公司终止确认与使用权资产和租赁负债相关的剩余余额美金6.4 亿和$6.2 分别为百万。

下表包含与公司经营租赁相关的其他信息：


位置	使用	近似平方英尺	生效日期	到期日期
华盛顿州西雅图	办公室/实验室	48,000	三月2019 到九月2020	2026年12月到 2028年4月
麻萨诸塞州剑桥	办公室/实验室	56,000	三月2019 到一月2020	2027年6月到 2028年2月
加利福尼亚州南旧金山	办公室/实验室	99,000	十二月2019 到 2022年4月	2030年4月
纽约州罗彻斯特	办公室/实验室	3,000	一月2022	2027年1月
华盛顿州博塞尔	办公室/实验室/制造业	80,000	2023年1月	2039年1月

在每份租赁协议的整个期限内，除了基本租金外，公司还负责支付某些运营成本，例如公共区域维护、税收、公用事业和保险。这些额外费用被视为可变租赁成本，并在成本发生期间确认。

下表汇总了公司的租赁成本：


	截至9月30日的三个月，				截至9月30日的九个月，
	2024		2023		2024		2023
	(in数千）
经营租赁成本	$	4,728	$	6,764	$	13,816	$	20,806
短期租赁成本		1,108		-		3,659		-
可变租赁成本		2,195		1,890		6,297		5,801
总租赁成本	$	8,031	$	8,654	$	23,772	$	26,607

截至2024年9月30日，加权平均剩余租期为 9.7 年，加权平均增量借款利率为 11.4%.

下表将公司按财年划分的未贴现经营租赁现金流量与截至2024年9月30日的经营租赁负债现值进行了对帐（单位：千）：


2024年（剩余3个月）	$	3,572
2025		21,768
2026		22,471
2027		19,899
2028		15,226
2029年及以后		93,495
未贴现租赁付款总额		176,431
减：估算利息		(80,347	)
经营租赁负债现值		96,084
减：经营租赁负债的流动部分	$	(10,601	)
经营租赁负债，扣除流动部分	$	85,483

11.基于股票的薪酬

股权激励计划

2021年2月，公司通过了2021年激励奖励计划(2021年计划)和2021年员工购股计划(2021年ESPP)，均于公司首次公开募股完成时生效。2021年计划规定了各种基于股票的薪酬奖励，包括股票期权、限制性股票奖励(RSA)和限制性股票单位(RSU)。2021年ESPP允许符合条件的员工通过工资扣减以折扣价购买公司普通股，最高可达15他们收入的%，受计划限制。除非公司董事会另有决定，员工可以按以下价格购买股票85在发行期的第一天或在购买日，公司普通股公允市值的较低者的百分比。截至2024年9月30日，20.9 万股和 6.2根据2021年计划和2021年ESPP，未来分别有100万股可供发行。

基于股票的补偿费用

以股票为基础的补偿费用在简明合并经营报表中确认如下：


	截至9月30日的三个月，				截至9月30日的九个月，
	2024		2023		2024		2023
	(in数千）
研发	$	6,481	$	5,722	$	19,452	$	18,387
一般及行政		4,289		3,281		11,790		9,215
股票补偿费用总额	$	10,770	$	9,003	$	31,242	$	27,602

截至2024年9月30日，与未归属奖励有关的未确认股票补偿费用以及预计确认这些费用的加权平均期间如下：


	股票期权		股份单位
未确认的基于股票的薪酬支出(千)	$	60,322	$	25,801
预计确认的加权平均期间成本(年数)		2.5		3.2

股票期权

公司股票期权活动摘要如下：


	股票期权 (in数千）			加权平均行使价分享		加权平均剩余合约年期 (in年）		总内在值 (in数千）
截至2023年12月31日未完成		26,849		$	6.60		8.0	$	11,235
授予		7,538			8.82
行使		(2,472	)		3.72
被没收/取消		(3,432	)		8.06
截至2024年9月30日未完成		28,483		$	7.26		7.8	$	7,966
截至2024年9月30日可撤销		14,635		$	7.19		6.9	$	6,450

授予员工、董事和顾问的股票期权的公允价值是在授予日期使用布莱克-斯科尔斯期权定价模型并使用以下假设估计的：


	截至9月30日的九个月，
假设	2024	2023
无风险利率	3.7% – 4.7%	3.4% – 4.6%
预期波幅	72.5%	70.0% – 72.5%
预期期限(年)	5.50 – 6.25	5.50 – 6.50
预期股息	0%	0%

下表总结了与股票期权活动相关的其他信息：


	截至9月30日的九个月，
	2024		2023
已授予期权的加权平均授予日期每股公允价值	$	5.98	$	2.62
已行使的股票期权的总内在价值（单位：千）	$	7,632	$	2,426

限制性股票

公司RSU活动摘要如下：


	股份单位 (in数千）			股份单位加权平均授出日期公平每股价值
截至2023年12月31日未投资		2,341		$	3.88
授予		3,345			8.75
既得		(524	)		4.76
没收		(673	)		6.46
截至2024年9月30日未投资		4,489		$	7.03

截至2024年9月30日和2023年9月30日止九个月内归属的RSU的公允价值为美金5.0 亿和$1.6 分别为百万。

13.每股净利润（亏损）

每股普通股基本和稀释净亏损的计算方法是将净亏损除以相关期间已发行普通股的加权平均股数，包括考虑到名义行使价的预先融资的认购权。该公司在所有呈报期间均处于亏损状态，因此所有期间的每股基本净亏损和每股稀释净亏损相同，因为纳入所有潜在的发行普通证券将具有反稀释作用。

下表总结了每股普通股基本和稀释净利润（亏损）的计算：


	截至9月30日的三个月，					截至9月30日的九个月，
	2024			2023		2024			2023
	(in数千，每股金额除外）
每股普通股基本收益：
归属于普通股股东的净利润（损失）	$	(59,924	)	$	984	$	(217,690	)	$	(195,138	)
加权平均普通股数-基本		235,412			196,978		229,076			193,605
每股普通股基本收益（亏损）	$	(0.25	)	$	0.00	$	(0.95	)	$	(1.01	)

每股普通股稀释收益：
归属于普通股股东的净利润（损失）	$	(59,924	)	$	984	$	(217,690	)	$	(195,138	)
加权平均普通股数-基本		235,412			196,978		229,076			193,605
稀释证券的影响：
股票期权和限制性股票单位		-			3,495		-			-
加权平均普通股数-稀释		235,412			200,473		229,076			193,605
每股普通股稀释收益（亏损）	$	(0.25	)	$	0.00	$	(0.95	)	$	(1.01	)

以下证券被排除在所列期间每股稀释普通股净亏损的计算之外，因为其影响具有反稀释性：


	截至9月30日的九个月，
	2024		2023
	(in数千）
购买普通股的选择		28,483		23,302
未投资的RSU		4,489		142
总		32,972		23,444

您应该阅读以下关于我们财务状况和经营成果的讨论和分析，以及我们未经审计的简明财务报表和本季度报告中其他部分包含的相关附注，我们已审计的综合财务报表和相关附注，以及相关管理层对财务状况和经营成果的讨论和分析，这些已作为我们于2024年2月29日提交给美国证券交易委员会的10-k表格年度报告(2023年年报)的一部分。本讨论和分析以及本季度报告的其他部分包含前瞻性陈述，这些陈述基于与未来事件和我们未来财务表现相关的当前信念、计划和预期，涉及风险、不确定性和假设，例如关于我们对业务的意图、计划、目标和预期的陈述。由于许多因素的影响，我们的实际结果和选定事件的时间可能与这些前瞻性陈述中描述或暗示的情况大不相同，其中包括本季度报告中题为“风险因素”的部分所阐述的因素。另见本季度报告题为“关于前瞻性陈述的特别说明”一节。

我们的信念是，工程细胞将成为未来几十年医学中最重要的转变之一。可以通过工程细胞从根本原因上解决的疾病负担是巨大的。我们认为工程细胞具有与生物药物一样对临床实践产生治疗破坏性的潜力。实现这一愿景的关键是找到一致且可扩展的生产基于细胞的药物的方法，我们在低免疫平台（HIP）技术上进行了大量投资，其双重目标是使用逃避患者免疫检测的同种异基因细胞，并且我们可以大规模生产。我们正在开发细胞工程计划，以彻底改变未满足治疗需求的治疗领域的治疗，包括1型糖尿病、线粒体细胞介导的自身免疫性疾病和肿瘤学。

我们正在推进三个临床项目，评估我们的候选产品或使用我们的技术开发的候选产品，涵盖五种适应症，包括1型糖尿病单核细胞介导的自身免疫性疾病和难治性B细胞恶性肿瘤，如下所述：

2024年11月，我们宣布进行战略重新定位，优先考虑1型糖尿病线粒体介导的自身免疫性疾病、难治性b细胞恶性肿瘤和融合原平台的临床和临床前开发体内 CAR t细胞。我们将暂停肿瘤学领域SC 291（我们的HIP-修饰的CD 19异基因CAR t疗法）和SC 379（我们的神经胶质祖细胞计划）的开发，因为我们正在为这些计划寻求合作伙伴关系。作为这些工作的一部分，我们将结束ARDENT 1期临床试验，该试验在b细胞恶性肿瘤（包括非霍奇金淋巴瘤和慢性淋巴母细胞白血病）中评估SC 291。

我们寻求克服基因和细胞疗法的几个现有限制，通过我们的体外实验和体内细胞工程平台，这两个平台都可能促进疗法的开发，通过在可能的情况下修复体内的细胞并在需要时更换它们来改变患者的生活。为离体当疾病的细胞受损或完全消失，而有效的治疗需要替换整个细胞时，成功的治疗需要大规模制造植入人体、发挥功能并在体内存活的细胞。其中，我们认为细胞持久性是目前极大地扩大这类疗法影响的最大限制，特别是克服移植的同种异体细胞的免疫排斥障碍。我们相信，与我们的合作开发的候选产品离体细胞工程平台使用HIP修饰的同种异体细胞，可以“隐藏”患者的免疫系统，可以解决这一根本限制，并开启一波颠覆性治疗。我们将这项技术称为我们的免疫低下平台。为体内旨在修复和控制体内基因的疗法，一个成功的候选产品需要同时进行基因修饰和体内运送治疗有效载荷。其中，我们认为是有效的体内分娩是目前极大地扩大这类疗法影响的最大限制。为此，我们最初的关注点是基因有效载荷的细胞特异性传递。

我们相信，现在是在广泛的治疗领域开发工程细胞疗法的正确时机。对遗传学、基因编辑、蛋白质工程、干细胞生物学、免疫学、过程分析和计算生物学的理解取得了重大进展，为显著增加细胞药物潜在影响的广度和深度创造了机会。我们继续取得进展，开发我们的离体细胞工程平台-我们的低免疫同种异源CAR t细胞平台和我们的干细胞衍生平台，也利用了我们的HIPP技术。我们正处于广泛的候选产品管道的早期开发阶段，概述如下：

缩写：AAC，ANCA相关血管炎; ERL，肾外系统性红斑狼疮; LN，狼疮性肾病; NHL，非霍奇金淋巴瘤; T1 D，1型糖尿病; WW，全球。

我们的每个项目都提供了有意义的独立价值的潜力，同时也支持我们进一步利用我们平台的潜在能力，从而开发广泛适用的药物。根据我们当前领先项目的时间表，我们相信我们的现金跑道将能够在我们的项目中读取多个数据。我们预计将在2024年或2025年共享多项研究中的临床概念验证数据。

此外，我们在推进研究和临床前阶段候选产品进入临床前开发以及潜在的IND提交方面继续取得进展。随著我们的某些候选产品向潜在的IND提交迈进，我们正在进行良好实验室规范毒性研究，并为我们的制造工艺建立必要的放大规模。

鉴于我们投资组合的深度和广度，我们预计将继续根据各种因素（包括内部和外部机会和限制）持续评估我们的项目并确定优先顺序，这可能导致我们决定提前推进某些项目或取代其他项目。有关我们候选产品的详细信息，请参阅我们2023年年度报告中包含的第一部分第1项中题为「业务-概述」的部分。

我们离体和体内技术代表了多个学术机构和公司多年来创新和技术的集合，包括哈佛学院（哈佛）院长和研究员和加州大学董事会授权的低免疫技术，以及从Cobalt Biomedicines Inc.收购的融合原技术。（Cobalt），以及Beam Therapeutics Inc.授权的基因编辑技术，其中。有关这些收购以及许可和合作协议的详细信息，请参阅2023年年度报告中合并财务报表的注释3，收购和注释4，许可和合作协议，以及2023年年度报告中第一部分第1项中题为「业务-关键智慧财产权协议」的部分。

到目前为止，我们的业务包括开发我们的离体和体内我们的业务范围包括开发和开发潜在的候选产品、进行临床前研究、建立制造能力、进行候选产品的临床试验、支持使用我们的技术开发的候选产品的临床试验、获取技术、为公司配备员工、业务规划、建立和维护我们的知识产权组合、筹集资金，以及为这些运营提供一般和行政支持。我们所有的专案目前都在开发阶段，我们还没有任何产品被批准销售。自成立以来，我们每年都出现净亏损。截至2024年和2023年9月30日的9个月，我们的净亏损分别为21770美元万和19510美元万。截至2024年9月30日，我们的累计赤字为16美元亿，其中包括与成功付款负债重估和或有对价相关的累计非现金费用1,270美元万和6,060美元万。我们的净亏损主要来自我们的研究和开发计划，其次是与我们的运营相关的一般和行政成本。

2024年2月，我们完成了承销公开发行，据此，我们出售了2180股普通股，其中包括根据完全行使承销商购买额外股份的选择权而出售的450股普通股，以及预先融资的认购权以购买1270股普通股，净收益约为18000美金，扣除承保折扣、佣金和发行费用后。

2022年8月，我们与担任销售代理的Cowen and Company，LLC（Cowen）签订了一份销售协议，根据该协议，我们可以通过Cowen不时在一系列一次或多次的市场股票发行中提供和出售高达15000美金的普通股股份（统称为ATM设施）。截至2024年9月30日，我们已根据ATM机制出售了总计490股普通股，扣除佣金和费用后，净收益为2860美金。

截至2024年9月30日，我们拥有19900美金的现金、现金等值物和有价证券。根据我们当前的运营计划，我们相信我们现有的现金、现金等值物和有价证券将足以满足我们自本季度报告提交以来至少12个月内的运营资金和资本支出需求。这种现金资源预测是前瞻性信息，涉及风险和不确定性，实际费用金额可能会因多种因素而发生重大不利变化。

与2024年11月的战略重新定位有关，我们预计将产生约640加元的与员工遣散费、福利和相关成本相关的现金费用。我们预计投资组合更新和相关员工削减将在2025年第一季度基本完成。

由于我们在2024年11月进行了战略重新定位，我们预计2025年的运营亏损和费用将比2024年减少。如果我们的临床试验取得成功，如果我们扩大研发努力，长期而言，运营费用可能会增加。如果发生成本增加，很大程度上将通过临床试验推进我们当前和未来的候选产品；确定更多的候选产品；建立我们的制造能力，包括通过第三方合同开发和制造组织(CDMO)和建设我们的内部制造能力；推进我们当前和未来候选产品的临床前开发；促进和扩大我们的离体和体内我们的目标是：建立细胞工程平台；获得与我们将工程细胞转化为药物的雄心相一致的技术；寻求监管机构对我们当前和未来的候选产品的批准；增加我们的员工队伍，以支持我们的研究、临床和临床前开发、制造和商业化努力；扩大我们的运营、财务和管理系统；继续开发、起诉和捍卫我们的知识产权组合；以及继续产生法律、会计或其他业务运营费用，包括与上市公司相关的成本。

我们继续投资在制造科学和运营的关键领域建立世界一流的能力，包括开发我们的细胞工程平台、产品特征和过程分析。我们的投资还包括规模化的研究解决方案、规模化的基础设施和新颖技术，以提高制造的效率、特征和可扩展性，包括建立我们的内部制造能力。

我们未来需要筹集额外融资来资助我们的运营，包括任何批准的候选产品的商业化。在此之前（如果有的话），由于我们能够产生可观的产品收入，我们预计用现有现金、现金等值物和有价证券、任何未来股权或债务融资的收益以及根据任何未来许可、合作或其他安排收到的预付款、里程碑和特许权使用费来为我们的运营提供资金。如果有的话，可能无法以合理或我们可接受的条款提供额外资本。如果我们无法在需要时或以有吸引力的条款筹集资金，我们的业务、经营运绩和财务状况将受到不利影响。

我们的业务和运营可能会受到全球经济状况的负面影响，这些挑战可能会继续受到全球宏观经济挑战的影响，如通胀和利率变化的时机、消费者信心下降、经济增长放缓、市场不确定性、持续的俄罗斯-乌克兰战争导致的地缘政治和经济稳定、中东冲突升级、美国和中国关系的紧张以及新冠肺炎疫情的后果。这些事件和情况对我们业务的影响的严重程度和持续时间无法预测，而且可能在未来几个时期才能完全反映在我们的运营结果中。如果经济不确定性持续或增加，或者如果全球经济恶化，我们的业务、财务状况和运营结果可能会受到损害。有关宏观经济事件和状况对我们的业务、财务状况和经营业绩的潜在影响的进一步讨论，请参阅本季度报告中题为“风险因素”的部分。

自成立以来，我们已经完成了各种收购。有关收购的详细信息，请参阅2023年年度报告中合并财务报表标题为「业务关键智慧财产权协议」的部分和附注3「收购」。

我们已与多个第三方签订了许可和合作协议。有关这些协议的详细信息，请参阅2023年年度报告中合并财务报表标题为「业务-关键智慧财产权协议」的部分和注释4「许可和合作协议」。

根据钴收购协定的条款及条件，吾等有责任于实现若干特定发展里程碑时，向若干前钴股东支付总额高达50000万的或有代价(或有代价)，以及高达50000万的成功付款(钴成功付款)，每笔款项均以现金或股票支付。如果在预定的估值计量日期，我们的市值等于或超过81美元亿，并且我们正在根据IND在临床试验中推进基于FusoGen技术的计划，或者已经为基于FusoGen技术的产品申请生物制品许可证申请或新药申请，或已经申请或获得批准，则将支付钴成功付款。Cobalt Success付款最多可以在收购之日起20年内完成，但如果发生某些事件，这一期限可能会更短。如果我们基于FusoGen技术的专案中至少有一个是在控制权变更时正在进行的研究项目的主题，则也将在控制权变更时触发估值计量日期。如果控制权发生变更，且截至控制权变更之日，我们的市值低于81美元亿，则潜在钴成功付款的金额将减少，而潜在钴或有对价的金额将增加。截至2024年9月30日，尚未触发Cobalt Success付款。

请参阅本季度报告其他地方包含的简明综合财务报表的注释3，以了解潜在Cobalt Success付款和潜在Cobalt或有对价金额的详细信息，如果在控制权变更日期根据我们市值的各种阈值发生控制权变更。见第二部分第7项。管理层对财务状况和经营运绩的讨论和分析」-关键会计政策以及重大判断和估计-成功付款」和「-关键会计政策以及重大判断和估计-或有考虑」在我们的2023年年度报告中了解有关钴成功付款和钴或有考虑的会计处理的更多信息。

根据哈佛协定的条款，我们可能需要向哈佛支付总计17500美元的万成功付款(哈佛成功付款)，以现金形式支付，这是基于我们普通股每股公平市值的增加。潜在的哈佛成功付款基于价值递增倍数，范围从5倍到40倍，基于我们普通股的每股公允市值相对于正在进行的预先确定的估值衡量日期的每股4.00美元的原始发行价的比较。自协定生效之日起，哈佛大学的成功奖金最多可在12年内实现。如果在满足较低级别的同时满足较高的成功付款级别，则两个级别都将被拖欠。之前支付的任何哈佛成功付款都将计入截至任何估值衡量日期所欠的哈佛成功付款，这样哈佛就不会收到与同一门槛相关的多笔成功付款。截至2024年9月30日，哈佛大学的成功奖金尚未触发。

有关触发哈佛成功付款的各种每股普通股价值的详细信息，请参阅本季度报告其他地方包含的简明合并财务报表的注释4「许可和合作协议」。见第二部分第7项。管理层对财务状况和经营运绩的讨论和分析「-关键会计政策以及重大判断和估计-成功付款」在我们的2023年年度报告中，了解有关哈佛成功付款会计处理的更多信息。

迄今为止，研发费用主要与我们平台技术和候选产品的发现和开发有关。研究与开发费用在发生时确认，在收到用于研究与开发的商品或服务之前支付的付款记录为预付费用，直至收到商品或服务。

研发费用包括人员相关成本，包括薪津、福利和非现金股票薪酬、与第三方安排下产生的外部研发费用，包括CDMO制造成本（包括传递成本）和临床试验成本、实验室用品成本、获取和许可技术的成本，与我们将工程细胞转化为药物的目标一致，和设施费用，包括租金和折旧，以及分配的管理费用。未来获取和许可技术的时间和成本金额无法可靠估计，并且可能会按季度和逐年波动。

我们在多个研发计划中部署员工和基础设施资源，以开发离体和体内细胞工程平台、识别和开发候选产品以及建立制造能力。由于我们的早期开发阶段、正在进行的项目数量以及我们在多个项目中使用资源的能力，我们的大部分研发成本不会根据特定项目记录。其中包括人员、实验室成本以及其他间接设施和运营成本。

研发活动占我们运营费用的很大一部分。由于我们在2024年11月进行了战略重新定位和相关的裁员，我们预计2025年的研发费用将比2024年减少。如果我们的临床试验取得成功，如果我们扩大研发努力，从长远来看，研发费用可能会增加。如果发生成本增加，很大程度上将通过以下方式推动我们当前和未来的候选产品进入并通过临床试验；确定更多的候选产品；建立内部和外部制造能力；推进我们当前和未来候选产品的临床前开发；推进和扩大我们的离体和体内我们的主要目标是建立细胞工程平台；获得与我们将工程细胞转化为药物的雄心相一致的技术；寻求监管机构对我们当前和未来的候选产品进行批准；以及增加我们的员工队伍，以支持我们扩大的研发业务。任何这些因素的结果发生变化都可能导致与我们的候选产品开发相关的成本和时间发生重大变化。

与研发相关的成功付款和或有对价包括我们的Cobalt和Harvard成功付款负债以及Cobalt或有对价负债的估计公允价值的变化。与我们的研发相关的成功付款和或有对价相关的费用或收益是不可预测的，部分原因是我们的成功付款受到每个报告期末普通股价格和市值变化的影响，并且由于计算中使用的假设的变化，每个季度和年之间继续存在显著差异。

一般和行政费用包括与人员相关的成本，包括财务、法律、行政、人力资源和信息技术职能部门员工的薪津、福利和非现金股票补偿、法律和咨询费、保险费以及不包括在研发费用中的设施成本。法律费用包括与公司和专利事务相关的费用。截至2023年9月30日的三个月和九个月的一般和行政费用包括提前终止我们在加利福尼亚州弗里蒙特的租赁（弗里蒙特租赁）产生的费用。

由于我们在2024年11月进行了战略重新定位和相关劳动力削减，我们预计2025年的一般和行政费用将比2024年有所下降。从长远来看，一般和行政费用可能会增加，以支持潜在的扩大研发活动。

截至2024年9月30日和2023年9月30日的三个月，研发费用分别为5320美金和6560美金。减少1240美金主要是由于：

截至2024年9月30日和2023年9月30日的九个月，研发费用分别为17050美金和20580美金。减少3530美金主要是由于：

下表总结了所示期间与研发相关的成功付款和或有对价相关的费用（收益）：

截至2024年9月30日的三个月，与Cobalt Success付款的估计公允价值变化相关的收益为490日元，而2023年同期为2200日元。价值变化是由于相关期间我们的市值变化所致。截至2024年9月30日的三个月，与我们的哈佛成功付款估计公允价值变化相关的收益为80加元，而2023年同期为200加元。价值变化主要是由于相关时期我们普通股价格的变化。与我们的钴或有对价的估计公允价值变化相关的费用为20加元，而截至2024年9月30日和2023年9月30日的三个月的收益分别为5860加元。价值变化主要是由于相关期间实现里程碑的时间和可能性以及计算中使用的贴现率发生变化。

下表总结了所示期间与研发相关的成功付款和或有对价相关的费用（收益）：

截至2024年9月30日的九个月，与Cobalt Success付款的估计公允价值变化相关的费用为230加元，而2023年同期的收益为830加元。价值变化是由于相关期间我们的市值变化所致。截至2024年9月30日的九个月，与哈佛成功付款的估计公允价值变化相关的收益并不重大，而2023年同期的收益为30日元。价值变化主要是由于相关时期我们普通股价格的变化。截至2024年9月30日和2023年9月30日的九个月，与钴或有对价的估计公允价值变化相关的费用分别为230加元和4720加元。价值变化是由于相关期间实现里程碑的时间和可能性以及计算中使用的贴现率发生变化。

截至2024年9月30日的三个月和九个月的一般费用和行政费用分别为1，410卢比和4，680卢比，而2023年同期为1，920卢比和5，250卢比。

截至2024年9月30日的三个月内，发票减少了510美金，主要是由于我们之前计划在加利福尼亚州弗里蒙特的制造工厂相关成本下降、法律和咨询费减少以及人员相关成本下降，由于人数减少。这些下降被非现金股票薪酬的增加部分抵消。

截至2024年9月30日的九个月内，发票减少了580美金，主要是由于与我们之前计划在加利福尼亚州弗里蒙特的制造工厂相关的成本减少、人员数量减少导致的人员相关成本降低以及法律费用降低。这些下降被非现金股票薪酬的增加部分抵消。

截至2024年9月30日的三个月和九个月，净利息收入分别为260日元和880日元，而2023年同期分别为290日元和720日元，主要包括我们的现金和有价证券余额赚取的利息。

截至2024年9月30日的三个月和九个月，其他费用净额分别为70卢比和460卢比，而截至2023年9月30日的三个月和九个月，其他收入分别为30卢比和0.1美金。截至2024年9月30日的三个月和九个月的价值变化分别为100美金和470美金，是由于其他资产的非暂时性损害。

截至2024年9月30日，我们拥有19900美金的现金、现金等值物和有价证券。迄今为止，我们已通过出售普通股和私募可转换优先股筹集了总计约15澳元的净收益。

2022年8月，我们与担任销售代理的Cowen签订了一份销售协议，根据该协议，我们可以通过Cowen在ATM设施下提供和出售高达15000美金的普通股股份。截至2024年9月30日，我们已根据ATM机制出售了总计490股普通股，扣除佣金和费用后，净收益为2860美金。

自成立以来，我们没有从产品销售或任何其他来源中产生任何收入，并且出现了重大运营损失。我们尚未将任何产品商业化，并且我们预计在几年内（如果有的话）不会从任何候选产品的销售中产生收入。

我们预计在可预见的未来，在开展研发工作（包括进行临床试验和临床前研究、开发新候选产品、建立内部和外部制造能力以及为我们的运营提供资金）时将遭受额外损失。我们面临与新产品开发相关的风险，我们可能会遇到不可预见的费用、困难、并发症、延误和其他可能对我们的业务产生不利影响的未知因素。

根据我们当前的运营计划，我们相信我们现有的现金、现金等值物和有价证券将足以满足我们自本季度报告提交以来至少12个月内的运营资金和资本支出需求。然而，我们未来需要筹集额外融资来资助我们的运营，包括任何批准的候选产品的商业化。

在此之前，如果我们可以从产品销售中获得可观的收入，我们预计将使用现有的现金、现金等价物和有价证券、未来任何股权或债务融资的收益以及根据任何未来许可、合作或其他安排收到的预付款、里程碑和特许权使用费来为我们的运营提供资金。如果需要额外的融资，我们可能无法以我们可以接受的条件筹集资金，或者根本无法筹集。我们筹集额外资金的能力可能会受到以下因素的不利影响：潜在的全球经济状况恶化，以及美国和世界各地的信贷和金融市场最近因公共卫生危机、乌克兰、中东或其他地区的冲突、通胀变化、利率不确定性以及其他造成市场风险的因素而中断和波动。最近的银行倒闭也引发了人们对更广泛的金融服务业流动性的日益担忧，我们的业务、商业合作伙伴或整个行业可能会受到目前无法预测的负面影响。如果我们通过发行股权或可转换债务证券筹集更多资金，现有股东的所有权权益将被稀释，这些证券的条款可能包括清算或其他对我们股东权利产生不利影响的优惠。债务融资如果可行，可能会导致固定支付义务的增加，以及具有优先于普通股的权利的证券的存在，并涉及一些协定，其中包括限制或限制我们采取特定行动的能力的契约，例如招致额外债务、进行资本支出、宣布股息或获取、出售或许可知识产权或资产，这可能对我们开展业务的能力产生不利影响。如果我们通过战略合作或许可或其他安排筹集资金，我们可能不得不放弃重大权利或以对我们不利的条款授予许可。我们筹集更多资金的能力可能会受到潜在的全球经济状况恶化以及美国和世界各地信贷和金融市场最近因各种我们无法控制的因素而中断和波动的不利影响。如果我们不能在需要的时候筹集额外的资本，我们的业务、经营结果和财务状况将受到不利影响。

截至2024年9月30日的九个月内，经营活动使用的净现金为17600加元，主要包括净亏损21770加元以及净运营资产和负债变化550加元，被非现金调整4720加元所抵消。4720美金的非现金调整包括3120美金的非现金股票补偿、1170美金的折旧费用、分别用于重新评估我们的成功付款负债和或有对价的费用230美金和230美金，并被其他非现金调整30美金所抵消。

截至2023年9月30日的九个月内，经营活动使用的净现金为20160加元，主要包括净亏损19510加元、净运营资产和负债变化840加元以及非现金调整1490加元。1490美金的非现金调整包括2760美金的非现金股票补偿、分别为重新评估成功付款负债和或有对价而获得的860美金和4720美金的收益以及1330美金的折旧费用。

截至2024年9月30日的九个月内，投资活动使用的现金为2960卢比，截至2023年9月30日的九个月内，投资活动提供的现金为15670卢比。截至2024年9月30日的九个月，其中包括购买3300加元的财产和设备，部分被340加元的有价证券净到期日所抵消。截至2023年9月30日的九个月，这包括有价证券净到期日为16270日元，部分被600日元的财产和设备购买所抵消。

截至2024年9月30日和2023年9月30日的九个月内，融资活动提供的现金分别为19910卢比和2990卢比，主要包括发行普通股的净收益，以及截至2024年9月30日的九个月，为租户改善我们位于华盛顿州博瑟尔的制造设施提供资金的贷款净收益。

除上表中披露的内容外，截至2024年9月30日，我们的许可、合作和收购协议项下的付款义务取决于未来事件，例如我们实现指定的开发、监管和商业里程碑或净产品销售的特许权使用费。有关这些付款义务的更多信息，请参阅我们2023年年度报告第一部分第1项中题为「业务关键智慧财产权协议」的部分。

根据Cobalt收购协议的条款和条件，我们还有义务向Cobalt支付高达50000美金的成功付款，以现金或股票支付，并向哈佛大学支付总计高达17500美金的成功付款，以现金支付。见第二部分第7项。管理层对财务状况和经营运绩的讨论和分析「-关键会计政策以及重大判断和估计-成功付款」在我们的2023年年度报告和注释3「收购」以及注释4「许可和合作协议」中包含，请参阅本季度报告其他地方的简明合并财务报表，以了解有关成功付款的更多信息。截至2024年9月30日，实现里程碑和成功付款以及产生未来产品销售的时间和可能性尚不确定，因此任何相关付款均不包括在上表中。

我们还在正常业务过程中就赞助研究、临床前研究、临床试验、合同制造以及用于运营目的的其他服务和产品达成协议，这些协议通常可以在书面通知后取消。这些义务和承诺不包括在上表中。

自成立以来，我们没有参与美国证券交易委员会规则和法规定义的任何表外安排。

正如2012年《快速启动我们的商业初创公司法案》（JOBS法案）所定义的那样，我们是一家「新兴成长型公司」。我们将继续是一家新兴成长型公司，最早直到（1）2026年12月31日，（2）我们的年度总收入至少为12.35加元的财年的最后一天，（3）我们被视为「大型加速备案人」的财年的最后一天，根据《交易法》第120条第2款的定义，如果截至当年第二财政季度最后一个营运日，非关联公司持有的我们普通股的公平市场价值超过70000加元，或（4）我们在过去三年期间发行超过10加元的不可转换债务证券之日，就会发生这种情况。

For so long as we remain an emerging growth company, we are permitted and intend to rely on certain exemptions from various public company reporting requirements, including not being required to have our independent registered public accounting firm provide an attestation report on our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved.

In addition, under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued after the enactment of the JOBS Act until such time as those standards apply to private companies. We have elected to use the extended transition period for any new or revised accounting standards during the period in which we remain an emerging growth company; however, we may adopt certain new or revised accounting standards early if the standard allows early adoption.

Our condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Our significant accounting policies are described in more detail in the notes to our condensed consolidated financial statements as of September 30, 2024 and for the three and nine months ended September 30, 2024 and 2023, are consistent with those discussed in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations “—Critical accounting policies and significant judgments and estimates” in our 2023 Annual Report.

We are exposed to market risks in the ordinary course of our business, primarily related to interest rate sensitivities and the volatility of our common stock price.

As of September 30, 2024, we had cash, cash equivalents, and restricted cash of $130.8 million, which consisted of bank deposits and money market funds, and also had marketable securities of $72.0 million. The primary objective of our investment activities is to preserve capital to fund our operations while earning a low-risk return. Because our marketable securities are all short-term in duration, we believe that our exposure to interest rate risk is not significant, and a hypothetical 10% change in market interest rates during any of the periods presented would not have had a significant impact on the total value of our portfolio. As of September 30, 2024, we had no debt outstanding that is subject to interest rate variability.

We agreed to make a success payment to Cobalt based on our market capitalization payable in cash or stock, and success payments to Harvard based on increases in the per share fair market value of our common stock, payable in cash.

截至2024年9月30日，成功付款负债的估计公允价值总额为1510日元。截至2024年9月30日的三个月和九个月，我们分别记录了570卢比的收益和230卢比的费用，与我们成功付款负债的估计公允价值的总变化有关。

在每个资产负债表日，我们的市值和普通股的公允价值的变化可能会导致成功付款负债和由此产生的费用或收益的估计估值发生相对较大的变化。例如，对于Cobalt Success付款，在所有其他变量保持不变的情况下，假设截至2024年9月30日我们的市值从9美元亿增加20%至11美元亿，将使截至2024年9月30日的三个月的收益减少340美元万至150美元万。假设我们的市值从9美元亿下降20%至7美元亿，将使截至2024年9月30日的三个月的收益增加320美元万至810美元万。对于哈佛大学Success Payments，在所有其他变量保持不变的情况下，假设截至2024年9月30日，我们的普通股价格从每股4.16美元上涨至4.99美元，将使截至2024年9月30日的三个月的收益减少60美元万至20美元万。假设普通股价格从每股4.16美元下降20%至每股3.33美元，将使截至2024年9月30日的三个月的收益增加50美元万至130美元万。

我们目前没有面临与外币价位变化相关的重大市场风险;但是，我们确实与位于美国境外的供应商签订了合同，并且可能会受到外币价位波动的影响。我们认为我们不会受到这种外币敏感性的重大影响。我们未来可能会与美国以外的供应商签订额外合同，这可能会增加我们的外币兑换风险。

通货膨胀通常通过增加劳动力和实验室消耗品的成本来影响我们。我们认为通货膨胀并未对我们的财务报表产生重大影响。

我们的管理层在执行长（目前担任我们的执行长和财务长）的参与下，评估了截至本季度报告所涵盖期间结束时我们的披露控制和程式（定义见交易法第13 a-15（e）条和第15 d-15（e）条）。我们的披露控制和程式旨在确保我们根据《交易法》提交或提交的报告中要求披露的信息在SEC规则和表格指定的时间段内得到记录、处理、总结和报告，并且这些信息被积累并传达给我们的管理层，包括我们的执行长和财务长。以便及时就所需的披露做出决定。

任何控制措施和程式，无论设计和操作如何良好，都只能为实现预期的控制目标提供合理的保证，管理层在评估可能的控制措施和程式的成本效益关系时必须应用其判断。根据这项评估，我们的执行长（目前担任我们的执行长和财务长）得出的结论是，截至本季度报告所涵盖的期末，我们的披露控制和程式的设计和运作在合理的保证水平上有效。

截至2024年9月30日的季度，我们对财务报告的内部控制没有发生对或合理可能对我们对财务报告的内部控制产生重大影响的变化。

我们目前不是任何重大法律诉讼的一方。在正常业务过程中，我们可能会不时面临第三方提出的各种索赔，我们可能会提出索赔或采取法律行动来维护我们的权利，包括智慧财产权，以及与就业问题和我们产品的安全性或有效性相关的索赔。任何这些索赔都可能使我们面临代价高昂的诉讼，虽然我们普遍认为我们有足够的保险来覆盖多种类型的责任，但我们的保险公司可能会拒绝承保，可能资本不足无法支付有效索赔，或者我们的保单限额可能不足以完全满足任何损害赔偿或和解。如果发生这种情况，任何此类奖励的支付可能会对我们的运营、现金流或财务状况产生重大不利影响。此外，任何此类索赔，无论成功与否，都可能损害我们的声誉和业务。

投资我们的普通股涉及很高的风险。在做出投资决定之前，您应仔细考虑以下风险和不确定性，以及本季度报告中包含的所有其他信息，包括我们的财务报表和本季度报告其他地方包含的相关注释。下面描述的风险并不是我们面临的唯一风险。全球地缘政治、商业和经济环境的恶化正在并将继续加剧以下许多风险和不确定性。发生以下任何风险，或我们目前未知或我们目前认为不重大的额外风险和不确定性，可能会对我们的业务、财务状况、声誉或经营运绩产生重大不利影响。在这种情况下，我们普通股的交易价格可能会下降，您可能会损失全部或部分投资。

以下概述的风险因素是我们认为对投资者来说重要的主要风险，读者应该仔细考虑它们。以下是主要风险和不确定性的总结;然而，「风险因素」部分还描述了其他风险和不确定性。本摘要并未解决我们风险因素的各个方面、我们面临的所有风险或我们目前不知道或我们目前认为无关紧要的其他因素。

以下是本季度报告中更详细描述的主要风险和不确定性摘要：

我们的离体和体内细胞工程平台基于未经证实的新技术，并且可能无法产生可批准或可销售的产品。这种不确定性使我们面临不可预见的风险，使我们难以预测候选产品的开发和潜在的监管批准所需的时间和成本，并增加了我们最终可能无法成功使用和扩展我们的技术平台来建立候选产品管道的风险。

我们战略的一个关键要素是使用我们的产品来识别和开发广泛的候选产品管道离体和体内细胞工程平台，并通过临床开发推进这些候选产品，以治疗各种不同疾病。构成我们利用平台开发候选产品工作基础的科学研究仍在进行中。我们不知道有任何FDA批准的治疗方法是源自多能干细胞（OSC）的细胞产品或利用我们的融合原技术。此外，支持基于我们的平台开发治疗方法的可行性的科学证据是初步的、有限的，并且仍在进行中。因此，我们面临著许多不可预见的风险，并且很难预测我们在开发候选产品过程中可能遇到的挑战和风险类型。

候选产品的临床前和临床测试本质上是不可预测的，可能会导致意想不到的结果，特别是当这些候选产品基于新技术时。例如，我们没有在所有多能和分化的细胞类型或所有微环境中测试我们的细胞工程平台，来自一种细胞类型或微环境的结果可能不会转化为其他细胞类型或微环境。此外，我们目前的基因编辑方法依赖于新的基因编辑试剂，这些试剂可能具有意想不到的或不希望看到的效果，或者被证明没有我们预期的那么有效。此外，我们正处于使用我们的细胞工程平台开发的候选产品在人类身上进行测试的早期阶段，我们目前的大多数数据仅限于动物模型和临床前细胞株和检测，这可能无法准确预测我们的候选产品在人体上的安全性和有效性。此外，我们和第三方可能拥有有限的临床前和临床数据，以及对包括自身免疫性疾病在内的某些适应症的更有限的了解，我们无法预测候选产品的安全性和有效性在不同适应症之间的差异程度。我们可能会在创建适当的模型和分析方法以评估我们候选产品的安全性和纯度方面遇到重大挑战，并且可能无法提供足够的数据或其他证据(令监管机构满意)，即在我们候选产品的临床前和临床测试中观察到的某些意外结果并不表明这些候选产品存在潜在的安全问题。此外，我们可能会在各种计划和计划中使用制造试剂和材料。某些试剂和材料可能是新奇的，具有未知或意想不到的影响，包括关于候选产品的安全性、有效性或可制造性。任何与此类试剂或材料相关或可归因于此类试剂或材料的意外或不利影响都可能影响使用它们的所有计划和计划，并导致延迟和损害我们通过临床前和临床开发及时成功地开发我们的候选产品的能力。

我们可能会根据我们对不同适应症的此类候选产品的经验，或对采用相同技术或使用相同技术开发的其他候选产品的经验，根据我们对此类候选产品的预期，为某些候选产品制定计划和时间表。然而，当在不同的适应症中开发时或与此类其他候选产品相比时，我们的候选产品可能会显示出意想不到的重要差异，包括安全性或有效性方面的差异，包括可能需要改变制造工艺或临床开发计划的差异，这需要超出我们最初预期的额外时间和资源。任何此类事件都可能需要我们调整或改变我们的开发计划，这可能会延迟、损害或阻止我们开发和商业化此类候选产品的能力。

此外，使用我们的低免疫和FusoGen技术开发的候选产品存在潜在的安全风险，包括与提供基因组修改有效载荷相关的遗传毒性相关的风险。例如，随机整合到细胞DNA中的DNA序列可能会增加某些癌症的风险或导致某些癌症。此外，基因编辑方法可能会在目标DNA靶点以外的位置编辑基因组，或者导致DNA重排，每一种方法都可能产生致癌或其他不利影响。PSC来源的细胞产品可能存在潜在的安全风险，这些风险与制造过程中已经发生或可能发生的基因组和表观基因组变异有关。我们不能总是预测这些基因组变化的类型和潜在影响，包括某些变化是否有害或最终可能有害。因此，我们可能很难进行必要的测试和分析开发，以确保我们的PSC衍生细胞候选产品在用于人类时具有可接受的安全性。这些与基因变异相关的风险也与我们从捐赠者来源的细胞创造的候选产品有关。此外，我们基于干细胞的候选产品存在潜在的安全风险，这些风险可能源于未分化或未完全分化为所需表型的细胞，并导致致癌转化或其他不良影响。因此，安全事件或担忧可能会对我们的候选产品的开发产生负面影响，如这些风险因素中的其他部分所述。

鉴于我们技术的新颖性，我们打算与FDA和类似的外国监管机构密切合作，对我们的方法进行必要的科学分析和评估，以获得监管部门对我们候选产品的批准。然而，由于缺乏类似疗法或给药方法的经验，与FDA和类似的外国监管机构的监管途径可能比更知名的疗法更复杂、更耗时、更不可预测。例如，即使我们获得人类数据来支持对我们的候选产品进行持续的评估和批准，FDA或类似的外国监管机构可能在评估与我们的候选产品类似的疗法的安全性和有效性方面缺乏经验，或者可能比更成熟类型的生物制品产生的数据更仔细地审查这些数据。此外，由于市场上没有获得批准的PSC或供体来源的细胞治疗产品，FDA和类似的外国监管机构尚未建立一致的标准来评估此类产品的安全性，他们建立的任何此类标准都可能随后发生变化。此外，FDA仍然专注于与基因和细胞治疗产品相关的潜在安全问题，随著近年来提交FDA审查的新基因和细胞治疗产品候选产品的数量增加，FDA强制实施的临床搁置数量也增加了。例如，FDA已经对某些候选产品进行了临床搁置，等待在服用这些候选产品后对仅在单个患者中检测到的基因组异常进行进一步评估。我们不能确定FDA或类似的外国监管机构是否会确定与我们的候选产品相关的潜在安全风险超过了我们开发产品的每个适应症的潜在治疗益处，以及它们是否允许我们及时开始或根本不允许我们开始此类候选产品的临床试验，或在此类临床试验开始后继续进行。如果我们因潜在的安全问题而对我们的任何候选产品进行临床暂停，我们不能保证我们将能够向适用的监管机构提供关于该候选产品的安全概况的足够数据或其他证据，以便我们能够及时开始或恢复该候选产品的临床开发。任何此类事件都可能推迟此类候选产品的临床开发，包括其他适应症，或我们其他候选产品的临床开发，增加我们的预期开发成本，延长监管审查过程的时间，并推迟或阻止我们候选产品的商业化。此外，我们候选产品的评估过程将耗费时间和资源，可能需要独立的第三方分析，我们的候选产品最终可能不会被FDA或类似的外国监管机构接受或批准。因此，即使我们成功地建立了我们的候选产品管道，离体和体内对于细胞工程平台，我们不能确定这样的努力将导致单独或与其他疗法结合开发出可批准或可销售的产品。

为了回应之前接受嵌合抗原受体(Car)t细胞免疫疗法的患者患t细胞恶性肿瘤的报告，fda于2023年11月宣布，它正在调查继发性癌症的风险，以及对此类疗法采取监管行动的必要性，并已就有关此类疗法的新的患者监测和报告要求提出建议。2024年1月，FDA对所有批准的CART疗法实施了关于T细胞恶性肿瘤发生的全类方框警告要求。FDA指出，目前它认为这些疗法的总体好处继续超过它们被批准使用的潜在风险。然而，目前批准的所有CART细胞免疫疗法仅在肿瘤学适应症中获得批准，不能保证FDA或类似的外国监管机构将在其他适应症(如自身免疫性疾病)上达到同样的风险-效益确定。我们已经收到并可能在未来收到FDA的信件，要求更新我们的某些CAR T细胞临床试验，以解决这些进展。此外，我们和我们的候选产品可能会受到FDA或类似的外国监管机构与这些疗法相关的进一步监管行动或要求，例如要求对任何批准的产品进行黑盒警告或其他标签披露。上述任何情况的发生都可能增加此类候选产品的开发和商业化的成本和复杂性，并限制其商业机会，其中任何一项都可能对我们的业务产生重大不利影响。

如果我们无法成功识别、开发和商业化任何候选产品，或者在这样做时遇到重大延误，我们的业务、财务状况和运营结果将受到重大不利影响。

我们从任何候选产品的销售中获得收入的能力，我们预计至少在未来几年内不会发生，如果有的话，将在很大程度上取决于任何此类候选产品的及时和成功的识别、开发、监管批准和最终商业化，而这可能永远不会发生。到目前为止，我们还没有从任何产品的销售中获得收入，我们可能永远无法开发、获得监管部门的批准或将适销对路的产品商业化。在我们从当前或潜在的未来候选产品的产品销售中获得任何收入之前，我们需要管理临床前、临床和制造活动，包括进行重要的临床开发，获得多个司法管辖区的监管批准，建立制造供应，包括商业制造供应，以及建立商业组织，这将需要大量投资和大量营销努力。我们的任何候选产品可能永远不会获得监管部门的批准，这将阻止我们营销、推广或销售我们的任何候选产品并创造收入。

我们候选产品的成功开发将取决于或受到多种因素的影响，包括以下因素：

如果我们在其中任何一个或多个因素方面遇到问题或延误，我们可能会遇到重大延误或无法成功开发和商业化我们的候选产品，这将对我们的业务、财务状况和运营结果产生重大不利影响。

我们可能没有意识到我们已经获得或获得许可或将来将获得或获得许可的技术的好处。

我们战略的一个关键组成部分是获取和许可技术，以支持我们使用工程细胞作为药物的使命。我们离体和体内细胞工程技术代表了来自多个学术机构和公司多年创新和技术的集合，包括我们从哈佛学院（哈佛）院长和研究员和加州大学（UCSF）董事会那里授权的低免疫技术，以及我们从Cobalt Biomedicine，Inc.收购的融合原技术。（Cobalt），以及我们从Beam Therapeutics Inc.授权的基因编辑技术，其中。我们将继续积极评估各种收购和许可机会。

这些收购和许可内安排（包括我们未来可能达成的任何安排）的成功程度将取决于所涉及的风险和不确定性，包括：

For example, in October 2023, we underwent a strategic repositioning pursuant to which we updated our portfolio to increase our focus on our ex vivo cell therapy product candidates and reduce our near-term investment in our fusogen platform. As part of this reduction, we shifted our focus on fusogen to research activities. We expect to encounter increased costs and difficulties if and when we expand preclinical development and initiate clinical development for product candidates derived from our fusogen platform, including those related to scaling up and driving forward clinical development and manufacturing activities. As a result, there is increased risk that the benefits we expected from the fusogen platform at the time of the Cobalt acquisition may be more expensive and difficult to obtain or may not occur at all.

In addition, foreign acquisitions are subject to additional risks, including those related to integration of operations across different cultures and languages, currency risks, potentially adverse tax consequences of overseas operations, and the particular economic, political, and regulatory risks associated with specific countries. The occurrence of any of these risks or uncertainties may preclude us from realizing the anticipated benefit of any acquisition, and our financial condition may be harmed.

Additionally, we may not be successful in our efforts to acquire, obtain rights to, or otherwise access certain technologies or products that are necessary for the success of our product candidates or technologies on acceptable terms or at all, including because we may be unable to successfully or timely negotiate the terms of an agreement with the third-party owner of such technology or products or such third party may have determined to deprioritize such technology or products. Such transactions, as well as other strategic relationships we may enter into, may also be impacted by policies of or actions by certain regulatory authorities, such as the Federal Trade Commission (FTC), that have jurisdiction over various aspects of such transactions and relationships. If we are not able to acquire, obtain rights to, or otherwise access certain technologies or products on which certain of our product candidates or technologies may depend, it may be necessary for us to delay, reduce, or curtail the development of such product candidates or technologies, or incur additional costs in order to continue development without such rights.

We may fail to enter into new strategic relationships or may not realize the benefits of any strategic relationships that we have entered into, either of which could materially adversely affect our business, financial condition, commercialization prospects, and results of operations.

Our product development programs and the potential commercialization of our product candidates will require substantial additional cash to fund expenses. In addition, our ex vivo and in vivo cell engineering platforms are attractive technologies for potential collaborations due to their breadth of application. Therefore, for certain of our product candidates, including product candidates that we may develop in the future, we may decide to form or seek strategic alliances, collaborations, or similar arrangements with pharmaceutical or biotechnology companies that we believe will complement or augment our development and potential commercialization efforts with respect to such product candidates, including in territories outside the United States or for certain indications. We may also pursue joint ventures or investments in complementary businesses that align with our strategy. To the extent we enter into strategic relationships involving companies located outside the United States, we are subject to similar risks to those described elsewhere in these Risk Factors with respect to foreign acquisitions.

我们在寻找合适的合作者方面面临著激烈的竞争。协作的谈判和记录既复杂又耗时。我们可能无法以可接受的条款或根本不成功地为我们的候选产品建立合作或其他替代安排，包括因为我们的候选产品可能被认为处于合作努力的开发阶段太早，或者第三方可能认为我们的候选产品不具备在临床试验中证明成功并最终获得监管部门批准的必要潜力。此外，最近大型制药公司之间的大量业务合并减少了未来潜在合作者的数量，并改变了合并后公司的战略。此外，根据适用于我们候选产品的某些许可协定的条款，我们可能会被限制以某些条款或根本不参与与这些候选产品有关的合作或类似协定。如果我们与第三方合作开发和商业化候选产品，我们预计我们可能不得不将对该候选产品未来成功的部分或全部控制权让给第三方。我们就合作达成最终协定的能力将取决于我们对合作者的资源和专业知识的评估、建议的合作的条款和条件，以及建议的合作者对我们的技术、候选产品和市场机会的评估。协作者还可以考虑替代候选产品或技术，以获得可能可用于协作的类似指示，并可以确定对于我们的候选产品而言，此类其他协作比与我们协作更具吸引力。对于我们可能进行的任何合资企业，都存在类似的风险，以及与管理和获得任何此类合资企业的利益所需的成本、时间和其他资源相关的风险和不确定性，以及我们可能因合资企业而招致的任何潜在责任。

In instances where we enter into collaborations, we could be subject to the following risks, each of which may materially harm our business, commercialization prospects, and financial condition:

如果我们的战略合作没有成功开发候选产品并将其商业化，或者如果我们的一个合作者终止了与我们的协定，我们可能不会根据合作获得任何未来的研究资金、里程碑或特许权使用费。此外，我们对根据我们的战略合作有资格获得的潜在收入的初步估计可能包括与我们的合作者可能停止开发的治疗专案相关的潜在付款。如果我们无法达成战略合作，或者在我们达成合作之后发生本风险因素中描述的任何其他事件，我们可能不得不减少特定候选产品的开发，减少或推迟该候选产品或我们的一个或多个其他候选产品的开发计划，推迟其潜在的商业化或缩小我们的销售或营销活动的范围，或者增加我们的支出，并自费进行开发或商业化活动。如果我们选择增加我们的支出，为我们自己的开发或商业化活动提供资金，我们可能需要获得额外的资本，这些资本可能无法以可接受的条件提供给我们，或者根本无法获得。如果我们没有足够的资金，我们将无法将我们的候选产品推向市场并产生产品收入。

我们开发细胞工程平台和候选产品的能力以及未来的增长取决于保留我们的关键人员和招募更多合格人员。

我们的成功有赖于我们关键的管理、科学和技术人员的持续贡献，他们中的许多人为我们提供了帮助，并在我们的细胞工程平台及其基础技术和相关产品候选产品方面拥有丰富的经验。鉴于我们的专业性质，我们离体和体内细胞工程技术，以及我们在新的和新兴的领域开展业务的事实，固有地缺乏具有必要经验的人员来填补我们整个组织的角色。随著我们继续开发我们的候选产品并建立我们的管道，我们将需要具有医疗、科学或技术资格和专业知识的人员来专门针对每个专案。关键管理层和高级科学家或其他人员的流失可能会推迟我们的研发活动。此外，关键高管的流失可能会扰乱我们的运营和我们开展业务的能力。尽管我们努力留住有价值的员工，但我们的所有员工都是随意的员工，我们的管理、科学和开发团队的成员可以在通知或不通知的情况下随时终止与我们的合作。此外，影响我们劳动力的法规或立法，如最近发布的FTC规则，一般禁止雇主将竞业禁止义务强加于员工，并使大多数现有的竞业禁止义务无法执行，以及任何对此的法律挑战，可能会导致招聘和人才竞争的不确定性增加，并损害我们在终止雇佣后保护公司(包括我们的知识产权)的能力。如果我们现在或未来的留住努力不成功，我们可能很难实施我们的业务战略，这可能会对我们的业务产生实质性的不利影响。

此外，我们的某些关键人员继续受雇于学术机构。未来我们可能会有其他人员有类似的安排。这些安排使我们面临这样的风险：这些人可能会全职返回他们的学术职位，在我们身上投入的时间或注意力低于最佳水平，或者可能使我们面临各自学术机构的智慧财产权所有权或共同所有权主张。

生物技术和制药行业对合格人才的竞争非常激烈，我们未来的成功取决于我们吸引、留住和激励高技能员工的能力，包括高管、科学家、工程师、临床运营和制造人员以及销售专业人员。我们预计，我们可能会继续面临来自其他公司、大学、公共和私人研究机构以及其他组织的人员竞争。在以可接受的条件聘用和留住合资格的员工方面，我们不时遇到困难，我们预计亦会继续遇到困难。与我们竞争的许多公司可能拥有比我们更多的资源，而且可能能够为未来的求职者或我们的现有员工提供比我们所能提供的更具吸引力的职位、工资或福利。如果我们从竞争对手或其他公司雇佣员工，他们的前雇主可能会试图断言这些员工或我们违反了法律义务，包括竞业禁止或竞业禁止义务，这可能会导致我们的时间和资源被转移，并可能造成损害。此外，求职者和现有员工通常会考虑与其工作相关的股票奖励的价值。如果我们的股票奖励的预期收益下降，或者与我们争夺人才的公司相比，被认为是不利的，或者如果我们或我们的前景被认为是不利的，这可能会对我们招聘、激励和留住高技能员工的能力产生负面影响。

我们分别于2022年11月、2023年10月和2024年11月宣布了战略调整，据此我们进行了员工人数的削减。我们的员工人数减少可能会导致超出我们计划的员工人数减少、员工士气下降和负面宣传，这可能会损害我们的声誉，并使我们更难保留和激励现有人员以及吸引新人员。这些劳动力削减还导致我们失去了机构知识、能力和主题专业知识，如果我们无法识别所做出的发明或识别或重建必要的科学记录或数据，可能会对我们获取和维护智慧财产权的努力产生负面影响。上述任何情况都可能严重损害我们的业务和未来增长前景。

尽管我们的许多人员在制造生物制药产品方面拥有丰富的经验，但作为一家公司，我们没有开发或维护制造设施的经验。鉴于制造新型疗法的复杂性，我们无法保证能够维持合规设施并按预期生产我们的候选产品。如果我们未能成功运营我们的设施并生产足够且合规的候选产品，我们的临床试验和候选产品的商业可行性可能会受到不利影响。

生物制药产品的制造是复杂的，需要大量的专业知识，包括开发先进的制造技术和工艺控制。基因和细胞治疗产品的制造商在生产中经常遇到困难，特别是在扩大规模、扩大规模、验证初始生产、确保没有污染以及确保初始生产后的工艺稳定性方面。这些困难包括生产成本和产量、质量控制(包括产品的稳定性)、品质保证测试、操作员错误和合格人员短缺，以及遵守严格执行的联盟、州和外国法规。由于生物制药制造涉及的复杂性，生物制剂的制造成本通常高于传统的小分子化合物，制造工艺更不可靠，更难复制，对于我们的候选产品来说尤其如此。应用新的监管指南或参数，例如与控制策略测试相关的指南或参数，也可能对我们以合规和经济高效的方式生产我们的候选产品的能力产生不利影响，或者根本不影响。

我们继续投资在制造科学和运营的关键领域建立世界一流的能力，包括开发我们的细胞工程平台、产品特征和过程分析。我们的投资还包括规模化的研究解决方案、规模化的基础设施和新颖技术，以提高制造的效率、特征和可扩展性，包括建立我们的内部制造能力。然而，我们在管理制造细胞和基因疗法所需的制造过程方面经验有限。我们无法确定我们使用的制造工艺或我们融入这些工艺的技术是否会产生可行或可扩展的产量离体和体内具有可接受的安全性、纯度和效力或功效、特征并满足市场需求的候选细胞工程产品。

2022年6月，我们签订了一份长期租赁，以在华盛顿州博瑟尔建立和开发我们自己当前的良好制造规范（GMP）生产工厂（博瑟尔工厂）。此外，2022年1月，我们与罗切斯特大学达成了一项协议，根据该协议，我们获得了罗切斯特大学医学中心（URMC）基于细胞的制造工厂（URMC工厂）的制造能力，以支持我们早期临床试验产品组合中候选产品的制造。

设计和扩建Bothell设施和URMC网站非常耗时，需要大量资源，包括重新分配我们现有的某些财务、人力和其他资源，包括我们高级管理层的时间和注意力。此外，鉴于建筑材料成本的波动，以及近年来通货膨胀率上升和未来可能发生的影响，扩建我们的制造能力可能比我们预期的更昂贵。作为一家公司，我们没有开发内部制造能力的经验，我们可能会遇到意想不到的成本或延误，或者无法及时开发我们的内部制造能力，以支持我们的候选产品的注册临床试验，或者根本不成功。为了扩建Bothell工厂和URMC工厂，我们将需要继续与第三方服务提供商合作，并获得制造我们的候选产品所需的设备和第三方技术。然而，我们可能无法以商业上合理的条款或根本不能与第三方谈判达成协定或获得必要的技术。此外，不能保证我们为开发Bothell设施而租赁的空间在租赁期内不会改变所有权，不会受到额外的分区或其他限制，也不能保证在这种情况下，我们将能够继续建造或运营该设施，而不受限制或进一步延误或成本。

此外，运营Bothell工厂和URMC工厂将需要我们继续雇用和留住经验丰富的科学、质量控制、质量保证和制造人员。正如这些风险因素中其他地方所述，鉴于生物技术和制药行业对合格人员的激烈竞争，这可能很困难。此外，尽管我们计划在URMC工厂进一步设计和建设制造能力，但我们无法控制URMC的基于细胞的制造设施，也无法控制URMC管理和运营该设施的方式。如果URMC不按照我们的要求维护其基于细胞的生产设施，我们可能无法及时或根本无法生产我们的候选产品，这可能会推迟我们开始临床试验、获得监管机构批准和商业化我们的候选产品的能力。

我们目前依赖并预计将继续依赖CDMO来生产用于临床前研究和临床试验的候选产品。此外，我们建立和运营Bothell工厂的时间可能比我们最初预期的要长，这可能会推迟我们开始内部生产某些候选产品的能力，延长我们必须完全依赖CDMO生产此类候选产品的时间，并导致我们的临床开发时间表延迟。例如，在当前的临床开发时间表下，我们可能会依赖我们的CDMO来进行第一个候选产品的潜在注册和商业发布，如果我们建立和运营Bothell工厂的能力出现任何延迟，我们可能会被要求更严重地依赖我们的CDMO来进行其他候选产品的潜在注册和商业发布。

为了在以下位置开始制造活动在Bothell工厂和URMC现场，我们可能需要将我们某些候选产品的制造工艺和技术从我们的其他工厂或CDMO转移到Bothell工厂或URMC现场(视情况而定)。到目前为止，我们和我们的CDMO在制造过程的技术转让方面经验有限。转移制造工艺和专有技术是复杂的，涉及审查和纳入可能随著时间推移而演变的有记录的和无记录的过程。此外，将生产转移到Bothell工厂和URMC现场可能需要使用新的或不同的工艺来满足我们的设施要求。可能还需要进行额外的研究，以支持某些制造工艺的转移和工艺改进。在完成旨在证明我们CDMO以前生产的材料与我们工厂生产的材料具有可比性的研究和评估完成之前，我们无法确定所有相关技术和数据是否已充分纳入我们工厂正在进行的制造过程中。类似的风险和考虑也适用于从我们向我们的CDMO进行制造临床前和临床用品的初始技术转让，以及在我们被要求切换到新的CDMO的情况下CDMO之间的技术转让。

运营Bothell设施和URMC现场将要求我们遵守复杂的法规。此外，Bothell工厂和我们未来可能运营的任何商业制造设施都需要FDA或类似的外国监管机构的批准，我们可能无法及时获得批准，以支持我们的候选产品进行注册临床试验。即使获得批准，我们也将受到FDA、药品监督管理局、相应的州机构和类似的外国监管机构的持续定期突击检查，以确保严格遵守cGMP、当前的良好组织规范(CGTP)和其他政府法规。如果我们不能满足监管要求，并且可能无法扩大我们的制造规模以满足市场需求，我们可能无法制造我们的候选产品。我们制造能力发展的任何失败或延迟，包括Bothell工厂和URMC工厂，都可能对我们候选产品的开发和潜在商业化产生不利影响。

如果我们扩大业务（包括我们的开发和监管能力），我们可能会在管理增长方面遇到困难，这可能会扰乱我们的运营并以其他方式损害我们的业务。

自2018年7月成立以来，我们经历了快速增长。然而，正如这些风险因素中其他地方所述，作为2022年11月、2023年10月和2024年11月重组的一部分，我们进行了裁员。这些裁员可能会产生意想不到的后果和成本，包括难以留住和激励剩余员工、难以吸引和雇用合格员工，以及在需要支持我们的内部能力时增加对第三方的依赖。

尽管我们裁员，但如果我们在最初的临床试验中取得成功，我们预计我们的业务范围将继续增长，特别是如果我们推动我们的候选产品进入并通过IND使能研究和临床试验，并继续建立和发展我们的监管、质量和临床运营以及供应链物流和制造。为了管理我们的增长，我们已经实施并改进了我们的管理、运营和财务制度，并计划继续实施和改进，并继续招聘和培训更多合格的人员。然而，由于我们有限的财政资源以及管理一家具有如此增长的公司的复杂性，我们可能无法有效地管理我们业务的扩张，或者招聘和培训足够多的合格人员来在我们期望的时间表内实现我们的业务目标。继续扩大我们的业务将是代价高昂的，并可能转移我们的管理和业务发展资源。例如，管理层成员将承担与实现和管理我们的增长相关的重大额外责任，包括识别、招聘、整合、维护和激励当前和未来的员工，有效管理我们的内部开发工作，包括临床和监管(例如FDA)审查过程，同时遵守我们对第三方的合同义务，以及维护和改进我们的运营、财务和管理控制、报告系统和程式。此外，随著我们的成长，我们可能会被要求更多地依赖第三方服务提供商，这将使我们面临风险，如果我们在内部完成所有工作，就不会受到这些风险因素在其他地方描述的风险。我们无法成功地管理我们的增长，可能会扰乱我们的运营，并以其他方式损害我们的业务，包括推迟我们的计划和业务计划的执行。

我们可能会花费有限的资源来追求特定的候选产品或适应症，但未能利用可能利润更高或成功可能性更大的候选产品或适应症。

由于我们的财务和管理资源有限，我们专注于我们确定的特定适应症的研究计划、治疗平台和候选产品。此外，根据我们的某些协定，我们有合同承诺使用商业上合理的努力来开发某些专案，因此，我们没有单方面的自由裁量权来改变这种努力。此外，我们有实施某些开发计划的合同承诺，因此在未经我们的合作伙伴同意的情况下，可能无权修改此类开发计划，包括临床试验设计。因此，我们可能会放弃或推迟寻求其他治疗平台或候选产品或后来被证明具有更大商业潜力的其他适应症的机会。我们的资源分配决策可能会导致我们无法利用可行的商业产品或有利可图的市场机会。此外，我们可能被要求将我们的资源投资于少数在短期内有更高成功概率的更高级的计划，因此，我们可能需要减少对有希望的早期计划的投资。这样的决定将要求我们减少产品组合的广度和多样性，这可能会限制我们产品线的长期增长，并使我们面临更大的风险，即任何此类计划的失败都会损害我们的前景。我们在当前和未来的研发计划、治疗平台和特定适应症候选产品上的支出可能不会产生任何商业上可行的产品。如果我们没有准确评估特定候选产品的商业潜力或目标市场，在保留独家开发权和商业化权利对我们更有利的情况下，我们可能会通过合作、许可或其他版税安排放弃对该候选产品有价值的权利。

The use of human stem cells exposes us to a number of risks in the development of our human stem cell-derived products, including inability to obtain suitable donor material from eligible and qualified human donors, restrictions on the use of human stem cells, as well as the ethical, legal, and social implications of research on the use of stem cells, any of which could prevent us from completing the development of or commercializing and gaining acceptance for our products derived from human stem cells.

We use human stem cells in our research and development, including induced PSCs (iPSCs) and embryonic stem cells (ESCs), and one or more of our ex vivo cell engineering product candidates may be derived from human stem cells. The use of such cells in our research, or as starting cell lines in the manufacture of one or more of our product candidates, exposes us to numerous risks. These risks include difficulties in securing viable, appropriate, and sufficient stem cells as starting material, recruiting patients for our clinical trials, as well as managing a multitude of global legal and regulatory restrictions on the sourcing and use of these cells. For example, to the extent regulatory requirements differ across jurisdictions, we may face increased difficulty finding cells that meet all applicable jurisdictional requirements, or may be required to develop our product candidates using multiple different types of cells, which could increase the complexity and cost of development. In addition, certain cells may be subject to restrictions regarding the patient populations in which the resulting products can be used, which could limit the applicability and value of our product candidates. Further, in some states, use of embryonic tissue as a source of stem cells is prohibited and many research institutions have adopted policies regarding the ethical use of human embryonic tissue. If these regulations, policies, or restrictions have the effect of limiting the scope of research or other activities we can conduct using stem cells, our ability to develop our ex vivo cell engineering product candidates may be significantly impaired, which could have a material adverse effect on our business.

Additionally, the use of stem cells generally, and ESCs, in particular, has social, legal, and ethical implications. Certain political and religious groups continue to voice opposition to the use of human stem cells in drug research, development, and manufacturing. Adverse publicity due to ethical and social controversies surrounding the use of stem cells could lead to negative public opinion, difficulties enrolling patients in our clinical trials, increased regulation, and stricter policies regarding the use of such cells, which could harm our business and may limit market acceptance of any of our product candidates that may receive regulatory approval. In addition, clinical experience with stem cells, including iPSCs and ESCs, is limited. We are not aware of any products utilizing iPSCs or ESCs as a starting material that have received marketing approval from the FDA or a comparable foreign regulatory authority. Therefore, patients in our clinical trials may experience unexpected side effects, and we may experience unexpected regulatory delays prior to or, if approval were to be granted, after regulatory approval.

Furthermore, manufacturing and development of our ex vivo stem cell-derived and allogeneic T cell-derived product candidates will require that we obtain suitable donor material from eligible and qualified human donors. If we are unable to obtain sufficient quantities of suitable donor material, or if we are unable to obtain such material in a timely manner, we may experience delays in manufacturing our ex vivo product candidates, which would harm our ability to conduct clinical trials for or to commercialize these product candidates. Moreover, if the consent, authorization, or process for the donation and use of those materials is not obtained or conducted in accordance with applicable legal, ethical, and regulatory requirements, we could face delays in the clinical testing and approval of these product candidates, or, potentially, we could face claims by such human donors or regulatory authorities, which could expose us to damages and reputational harm.

Negative public opinion and increased regulatory scrutiny of research and therapies involving gene editing or other ex vivo or in vivo cell engineering technologies may damage public perception of our product candidates or adversely affect our ability to conduct our business or obtain regulatory approvals for our product candidates.

Certain aspects of our cell engineering platforms rely on the ability to modify the genome, including by editing genes. Public perception may be influenced by claims that genome modification is unsafe, and products using or incorporating genome modification may not gain the acceptance of the public or the medical community. Similarly, general perceptions of products relying on ex vivo or in vivo cell engineering techniques may be impacted by developments within the research community as well as across the pharmaceutical and biotechnology industries, including those affecting or related to other companies, including those developing products that are similar or within adjacent fields or that are being developed in the same indications. Negative perceptions of genome modification, including gene editing, or of cell or gene therapy products generally, may result in fewer physicians being willing to enroll patients into clinical trials of our product candidates or prescribing our treatments, reduce the willingness of patients to participate in clinical trials of our product candidates or use our treatments, or otherwise negatively impact the development of our product candidates.

In addition, given the novel nature of ex vivo and in vivo cell engineering technologies, governments may impose import, export, or other restrictions in order to retain control or limit the use of such technologies. Further, in order to further understand the risks of novel genome modification technologies, regulatory authorities may require us to provide additional data prior to allowing clinical testing or commercialization of product candidates that use such technologies, which may cause us to incur additional costs and delay our development plans for certain of our product candidates. Increased scrutiny, negative public opinion, more restrictive government regulations, or enhanced governmental requirements, either in the United States or internationally, would have a negative effect on our business or financial condition and may delay or impair the development and commercialization of our product candidates or demand for such product candidates.

We must successfully progress our product candidates through extensive preclinical studies and clinical trials in order to obtain regulatory approval to market and sell such product candidates. Even if we obtain positive results in preclinical studies of a product candidate, these results may not be predictive of the results of future preclinical studies or clinical trials.

Before an IND or comparable foreign submission can be submitted to the FDA or a comparable foreign regulatory authority and be cleared or otherwise become effective, which is a prerequisite for conducting clinical trials on human subjects, a product candidate must successfully progress through extensive preclinical studies, which includes preclinical laboratory testing, animal studies, and formulation studies conducted in accordance with good laboratory practices. In addition, to obtain the requisite regulatory approvals to ultimately market and sell any of our product candidates, we or any future collaborator for such product candidate must satisfy the FDA’s or a comparable foreign regulatory authority’s legal standards with respect to safety, purity, and potency, or efficacy, which may include, among other things, demonstrating through adequate and well-controlled clinical trials that the benefits of the product candidate outweigh its known risks for the intended patient population.

Preclinical and clinical testing is inherently unpredictable. We may obtain positive data from early research involving our product candidates but subsequently encounter unexpected or unexplained results in preclinical or clinical studies that may cause such product candidates to be unsuitable for further development. We may also need to perform additional research and preclinical or clinical studies for various reasons, including to determine the cause of any unexpected results, including whether such results were caused by our product candidates or other factors, which could delay our development timelines or prevent us from continuing further development at all.

Even if we obtain positive results from preclinical or clinical studies of our product candidates, success in preclinical or clinical studies does not ensure that later preclinical studies or clinical trials will be successful. A number of biotechnology and pharmaceutical companies have suffered significant setbacks in clinical trials, even after positive results in earlier preclinical or clinical studies, such as adverse findings observed while clinical trials were underway or safety or efficacy observations during clinical trials, including previously unreported adverse events, and we cannot be certain that we will not face similar setbacks. The design of a clinical trial can determine whether its results have the potential to support approval of a product, and flaws in a clinical trial’s design may not become apparent until the clinical trial is well advanced. In addition, the results of our preclinical animal studies, including our non-human primate (NHP) studies, may not be predictive of the results of subsequent clinical trials involving human subjects. Product candidates may fail to show the desired pharmacological properties or safety and efficacy traits in clinical trials despite having successfully progressed through preclinical studies or earlier clinical trials.

If we fail to obtain positive results in preclinical studies or clinical trials of any product candidate, the development timeline and regulatory approval and commercialization prospects for that product candidate, and, correspondingly, our business and financial prospects, would be negatively impacted.

Preclinical testing of our product candidates may be delayed or otherwise unsuccessful, which would harm our ability to commence and successfully complete clinical trials of, and ultimately commercialize, such product candidates.

Applicable laws and regulations require us to conduct preclinical testing of our product candidates in animals before initiating clinical trials involving humans, and the results and timing of such testing are uncertain. We may experience delays in or difficulty completing studies of our product candidates in animals for various reasons. For example, due to global supply chain issues caused by global geo-political, economic, and other factors beyond our control, as described elsewhere in these Risk Factors, we have experienced and may continue to experience difficulty and increased costs in accessing animal models, specifically certain NHP models, which could delay completion of our preclinical studies involving such models or harm our ability to conduct or complete such studies at all, and could limit the potential patient population for our product candidates.

In addition, animal testing has been the subject of controversy and adverse publicity. Animal rights groups and others have attempted to stop animal testing by pressing for legislation and regulation and by disrupting such testing through protests and other means. To the extent these attempts are successful, our research and development activities may be interrupted or delayed, become more expensive, or both.

We are required to submit an IND or comparable foreign submission to the FDA or comparable foreign regulatory authorities with respect to each product candidate prior to commencing a clinical trial for such product candidate in the applicable jurisdiction. Although we expect our pipeline to yield additional INDs and plan to submit INDs for each of our product candidates, we may not be able to submit future INDs in accordance with our expected timelines for various reasons, including due to:

Moreover, we cannot guarantee that submission of an IND or comparable foreign submission for a product candidate will result in the FDA or comparable foreign regulatory authorities allowing clinical trials of that product candidate to commence in accordance with our timelines or expectations or at all, or that, once begun, issues will not arise that require suspension or termination of such clinical trials. For example, the FDA or a comparable foreign regulatory authority may accept an IND or comparable foreign submission for a product candidate but place clinical trials of such product candidate on hold pending the results of additional testing or the development of additional assays, or may otherwise refuse or terminate the applicable submission. Further, because legal and regulatory requirements for conducting clinical trials vary across jurisdictions, our receipt of authorization to conduct clinical trials in one jurisdiction does not guarantee such authorization will be granted in other jurisdictions.

In addition, such legal and regulatory requirements may change over time, including in a manner that could cause us to incur delays or additional expense in order to comply. For example, the regulatory landscape related to clinical trials in the European Union (EU) continues to evolve. The EU Clinical Trials Regulation (CTR), which was adopted in April 2014 and repealed the EU Clinical Trials Directive, became applicable on January 31, 2022. Unlike the EU Clinical Trials Directive, which required a separate clinical trial application (CTA) to be submitted to both the competent national health authority and an independent ethics committee in each EU member state in which the clinical trial will be conducted, the CTR provides for a centralized process. The CTR allows sponsors for multi-center trials to make a single submission to both the competent authority and an ethics committee in each member state, leading to a single decision per member state. The CTA assessment procedure has been harmonized as well, including a joint assessment by all member states concerned, and a separate assessment by each member state with respect to specific requirements related to its own territory, including ethics rules. The decision of each EU member state is communicated to the sponsor via the centralized EU portal. Once the CTA is approved, clinical studies may proceed. The CTR foresees a three-year transition period. Compliance with the CTR requirements by us and our service providers, such as CROs, may impact our development plans. For example, because the CTR requires coordination of application review and processing across multiple member states, our ability to commence clinical trials in accordance with our timelines could be delayed. Further, as discussed elsewhere in these Risk Factors, the United Kingdom (UK) withdrew from the EU in 2020, and uncertainty remains as to whether and to what extent certain UK laws and regulations will be aligned with those of the EU, including the CTR, which does not apply in the UK. Local requirements in the UK and the EU have diverged and may further diverge in the future, which could impact any UK clinical and development activities we may conduct. In addition, clinical trial submissions in the UK must be separate from those submitted to EU member states, adding further complexity, cost, and potential risk to any clinical and development activity in the UK.

If we are unable to satisfy applicable legal or regulatory requirements or standards for an IND or comparable foreign submission, or experience delays in doing so, clinical development of our product candidates may be delayed or we may be unable to execute clinical trials of the applicable product candidate in the relevant jurisdiction. For example, we may decide not to submit an IND or comparable foreign submission in certain jurisdictions due to applicable legal or regulatory requirements in such jurisdiction, including based on future changes to such requirements. Additionally, even if regulatory authorities agree with the design and implementation of the clinical trials set forth in an IND or a comparable foreign submission, we cannot guarantee that such regulatory authorities will not change their requirements in the future, which could require us to make costly changes to and delay the conduct of our clinical trials or require suspension or termination of such trials entirely. In addition, because the manufacturing of our product candidates, including our ex vivo CAR T cell product candidates, is in its early stages and continues to evolve, we expect that manufacturing-related matters such as chemistry, manufacturing, and controls, including product specifications, will continue to be a focus of regulatory review of our INDs or comparable foreign submissions, which may delay our ability to proceed with the relevant clinical trials. These considerations also apply to new clinical trials we may submit as amendments to existing INDs or comparable foreign submissions.

Clinical drug development is a lengthy and expensive process with uncertain timelines and outcomes. If clinical trials of any of our product candidates are prolonged or delayed, or need to be terminated, we may be unable to obtain required regulatory approvals and commercialize such product candidates on a timely basis or at all.

Clinical trials are expensive, complex, and can take many years to complete, and their outcomes are inherently uncertain and their data subject to varying interpretations and analyses. Product candidates in later-stage clinical trials may fail to produce the same results as observed in earlier trials or fail to show the desired safety and efficacy characteristics despite having progressed through preclinical studies and earlier clinical trials.

We do not know whether our current or future clinical trials will begin on time, need to be redesigned, enroll patients on time, or be completed on schedule, if at all. Clinical trials may be delayed, suspended, or terminated, or may not be able to be conducted at all, for a variety of reasons, including the following:

Clinical trials must be conducted in accordance with the FDA’s and comparable foreign regulatory authorities’ legal requirements, regulations, and guidelines and are subject to oversight by these governmental authorities and IRBs or ECs of the medical institutions where the clinical trials are conducted. We could encounter delays if a clinical trial is suspended or terminated by us, by the IRBs or ECs of the institutions at which such trial is being conducted, by the Data Review Committee or Data Safety Monitoring Board for such trial, or by the FDA or comparable foreign regulatory authorities. Such authorities may impose such a suspension or termination, including following an inspection of clinical trial operations or a clinical trial site, for various reasons, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from use of the product candidate being tested, or changes in governmental regulations or administrative actions.

In addition, the complexity and novelty of certain product candidates, the clinical trial design, and the indications for which such product candidates are being developed, as well as the combination of these factors, could negatively affect our ability to successfully execute and complete clinical trials of such product candidates in accordance with our timelines. For example, clinical trials involving certain indications, such as autoimmune diseases, may require the involvement and alignment of medical professionals across various specialties. Additionally, we may evaluate certain of our product candidates in multiple indications and across a broad range of diseases in a single clinical trial. Because these diseases can vary significantly, doing so may introduce additional complexities and challenges with executing our clinical trials, any of which could increase the time and expense required to commence and complete the applicable trial. Further, to the extent we develop our product candidates for multiple indications, the occurrence of any potential safety issues or significant side effects with respect to a particular indication or study could negatively affect the development of such product candidate in all indications. We and third parties involved in our clinical trials may not have sufficient resources to adequately address such complexities in accordance with our timelines or at all. If we experience delays in completing, or are required to terminate, any clinical trial of our product candidates, the commercial prospects of the relevant product candidates will be harmed, and our ability to generate product revenues from these product candidates will be delayed. In addition, any delays in completing our clinical trials will increase our costs, delay our ability to obtain regulatory approval for the relevant product candidate, and jeopardize our ability to commence product sales and generate revenues. Significant clinical trial delays could also allow our competitors to bring products to market before we do or shorten any periods during which we have the exclusive right to commercialize our product candidates, which may impair our ability to commercialize our product candidates and harm our business and results of operations.

Furthermore, as described elsewhere in these Risk Factors, we rely and will continue to rely on third parties that are responsible for executing or supporting our clinical trials, such as CROs and clinical trial sites, including principal investigators, and to the extent they fail to timely and properly perform their obligations, we may experience program delays, incur additional costs, or both, which may harm our business. In addition, we may experience delays and incur additional costs with respect to clinical trials that we conduct in countries outside the United States, including as a result of increased shipment and distribution costs, compliance with additional regulatory requirements, and the engagement of non-United States-based CROs, and may also be exposed to risks associated with clinical investigators who are unknown to the FDA, and different standards of diagnosis, screening, and medical care.

We will depend on timely and successful enrollment and retention of patients in our clinical trials for our product candidates. If we experience delays or difficulties enrolling or retaining patients in our clinical trials, our research and development efforts and business, financial condition, and results of operations could be materially adversely affected.

Successful and timely initiation and completion of clinical trials will require that we timely enroll and retain a sufficient number of patients. Any clinical trials we conduct may be subject to delays for a variety of reasons, including as a result of patient enrollment taking longer than anticipated, patient withdrawal, or the occurrence of adverse events. These types of developments could cause us to delay the trial or halt further development of the relevant product candidate.

In particular, our clinical trials will compete with other clinical trials that are in the same therapeutic areas as our product candidates. In addition, because the number of qualified clinical investigators and clinical trial sites is limited, we expect to conduct at least some of our clinical trials at the same sites as those used by our competitors. Competition with other clinical trials may reduce the number and types of patients available to participate in our trials, as some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors. Moreover, enrolling patients in clinical trials for diseases for which there is an approved standard of care is challenging, as patients will first receive the applicable standard of care, and many patients who respond positively to the standard of care do not enroll in clinical trials. In addition, although patients who fail to respond positively to the standard of care treatment may be eligible for clinical trials of our product candidates, treatment with prior regimens may render our product candidates less effective in clinical trials. As a result, the number of eligible patients who have the potential to benefit from our product candidates could be limited, which could extend development timelines or increase costs for our programs.

The circumstances described above and elsewhere in these Risk Factors may make it difficult for us to enroll enough patients to complete our clinical trials in a timely and cost-effective manner. If we are unable to timely recruit and enroll patients for our clinical trials, enroll a sufficient number of patients to complete our clinical trials as planned, or retain patients in our clinical trials, we may be required to change our trial design, recruit and enroll a different population of patients than we anticipated, or recruit and enroll patients in geographies that are more challenging. We may not be fully prepared to address such challenges, and even if we are able to address such challenges, the results of our clinical trials may be negatively impacted. Delays in the completion of any clinical trial we may conduct will increase our costs, slow down the development and approval process, and delay or potentially jeopardize our ability to commence product sales and generate revenue for the relevant product candidate. In addition, some of the factors that may cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates.

Clinical trials may fail to demonstrate that our product candidates, including any future product candidates, or technologies used in or used to develop such product candidates, meet the FDA’s or a comparable foreign regulatory authority’s requirements with respect to safety, purity, and potency, or efficacy, which would prevent, delay, or limit the scope of regulatory approval and commercialization of such product candidates.

To obtain the requisite regulatory approvals to market and sell any of our current or future product candidates, we or our potential future collaborators must demonstrate with substantial evidence from adequate and well-controlled clinical trials of the product candidate, and to the satisfaction of the FDA or comparable foreign regulatory authorities, that such product candidate meets the FDA’s or such comparable foreign regulatory authorities’ legal standards with respect to safety, purity, and potency, or efficacy, which may include, among other things, demonstrating through adequate and well-controlled clinical trials that the benefits of the product candidate outweigh its known risks for the intended patient population. Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the clinical development process. Most product candidates that begin clinical trials are never approved by regulatory authorities for commercialization. We may be unable to establish clinical endpoints that applicable regulatory authorities would consider clinically meaningful.

Clinical trials of our product candidates or product candidates developed using our technologies (including those conducted by third parties, such as in the case of ISTs) may not demonstrate that such product candidates or technologies have efficacy and safety profiles necessary to support regulatory approval. Safety or efficacy results for a particular clinical trial, or between different clinical trials of the same product candidate, can vary significantly due to numerous factors, including differences in the size and type of the patient populations, variety of patients and disease types within a trial, changes in and adherence to the clinical trial protocols and trial procedures, and the rate of dropout among clinical trial participants. If the results of clinical trials are inconclusive with respect to the efficacy of our product candidates or those developed using our technologies, if we do not meet the clinical endpoints with statistical and clinically meaningful significance, or if there are safety concerns associated with our product candidates or technologies, we may experience delays in obtaining marketing approval, or we may not obtain approval at all. Additionally, any safety concerns observed in any clinical trial of one of our product candidates, or those developed using our technologies, in our targeted indications could limit the prospects for regulatory approval of such product candidate in those and other indications or the prospects of other product candidates we may develop that are perceived to have the potential for similar safety concerns.

Additionally, some of our trials may be open-label trials in which the patient and/or investigator know whether the patient is receiving the investigational product candidate. Data generated from open-label clinical trials may exaggerate any therapeutic effect, as patients and/or investigators are aware when a patient has received the experimental treatment, which may cause investigators to interpret the information of the treated group more favorably. Therefore, positive results observed in open-label trials may not be replicated in later controlled trials.

Even if we or our collaborators (or other third parties, in the case of ISTs) successfully complete any clinical trials, clinical data are often susceptible to varying interpretations and analyses. We cannot guarantee that the FDA or comparable foreign regulatory authorities will interpret the results as we do, and more trials could be required before we submit our product candidates for approval. Even if positive results are observed in clinical trials, we cannot guarantee that the FDA or comparable foreign regulatory authorities will view our product candidates as having efficacy. Further, the FDA or comparable foreign regulatory authorities may not agree with our manufacturing strategy or may not find comparability between our clinical trial product candidates and proposed commercial product candidates, which may result in regulatory delays or a need to perform additional clinical studies. Moreover, clinical trial results that may be acceptable to support approval of a certain scope in one jurisdiction may be deemed inadequate to support regulatory approval, or may only be deemed sufficient to support a narrower scope of approval, in other jurisdictions. If the FDA or comparable foreign regulatory authorities determine that the results of clinical trials of our product candidates are not adequate to support approval of a marketing application, we may experience delays in obtaining, or fail to obtain, approval of our product candidates, or we may be required to expend significant additional resources, which may not be available to us, to conduct additional trials in support of potential approval of our product candidates. Even if regulatory approval is obtained for a product candidate, the terms of such approval may limit the scope and use of the specific product candidate, which may also limit its commercial potential.

Our product candidates may cause serious adverse, undesirable, or unacceptable side effects or have other properties that may delay or prevent marketing approval. If a product candidate receives regulatory approval, and such side effects are identified following such approval, the commercial profile of any approved label may be limited, or we may be subject to other significant negative consequences following such approval.

Our product candidates may cause serious adverse, undesirable, or unacceptable side effects, which could cause us or regulatory authorities to interrupt, delay, or halt our future clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or comparable foreign authorities. We do not currently, and in the future may not, have sufficient clinical data or other information to enable us to fully anticipate the side effects of our product candidates. Accordingly, we may observe unexpected side effects or higher levels of expected side effects in clinical trials of our product candidates, including adverse events known to occur in the same classes of therapeutics, such as infusion reaction, cytokine release syndrome, graft-versus-host disease, neurotoxicities, severe infection, and certain cancers.

Results of our clinical trials could reveal a high and unacceptable severity and prevalence of these or other side effects associated with our product candidates. In such an event, clinical trials of such product candidates could be suspended or terminated, and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny approval of such product candidates for any or all targeted indications. In addition, the FDA or comparable foreign regulatory authorities may more closely scrutinize any side effects or safety concerns associated with our product candidates in the context of the potential benefits observed in diseases that are not immediately life-threatening, such as certain autoimmune diseases, which could harm our ability to develop or obtain regulatory approval for applicable product candidate in such diseases. Moreover, the occurrence of such side effects could negatively affect our ability to recruit and enroll patients in our clinical trials or the ability of enrolled patients to complete the clinical trials, or result in product liability claims. For example, patients with diseases that are not immediately life-threatening, including certain autoimmune diseases, and their physicians may be less likely to enroll or recommend enrollment in clinical trials of our product candidates if there is a risk of certain side effects or safety concerns and may be more likely to cease their participation in such clinical trials if they experience certain side effects. Similar events may occur if it is determined that there are side effects or safety concerns associated with other products or product candidates that are, or are perceived to be, similar to ours. Any of these occurrences could significantly harm our business, financial condition, and prospects.

Further, clinical trials by their nature involve only a sample of the potential patient population. Because our clinical trials will involve only a limited number of patients and limited duration of exposure to our product candidates, rare and severe side effects of our product candidates may not be apparent during early clinical trials and may only be uncovered once a significantly larger number of patients have been exposed to the product candidate, including during later-stage clinical trials or following commercialization, or when longer-term data is available. As such, even if applicable regulatory authorities initially determine that our product candidates have an acceptable safety profile for their intended use in humans, they may later prove to cause serious side effects in patients that we were unable to observe or predict during their clinical development.

In the event that any of our product candidates receives regulatory approval and we or others later determine that such product may cause undesirable or unacceptable side effects, a number of potentially significant negative consequences could result, including:

Any of these events could prevent us or our potential future partners from achieving or maintaining market acceptance of the affected product or could substantially increase commercialization costs and expenses, which in turn could delay or prevent us from generating significant revenue from the sale of any products.

Interim, topline, or preliminary data from our preclinical studies or clinical trials that we may announce or publish from time to time may change as more data become available or as we make changes to our manufacturing processes. These data are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publicly disclose interim, topline, or preliminary data from our preclinical studies or clinical trials, which are based on a preliminary analysis of then-available data, and the final results and related findings and conclusions are subject to change following a more comprehensive review of the study or trial data. We also make assumptions, estimations, calculations, and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data at the time of our initial disclosure of data. Further, modifications or improvements to our manufacturing processes for a product candidate may result in changes to its characteristics or behavior that could cause the product candidate to perform differently and affect the results of our preclinical studies or planned or ongoing clinical trials of such product candidate, and potentially require us to conduct additional preclinical studies or clinical trials. As a result, the topline results that we report may differ from future results of the same studies, or different conclusions or considerations may qualify such results once additional data have been received and fully evaluated. Topline data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously disclosed. As a result, topline data should be viewed with caution until the final data are available. Similarly, preliminary or interim data from clinical trials are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Adverse differences between preliminary or interim data and final data could significantly harm our business prospects. Additionally, disclosure of preliminary or interim data by us or our competitors, with respect to clinical trials of their product candidates, could result in volatility in the price of our common stock.

Further, others, including regulatory authorities, investors, or analysts, may not accept or agree with our assumptions, estimates, calculations, conclusions, or analyses, or may interpret or weigh the importance of data, including any decisions we may make based on that data, particularly limited or preliminary data, differently than we do, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate, and our company in general. If the interim, topline, or preliminary data that we report differ from actual results, or if others, including regulatory authorities, investors, or analysts, disagree with the conclusions reached, our ability to obtain approval for and commercialize our product candidates, as well as our business, operating results, prospects, and financial condition, could be harmed.

Our product candidates or technologies may be involved in investigator-sponsored clinical trials, and we will have limited or no control over the conduct of such trials.

ISTs involving our product candidates or technologies pose or are subject to similar risks to those set forth elsewhere in these Risk Factors relating to clinical trials that we conduct ourselves. Although ISTs may provide us with clinical data that can inform the development strategy for our product candidates, we will be unable to control the timing, design, and conduct of such ISTs or regulatory matters with respect to such ISTs, including the submission, clearance or approval, or maintenance of any IND or comparable foreign submission required to conduct such ISTs. In addition, we will not control the data collection and reporting, including timing thereof, with respect to any ISTs, and may not control the manufacturing of the product candidate or technology to be tested in any such ISTs. A delay in the timely completion of or reporting of data from any IST, including as a result of manufacturing complications or delays, which could occur for various reasons such as the need to obtain additional licenses, delays in recruiting, enrolling, or retaining patients, or other potential issues, including those described in these Risk Factors, could have a material adverse effect on our ability to further develop our product candidates or to advance our product candidates through subsequent clinical trials. Negative results from an IST could have a material adverse effect on our business and prospects and the perception of our product candidates and technologies. Additionally, there is a possibility that ISTs may be conducted under less rigorous clinical standards than those used in company-sponsored clinical trials. Accordingly, the FDA and comparable foreign regulatory authorities may more closely scrutinize the resulting data and may not view these data as providing adequate support for future clinical trials, whether sponsored by us or third parties. In addition, any potential IST could demonstrate marginal efficacy or reveal clinically relevant safety concerns that could delay the further clinical development or regulatory approval of our product candidates. Further, data from a potential IST may fail to demonstrate efficacy for various reasons, including those unrelated to our product candidates or technologies, which may negatively impact the perception of such product candidates and technologies, despite their potential for future success. To the extent that the results of any ISTs raise safety or other concerns regarding our product candidates or technologies, regulatory authorities may question the results of such ISTs or other clinical trials involving the relevant product candidate or technology. Safety concerns arising from any ISTs may cause the FDA or comparable foreign regulatory authorities to impose partial or full clinical holds on our product candidates, including product candidates that were developed using the same technology or manufactured using the same reagents and materials as those product candidates that are the subject of such ISTs, which could delay or prevent us from advancing our product candidates into further clinical development and require us to discontinue our development of such product candidates. The occurrence of any of the foregoing would severely harm our business and prospects.

The manufacture of our product candidates is complex. We or our CDMOs may encounter difficulties in production, which could delay or entirely halt our or their ability to supply our product candidates for clinical trials or, if approved, for commercial sale.

Our product candidates are considered to be biologics, and the process of manufacturing biologics is complex and requires significant expertise and capital investment, including with respect to the development of advanced manufacturing techniques and process controls. As described elsewhere in these Risk Factors, we have entered into a long-term lease to establish manufacturing capabilities at the Bothell facility and have entered into an agreement to access manufacturing capabilities within URMC’s cell-based manufacturing facility. We currently rely, and expect to continue to rely, on CDMOs for the manufacture of certain of our product candidates for preclinical and clinical studies. We also anticipate that we will continue to rely on CDMOs for at least some portions of our supply chain following commercialization of any product candidates for which we may receive regulatory approval. As described elsewhere in these Risk Factors, we expect that we will continue to be required to transition certain manufacturing processes and know-how to our CDMOs, the Bothell facility, and the URMC site, which is a complex process with which we have limited experience. If we experience any delays or issues with the foregoing, our ability to begin manufacturing certain of our product candidates internally could be delayed, and we may need to rely to a greater extent on CDMOs for the manufacture of such product candidates for longer than we currently anticipate.

To date, we and our CDMOs have limited experience in manufacturing of cGMP batches of our product candidates. Our CDMOs and, once we begin to operate the Bothell facility and the URMC site, we, must comply with cGMPs and other complex regulations and guidelines applicable to the manufacturing of biologics for use in clinical trials and, if approved, commercial sale, and any inability or failure to comply with such regulations and guidelines could delay our clinical trials or prevent us from being able to commence clinical testing at all. To date, we have not scaled the manufacturing processes with respect to our product candidates for later-stage clinical trials and commercialization, and we and our CDMOs may not have sufficient capacity, resources, or capabilities to scale such manufacturing processes in accordance with our desired timelines or at all. Further, certain of our product candidates may have characteristics that present increased manufacturing complexity, necessitate longer manufacturing process timelines, or require a greater number of manufacturing runs. If we are unable to successfully scale the manufacturing process for these product candidates, including in compliance with cGMP quality requirements, or adapt such manufacturing process to meet late-stage development or commercial quality requirements, we may not be able to manufacture sufficient quantities of compliant product candidates, or manufacture them in a timely manner, which would harm our ability to clinically develop and commercialize such product candidates. In addition, the manufacturing of our product candidates, including large-scale manufacturing, may require the development of novel processes for upstream and downstream activities, including analytical technologies, which could cause delays in the scaling of manufacturing, as well as greater costs that could negatively impact the financial viability of our product candidates. We cannot be sure that the manufacturing processes employed by us or our CDMOs or the technologies that our CDMOs incorporate into our manufacturing processes will result in viable or scalable yields of ex vivo and in vivo cell engineering product candidates that will have acceptable safety, purity, potency, or efficacy profiles and, if approved, meet market demand.

Our biologic product candidates are susceptible to product loss or reduced manufacturing success rates at various points during the manufacturing process, including due to contamination, equipment damage or failure, including during shipment or storage, failure of equipment to operate as expected, improper installation or operation of equipment, vendor or operator error, damage to, variability of, or improper use of raw materials or consumables necessary for the manufacturing process, inconsistency in yields, variability in product characteristics, and difficulties in scaling the production process. Any of these issues, and even minor deviations from normal manufacturing processes, could result in reduced production yields, product defects, and other supply disruptions and delays. If microbial, viral, or other contaminations are discovered in our product candidates or in the facilities in which our product candidates are manufactured, including the Bothell facility, the URMC site, or any future manufacturing facilities, or those of our CDMOs, such supply may have to be discarded, our products may be withdrawn from clinical trials and, if approved, the market, and such facilities may need to be closed for an extended period of time to investigate and remedy the contamination. Moreover, if the FDA or comparable foreign regulatory authorities determine that we or our CDMOs, or our or our CDMOs’ facilities, are not in compliance with applicable laws and regulations, including cGMPs, the FDA or comparable foreign regulatory authority may not approve a biologics license application (BLA) or comparable foreign marketing authorization until the deficiencies are corrected or we replace the manufacturer in our applications with a compliant manufacturer, and we may ultimately be unable to manufacture our product candidates. The occurrence of any of these issues could delay our ability to commence or timely complete clinical development, obtain regulatory approval of, and commercialize our product candidates.

We also may make changes to our manufacturing processes at various points during development, and even after commercialization, for various reasons, such as to control costs, achieve scale, decrease processing time, or increase manufacturing success rate. Such changes carry the risk that they will not achieve their intended objectives, and any of these changes could result in changes to a product candidate’s characteristics or behavior or cause our product candidates to perform differently and affect the results of any of our then-ongoing or future preclinical studies or clinical trials, or the performance of the product, once commercialized. In certain circumstances, if we make changes to our manufacturing process for a product candidate, regulatory authorities may require us to perform comparability studies and collect additional preclinical or clinical data prior to undertaking additional clinical trials or obtaining marketing approval for or commercializing the product candidate produced with such modified process. For instance, if we make changes to our manufacturing process for a product candidate during the course of preclinical or clinical development, regulatory authorities may require us to demonstrate the comparability of the product used in preclinical studies, earlier clinical phases, or earlier portions of a trial to the product used in later clinical trials or clinical phases or later portions of a trial, as applicable. If at any point we switch to a different CDMO or supplier of reagents or materials used in the manufacturing process for a product candidate or to any manufacturing facility we may operate, such as the Bothell facility, including, for example, in order to ensure sufficient supply for later-stage clinical trials and potential commercialization, we will also be required to perform comparability studies in order to demonstrate comparability of the applicable product candidate, reagent, or material from the prior CDMO or supplier to that from, as applicable, the new CDMO or supplier or our manufacturing facility, and otherwise demonstrate that the relevant product candidate, reagents, or materials meet the applicable specifications. We may be unable to successfully generate comparability data, and even if we are able to generate and provide such data, regulatory authorities may disagree with the design of our comparability studies or otherwise determine that the data are insufficient to support a determination of comparability. Similarly, we may be unable to demonstrate that the relevant materials meet the applicable specifications. In such an event, we may be required to make further changes to our process or undertake additional preclinical or clinical testing, which could result in manufacturing delays and affect our ability to timely dose patients in our clinical trials, which could delay further development or commercialization of such product candidate, or we may be unable to continue development of the applicable product candidate at all.

Any adverse developments affecting manufacturing operations for any of our product candidates, including those for which we may obtain regulatory approval, may result in shipment delays, inventory shortages, lot failures, product withdrawals or recalls, or other supply interruptions that could negatively impact the conduct of our clinical trials or our ability to successfully commercialize any product candidates for which we may obtain regulatory approval. We may also have to take inventory write-offs and incur other charges and expenses for products that fail to meet specifications as a result of defects or storage over an extended period of time, undertake costly remediation efforts, or seek more costly manufacturing alternatives. Any such issues would harm our ability to timely and successfully complete clinical trials and obtain regulatory approval of our product candidates, which could have a significant negative impact on our business, operations, and prospects.

We are exposed to a number of risks related to the supply chain for the materials required to manufacture our product candidates.

The manufacturing of our product candidates is highly complex and requires sourcing of specialty materials. Many of the risks associated with the complex manufacturing of our final product candidates are applicable to the manufacture and supply of the raw materials required to make such product candidates. In particular, these raw materials are subject to inconsistency in yields, variability in characteristics, contamination, difficulties in scaling the production process, and defects. Similar minor deviations in the manufacturing process for these raw materials could result in supply disruption and reduced production yields for our final product candidates. In addition, we rely on third parties for the supply of these materials, which exposes us to risks associated with dependence on third parties, as described elsewhere in these Risk Factors. Further, we use certain reagents and materials across various programs and initiatives, and any difficulties we experience with such reagents or materials, including with respect to sourcing, quality, or other factors, could have a more significant impact on our portfolio and business than if we used different reagents and materials for each of our programs and initiatives.

We must obtain suitable donor material from eligible and qualified donors for the manufacture of product candidates from our ex vivo cell engineering platform. If we are unable to obtain sufficient quantities of suitable donor material in a timely manner or at all, including if we are unable to find donors who meet the eligibility criteria or as a result of geo-political, economic, and other factors beyond our control that may prevent individuals from donating blood, we may experience delays in manufacturing our ex vivo product candidates, which would harm our ability to conduct clinical trials of or to commercialize these product candidates.

In addition, we require many reagents, which are drug substance intermediates used in our manufacturing processes to bring about chemical or biological reactions, and other specialty raw and intermediate materials, consumables, and equipment, for our manufacturing processes and for quality control testing of our product candidates, some of which are manufactured or supplied by small companies with limited resources and experience with respect to supporting clinical or commercial biologics production. Some of these suppliers may not have the capacity or resources to support manufacturing of products under cGMP on our timelines or at all or may otherwise be ill-equipped to support our needs, including if and as we expand our manufacturing activities to support later-stage clinical trials and, for any product candidates that may receive regulatory approval, commercialization. Reagents and other key materials from these suppliers may have inconsistent attributes and introduce variability into our manufactured product candidates, which may contribute to variable patient outcomes and possible adverse events. We also do not have supply contracts with many of these suppliers and may not be able to enter into supply contracts with them on acceptable terms or at all. Accordingly, we may experience delays in receiving key reagents, materials, consumables, and equipment to support clinical or commercial manufacturing, which could delay development and commercialization of our product candidates.

For some of these reagents, materials, consumables, and equipment, we and our CDMOs currently rely and may in the future rely on sole source vendors or a limited number of vendors. We may be unable to continue to source reagents, materials, consumables, or equipment from any of these vendors for various reasons, including due to regulatory actions or requirements affecting a vendor, adverse financial or other strategic developments experienced by a supplier, labor disputes or shortages, unexpected demand from other customers and supply limitations, or quality issues. Additionally, due to global geo-political, economic, and other factors beyond our control, there has been, and there are and may continue to be, a shortage of key materials, consumables, and equipment that are necessary to manufacture our product candidates, including certain consumables such as bags, flasks, and pipette tips, which could affect our or our CDMOs’ ability to obtain the materials, consumables, and equipment necessary to manufacture our product candidates. If any of the foregoing events were to occur, we may experience delays in manufacturing our product candidates, which would harm our ability to conduct future clinical trials and, if approved, commercialize our products and generate product revenues in a timely manner or at all.

Additionally, as described elsewhere in these Risk Factors, rising rates of inflation in recent years and other factors have resulted in substantial increases in the costs associated with manufacturing our product candidates, including the costs of materials, consumables, and equipment, that we are unable to offset. Given the unpredictable nature of the current economic climate, including future rates of inflation, it may be increasingly difficult for us to predict and control our future expenses, which may harm our ability to conduct our business.

As we continue to develop and scale our manufacturing processes, we expect that we will need to obtain rights to and supplies of certain materials and equipment to be used as part of those processes. We may not be able to obtain rights to or sufficient quantities of such materials or equipment on commercially reasonable terms, or at all, and our inability to alter our processes in a commercially viable manner to avoid the use of such materials or equipment or find suitable substitutes would have a material adverse effect on our business. Even if we are able to alter our processes so as to use other materials or equipment, such a change may delay our clinical development or commercialization plans. As described elsewhere in these Risk Factors, if such a change occurs for product candidate that is already being tested in clinical trials, the change may require us to perform comparability studies, demonstrate that the new materials or equipment meet applicable specifications, and collect additional data from patients prior to undertaking more advanced clinical trials.

We may become exposed to costly and damaging liability claims, either when testing our product candidates in clinical trials or at the commercial stage, and our product liability insurance may not cover all damages arising from such claims.

We are exposed to potential product liability and professional indemnity risks that are inherent in the research, development, manufacturing, marketing, and use of pharmaceutical products. The use of our product candidates in clinical trials, and the sale of any products for which we may obtain approval in the future, may expose us to liability claims. These claims might be made by patients that use the product, healthcare providers, pharmaceutical companies, or others selling such products. Any claims against us, regardless of their merit, could be difficult and costly to defend and could materially adversely affect the market for our product candidates or any prospects for commercialization of our product candidates.

Although the clinical trial process is designed to identify and assess potential side effects, it is always possible that a drug, even after regulatory approval, may exhibit unforeseen side effects. Physicians and patients may not comply with any warnings that identify known potential adverse effects or patients who should not use our product candidates. If any of our product candidates were to cause adverse side effects during clinical trials or after approval, we may be exposed to substantial liabilities.

We would require significant financial and management resources to defend against any product liability claims, even if we are successful in such defense. Regardless of the merits or eventual outcome, liability claims may result in decreased demand for our product candidates, negative publicity and injury to our reputation, withdrawal of clinical trial participants, investigations by regulatory authorities, costs to defend the related litigation, diversion of management’s time and our resources, substantial monetary awards to clinical trial participants or patients, product recalls, withdrawals, or labeling, marketing, or promotional restrictions, loss of revenue, exhaustion of any available insurance and our capital resources, inability to commercialize our product candidates, and a decline in our share price.

Although we maintain product liability insurance for our product candidates, it is possible that our liabilities could exceed our insurance coverage. We intend to expand our insurance coverage to include the sale of commercial products if we obtain marketing approval for any of our product candidates. However, we may be unable to maintain insurance coverage at a reasonable cost or obtain insurance coverage that will be adequate to satisfy any liability that may arise. If a successful product liability claim or series of claims is brought against us for uninsured liabilities or in excess of insured liabilities, our assets may not be sufficient to cover such claims, and our business operations could be impaired.

We rely, and expect to continue to rely, on CDMOs, including third-party testing laboratories, to manufacture our product candidates, as well as materials used in the manufacturing of our product candidates, including testing of such product candidates and materials. Any failure by a CDMO to properly produce acceptable materials or product candidates for us or any failure by us or such CDMO to obtain authorization from the FDA or comparable foreign regulatory authorities or otherwise satisfy regulatory requirements with respect to such manufacturing of our product candidates may delay or impair our ability to initiate or complete our clinical trials, obtain regulatory approvals, or commercialize approved products.

We continue to invest in developing our internal cGMP manufacturing capabilities, including at the Bothell facility and the URMC site. Until we are able to begin manufacturing our product candidates at our Bothell facility and the URMC site, we will rely in part on CDMOs, including third-party testing laboratories, to manufacture our product candidates for use in preclinical and clinical testing and expect to continue to rely on such CDMOs to manufacture certain of our product candidates thereafter as part of our manufacturing strategy.

A limited number of CDMOs specialize in or have the expertise required to manufacture our product candidates or materials used in their manufacture. Moreover, our CDMOs have limited capacity at their facilities and require commitments to secure availability well in advance of manufacturing any products or other materials. Additionally, we face competition from other biopharmaceutical companies to secure manufacturing availability at these facilities. If the CDMOs on which we rely to manufacture our product candidates and other materials do not have sufficient availability at their facilities to do so in accordance with our timelines or are not otherwise able to meet our expected deadlines, we will experience delays in manufacturing our product candidates or other materials necessary for their manufacture. For example, because we rely on, and may continue to rely on, single CDMOs for certain manufacturing activities across multiple programs, any issues we may experience with such a CDMO, including inability to secure manufacturing capacity as and when needed, could result in manufacturing delays across all such programs and harm our ability to timely and successfully complete clinical trials and commercialization of our product candidates. In addition, as described elsewhere in these Risk Factors, we assess and prioritize our programs on an ongoing basis based on various factors. We may not be able to secure manufacturing capacity for certain programs as and when needed and may be required to prioritize manufacturing activities for certain programs over others, which could lead to manufacturing delays and harm our ability to further develop the relevant product candidates. We may also experience similar capacity constraints and manufacturing delays in the future with respect to any products we may manufacture at the Bothell facility. Further, for each new program or CDMO we engage, or in the case of certain changes to the manufacturing process for a product candidate, the relevant manufacturing process and related know-how must be transferred to the CDMO. This technology transfer is time-consuming and complex. If we are required to switch from an existing CDMO to a new CDMO or to any manufacturing facility we may operate, such as the Bothell facility, including to meet cGMP quality requirements or support process lock or larger-scale manufacturing for later-stage clinical trials or potential commercialization, we will need to conduct additional technology transfer activities, which could result in delays in further development of the applicable product candidate.

Our CDMOs also face intense competition to attract and retain qualified personnel. If our CDMOs are unable to attract, retain, and motivate qualified personnel, they may be unable to perform their obligations in a timely manner or at all, or their performance may be substandard or may not meet our quality requirements, which could cause us to experience delays in or otherwise negatively impact the manufacturing of our product candidates. In addition, our CDMOs and other third parties supporting our operations may experience organizational changes, including due to mergers, acquisitions, or other transactions in which they are involved, which could similarly affect such parties’ ability to timely and properly perform their obligations or perform such obligations at all. Further, as described elsewhere in these Risk Factors, there are few alternatives for the CDMOs that we currently engage, and even if one of our CDMOs fails to perform according to our expectations and, for this or other reasons, we decide to switch to an alternative CDMO, there is no guarantee that such alternative CDMO will be able to perform its obligations in a timely manner or that its performance will meet our expectations or quality requirements. Any delays in manufacturing our product candidates could materially harm our ability to conduct our clinical trials or commercialize our product candidates in a timely manner or at all and could harm our business.

In addition, we rely on multiple CDMOs to produce sufficient quantities of materials required for the manufacture of our product candidates for preclinical testing and clinical trials and intend to continue to rely on such CDMOs for the commercial manufacture of certain of our products, if approved. Global supply chain shortages and rising rates of inflation in recent years have resulted in substantial increases in the costs of materials, including raw materials, reagents, consumables, and equipment that are required to make or used in the manufacture of our product candidates, and such costs may continue to increase. If we are unable to obtain such items from third-party sources, or fail to do so on commercially reasonable terms, we may not be able to produce sufficient supply of product candidate or we may be delayed or be required to incur additional costs in doing so. Such inability or failure, or any substantial delay in obtaining or additional costs for such items, could materially harm our business.

We rely on third parties to produce certain reagents and biological materials that are used in our discovery and development programs. These materials can be difficult to produce and occasionally have variability from our product specifications. If these materials do not comply with our product specifications, or in the event of any other disruption in the supply of these materials, our business could be materially adversely affected. Although we have control processes and screening procedures, biological materials are susceptible to damage and contamination and may contain active pathogens. Our suppliers may also have low yield from manufacturing batches of these materials, which could increase our costs and slow our development timelines. Improper storage of these materials, by us or any third-party suppliers, may require us to destroy some of these materials or product candidates generated using such materials.

Reliance on CDMOs entails additional risks to which we would not be subject if we manufactured product candidates ourselves, including those applicable to other third-party service providers, as described elsewhere in these Risk Factors. In particular, such risks include reliance on the CDMO for regulatory compliance and quality control and assurance, including compliance with cGMP requirements and comparable standards relating to methods, facilities, and controls used in the manufacturing, processing, testing, and packing of product candidates, which are intended to ensure that biological products have acceptable safety profiles and that they consistently meet applicable requirements and specifications, and our CDMOs may be unable to satisfy applicable compliance and quality requirements in accordance with our timelines or at all. Additional risks include reliance on the CDMO for volume production, the possibility of breach of or inability to perform its obligations under the manufacturing agreement by the CDMO (including a failure to synthesize and manufacture our product candidates in accordance with our product specifications, failure to properly scale-up manufacturing processes, or failure to deliver sufficient quantities of product candidates in a timely manner), and the possibility of termination or nonrenewal of the agreement by the CDMO at a time that is costly or damaging to us. For example, certain of our CDMOs may be unable to manufacture sufficient supply of our product candidates or materials used in their manufacture, in particular, if and as we implement commercial cGMP practices or scale up manufacturing for later-stage clinical trials and potential commercialization. If we experience any issues with respect to the risks described above, we may be required to seek a replacement CDMO, which could require significant internal resources and additional costs, delay our ongoing manufacturing activities, and ultimately be unsuccessful. If we were unable to timely find an adequate replacement for our CDMOs or another acceptable solution when needed, our clinical trials could be delayed, or our commercial activities could be harmed. In addition, because we depend on our CDMOs, our suppliers, and other third parties for the manufacture, filling, storage, and distribution of our product candidates, we may be unable to prevent or control manufacturing defects in our products, the use or sale of which could seriously harm our business, financial condition, and results of operations. Issues involving any of the foregoing risks could increase our costs, delay our development timelines, and ultimately lead to a delay in, or failure to obtain, regulatory approval of our product candidates.

Pharmaceutical manufacturers are required to register their facilities and products manufactured at the time of submission of the marketing application and then annually thereafter with the FDA and certain state and foreign agencies. If the FDA or a comparable foreign regulatory authority does not approve our CDMO’s facilities for the manufacture of our product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for, or market our product candidates, if approved, on a timely basis or at all. Any discovery of problems with a product, or a manufacturing or laboratory facility used by us or our strategic partners in connection with manufacturing of that product, may result in restrictions on the product or on the relevant facility, including marketed product recall, suspension of manufacturing, product seizure, or a voluntary withdrawal of the drug from the market. We may have little to no control regarding the occurrence of any such incidents at our CDMOs.

Pharmaceutical manufacturers are also subject to extensive post-marketing oversight by the FDA and comparable regulatory authorities in the jurisdictions where a product is marketed, including periodic unannounced and announced inspections by the FDA to assess compliance with cGMP requirements. Any failure by one of our CDMOs to comply with cGMP or to provide adequate and timely corrective actions in response to deficiencies identified in a regulatory inspection could result in further enforcement action that could lead to a shortage of products and harm our business, including withdrawal of approvals previously granted, seizure, injunction, or other civil or criminal penalties. The failure of a CDMO to address any concerns raised by the FDA or comparable foreign regulatory authorities could also lead to plant shutdown or the delay or withholding of product approval by the FDA in additional indications or by comparable foreign regulatory authorities in any indication. In addition, because our CDMOs also provide manufacturing services to other companies, including our competitors, there is a risk that our CDMOs may experience the issues described in this Risk Factor with respect to such third parties and their product candidates as well. The occurrence of any such issues could restrict, partially or completely, or otherwise negatively impact such CDMO’s ability to timely and successfully perform its obligations for us with respect to our own product candidates, which would harm our ability to continue manufacturing and commercialize such product candidates. Certain countries may impose additional requirements on the manufacturing of drug products or drug substances, and on manufacturers, as part of the regulatory approval process for products in such countries. The failure by our CDMOs to satisfy such requirements could impact our ability to obtain or maintain approval of our products in such countries. In addition, as described elsewhere in these Risk Factors, our CDMOs may be subject to various other laws and regulations, compliance with or the effect of which could harm our relationship with such CDMOs and negatively impact our business.

If we are unable to obtain sufficient raw and intermediate materials on a timely basis or if we experience other manufacturing or supply interruptions or difficulties, we may be unable to resume supply of such materials or other manufacturing activities within a reasonable time frame and at an acceptable cost or at all, which could materially adversely affect our business.

The manufacture of our product candidates requires the timely delivery of sufficient amounts of raw and intermediate materials. We purchase, and rely on our CDMOs to purchase, certain of these materials from third-party suppliers in order to produce our product candidates for our preclinical studies. There are a limited number of suppliers of these materials, and we may need to assess alternate suppliers to prevent possible disruption of manufacturing of our product candidates for our preclinical studies, our future clinical trials, and if ultimately approved, commercial sale. We rely, and expect to continue to rely, on our CDMOs to purchase materials in order to produce product candidates for our clinical trials; however, we do not have any control over the process or timing of the acquisition of these materials by our CDMOs or the costs of such materials. We work closely with our CDMOs and suppliers, as applicable, to ensure the continuity of supply, but we cannot ensure that these efforts will always be successful. Further, although we strive to diversify our sources of raw and intermediate materials, in certain instances we acquire raw and intermediate materials from a sole supplier. We cannot be sure that these suppliers will remain in business, or that they will not be purchased by one of our competitors or another company that is not interested in continuing to supply these materials for our intended purpose. As described elsewhere in these Risk Factors, such suppliers may also experience other organizational changes that could negatively impact their ability to supply necessary materials for our programs in a timely manner or at all. Alternative sources of supply may exist when we rely on sole supplier relationships, but we cannot ensure that, if needed, we would be able to quickly establish additional or replacement sources for some materials. The lead time needed to establish a relationship with a new supplier can be lengthy, and we may experience delays in the event a new supplier must be used. In addition, the time and effort to qualify a new supplier could result in additional costs, diversion of resources, or reduced manufacturing yields, any of which would negatively impact our operating results. Although we generally would not begin a clinical trial unless we believe we have a sufficient supply of a product candidate to complete the clinical trial, any significant delay in the supply of a product candidate, or the raw or intermediate material components thereof, for an ongoing clinical trial due to the need to replace a supplier could considerably delay completion of our clinical trials, product testing, and potential regulatory approval of our product candidates. Moreover, we currently do not have any agreements for the commercial supply of these raw or intermediate materials. A reduction or interruption in supply of raw or intermediate materials combined with an inability of us or our CDMOs to timely establish alternative sources for such supply could adversely affect our ability to manufacture our product candidates or approved products in a timely or cost-effective manner, result in a shortage of product supply, delay the development and any commercial launch of our product candidates, and ultimately impair our ability to generate revenues from sales of any approved products.

We rely, and expect to continue to rely, on third parties, including service providers such as CROs, clinical trial sites, including principal investigators, and independent clinical investigators, to conduct or support our preclinical studies and clinical trials. If these third parties do not successfully carry out their contractual duties, comply with applicable regulatory requirements, or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our product candidates and our business could be substantially harmed.

We rely, and expect to continue to rely, on third parties, including service providers such as CROs, independent clinical investigators, and clinical trial sites, to properly and timely execute or support our preclinical studies and clinical trials and related activities, and to monitor and manage data for our ongoing preclinical and clinical programs and we may rely to a greater extent on such outsourced activities following our November 2024 workforce reduction. However, we are only able to control certain aspects of the activities of these third parties to the extent set forth under our contracts with these third parties, and we have limited influence over their actual performance. Nevertheless, we are responsible for ensuring that each of our preclinical studies and clinical trials is conducted in accordance with the applicable protocol and legal, regulatory, and scientific standards and rules, and our reliance on these third parties does not relieve us of these obligations. With respect to any of our product candidates that may enter clinical development, we and our CROs and other service providers, as well as our clinical trial sites, including principal investigators, are required, and we rely on them, to comply with good clinical practices (GCP) requirements, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities. Regulatory authorities enforce GCPs through periodic inspections of clinical trial sponsors and clinical trial sites, including principal investigators. If we or any of our CROs or other service providers, or any clinical trial sites or principal investigators involved in our trials, fail to comply with applicable GCPs, the clinical data generated from these clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. We cannot be certain that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials comply with GCP. In addition, to the extent third parties executing or otherwise supporting our clinical trials, including CROs and clinical trial sites, including principal investigators, fail to conduct such clinical trials in accordance with GCP, fail to timely and successfully enroll patients in our clinical trials, or experience significant delays in the execution of our trials, including delays in achieving full enrollment or clinical trial data collection and analysis, we may experience program delays, incur additional costs, or both, which may harm our business. Our clinical trials must also be conducted using product produced in compliance with cGMP regulations, and our failure to do so may require us to repeat clinical trials, which would delay the regulatory approval process for the relevant product candidate.

Further, third parties that support our preclinical and clinical programs, such as service providers, including CROs, independent clinical investigators, and clinical trial sites, including principal investigators, are not our employees, and we are unable to control, other than by contract, the amount of resources, including time, that they devote to our product candidates, preclinical studies, and clinical trials. If such third parties, including our CROs or other service providers, are unable to attract, retain, and motivate qualified personnel or fail to devote sufficient resources to the development of our product candidates, they may be unable to perform their obligations in a timely manner or at all, or their performance may be substandard or fail to meet our quality requirements, which may delay or compromise the conduct of our preclinical and clinical programs and the prospects for approval and commercialization of any such product candidates. As described elsewhere in these Risk Factors, such third parties may also experience organizational changes that could similarly negatively impact their performance or prevent them from performing at all. In addition, in order for these third parties to perform under their contracts with us, we regularly disclose or plan to disclose to these third parties confidential or proprietary information, which increases the risk that this information will be misappropriated. Additionally, disruptions caused by global geo-political, economic, and other factors beyond our control may increase the likelihood that these third parties encounter difficulties or delays in performing their obligations to us, including with respect to initiating, enrolling, conducting, or completing our planned clinical trials.

There is a limited number of third parties, including service providers such as CROs and clinical trial sites, that specialize in or have the expertise required to achieve our business objectives. These third parties generally have the right to terminate their agreements with us in the event of our uncured material breach, and may have the right to terminate under other circumstances, including if it can be reasonably demonstrated that the safety of the subjects participating in our clinical trials warrants such termination. If any of our relationships with these third parties terminate, we may not be able to enter into arrangements with alternative third parties or do so in a timely manner or on commercially reasonable terms. If these third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced, or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to our preclinical or clinical protocols, regulatory requirements, or for other reasons, our preclinical studies or clinical trials may be extended, delayed, or terminated, the results thereof could be negatively impacted, and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates. As a result, our results of operations and the commercial prospects for our product candidates would be harmed, our costs could increase, and our ability to generate revenues could be delayed. Switching from existing to alternative service providers or clinical trial sites, or adding new service providers or clinical trial sites, may involve significant cost and requires management time and focus. In addition, there is a natural transition period when a new service provider commences work, which could lead to delays and materially impact our ability to meet our desired development, including clinical development, timelines. Additionally, even if our service providers perform as required, they may lack the capacity to absorb higher workloads or take on additional capacity to support our needs. Though we carefully manage our relationships with these service providers, including our contracted laboratories and CROs, there can be no assurance that we will not encounter these types of challenges or delays in the future or that these delays or challenges will not have a material adverse impact on our business, financial condition, and prospects.

Our success depends on our ability to protect our intellectual property rights and proprietary technologies, and we may not be able to protect our intellectual property rights throughout the world.

Patent rights are national or regional rights. The filing, prosecution, maintenance, and defense of patent rights on our platform technologies and product candidates worldwide would be prohibitively expensive, and our intellectual property rights in some countries outside the United States may have a different scope and strength than do those in the United States. In addition, the laws of some foreign countries, particularly certain developing countries, do not protect intellectual property rights to the same extent as federal and state laws in the United States. Consequently, we may not be able to prevent third parties from practicing our intellectual property rights in all countries outside the United States or from making, using, selling, or importing products made using our intellectual property rights in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained intellectual property rights, including patent protection, to develop their own products and may also export otherwise infringing products to territories where we have intellectual property rights, including patent protection, but enforcement rights are not as strong as those in the United States. These products may compete with our products and our patent or other intellectual property rights may not be effective or adequate to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets, and other intellectual property, particularly those relating to biopharmaceutical products, which could make it difficult in those jurisdictions for us to stop the infringement or misappropriation of our patents or other intellectual property rights, or the marketing of competing products in violation of our proprietary rights. Proceedings to enforce our patent and other intellectual property rights in foreign jurisdictions are expensive, especially in jurisdictions where we have no local presence, and could result in substantial costs and divert our efforts and attention from other aspects of our business. Furthermore, such proceedings could put our patents at risk of being invalidated, held unenforceable, or interpreted narrowly, could put our patent applications at risk of not issuing, and could provoke third parties to assert claims of infringement or misappropriation against us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Similarly, if our trade secrets are disclosed in a foreign jurisdiction, competitors worldwide could have access to our proprietary information, and we may be without satisfactory recourse. Such disclosure could have a material adverse effect on our business. Moreover, our ability to protect and enforce our intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual property laws. In addition, certain developing countries, including China and India, have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In those countries, we and our licensors may have limited remedies if patents are infringed or if we or our licensors are compelled to grant a license to a third-party, which could materially diminish the value of those patents. In addition, many countries limit the enforceability of patents against government agencies or government contractors. This could limit our potential revenue opportunities. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

Because of the expense and uncertainty of litigation, we may conclude that, even if a third party is infringing our issued patents, or any patents that may be issued as a result of our pending or future patent applications, or other intellectual property rights, the risk-adjusted cost of bringing and enforcing such a claim or action, which typically lasts for years before it is concluded, may be too high or not in the best interest of our company or our stockholders, or it may be otherwise impractical or undesirable to enforce our intellectual property against some third parties. Our competitors or other third parties may be able to sustain the costs of complex patent litigation or proceedings more effectively than we can because of their greater financial resources and/or more mature and developed intellectual property portfolios. In such cases, we may decide that the monetary cost of such litigation and the diversion of the attention of our management and scientific personnel could outweigh any benefit we may receive as a result of the proceedings and that the more prudent course of action is to simply monitor the situation or initiate or seek some other non-litigious action or solution. In addition, the uncertainties associated with litigation could compromise our ability to raise the funds necessary to initiate or continue our future clinical trials, continue our internal research programs, in-license needed technology or other product candidates, or enter into development partnerships that would help us bring our product candidates to market.

Global geo-political actions could also increase the uncertainties and costs surrounding the prosecution and maintenance of our or our licensors’ patent applications and the maintenance, enforcement, and defense of our or our licensors’ issued patents. For example, further to actions by the United States and foreign governments in response to Russia’s invasion of Ukraine, the Kremlin issued Decree 299 stating that Russian companies and individuals can use patented inventions without the patent owner’s permission or compensation if the owner is from an “unfriendly” country, which includes the United States. As a result, we may not be able to enforce our otherwise valid patent rights against an infringer in Russia.

We depend on intellectual property licensed from third parties, and our rights to develop and commercialize our product candidates are subject to, in part, the terms and conditions of the applicable license agreements. If we breach our obligations under these agreements or if any of these agreements is terminated, we may be required to pay damages, lose our rights to such intellectual property and technology, or both, which would harm our business.

We depend on patents, know-how, and proprietary technology, both that we own and that we license from others, to research, develop, and commercialize our product candidates. We are a party to a number of intellectual property license agreements and acquisition agreements pursuant to which we have acquired certain of our core intellectual property rights. Moreover, we rely upon licenses to certain intellectual property rights and proprietary technology from third parties that are important or necessary for the development of our technologies and products, including technology related to our manufacturing processes and our product candidates. These licenses may not provide exclusive rights to use such intellectual property and technology in all relevant fields of use or in all territories in which we may wish to develop or commercialize our technology and products in the future. As a result, we may not be able to prevent competitors from developing and commercializing competitive products in such fields of use or territories. These licenses may also require us to grant back certain intellectual property rights to our licensors and to pay certain amounts relating to sublicensing patent and other rights.

We have entered into, and we expect to enter into in the future, license agreements and other agreements pursuant to which we may obtain access to or acquire intellectual property rights and technologies. These license and acquisition agreements impose, and we expect that future license and acquisition agreements will impose, various diligence, milestone and royalty payment, and other obligations on us. If we fail to comply with our obligations under these agreements, we may be required to pay damages, and the licensor may have the right to terminate the agreement. Any termination of these licenses could result in the loss of significant rights and could harm our ability to develop or advance one of our cell engineering platforms, or develop, manufacture, or commercialize one of our product candidates. See the subsection titled “Business— Key Intellectual Property Agreements” in Part I, Item 1 of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on February 29, 2024 (2023 Annual Report) for additional information regarding these key agreements.

Licensing of intellectual property is of critical importance to our business, involves complex legal, business, and scientific issues and is complicated by the rapid pace of scientific discovery in our industry. Disputes may arise between us and our licensors regarding intellectual property subject to a license agreement, including those relating to:

The resolution of any contract interpretation disagreement that may arise could change what we believe to be the scope of our rights to the relevant intellectual property or technology or increase what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial condition, results of operations, and prospects. Our business may also suffer if any current or future licensors fail to abide by the terms of the applicable agreement, if such licensors fail to enforce licensed patents against infringing third parties, if the licensed patents or other rights are found to be unpatentable, invalid, or unenforceable, or if we are unable to enter into or maintain necessary license agreements on acceptable terms or at all. If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current or future licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates. We are generally also subject to all of the same risks with respect to protection of intellectual property that we license as we are for intellectual property that we own, which are described below.

In addition, although we cannot currently determine the amount of the royalty obligations we would be required to pay on sales of future products, if any, the amounts may be significant. The amount of our future royalty obligations will depend on the technology and intellectual property we use in product candidates that we successfully develop and commercialize, if any. Therefore, even if we successfully develop and commercialize any product candidates, we may be unable to achieve or sustain profitability.

If we are unable to successfully maintain the intellectual property rights we currently have pursuant to agreements with third parties, or those we may in-license or acquire in the future, we may have to abandon development of the relevant research programs or product candidates, which could harm our ability to commercialize our products, and our business, financial condition, results of operations, and prospects could be materially adversely affected.

We depend, in part, on our licensors to file, prosecute, maintain, defend, and enforce certain patents and patent applications that are material to our business.

Certain patents relating to our product candidates are owned or controlled by certain of our licensors. Each of our licensors generally has rights to file, prosecute, maintain, and defend the patents we have licensed from such licensor in their name, generally with our right to comment on such filing, prosecution, maintenance, and defense, with some obligation for the licensor to consider or incorporate our comments, for our exclusively licensed patents. We generally have the first right to enforce our exclusively licensed patent rights against third parties, although our ability to settle such claims often requires the consent of the licensor. If our licensors, third parties from whom they license or have obtained the relevant patents, or any future licensees having rights to file, prosecute, maintain, and defend our patent rights fail, or have in the past failed, to properly and timely conduct these activities for patents or patent applications covering any of our product candidates, our ability to develop and commercialize those product candidates may be adversely affected and we may not be able to prevent competitors from making, using, or selling competing products. We cannot be certain that such activities have been or will be conducted in compliance with applicable laws and regulations or will result in valid and enforceable patents or other intellectual property rights. Pursuant to the terms of the license agreements with some of our licensors, these licensors may have the right to control enforcement of our licensed patents or defense of any claims asserting the invalidity of these patents and, even if we are permitted to pursue such enforcement or defense, we cannot ensure the cooperation of our licensors. We cannot be certain that our licensors will allocate sufficient resources or prioritize their or our enforcement of such patents or defense of such claims to protect our interests in the licensed patents. Even if we are not a party to these legal actions, an adverse outcome could harm our business because it could cause us to lose rights to intellectual property that we may need to operate our business or could cause us to lose the ability to exclude our competitors from using the intellectual property rights. In addition, even when we have the right to control patent prosecution of licensed patents and patent applications, enforcement of licensed patents, or defense of claims asserting the invalidity of those patents, we may still be adversely affected or prejudiced by actions or inactions of our licensors and their counsel that took place prior to or after our assuming control. In the event we breach any of our contractual obligations to our licensors related to such prosecution, we may incur significant liability to our licensors.

We may not be successful in obtaining or maintaining necessary rights to product candidates, product candidate components, or processes for our product development pipeline, which may require us to operate our business in a more costly or otherwise adverse manner than we anticipated. We may not be successful in obtaining or maintaining exclusive rights to owned and in-licensed patents or patent applications or future patents to the extent they are co-owned by us and third parties.

We own or license from third parties certain intellectual property rights necessary to develop our product candidates. The growth of our business will likely depend in part on our ability to acquire or in-license additional proprietary rights, including to advance our research or allow commercialization of our product candidates. If we are unable to successfully obtain rights to required third-party intellectual property or to maintain the existing intellectual property rights we have, we may have to abandon development or delay commercialization of one or more product candidates and our business and financial condition could suffer.

If we are unable to obtain or maintain necessary third-party intellectual property rights, we may be required to expend considerable time and resources to develop or license replacement technology. For example, our programs may rely upon technologies or product candidates that require the use of additional proprietary rights held by third parties. Furthermore, other pharmaceutical companies and academic institutions may have filed or may plan to file patent applications potentially relevant to our business. In order to work effectively and efficiently, or for other reasons, our product candidates may also require specific formulations, reagents, materials, components, or other technology, which may be covered by intellectual property rights held by others. In order to avoid infringing third-party patents, we may be required to license technology from these third parties to further develop or commercialize our product candidates. We may be unable to acquire or in-license third-party intellectual property rights that we identify as necessary or important to our business operations, including composition, method of use, method of making, or other intellectual property rights required to make, use, or sell our product candidates. Such licenses or other rights may not be available at a reasonable cost or on reasonable terms, or at all, and, as a result, we may be unable to develop or commercialize the affected product candidates, which would harm our business. We may need to cease use of the compositions or methods covered by such third-party intellectual property rights. In addition, we may need to seek to develop alternative approaches that do not infringe on such intellectual property rights, which, if we were successful in developing such alternatives, may entail additional costs and lead to delays in development. In certain cases, it may not be feasible for us to develop such alternatives, which would harm out ability to continue development of the affected product candidates. Even if we are able to obtain a license to such intellectual property rights, any such license may be non-exclusive, which may allow our competitors to access to the same technologies licensed to us.

Additionally, we sometimes collaborate with academic institutions to accelerate our preclinical research or development under written agreements with these institutions. Typically, these institutions provide us with an option to negotiate a license to any of the institution’s rights in technology resulting from the collaboration. However, we may be unable to negotiate a license within the specified timeframe or under terms that are acceptable to us. If we are unable to do so, the institution may license the intellectual property rights to other parties, potentially blocking our ability to pursue any of our programs to which such rights relate.

The licensing and acquisition of third-party intellectual property rights is competitive, and companies that may be more established, or have greater resources than we do, may also be pursuing strategies to license or acquire third-party intellectual property rights that we may consider necessary or attractive in order to commercialize our product candidates. More established companies may have a competitive advantage over us due to their larger size and cash resources or greater clinical development and commercialization capabilities. There can be no assurance that we will be able to successfully complete negotiations and ultimately license or acquire the intellectual property rights necessary or useful for the development of our product candidates. Any delays in entering into, or inability to enter into, license or other agreements pursuant to which we obtain rights related to our product candidates could delay or halt the development and commercialization of our product candidates in certain geographies, which could harm our business prospects, financial condition, and results of operations.

Moreover, some of our owned and in-licensed patents or patent applications or future patents are or may be co-owned with third parties. If we are unable to obtain an exclusive license to any such third-party co-owner’s interest in such patents or patent applications, such co-owner may be able to license their rights to other third parties, including our competitors, and our competitors could market competing products and technologies. In addition, such co-owner may not provide the cooperation necessary to enforce such patents against third parties. Furthermore, our owned and in-licensed patents may be subject to a reservation of rights by one or more third parties. Any of the foregoing could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.

We may depend on intellectual property licensed or sublicensed to us from, or for which development was funded or otherwise assisted by, government agencies, such as the National Institutes of Health, for development of our technology and product candidates.

Government agencies have provided, and may in the future provide, funding, facilities, personnel, or other assistance in connection with the development of the intellectual property rights owned by or licensed to us. Such government agencies may have retained rights in such intellectual property, including the right to grant or require us to grant mandatory licenses or sublicenses to such intellectual property to third parties under specified circumstances, including if it is necessary to meet health and safety needs that we are not reasonably satisfying or if it is necessary to meet requirements for public use specified by federal regulations, or to manufacture products in the United States. Any exercise of such rights, including with respect to any such required sublicense, could result in the loss of significant rights and could harm our ability to commercialize or continue commercializing products that are subject to government rights. For example, at least one of our in-licensed patent cases related to each of our ex vivo and in vivo cell engineering platforms has been funded at least in part by the United States government. As a result, these patent cases are subject to certain federal regulations pursuant to the Bayh-Dole Act of 1980 (Bayh-Dole Act). In particular, the federal government retains a “nonexclusive, nontransferable, irrevocable, paid-up license” for its own benefit to inventions produced with its financial assistance. The Bayh-Dole Act also provides federal agencies with “march-in rights,” which allow the government, in specified circumstances, to require the contractors or successors in title to the patent to grant a “nonexclusive, partially exclusive, or exclusive license” to a “responsible applicant or applicants.” If the patent owner refuses to do so, the government may grant the license itself. Intellectual property rights discovered under government-funded programs are also subject to certain reporting requirements, compliance with which may require us or our licensors to expend substantial resources and failure to comply may lead to loss of rights. Such intellectual property is also subject to a preference for United States industry, which may limit our ability to contract with foreign product manufacturers for products covered by such intellectual property rights. Moreover, we cannot be sure that any intellectual property we may co-develop with academic institutions in connection with preclinical research or development activities will be free from government rights pursuant to the Bayh-Dole Act. If, in the future, we co-own or in-license technology that is critical to our business and is developed in whole or in part with federal funds subject to the Bayh-Dole Act, our ability to enforce or otherwise exploit patents covering such technology may be adversely affected.

If we are unable to obtain and maintain sufficient intellectual property protection for our platform technologies and product candidates, or if the scope of the intellectual property protection is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize our products may be adversely affected.

Our success depends in large part on our ability to obtain and maintain patent protection in the United States and other countries with respect to our platform technologies and product candidates. We seek to protect our proprietary position by filing patent applications in the United States and abroad related to our novel discoveries and technologies that are important to our business. We have filed numerous patent applications and anticipate that we will file additional patent applications both in the United States and in other countries, as appropriate. However, we cannot predict:

Obtaining and enforcing patents is expensive and time-consuming, and we may not be able to file, and we and our licensors may not be able to prosecute, all necessary or desirable patent applications or maintain, defend, or enforce patents that may issue based on our patent applications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development results before it is too late to obtain patent protection or before another party files a patent application covering the relevant inventions. Although we enter into confidentiality agreements with parties that have access to patentable aspects of our research and development output, such as our employees, corporate collaborators, outside scientific collaborators, contract research organizations, contract manufacturers, consultants, advisors, and other third parties, any of these parties may breach these agreements and disclose such results before a patent application is filed, thereby jeopardizing our ability to seek patent protection.

Composition of matter patents for biological products such as ex vivo and in vivo cell engineering product candidates often provide a strong form of intellectual property protection for those types of products, as such patents provide protection without regard to any method of use. We cannot be certain, however, that the claims in our pending patent applications covering the composition of matter of our product candidates will be considered patentable by the United States Patent and Trademark Office (USPTO) or by patent agencies in foreign countries, or that the claims in any of our issued patents will be considered valid and enforceable by courts in the United States or foreign countries. Method of use patents protect the use of a product for the specified method. This type of patent does not prevent a competitor from making and marketing a product that is identical to our product for an indication that is outside the scope of the patented method. Moreover, even if competitors do not actively promote their products for our targeted indications, physicians may prescribe these products “off-label” for those uses that are covered by our method of use patents. Although off-label prescriptions may infringe or contribute to the infringement of method of use patents, the practice is common and such infringement may be difficult to prevent or prosecute.

One aspect of the determination of patentability of inventions depends on the scope and content of the “prior art,” which is information that was or is deemed available to a person of skill in the relevant art prior to the priority date of the claimed invention. There may be prior art of which we are not aware that may affect the patentability of our inventions or, if issued, affect the validity or enforceability of a patent claim. Further, we may not be aware of all third-party intellectual property rights potentially relating to our product candidates or their intended uses, and as a result, the impact of such third-party intellectual property rights on the patentability of our own patents and patent applications, as well as upon our freedom to operate, is highly uncertain. Because patent applications in the United States and most other countries are typically confidential for a period of 18 months after filing, or may not be published at all, we cannot be certain that we were or will be the first to file any patent application related to our product candidates. As a result, the issuance, scope, validity, enforceability, and commercial value of our patent rights are highly uncertain. Furthermore, for United States patent applications in which all claims are entitled to a priority date before March 16, 2013, an interference proceeding can be instituted by a third party or the USPTO to determine who was the first to invent any of the subject matter covered by the relevant patent claims. For United States patent applications containing a claim not entitled to priority before March 16, 2013, there is a greater level of uncertainty in the patent law in view of the passage of the Leahy-Smith America Invents Act (the Leahy-Smith Act), which introduced significant changes to the United States patent laws, including new procedures for challenging pending patent applications and issued patents.

The strength of patents in the biotechnology and pharmaceutical fields can be uncertain and evaluating the scope and validity of such patents involves complex legal, factual, and scientific analyses, which may vary based on the jurisdiction in which the analyses are performed. Patents have in recent years been the subject of much litigation in the United States and worldwide, resulting in court decisions, including United States Supreme Court decisions, that have increased uncertainties as to the patentability of certain inventions as well as the enforceability of patent rights in the future. The patent applications that we own or in-license may fail to result in issued patents with claims that cover our platform technologies or our product candidates or uses thereof in the United States or in other foreign countries. Even if patents do successfully issue, third parties may challenge the patentability, validity, enforceability, or scope thereof, which may result in such patents being narrowed, invalidated, revoked, or held unenforceable. In the event of litigation or administrative proceedings involving our issued patents, we cannot be certain that the claims of any such patent will be considered patentable by administrative bodies or valid by courts in either the United States or foreign countries. Furthermore, even if they are unchallenged, our patents and patent applications may not adequately cover our platform technologies or product candidates or prevent others from designing their products to avoid being covered by our patent claims. If the breadth or strength of protection provided by our patent filings is threatened, companies may be dissuaded from collaborating with us to develop, and could threaten our ability to successfully commercialize, our product candidates. In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States, or vice versa. Further, as patent rights are time limited, if we encounter delays in our clinical trials, the period of time during which we could market our product candidates under patent protection would be reduced.

We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope, or expiration of a third-party patent, which might adversely affect our ability to develop and market our products.

We cannot guarantee that any of our patent searches or analyses, including the identification of relevant patents, the scope or validity of patent claims, or the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application worldwide, including in the United States, that is relevant to or necessary for the commercialization of our product candidates in any jurisdiction. The scope of a patent’s claims is determined by an interpretation of the laws of the country in which the patent has been granted, the written disclosure in the patent, and the patent’s prosecution history. Our interpretation of the relevance or the scope of a patent or a pending application may be incorrect, which may negatively impact our ability to market our products. We may incorrectly determine that our products are not covered by a third-party patent or may incorrectly predict whether a third party’s pending application will issue with claims of relevant scope. Our determination of the expiration date of any patent worldwide, including in the United States, that we consider relevant may be incorrect, which may negatively impact our ability to develop and market our product candidates. Our failure to identify and correctly interpret relevant patents may negatively impact our ability to develop and market our products.

Intellectual property rights do not necessarily protect us from all potential threats to our competitive advantage.

The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations and may not adequately protect our business or permit us to maintain our competitive advantage. For example:

Should any of these events occur, they could significantly harm our business, results of operations, and prospects.

Confidentiality agreements with employees and third parties may not prevent disclosure of trade secrets and other proprietary information.

In addition to the protection afforded by patents, we rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable or that we elect not to patent, subject matter for which patents are difficult to enforce, and other elements of our product candidates, technology, and product discovery and development processes that involve proprietary know-how, information, or technology that we do not cover through patent protection. Any disclosure, either intentional or unintentional, by our current or former employees, contractors, collaborators, or those of third parties, including those with whom we share our facilities and consultants and vendors that we engage to perform research, clinical trials, or manufacturing activities, or misappropriation by third parties (such as through a cybersecurity breach) of our trade secrets or proprietary or confidential information could enable competitors to duplicate or surpass our technological achievements, thus eroding our competitive position in our market. Because we rely and expect to continue to rely on third parties in the development and manufacture of our product candidates, we must, at times, share trade secrets with them, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.

Trade secrets and confidential information, however, can be difficult to protect. We seek to protect our trade secrets, know-how, and confidential information, including our proprietary processes, in part, by entering into confidentiality agreements with our employees, consultants, outside scientific advisors, contractors, collaborators, and other third parties. We require our employees to enter into written employment agreements containing provisions of confidentiality and obligations to assign to us any inventions generated in the course of their employment. In addition, we enter into agreements with our consultants, contractors, service providers, and outside scientific collaborators that typically include invention assignment obligations. We cannot guarantee that we have entered into such agreements with each party that may have or has had access to our trade secrets or proprietary or confidential information, including our technology and processes. Although we use reasonable efforts to protect our trade secrets and confidential information, our employees, consultants, outside scientific advisors, contractors, collaborators, and other third parties might intentionally or inadvertently disclose such information to competitors or other third parties, including, as to consultants and advisors, to their primary employers, in breach of our agreements with such parties, and adequate remedies for such breaches may be unavailable. In addition, competitors may otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. Further, we may be required to disclose trade secrets and other confidential information to governmental authorities, including in connection with regulatory filings related to our product candidates, and such authorities may make certain documentation or information contained therein available to the public. If we are unable to or otherwise fail to take advantage of any opportunity to protect such trade secrets or other confidential information, our competitors could use such information to compete with us, which would significantly harm our business.

Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive, and time-consuming, and the outcome is unpredictable. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor or other third party, we would have no right to prevent them from using that technology or information to compete with us. Furthermore, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the United States. As a result, we may encounter significant problems in protecting and defending our intellectual property both in the United States and abroad. If we are unable to prevent unauthorized material disclosure of our intellectual property to third parties or misappropriation of our intellectual property by third parties, we will not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, operating results, and financial condition.

Third-party claims of intellectual property infringement against us or our collaborators may prevent or delay our product discovery, development, or commercialization efforts.

Our commercial success depends in part on our avoiding infringement of the patents and proprietary rights of third parties. We cannot be certain that our platform technologies, product candidates, and other proprietary technologies we may develop will not infringe existing or future patents owned by third parties. The legal and administrative landscape related to infringement of the patents and proprietary rights of third parties is fluid as there is a substantial amount of litigation involving patents and other intellectual property rights in the biotechnology and pharmaceutical industries, as well as administrative proceedings for challenging patents. These include interference, derivation, inter partes review, post-grant review, and reexamination proceedings before the USPTO or oppositions and other comparable proceedings in foreign jurisdictions. Litigation and other legal proceedings relating to intellectual property claims, with or without merit, are unpredictable and generally expensive and time-consuming and, even if resolved in our favor, are likely to divert significant resources from our core business and distract our technical and management personnel from their normal responsibilities. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing, or distribution activities. We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources and more mature and developed intellectual property portfolios. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to enter into or compete in the marketplace. Furthermore, patent reform and changes to patent laws add uncertainty to the possibility of challenge to our patents in the future.

Numerous issued patents and pending patent applications owned by third parties may exist worldwide in the fields in which we are developing our platform technologies and product candidates. We cannot provide any assurances that third-party patent filings that might be enforced against the making, use, or sale of our current product candidates or future products do not exist, which, if they did exist, would result in either an injunction prohibiting our sales, or an obligation to pay royalties on product sales or other forms of compensation to third parties. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates will be subject to claims of infringement of the patent rights of others. Third parties may assert that we infringe their patents or other intellectual property, or that we are otherwise employing their proprietary technology without authorization, and may sue us. There may be third-party patent filings of which we are currently unaware with claims, including claims to compositions, formulations, methods of manufacture, or methods of use or treatment, that cover our product candidates. It is also possible that patent filings owned by third parties of which we are aware, but which we do not believe are relevant to our platform technologies, product candidates, or other proprietary technologies we may develop, could be found to be infringed by our product candidates. Because patent applications can take many years to issue, there may be pending patent applications, including those of which we are unaware, that may later result in issued patents that our product candidates may infringe. In addition, third parties, including our competitors in both the United States and abroad, many of which have substantially greater resources and have made substantial investments in patent portfolios and competing technologies, may obtain patents in the future that may prevent, limit, or otherwise interfere with our ability to make, use, and sell our product candidates, and may claim that use of our technologies or the manufacture, use, or sale of our product candidates infringes upon these patents. If any such third-party patents were held by a court of competent jurisdiction to cover our technologies or product candidates, or if we are found to otherwise infringe a third party’s intellectual property rights, the holders of any such patents may be able to block, including by court order, our ability to develop, manufacture, use, sell, or commercialize the applicable product candidate unless we obtain a license under the applicable patents or other intellectual property, or until such patents expire or are finally determined to be held unpatentable, invalid, or unenforceable. Such a license may not be available on commercially reasonable terms or may not be available at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. If we are unable to obtain a necessary license to a third-party patent on commercially reasonable terms, our ability to commercialize our product candidates may be impaired or delayed, which could significantly harm our business.

The pharmaceutical and biotechnology industries have produced a considerable number of patents, and it may not always be clear to industry participants, including us, which patents cover the making, use, or sale of various types of products or methods of use. The scope of patent coverage is subject to interpretation by both administrative bodies and the courts, and the interpretation is not always predictable or uniform. If we were sued for patent infringement, we would need to demonstrate that the making, use, or sale of our product candidates, products, or methods either do not infringe the patent claims of the relevant patent or that the patent claims are invalid or unenforceable, which we may not be able to do. Proving invalidity may be difficult. For example, in the United States, proving invalidity in court requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents, and there is no assurance that a court would invalidate the claims of any such patent. Third parties asserting their patent or other intellectual property rights, such as confidential information or trade secrets, against us may also seek and obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize our product candidates or force us to cease some of our business operations. We may not have sufficient resources to bring any these actions to a successful conclusion. Defense against any of these claims, regardless of their merit and whether we are successful or not, would require us to incur substantial costs and could divert management and other employee resources from our business, cause development delays, and impact our reputation, which could have a material adverse effect on our business and operations. In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties, or redesign our infringing products, which may be impossible to do on a cost-effective basis or require substantial time and monetary expenditure. In that event, we would be unable to further develop and commercialize our product candidates, which could harm our business significantly.

Our issued patents and patent applications could be found unpatentable, invalid, or unenforceable if challenged in courts or before an administrative body, and we may be involved in lawsuits to protect or enforce our patents or other intellectual property or the intellectual property of our licensors. Our participation in any such action could be expensive, time-consuming, and unsuccessful.

Our issued patents or pending patent applications may be challenged in the courts or patent offices in the United States and abroad. For example, our patent applications may be subject to a third-party pre-issuance submission of prior art to the USPTO, or we may become involved in post-grant review proceedings, opposition or derivation proceedings, reexaminations, or inter partes review proceedings, in the United States or elsewhere, challenging our patent rights or the patent rights of others. In addition, interference or derivation proceedings provoked by third parties or brought by the USPTO may be necessary to determine the priority of inventions or the correct inventorship of the inventions claimed in our patents or patent applications or those of our licensors. An unfavorable outcome could result in a loss of our current patent rights and could require us to cease using the related technology or to attempt to license rights from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms. An adverse determination in any such proceeding may result in loss of exclusivity or in our patent claims being narrowed, invalidated, held unpatentable, or held unenforceable, in whole or in part, which could limit our ability to exclude others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and products, and otherwise no longer protect our product candidates.

In addition, competitors may infringe our issued patents or other intellectual property or the intellectual property of our licensors. To cease such infringement or unauthorized use, we may be required to file patent infringement claims, which can be expensive and time-consuming and could divert the time and attention of our management and personnel. If we or one of our licensors initiates legal proceedings against a third party to enforce a patent covering one of our platform technologies or product candidates, the defendant could counterclaim that we infringe their patents or that the patent covering our product candidate is invalid or unenforceable, or both. In patent litigation in the United States or abroad, defendant counterclaims alleging invalidity or unenforceability are commonplace, and there are numerous grounds upon which a third party can assert invalidity or unenforceability of a patent, including lack of novelty, obviousness, non-enablement, or insufficient written description, or that someone connected with prosecution of the patent withheld relevant information from the USPTO or made a misleading statement during prosecution. Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation, using post-grant proceedings such as re-examination, inter partes review, post-grant review, opposition, or derivation proceedings.

The outcome following legal assertions of unpatentability, invalidity, or unenforceability is unpredictable. In a proceeding before an administrative body, there is a risk that the body will decide that a patent is unpatentable or will be revoked, in whole or in part. In any patent infringement proceeding or declaratory judgment action, there is a risk that a court will decide that a patent of ours or our licensors is invalid or unenforceable, in whole or in part. In the event of either decision, we would no longer have the right to stop another party from using the invention covered by the relevant patent. There is also a risk that, even if the validity of such a patent is upheld, the court or administrative body will construe the patent’s claims narrowly or decide that we do not have the right to stop the other party from using the invention at issue on the grounds that our patent claims do not cover the invention. The court could also decide that the other party’s use of our patented technology falls under the safe harbor to patent infringement under 35 U.S.C. §271(e)(1). With respect to the validity and patentability of our patents, for example, we cannot be certain that there is no invalidating prior art of which we, our patent counsel, and the patent offices were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection for the relevant product candidate, which could limit our ability to assert our patents against those parties or other competitors and prevent us from excluding third parties from making, using, or selling similar or competitive products.

Even if we establish infringement of our or our licensors’ intellectual property, the remedies may be insufficient. For example, the court may decide not to grant an injunction against further infringing activity and instead award only monetary damages, which may or may not be an adequate remedy. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure in the course of litigation. In addition, there could be public announcements of the results of hearings, motions, or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, the price of our common stock could be substantially adversely affected. Litigation, interference, derivation, or other proceedings involving our or our licensors’ patents may result in a decision adverse to our interests and, even if we are successful, may result in substantial costs and distract our management and other employees. Any failure to obtain or maintain patent protection with respect to our product candidates and other technologies, including as a result of such proceedings, could have a material adverse effect on our business, financial condition, results of operations, and prospects.

The terms of our patents may not be sufficient to effectively protect our products and business.

Patents have limited terms, and in many jurisdictions worldwide, including the United States, if all maintenance fees are timely paid, the natural expiration of a patent’s term is generally 20 years after its first effective non-provisional filing date. Although various extensions may be available, the term of a patent, and the protection it affords, is limited. Given the significant amount of time required for the development, testing, and regulatory review of new product candidates, patents protecting such product candidates might expire before or shortly after such product candidates are commercialized. Further, if we encounter delays in our clinical trials, the period of time during which we could market our product candidates under patent protection would be reduced. Even if patents covering our product candidates are obtained, once the patent life has expired for a product, we may be open to competition from biosimilar or generic therapies. As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing product candidates similar or identical to ours. Our patents issued as of October 2024 have terms expected to expire on dates ranging from 2028 to 2042, subject to any patent term extensions that may be available. If patents are issued on our patent applications pending as of October 2024, the resulting patents are projected to expire on dates ranging from 2028 to 2045. In addition, although upon issuance in the United States a patent’s term can be increased based on certain delays caused by the USPTO, this increase can be reduced or eliminated based on certain delays caused by the patent applicant during patent prosecution. A patent term extension based on regulatory delay may also be available in the United States and in certain other foreign jurisdictions. However, in the United States, only a single patent can be extended for each marketing approval, and any patent can be extended only once, for a single product. Moreover, the scope of protection during the period of the patent term extension in the United States does not extend to the full scope of the patent’s claims, but instead only as to the scope of the product as approved. The laws governing analogous patent term extensions in foreign jurisdictions vary widely and many differ from the process in the United States. Additionally, we may not receive a patent term extension if we fail to exercise due diligence during the testing phase or regulatory review process, fail to apply within applicable deadlines, fail to apply prior to expiration of relevant patents, or otherwise fail to satisfy applicable requirements. If we are unable to obtain a patent term extension for any particular patent, or the term of any such extension is less than we request, the period during which we will have the right to exclude others from using the patent rights will be shortened. Our competitors may be able to obtain approval of competing products following our patent expiration and take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data to launch a biosimilar product earlier than might otherwise be the case, which could reduce our revenue, possibly materially. In general, if we do not have sufficient patent term to protect our platform technologies and product candidates, our business and results of operations will be adversely affected.

Third parties may challenge the inventorship or ownership of or otherwise assert rights in our patent and other intellectual property rights.

We may be subject to claims that former employees, collaborators, or other third parties have an ownership interest in our patents or other intellectual property, including as a result of being an inventor or co-inventor. In the United States, the failure to name the proper inventors on a granted patent can result in the patent being unenforceable. Inventorship disputes may arise from conflicting views regarding the contributions made to an invention by the individuals named as inventors, the effects of foreign laws where foreign nationals are involved in the development of the subject matter of the patent, conflicting obligations of third parties involved in developing our product candidates, or as a result of questions regarding co-ownership of potential joint inventions. For example, inventorship disputes may arise from conflicting obligations of consultants or others who are involved in developing our platform technologies or product candidates or related intellectual property. Alternatively, or additionally, we may enter into agreements to clarify the scope of our rights in such intellectual property. Litigation may be necessary to defend against claims challenging or relating to inventorship and ownership of intellectual property rights. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or the right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and distract management and other employees.

We or our licensors may have relied on third-party consultants or collaborators or on funds from third parties, such as the United States government, such that we or our licensors are not the sole and exclusive owners of the patents that we own or that we have in-licensed. If third parties have ownership rights or other rights to our patents, including in-licensed patents, they may be able to license such patents to our competitors, and our competitors could make, use, or sell competing products and technology. This could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.

In addition, although it is our policy to require our employees, contractors and other third parties who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that we regard as our own. The assignment of intellectual property rights may not be self-executing, or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property. As described elsewhere in these Risk Factors, such claims could be expensive and time-consuming to litigate or defend and could divert the time and attention of our management and other personnel, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

We may be subject to claims that our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties.

We have received confidential and proprietary information from third parties. In addition, we employ and engage individuals who were previously employed by or have otherwise provided services for other organizations, including at other biotechnology or pharmaceutical companies or at academic institutions. We may be subject to claims that we or our employees, consultants, or independent contractors have inadvertently or otherwise improperly used or disclosed confidential information of these third parties or organizations. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could cause us to incur substantial costs and distract our management and employees. If our defenses to these claims fail, in addition to requiring us to pay monetary damages, a court could prohibit us from using technologies or features that are essential to our product candidates, if such technologies or features are found to incorporate or be derived from the trade secrets or other proprietary information of these third parties or organizations. Moreover, any such litigation or the threat thereof may adversely affect our reputation and our ability to form strategic alliances or sublicense our rights to collaborators, engage with scientific advisors, or hire employees or consultants, each of which would have an adverse effect on our business, results of operations, and financial condition.

Our internal computer systems, or those used by third parties involved in our operations, such as research institution collaborators, CROs, CDMOs, and other service providers, contractors, or consultants, may fail or suffer security breaches or incidents.

We and third parties involved in our operations are increasingly dependent upon information technology systems, infrastructure, and data to operate our business. In the ordinary course of business, we currently and will continue to collect, store, and transmit confidential information (including trade secrets or other intellectual property, proprietary business information, including data from our research, preclinical studies, and clinical trials, and personal information). It is critical that we and these third parties do so in a secure manner to maintain the confidentiality, integrity, and availability of such information. For example, we have outsourced elements of our operations to third parties, and as a result we manage a number of third-party vendors that have access to our confidential information, including those that provide information technology and data security systems and services, and we do not have operational control over these third-party vendors. In addition, we currently and may in the future share or exchange confidential information with other third parties, such as collaborators, licensors, or strategic partners, none of which we have control over and all of which are subject to similar security risks as we are. As such, we are subject to risks not only from security incidents involving our own systems and networks, but also those of third parties with whom we work.

Despite the implementation of security measures (including edge technology designed to identify and protect our network from infiltration by third-party systems), our internal computer systems and those of any third parties involved in our operations, including our third-party research institution collaborators, CROs, CDMOs, and other service providers, contractors, and consultants, including vendors of information technology and data security systems and services, are vulnerable to damage and interruptions from cyberattacks, security breaches and incidents, computer viruses, ransomware, fraud, and other compromises and incidents involving or leading to unauthorized access to or loss, modification, unavailability, use, disclosure, or other processing of confidential information. In addition, certain systems or components thereof require enhanced or otherwise different security measures, which may require us to invest additional resources and may leave such systems more vulnerable to security compromises or incidents. These compromises and incidents may involve acts by current or former employees, service providers (including providers of information technology-specific services), nation states (including groups associated with or supported by foreign intelligence agencies), organized crime organizations, “hacktivists,” or others. For example, SolarWinds Corporation (SolarWinds), a provider of information technology monitoring and management products and services that we used, experienced a cyberattack in 2020 that was likely the result of a supply chain attack by an outside nation state. We took steps to mitigate the vulnerabilities identified within these products and, following our investigations, concluded that our confidential information was not materially accessed, lost, or stolen as a result of this cyberattack. However, there may be unknown effects from this or other cyberattacks that have occurred or may occur in the future, any of which could have a material negative impact on our business. In addition, in certain cases, we may rely on or incorporate third-party software, code, or other similar materials into our systems, processes, and operations, such as in the case of internal software development, which exposes us to various risks, including that such third-party materials may have harmful components that could enable access and harm to our systems and confidential information. If we are unable to or otherwise do not detect these harmful components, or are unable to manage their effects, our business could be significantly harmed.

In addition, the geo-political climate, tensions between the United States and certain countries, including Russia and China, and other geopolitical events may increase our vulnerability to such cybersecurity attacks. For example, the conflict between Russia and Ukraine may create heightened threats of ransomware attacks and other cybersecurity threats for certain industries, including healthcare and pharmaceuticals. We continue to monitor and take steps to mitigate this risk, but we cannot ensure that such efforts will be sufficient to protect us from any such cyberattacks or other incidents. In addition, in July 2022, the heads of the FBI and MI5 issued joint warnings regarding the threat posed by China to national security due to the Chinese government’s increasing use of cyber espionage to steal technology from Western corporations and disrupt Western business. Moreover, the biotechnology industry is one of the top industries that China has targeted for domestic growth and development, and it therefore may be a primary target for such cyber espionage efforts. We continue to monitor our systems and upgrade our security capabilities in order to mitigate risk. However, any access to or loss or theft of our confidential information in connection with a future cyberattack could have a material adverse effect on our business.

Threats involving the misuse of access to our network, systems, and information by our current or former employees or third parties involved in our operations, including service providers, contractors, vendors, or partners, whether intentional or unintentional, also pose a risk to the security of our network, systems, and information, including data. For example, we are subject to the risk that employees may inadvertently share confidential information with unintended third parties, or that departing employees may take, or create their own information based on, our confidential information upon leaving the company. In addition, any such insiders may be the victims of social engineering attacks that enable unauthorized third parties to access our network, systems, and information using an authorized person’s credentials. We and our network, systems, and information are also vulnerable to malicious acts by insiders, including leaking, modifying, or deleting confidential information, or performing other acts that could materially interfere with our operations and business. Although we provide regular training to our employees regarding cybersecurity threats and best practices, we cannot ensure that such training or other efforts will prevent unauthorized access to or sabotage of our network, systems, and information.

Although we have not, to our knowledge, experienced any material system failure, accident, or security breach to date, because techniques used to obtain unauthorized access to or to sabotage systems are constantly evolving and generally are not recognized until they are launched against a target, we cannot be sure that our current practices, including our security and data protection efforts and investment in information security and technology will detect or prevent future significant breakdowns, data leakages, breaches in our systems or the systems of third parties involved in our operations, such as service providers, contractors, and collaborators, or other compromises or incidents that could have a material adverse effect upon our reputation, business, operations, or financial condition. If such an event were to occur, it could materially disrupt our operations and programs, the development of our product candidates could be delayed or otherwise negatively impacted, and our business could be significantly harmed. Any such event that leads to unauthorized access to or loss, modification, unavailability, use, disclosure, or other processing of personal information, including personal information regarding our clinical trial subjects or employees, or any reporting or belief that any such event or impact has occurred, could delay further development and commercialization of our product candidates, harm our reputation directly, require us to comply with federal or state breach notification laws and foreign law equivalents, subject us to mandatory corrective action, and otherwise subject us to liability under laws and regulations that protect the privacy and security of personal information. As a result, we could incur significant legal and financial exposure and reputational harm that could have a material adverse effect on our business. In any case, if we experience a cyberattack or security breach or incident, we could incur significant costs to remedy the resulting damage, including costs to deploy additional personnel and security and protection technologies, train employees, and engage third-party experts and consultants. We and the third parties involved in our operations may face difficulties and delays in identifying, responding to, and remediating security breaches and incidents, and we may find it necessary or appropriate to put in place additional measures designed to identify, protect against, and otherwise address cyberattacks and security breaches and incidents. Although we maintain cyber liability insurance, we cannot be certain that our coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to us on commercially reasonable terms or at all.

Further, our personnel, and those of any third parties involved in our operations, including vendors, service providers, collaborators, contractors, and consultants, may develop and use artificial intelligence technologies in the course of performing work for us, including generative artificial intelligence technologies (GenAI) that have the ability to output new content and information based on user inputs. GenAI has the potential to benefit our business and operations, possibly significantly, including by potentially creating efficiencies and enabling powerful research and development that may otherwise not be possible, and we may be at a competitive disadvantage if we do not or are unable to use GenAI, or only use it for limited purposes. However, use of GenAI in connection with our confidential, proprietary, or otherwise sensitive information, including personal data, may result in leaks, disclosure, or otherwise unauthorized or unintended access to or use or other processing of such information, including incorporation of such information into the applicable GenAI system or use of such information to further refine and train the GenAI models. Any such access or use, or any improper or inappropriate use, of GenAI could, for example, reveal trade secrets or other confidential information that may enable third parties to replicate or improve upon our technologies and programs, advance their technologies or programs more rapidly than we do, or otherwise negatively impact the value of, or our ability to obtain or maintain, intellectual property rights. Access to and use and other processing of personal data may subject us to risks and potential liability and obligations under applicable data privacy laws, as described elsewhere in these Risk Factors. Further, we may use the output of GenAI in our technologies, programs, and other aspects of our business, and such output could incorporate third party intellectual property, or we may otherwise be unable to own, protect, further develop, or ultimately use such output, which could significantly harm our business to the extent such technologies, programs, or other aspects of our business rely upon such output. Such output may also be false, non-sensical, biased, or otherwise harmful to our operations and business if incorporated therein. Further, our ability to use GenAI or further develop or use its output may depend on access to specific third-party software and infrastructure, such as processing hardware or third-party artificial intelligence models, and we cannot control the availability or pricing of such software and infrastructure, especially in a highly competitive environment. We may also face novel and urgent cybersecurity risks and emerging ethical risks relating to the use of GenAI, which could adversely affect our operations, assets, including intellectual property and data, and reputation, as well as those of any third parties involved in our operations. Use of artificial intelligence technologies in general, and GenAI in particular, in our business could subject us to additional costs and expenses, litigation, regulatory actions and investigations, and other negative consequences. There is significant uncertainty with respect to the nature of the laws and regulations that have been and may in the future be adopted, including how such laws and regulations will be interpreted and applied, both within and outside of the U.S., with respect to the use of artificial intelligence technologies in general, and GenAI in particular, including the ownership of or right to use the output of GenAI. We may need to expend significant resources to modify and maintain our business practices to comply with such laws and regulations and to otherwise ensure appropriate and lawful use of artificial intelligence technologies, including GenAI and its output, in our technologies, programs, and other aspects of our business.

In addition, we have entered into and expect to continue to enter into collaboration, license, contract research, and manufacturing relationships with organizations that operate in certain countries that are at heightened risk of technology, data, and intellectual property theft through direct intrusion by private parties or foreign actors, including those affiliated with or controlled by state actors. If any theft or intrusion affects our technology, data, or intellectual property, the value of such technology, data, or intellectual property to our company may be diminished and our competitive position could be harmed. In such a case, our efforts to protect and enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from such intellectual property, and we may be at heightened risk of losing our proprietary intellectual property rights around the world, including outside of such countries, to the extent such theft or intrusion destroys the proprietary nature of our intellectual property.

If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.

We currently and in the future will need to maintain and protect our trademarks and trade names to ensure, among other things, name recognition by potential partners and, if our products receive regulatory approval, customers in our markets of interest. We may not be able to protect our rights in our current or future trademarks and trade names or may be forced to stop using these trademarks or trade names, including as a result of such trademarks and trade names being challenged, infringed, circumvented, or declared generic or descriptive, or being determined to infringe on other marks. In any such case, we may no longer be able to enforce or use our rights in these trademarks and trade names. During trademark registration proceedings, our applications may be rejected by the USPTO or comparable foreign agencies. Although we would be given an opportunity to respond to those rejections, we may be unable to overcome such rejections. In addition, in the USPTO and in many comparable foreign agencies, third parties are given an opportunity to oppose pending trademark applications and to seek to cancel registered trademarks. Opposition or cancellation proceedings may be filed against our trademarks, and our trademarks may not survive such proceedings. If we are unable to establish name recognition based on our trademarks and trade names, we may not be able to compete effectively, and our business may be adversely affected. We may license our trademarks and trade names to collaborators or to third parties, such as distributors. Though these license agreements may provide guidelines for how our trademarks and trade names may be used, a breach of these guidelines or misuse of our trademarks and tradenames by our licensees may jeopardize our rights in or diminish the goodwill associated with our trademarks and trade names.

Moreover, any name we may propose to use as a trade name for any of our product candidates in the United States must be approved by the FDA, regardless of whether we have applied to register it as a trademark. Similar requirements exist in Europe. The FDA typically conducts a review of proposed product names, including an evaluation of potential for confusion with other product names. If the FDA or a comparable foreign regulatory authority objects to any of our proposed proprietary product names, we may be required to expend significant additional resources in an effort to identify a suitable substitute name that would be registerable under applicable trademark laws, not infringe the existing rights of third parties, and be acceptable to the FDA or comparable foreign regulatory authority. Furthermore, in many countries, owning and maintaining a trademark registration may not provide an adequate defense against a subsequent infringement claim asserted by the owner of a senior trademark. At times, competitors or other third parties may adopt trademarks or trade names similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trademark or trade name infringement claims brought against us by owners of other registered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names. If we assert trademark infringement claims against third parties, a court may determine that the marks we have asserted are invalid or unenforceable, or that the party against whom we have asserted trademark infringement has superior rights to the marks in question. In this case, we could ultimately be forced to cease use of such trademarks.

Changes in United States and foreign patent law could diminish the value of patents in general, thereby impairing our ability to protect our products.

As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property, and patent rights in particular. Obtaining and enforcing patents in the biopharmaceutical industry involves both technological and legal complexity and is therefore costly, time-consuming, and inherently uncertain. Changes in either the patent laws or related regulations, or interpretation of such laws or regulations, could increase the uncertainties and costs associated with protection of, and may diminish our ability to protect, our inventions and our ability to obtain, maintain, and enforce our intellectual property rights and, more generally, could adversely affect the value of our intellectual property or narrow the scope of or invalidate our owned and licensed patents. Patent reform legislation in the United States and other countries, including the Leahy-Smith Act signed into law on September 16, 2011, could increase uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents. The Leahy-Smith Act introduced a number of significant changes to United States patent law. These include provisions that affect the way patent applications are prosecuted, redefine prior art, and provide more efficient and cost-effective avenues for competitors to challenge patents. These include allowing third-party submission of prior art to the USPTO during patent prosecution and additional procedures to attack patents by USPTO-administered post-grant proceedings, including post-grant review, inter partes review, and derivation proceedings. In addition, under the Leahy-Smith Act, the United States transitioned to a first inventor to file system for filings made after March 2013, under which, assuming that the other statutory requirements are met, the first inventor to file a patent application will be entitled to the patent on an invention regardless of whether a third party was the first to invent the claimed invention. A third party that files a patent application in the USPTO after March 2013, but before we file an application covering the same invention, could therefore be awarded a patent covering an invention of ours even if we had made the invention before it was made by such third party. As a result, we must be cognizant of the time from invention to filing of a patent application. Since patent applications in the United States and most other countries are confidential for a period of time after filing or until issuance, we cannot be certain that we or our licensors were the first to either (i) file any patent application related to our platform technologies, product candidates, and other proprietary technologies we may develop or (ii) invent any of the inventions claimed in our or our licensors’ patents or patent applications. Even where we have a valid and enforceable patent, we may not be able to exclude others from practicing the claimed invention if the other party can show that they used the invention in commerce before our filing date or the other party benefits from a compulsory license. The Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

In addition, in 2012, the EU Patent Package regulations were passed with the goal of providing a single pan-European Unitary Patent and a new European Unified Patent Court (UPC) for litigation involving European patents. The EU Patent Package was implemented on June 1, 2023. As a result, all European patents, including those issued prior to ratification of the European Patent Package, now by default automatically fall under the jurisdiction of the UPC. The UPC provides third parties, including our competitors, with a new forum to seek to centrally revoke our European patents and to seek to obtain pan-European injunctions. It will be several years before we will understand the scope of patent rights that will be recognized and the strength of patent remedies that will be provided by the UPC. Under the current EU Patent Package, we have the right to opt our patents out of the UPC for the first seven years of the UPC’s existence, but doing so may preclude us from realizing the benefits of this new unified court.

Furthermore, the patent position of companies in the biopharmaceutical industry is particularly uncertain. Various courts, including the United States Supreme Court, have rendered decisions that could negatively affect the actual or perceived value of patents, such as recent federal district and appellate court rulings that have narrowed the scope of patent protection available in certain circumstances, weakened the rights of patent owners in certain situations, and in certain cases invalidated patents entirely. For example, in its 2023 decision in Amgen v. Sanofi, the United States Supreme Court held that a functionally-claimed genus was invalid for failing to comply with the enablement requirement of the Patent Act. In addition, the Federal Circuit’s 2023 decision in In re: Cellect, LLC, which considered the interaction of patent term adjustments (PTA), terminal disclaimers, and obvious-type double patenting, may negatively affect the patent term of any issued patents that rely on any PTA. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents once obtained. Depending on decisions by Congress, the federal courts, the USPTO, and the relevant law-making bodies in other countries, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future. For example, in the 2013 case Assoc. for Molecular Pathology v. Myriad Genetics, Inc., the United States Supreme Court held that certain claims to naturally occurring substances are not patentable. Although we do not believe that any of the patents owned or licensed by us will be found invalid based on this decision, we cannot predict how future decisions by Congress, the federal courts, the USPTO, or the relevant law-making bodies in other countries may impact the value of our patents. For example, the Inflation Reduction Act (IRA) authorizes the Secretary of the Department of Health and Human Services (HHS) to negotiate prices directly with participating manufacturers for selected medicines covered by Medicare even if these medicines are protected by an existing patent. While we do not believe that the IRA or its effects will impact our ability to obtain patents in the near future, we cannot be certain whether and to what extent it will affect our longer-term patent strategy or our business. Accordingly, evolving laws in the United States and other countries may adversely affect our and our licensors’ ability to obtain new patents or to enforce existing patents and may facilitate third-party challenges to any of our owned or licensed patents.

Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for noncompliance with these requirements.

The USPTO and foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment, and other similar requirements during the patent application process. Additionally, periodic maintenance fees on any issued patent must be paid to the USPTO and foreign patent agencies in several stages over the lifetime of the patent. We employ reputable law firms and other professionals to help us comply, and in many cases, an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules. However, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Noncompliance events that could result in a failure to perfect a priority claim, abandonment, or lapse of a patent or patent application include failure to respond to official actions within prescribed time limits, failure to pay fees, and failure to properly legalize and submit formal documents. In any such event, our competitors might be able to enter the market, which would have a material adverse effect on our business.

The development and commercialization of biopharmaceutical products is subject to extensive regulation, and the regulatory approval processes of the FDA and comparable foreign regulatory authorities are lengthy, time-consuming, and inherently unpredictable. If we are unable to obtain regulatory approval for our product candidates on a timely basis, or at all, our business will be substantially harmed.

The clinical development, manufacturing, labeling, packaging, storage, recordkeeping, advertising, promotion, export, import, marketing, distribution, adverse event reporting, including the submission of safety and other post-marketing information and reports, and other activities we may engage in relating to our product candidates are subject to extensive regulation. In the United States, marketing approval of biologics requires the submission of a BLA to, and approval of such BLA by, the FDA, before a party can market any product candidate in the United States. A BLA must be supported by extensive clinical and preclinical data, as well as extensive information regarding pharmacology, chemistry, manufacturing, and controls. Outside the United States, many comparable foreign regulatory authorities employ similar approval processes. Any issues encountered by such regulatory authorities, including as a result of any prolonged government shutdown, could delay or otherwise negatively impact the development and commercialization of our product candidates. For example, closures of government agencies or staffing shortages or furloughs could increase the time required for interactions with regulatory authorities, including with respect to the review, acceptance, or approval of regulatory applications or other correspondence or submissions related to our product candidates, as well as our patent or other intellectual property applications, and could also result in delays in the interpretation and implementation of important laws and regulations relevant to our business.

To date, we have not submitted a BLA to the FDA or similar applications to comparable foreign regulatory authorities for any product candidate, and we cannot be certain that any of our product candidates will receive regulatory approval once a BLA or similar application has been submitted. The process of obtaining regulatory approval is expensive, uncertain, often takes many years following the commencement of clinical trials, and can vary substantially based upon the type, complexity, and novelty of the product candidates involved, as well as the target indications, patient population, and regulatory authority involved. As a company, we have no experience with the preparation and submission of a BLA or any other application for marketing approval. Further, the FDA has not yet granted approval for a therapeutic derived from stem cells, which we believe may increase the complexity, uncertainty, and length of the regulatory approval process for certain of our product candidates developed using our ex vivo cell engineering platform. In addition, the FDA has the authority to require a REMS plan as part of a BLA approval or after BLA approval, which may impose further requirements or restrictions on the distribution or use of an approved biologic, such as limiting prescribing to certain physicians or medical centers that have undergone specialized training, limiting treatment to patients who meet certain safe-use criteria, and requiring treated patients to enroll in a registry.

Our product candidates could fail to receive regulatory approval for many reasons, including the following:

The lengthy approval process, as well as the unpredictability of clinical trial results, may prevent us from obtaining regulatory approval to market any of our product candidates, which would significantly harm our business, results of operations, and prospects. The FDA and comparable foreign regulatory authorities have substantial discretion in the approval process and in determining whether and when regulatory approval will be granted for any product candidates, including those that we may submit for approval in the future. For example, regulatory authorities in various jurisdictions have in the past had, and may in the future have, differing requirements for, interpretations of, and opinions on preclinical and clinical data, and certain regulatory authorities may more closely scrutinize our data, including our processes for maintaining the integrity of and disseminating such data, in particular, as our product candidates advance into later stages of development. We may be required to conduct additional preclinical studies, alter our proposed clinical trial designs, or conduct additional clinical trials to satisfy the regulatory authorities in each of the jurisdictions in which we hope to conduct clinical trials and develop and, if approved, market our products. In addition, from time to time, the FDA and other governmental or regulatory authorities across jurisdictions may adopt or promulgate laws, regulations, guidance, standards, or policies, or issue communications in areas applicable to various aspects of our research and development programs. Our efforts to comply with or address such laws, regulations, guidance, standards, policies, or communications could increase the time and expense required, or make it more difficult, to complete development activities and ultimately obtain regulatory approval for our product candidates. Further, certain of such laws, regulations, guidance, standards, policies, or communications may be subject to varying interpretations, which may increase our risk of potential non-compliance.

In addition, even if we obtain approval for any of our product candidates, regulatory authorities may grant such approval for fewer or more limited indications than we request, may not approve the price we intend to charge for such product, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve such product with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product. Notably, to date, the FDA has required that any patient receiving a gene therapy be followed for 15 years post-treatment. This post-treatment follow-up, and any other requirements that the FDA or other regulatory authorities may impose for gene or cell therapy products, increases the cost and complexity of developing and ultimately commercializing such products. Any of the foregoing scenarios could materially harm the commercial prospects for our product candidates.

Certain of our product candidates, including SC262, may require or otherwise benefit from use of a companion diagnostic to such product candidate for efficacy, safety, or other reasons. If we or our collaborators are unable to successfully develop and obtain regulatory approval for any necessary companion diagnostics for these product candidates, or experience significant delays in doing so, we may be unable to obtain regulatory approval for, commercialize, and generate revenue from such product candidates or be unable to realize their full commercial potential.

Certain of our product candidates, including SC262, may require or otherwise benefit from use of a companion diagnostic to such product candidate for efficacy, safety, or other reasons. In such cases, the FDA and comparable foreign regulatory authorities may require the development and regulatory approval or clearance of at least one companion diagnostic as a condition to approving such product candidate for use in the relevant patient population. We do not have experience in or capabilities for developing or commercializing companion diagnostics and expect that, if companion diagnostics are needed for our product candidates and satisfactory companion diagnostics are not commercially available, we will need to collaborate with third-party diagnostic development collaborators to perform these functions. The process of identifying suitable collaborators and developing and obtaining approval or clearance for companion diagnostics is lengthy, costly, uncertain, and time-consuming.

Companion diagnostics are subject to regulation by the FDA and comparable foreign regulatory authorities as medical devices and may require separate regulatory approval prior to commercialization. The approval or clearance of a companion diagnostic as part of a therapeutic product’s further labeling limits the use of the therapeutic product to only those patients who express the specific characteristic that the companion diagnostic was developed to detect. For any companion diagnostic developed for use with one of our product candidates, we or our collaboration partners may experience delays in obtaining or may be unable to obtain regulatory approval or clearance for or be able to continue marketing of such companion diagnostic for various reasons, such as difficulties in manufacturing, technology transfer activities, or obtaining adequate third-party reimbursement, which could harm our business. If we or our collaboration partners are unable to obtain necessary regulatory approvals or clearance for companion diagnostics necessary for our product candidates or experience delays in doing so, we may suffer significant negative consequences, including:

The occurrence of any of these events could harm our business, possibly materially.

We may attempt to secure approval from the FDA or comparable foreign regulatory authorities through accelerated approval pathways. If we are unable to obtain such approval, we may be required to conduct additional preclinical or clinical studies, or additional data analysis from prior studies, beyond those that we contemplate, which could increase the expense of obtaining, and delay the receipt of, necessary marketing approvals. Even if we receive approval through the FDA’s accelerated approval pathway, if our confirmatory trials or additional analysis do not verify clinical benefit, or if we do not comply with rigorous post-marketing requirements, the FDA may seek to withdraw any accelerated approval we have obtained.

We may in the future seek accelerated approval for one or more of our product candidates. Under the FDA’s Accelerated Approval Program, the FDA may grant accelerated approval to a product candidate designed to treat a serious or life-threatening condition that is reasonably likely to provide a meaningful therapeutic benefit over available therapies upon a determination that the product candidate has an effect on a surrogate endpoint or intermediate clinical endpoint that is reasonably likely to predict clinical benefit. The FDA considers a clinical benefit to be a positive therapeutic effect that is clinically meaningful in the context of a given disease, such as irreversible morbidity or mortality. For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign, or other measure that is thought to predict clinical benefit, but is not itself a measure of clinical benefit. An intermediate clinical endpoint is a clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit.

The accelerated approval pathway may be used in cases in which the advantage of a new drug over available therapy may not be a direct therapeutic advantage, but is a clinically important improvement from a patient and public health perspective. If granted, accelerated approval is typically contingent on the sponsor’s agreement to conduct, in a diligent manner, additional confirmatory studies or additional data analysis from prior studies to verify and describe the drug’s clinical benefit. If such post-approval confirmatory studies or additional analyses fail to confirm the drug’s clinical benefit or are not completed in a timely manner or at all, the FDA may withdraw its approval of the drug on an expedited basis.

In response to certain concerns regarding the current accelerated approval pathway, Congress has considered and may in the future consider legislation that could change aspects of the accelerated approval pathway, including in ways that may have uncertain outcomes. For example, in December 2022, President Biden signed an omnibus appropriations bill to fund the United States government through fiscal year 2023, included in which is the Food and Drug Omnibus Reform Act of 2022, which, among other things, introduced reforms intended to expand the FDA’s ability to regulate products receiving accelerated approval, including by increasing the FDA’s oversight over the conduct of confirmatory studies, such as requiring the FDA to specify conditions for post-approval study requirements and setting forth procedures for the FDA to withdraw a product on an expedited basis for non-compliance with post-approval requirements. To the extent the FDA requires us to amend the design of our clinical trials or requires additional trials to meet changes in the data requirements for approval, our clinical timelines and approval will be delayed, which could have an adverse effect on our business and operations. However, the ultimate impact of these reforms remains unclear. In addition, there is uncertainty regarding the extent to which reimbursement will be available for products that receive approval through this pathway. As a result, even if we obtain approval for a product candidate through this pathway, we may not receive reimbursement at the levels we expect, which could harm our ability to generate revenue and achieve or sustain profitability. The future of the Accelerated Approval Program is uncertain, and we cannot predict which, if any, additional changes Congress, the FDA, or other governmental authorities will make, when such changes will be adopted, or how existing or future changes will affect our business. These changes may alter the accelerated approval requirements in ways that make it more difficult or otherwise negatively impact our ability to obtain accelerated approval for our product candidates, and could increase the burden of compliance with post-marketing requirements, each of which could increase our costs and harm our ability to commercialize our products and achieve and sustain profitability.

Prior to seeking accelerated approval for any of our product candidates, we intend to seek feedback from the FDA and will otherwise evaluate our ability to seek and receive accelerated approval. There can be no assurance that, after our evaluation of the feedback and other factors, we will decide to pursue or submit a BLA for accelerated approval or any other form of expedited development, review, or approval, or that, if we decide to pursue any such pathway, our applications will be granted on a timely basis or at all. The FDA or other comparable foreign regulatory authorities could also require us to conduct further studies prior to considering our application or granting approval of any type. In addition, even if we are able to obtain accelerated approval or any other form of expedited approval for any of our product candidates, we may not obtain such approval in a timely manner or otherwise in accordance with our timelines, and the costs of obtaining such approval and performing any additional studies or analysis may be higher than we currently anticipate. Further, if the results of any such additional studies or analysis do not ultimately support full regulatory approval of the applicable product, it may be withdrawn from the market, which could harm our ability to generate revenue and otherwise negatively impact our business and financial prospects. A failure to obtain, or delay in obtaining, accelerated approval or any other form of expedited development, review, or approval for any of our product candidates would extend the period of time until commercialization, if any, of such product candidate, could increase the cost of development of such product candidate beyond what we anticipate, and could harm our competitive position in the marketplace.

Even if our product candidates receive regulatory approval, we and such products will be subject to ongoing obligations and continued regulatory review, which may require us to incur significant additional expense. Additionally, our product candidates, if approved, could be subject to labeling and other restrictions and market withdrawal, and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products.

If the FDA or a comparable foreign regulatory authority approves any of our product candidates, the manufacturing processes, testing, labeling, packaging, distribution, import, export, adverse event reporting, storage, advertising, promotion, and recordkeeping for the product will be subject to extensive and ongoing legal and regulatory requirements. These requirements include submission of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMP and GCP regulations for any clinical trials that we may conduct post-approval. Any regulatory approvals that we receive for our product candidates may also be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the safety and efficacy of the approved product. Compliance with the requirements and limitations described in this paragraph, or any issues that arise in connection with such compliance, may require us to incur significant expense and limit our ability to timely and successfully commercialize our products.

Manufacturers and their facilities are required to comply with extensive FDA and comparable foreign regulatory authority requirements, including ensuring that quality control and manufacturing procedures conform to cGMP regulations, as well as, for the manufacture of certain of our product candidates, the FDA’s cGTP regulations for the use of human cellular and tissue products to prevent the introduction, transmission, or spread of communicable diseases. As such, we and our CDMOs will be subject to continual review and inspections to assess compliance with cGMP and cGTP regulations and adherence to commitments made in any approved marketing application. Accordingly, we and third parties that we engage or with which we conduct business must continue to expend time, money, and effort in all areas of regulatory compliance, including manufacturing, quality control, and distribution.

In addition, if we obtain approval for any of our product candidates, our product labeling, advertising, and promotion will be subject to stringent legal and regulatory requirements and continuing regulatory review. In the United States, the FDA and the FTC strictly regulate the promotional claims that may be made about pharmaceutical products to ensure that any claims about such products are consistent with regulatory approvals, not misleading or false in any particular way, and adequately substantiated by clinical data. The promotion of a drug product in a manner that is false, misleading, unsubstantiated, or for unapproved (or off-label) uses may result in enforcement letters, inquiries and investigations, and civil and criminal sanctions by the FDA or the FTC. In particular, a product may not be promoted for uses that are not approved by the FDA, as reflected in the product’s approved labeling. If we receive marketing approval for a product candidate, physicians may nevertheless prescribe it to their patients in a manner that is inconsistent with the approved label. If we are found to have promoted such off-label uses, we may be subject to significant liability. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant sanctions and false claims litigation under federal and state statutes, which can lead to consent decrees, civil monetary penalties, restitution, criminal fines and imprisonment, and exclusion from participation in Medicare, Medicaid, and other federal and state healthcare programs. The federal government has levied large civil and criminal fines against companies for alleged improper promotion and has enjoined several companies from engaging in off-label promotion. The FDA has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.

If there are changes in the application of legislation or regulatory policies, or a regulatory authority subsequently discovers problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the manufacturing of such product, including the facility where it is manufactured, or disagrees with the promotion, marketing, or labeling of a product, such regulatory authority may impose restrictions on that product or us, including requiring withdrawal of the product from the market. If we or one of our distributors, licensees, or co-marketers fail to comply with applicable legal or regulatory requirements, a regulatory authority may, among other things:

If any of these events were to occur or if we otherwise fail to comply with ongoing legal and regulatory requirements, our ability to commercialize and generate revenue from our product candidates could be significantly impaired and we may incur substantial additional expense, which could materially adversely affect our business, financial condition, results of operations, and the overall value of our company. Moreover, the policies of the FDA and comparable foreign regulatory authorities may change and additional government regulations may be enacted that could prevent, limit, or delay regulatory approval of our product candidates. We cannot predict the likelihood, nature, or extent of government regulation that may arise from future legislation or administrative, judicial, or executive action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may be subject to enforcement action and we may not achieve or sustain profitability.

Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain, or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved, or commercialized in a timely manner or at all, which could negatively impact our business.

The ability of the FDA to review and approve new products may be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s ability to hire and retain key personnel, including personnel with the expertise necessary to evaluate product candidates such as ours, and accept the payment of user fees, and other events that may otherwise affect the FDA’s ability to perform routine functions. Average review times at the FDA have fluctuated in recent years. Moreover, these and other factors have increased the uncertainties associated with interpreting the FDA’s guidance and predicting its areas of focus and responses to various issues. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable. Disruptions at the FDA and other agencies may also extend the time necessary for new biologics or modifications to licensed biologics to be reviewed or approved by necessary government agencies, which would adversely affect our business. For example, over the last several years, the United States government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities. If a prolonged government shutdown occurs, or if global health concerns, staffing shortages, budget restrictions, or other changes in government policies prevent the FDA or comparable foreign regulatory authorities from conducting their normal operations, such as regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or comparable foreign regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Our business operations and current and future relationships with healthcare professionals, healthcare facilities and institutions, clinical investigators, consultants, vendors, customers, and third-party payors in the United States and elsewhere are subject to applicable anti-kickback, fraud and abuse, false claims, physician payment transparency, and other healthcare laws and regulations, which could expose us to substantial penalties, contractual damages, reputational harm, administrative burdens, and diminished profits.

Healthcare providers, healthcare facilities and institutions, physicians, and third-party payors in the United States and elsewhere will play a primary role in the recommendation and prescription of any product candidates for which we may obtain marketing approval. Our current and future arrangements with healthcare professionals, healthcare facilities and institutions, clinical investigators, consultants, customers, and third-party payors may expose us to broadly applicable fraud and abuse and other healthcare laws, including the federal Anti-Kickback Statute and the federal False Claims Act, that may constrain the business or financial arrangements and relationships through which we research, sell, market, and distribute any product candidates for which we obtain marketing approval. In addition, we may be subject to physician payment transparency laws and regulation by the federal and state governments and by foreign jurisdictions in which we conduct our business. The applicable federal, state, and foreign healthcare laws that affect our ability to operate include, but are not limited to, the following:

Ensuring that our internal operations and future business arrangements with third parties comply with applicable healthcare laws and regulations will involve substantial costs. We have entered into, and expect to enter into in the future, consulting and scientific and clinical advisory board arrangements with physicians and other healthcare providers, including some who could influence the use of our product candidates, if approved. Compensation under some of these arrangements may include the provision of stock or stock options in addition to or in lieu of cash consideration. Because of the complex and far-reaching nature of these laws, it is possible that governmental authorities could conclude that our payments to physicians may not be fair market value for bona fide services or that our business practices do not comply with current or future statutes, regulations, agency guidance, or case law involving applicable fraud and abuse or other healthcare laws and regulations. For example, these relationships and any related compensation could result in perceived or actual conflicts of interest, or the FDA’s determination that the financial relationship affected the conduct or interpretation of one of our preclinical studies or clinical trials. In such a case, the integrity of the data generated from such preclinical study or clinical trial may be questioned and the utility of the preclinical study or clinical trial itself may be jeopardized, which could result in the delay or rejection by the FDA of any regulatory submissions related to our product candidates. Any such delay or rejection could prevent us from commercializing our product candidates.

If our operations are found to be in violation of any of the laws described above or any other governmental laws and regulations that may apply to us, we may be subject to significant penalties, including civil, criminal, and administrative penalties, damages, fines, exclusion from government-funded healthcare programs, such as Medicare and Medicaid, or similar programs in other countries or jurisdictions, integrity oversight and reporting obligations to resolve allegations of noncompliance, disgorgement, imprisonment, contractual damages, reputational harm, diminished profits, and the curtailment or restructuring of our operations. Further, defending against any governmental actions can be costly and time-consuming and may require significant personnel resources. Therefore, even if we are successful in defending against any such actions, our business may be impaired. In addition, if any of the physicians or other providers or entities with whom we expect to do business are found to violate applicable laws or regulations, they may be subject to criminal, civil, or administrative sanctions, including exclusions from government funded healthcare programs and imprisonment, which could affect our ability to operate our business.

Our employees, independent contractors, principal investigators, consultants, vendors, commercial partners, and other third parties that we engage or with which we collaborate may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.

We are exposed to the risk of fraud and other misconduct committed by our personnel and third parties that we engage or with which we collaborate in the course of our operations, including our employees, independent contractors, principal investigators, consultants, vendors, and commercial partners. It is not always possible to identify and deter misconduct or business noncompliance by such parties. We cannot ensure that precautions we take to detect and prevent inappropriate conduct, including our compliance controls, policies, and procedures, will in every instance protect us or be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from unlawful acts committed by such parties in the jurisdictions in which we operate, including trade restrictions and sanctions and employment, foreign corrupt practices, environmental, competition, and patient privacy and other data privacy and protection laws and regulations. Misconduct by any such third parties could include failures to comply with FDA regulations, provide accurate information to the FDA, comply with manufacturing standards we may establish, report financial information or data accurately, comply with federal and state healthcare fraud and abuse laws and regulations, including prohibitions on pricing, discounting, labeling, marketing and promotion, sales commission, customer incentive programs, and other business arrangements, or disclose unauthorized activities to us. Such misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation.

If any actions are instituted against us as a result of such misconduct or noncompliance, and we are not successful in defending ourselves or asserting our rights, those actions could have a material adverse effect on our business, financial condition, results of operations, and prospects. For example, we may be subject to or experience significant civil, criminal, and administrative penalties, damages, monetary fines, individual imprisonment, disgorgement of profits, possible exclusion from participation in Medicare, Medicaid, and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, additional reporting or oversight obligations if we become subject to a corporate integrity agreement or other agreement to resolve allegations of noncompliance with the law, and curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and pursue our strategy.

Current and future legislation may increase the difficulty and cost for us and any future collaborators to obtain marketing approval of and commercialize our product candidates and affect the prices we, or they, may charge for such product candidates.

In the United States and other jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes and proposed changes to the healthcare system that could affect our future results of operations. In particular, there have been and continue to be a number of initiatives at the United States federal and state levels that seek to reduce healthcare costs and improve the quality of healthcare. For example, the Patient Protection and Affordable Care Act (the ACA) was enacted in 2010, which substantially changed the way healthcare is financed by both governmental and private payors. Among the provisions of the ACA of importance to the pharmaceutical and biotechnology industries, which includes biologics, are the following:

Since its enactment, there have been judicial, executive, and Congressional challenges to certain aspects of the ACA. On June 17, 2021, the United States Supreme Court dismissed the most recent judicial challenge to the ACA without specifically ruling on the constitutionality of the ACA. Thus, the ACA will remain in force in its current form.

Other legislative changes have been proposed and adopted in the United Stated since the ACA was enacted, including aggregate reductions of Medicare payments to providers through 2032. In addition, the American Rescue Plan Act of 2021 eliminated the statutory Medicaid drug rebate cap. Elimination of this cap may require pharmaceutical manufacturers to pay more in rebates than they receive on the sale of products, which could have a material impact on our business.

Most significantly, on August 16, 2022, President Biden signed the IRA into law. This statute marks the most significant action by Congress with respect to the pharmaceutical industry since adoption of the ACA in 2010. Among other things, the IRA requires, beginning in 2026, manufacturers of certain drugs to engage in price negotiations with Medicare, with prices that can be negotiated subject to a cap; imposes rebates, first due in 2023, under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation; and, beginning in 2025, replaces the Part D coverage gap discount program with a new discounting program. The IRA permits the Secretary of HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has issued and will continue to issue and update guidance as these programs are implemented. In addition, in response to the Biden administration’s October 2022 executive order, on February 14, 2023, HHS released a report outlining three new models for testing by the Center for Medicare and Medicaid Innovation, which will be evaluated on their ability to lower the cost of drugs, promote accessibility, and improve quality of care. It is unclear whether the models will be utilized in any health reform measures in the future. On August 29, 2023, HHS announced the list of the first ten drugs that will be subject to price negotiations, although the Medicare drug price negotiation program is currently subject to legal challenges. Various industry stakeholders, including certain pharmaceutical companies and the Pharmaceutical Research and Manufacturers of America, have initiated lawsuits against the federal government asserting that the price negotiation provisions of the IRA are unconstitutional. The impact of the IRA and these judicial challenges, as well as other potential judicial challenges against HHS in light of the Supreme Court’s decision to overturn the Chevron doctrine, as described elsewhere in these Risk Factors, on the pharmaceutical industry and our business cannot yet be fully determined, but it is likely to be significant. If we obtain regulatory approval for any of our product candidates, the IRA could substantially and negatively impact the prices we may charge for such products, which could harm our ability to generate revenue and achieve and sustain profitability.

Additionally, individual states in the United States have passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing and costs. Similar developments have occurred outside of the United States, including in the EU where healthcare budgetary constraints have resulted in restrictions on the pricing and reimbursement of medicines by relevant health service providers. To obtain reimbursement or pricing approval in some EU member states, we may be required to conduct studies that compare the cost-effectiveness of our product candidates to other therapies that are considered the local standard of care.

Further, there have been a number of, and there may in the future be, other policy, legislative, and regulatory proposals aimed at changing the pharmaceutical industry. The United States government, state legislatures, and foreign governmental entities have shown significant interest in implementing cost containment programs to limit the growth of government-paid healthcare costs, including price controls, restrictions on reimbursement and coverage, drug importation programs and proposals, and requirements for substitution of generic products for branded prescription drugs. Adoption of government controls and measures, and tightening of restrictive policies in jurisdictions with existing controls and measures, could exclude or limit our product candidates from coverage and limit payments for pharmaceuticals.

In addition, the policies of the FDA and of comparable foreign regulatory authorities may change and additional laws, regulations, and government actions may be enacted that could prevent, limit, or delay regulatory approval of our product candidates. We cannot predict the likelihood, nature, or extent of government regulation that may arise from future legislation or administrative, judicial, or executive action, either in the United States or abroad. In June 2024, the Supreme Court overturned the Chevron doctrine, which gave deference to regulatory agencies' statutory interpretations of ambiguous federal laws in litigation against these agencies, including the FDA. This landmark decision may invite more companies or other stakeholders to bring lawsuits against the FDA to challenge its longstanding decisions and policies, including its statutory interpretations of market exclusivities and the “substantial evidence” requirements for drug approvals, and could undermine its authority, increase the difficulty of enforcing FDA regulations,

disrupt its normal operations, lead to longer review and decision-making timelines, and lead to uncertainties in the industry, which could delay FDA review of any regulatory submissions we may submit for our product candidates. We cannot predict the full impact of this decision, future challenges brought against the FDA, or the nature or extent of government regulation that may arise from future legislation or administrative, judicial, or other governmental action.

Moreover, currently enacted legislation may not be renewed once it expires, which may make it more difficult for us to obtain regulatory approval for and commercialize our product candidates. For example, the Prescription Drug User Fee Act (PDUFA) was enacted by Congress in 1992 to allow the FDA to collect fees from parties that produce certain human drug and biological products. Among other things, the fees collected under PDUFA provide for the timely review of regulatory submissions, such as BLAs. PDUFA has been renewed multiple times since its enactment, including at the end of September 2022, which will allow the FDA to continue collecting prescription drug user fees in future fiscal quarters. However, there is no guarantee that future renewals will occur in a timely manner, if at all. In addition, there may be amendments to PDUFA that could significantly affect how regulatory submissions are reviewed, and we cannot predict the extent of such amendments and how they will affect our business. If PDUFA is not renewed or its renewal is delayed, or if PDUFA is amended in certain ways, the FDA’s ability to review any regulatory submissions and related correspondence for our product candidates may be materially adversely impacted, which could negatively impact our development timelines and ability to obtain regulatory approval of our product candidates.

In the EU, similar developments may affect our ability to profitably commercialize our product candidates, if approved. In addition to continuing pressure on prices and cost containment measures, legislative developments at the EU or member state level may result in significant additional requirements or obstacles that may increase our operating costs. The delivery of healthcare in the EU, including the establishment and operation of health services and the pricing and reimbursement of medicines, is almost exclusively a matter for national, rather than EU, law and policy. National governments and health service providers have different priorities and approaches to the delivery of health care and the pricing and reimbursement of products in that context. In general, however, the healthcare budgetary constraints in most EU member states have resulted in restrictions on the pricing and reimbursement of medicines by relevant health service providers. Coupled with ever-increasing EU and national regulatory burdens on those wishing to develop and market products, this could prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our ability to commercialize our product candidates, if approved. In markets outside of the United States and EU, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies.

On December 13, 2021, Regulation 2021/2282 on Health Technology Assessment (HTA) amending Directive 2011/24/EU (the Regulation), was adopted in the EU. While the Regulation entered into force in January 2022, it will only begin to apply from January 2025 onwards, with preparatory and implementation-related steps to take place in the interim. Once the Regulation becomes applicable, it will have a phased implementation depending on the concerned products. The Regulation intends to boost cooperation among EU member states in assessing health technologies, including new medicinal products, and providing the basis for cooperation at the EU level for joint clinical assessments in these areas. The Regulation will permit EU member states to use common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of the innovative health technologies with the most potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas. Individual EU member states will continue to be responsible for assessing non-clinical (e.g., economic, social, and ethical) aspects of health technology, and making decisions on pricing and reimbursement.

In the UK, the Voluntary Scheme for Branded Medicines Pricing and Access (VPAS) currently returns a portion of funds to the National Health Service (NHS) based on the sales of branded prescription medicines (innovative brands, branded generics, and biosimilars) when a maximum sales growth rate is exceeded. The 2019 VPAS caps the growth of NHS branded medicine spending at a nominal rate of 2% per year, with the industry returning any spending beyond the cap. However, the 2019 VPAS is due to come to an end in December 2023. It is possible that a future VPAS will include higher payback rates which could have a negative impact on our future potential NHS-based revenues.

We cannot predict the likelihood, nature, or extent of government regulation that may arise from future legislation or administrative, judicial, or executive action in the United States or any other jurisdiction. If we or any third parties we may engage or with which we collaborate are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or such third parties are not able to maintain regulatory compliance, our product candidates may be unable to obtain regulatory approval or lose any regulatory approval that may have been obtained, and we may not achieve or sustain profitability.

Even if we are able to commercialize any product candidate, coverage and adequate reimbursement may not be available or such product candidate may become subject to unfavorable pricing regulations or third-party coverage and reimbursement policies, which would harm our business.

The regulations that govern regulatory approvals, pricing, and reimbursement for drug products vary widely from country to country. Some countries require approval of the sale price of a drug product before it can be marketed. In many countries, the pricing review period begins after marketing approval is granted. In some foreign markets, prescription drug product pricing remains subject to continuing governmental control even after initial approval is granted. As a result, we might obtain regulatory approval for a product in a particular country, but then be subject to price regulations that delay our commercial launch of the product, possibly for lengthy time periods, and negatively impact the revenues we are able to generate from the sale of the product in that country. Adverse pricing limitations may hinder our ability to recoup our investment in one or more product candidates, even if our product candidates obtain regulatory approval.

Our ability to commercialize any products successfully also will depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from third-party payors, such as government authorities, private health insurers, and other organizations, which consider various factors in determining the level of coverage and reimbursement, including the nature of the disease to be treated, the availability and cost of other therapies for the same disease, and the size of the patient population that could benefit from such treatment. Even if we succeed in bringing one or more products to the market, these products may not be considered cost-effective, and the amount reimbursed for any products may be insufficient to allow us to sell our products on a competitive basis. For example, the cost of treatment with our product candidates may be expensive or more costly than other available treatment options, in particular, because such product candidates may require only a single or minimal number of administrations. Even if treatment costs are partially offset by coverage from third-party payors, required co-payments or deductibles may cause treatment with such product candidates to be too expensive for certain patients. Because our product candidates are in the early stages of development, we are currently unable to determine their cost effectiveness or the likely level or method of coverage and reimbursement. Increasingly, the third-party payors that reimburse patients or healthcare providers are requiring that drug companies provide these payors with predetermined discounts from list prices and are seeking to reduce the prices charged or the amounts reimbursed for drug products. If the price we are able to charge for any products we develop, or the coverage and reimbursement provided for such products, is inadequate in light of our development and other costs, our return on investment could be adversely affected.

There may be significant delays in obtaining reimbursement for newly-approved drug products, and coverage may be more limited than the purposes for which the drug product is approved by the FDA or comparable foreign regulatory authorities. Moreover, eligibility for reimbursement does not imply that any product for which we receive regulatory approval will be reimbursed in all cases or at a rate that covers our costs, including for research, development, manufacture, sale, and distribution.

Interim reimbursement levels for new drug products, if applicable, may also be insufficient to cover our costs and may not be made permanent. Reimbursement rates may be based on payments allowed for lower cost drug products that are already reimbursed, may be incorporated into existing payments for other services, and may reflect budgetary constraints or imperfections in Medicare data. Net prices for drug products may be reduced by mandatory discounts or rebates required by third-party payors and by any future relaxation of laws that presently restrict imports of drug products from countries where they may be sold at lower prices than in the United States. Obtaining coverage and adequate reimbursement for our product candidates may be particularly difficult because of the higher prices often associated with drugs administered under the supervision of a physician. Similarly, because our product candidates are physician-administered injectables, separate reimbursement for the product itself may or may not be available. Instead, the administering physician may or may not be reimbursed for providing the treatment or procedure in which our product is used.

Further, no uniform policy for coverage and reimbursement exists in the United States, and coverage and reimbursement can differ significantly from payor to payor. Third-party payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates, but also have their own methods and approval process apart from Medicare determinations. As a result, the coverage determination process is often time-consuming and costly and will likely require us to provide scientific and clinical support for the use of our product candidates to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance. Decisions regarding the extent of coverage and amount of reimbursement to be provided for any product candidates that we develop will be made on a payor-by-payor basis. One payor’s determination to provide coverage for a drug does not assure that other payors will also provide coverage and adequate reimbursement for the drug. Additionally, a third-party payor’s decision to provide coverage for a therapy does not imply that an adequate reimbursement rate will be approved.

As discussed elsewhere in these Risk Factors, there have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal, and state levels directed at broadening the availability of healthcare and containing or lowering the cost of healthcare. We cannot predict what initiatives may be adopted in the future. The continuing efforts of the government, insurance companies, managed care organizations, and other payors of healthcare services to contain or reduce costs of healthcare or impose price controls may adversely affect:

Additionally, companion diagnostic tests that we or our collaborators may develop require coverage and reimbursement separate and apart from the coverage and reimbursement for their companion pharmaceutical or biologics products. Similar challenges to obtaining coverage and reimbursement, applicable to pharmaceutical or biologics products, will apply to companion diagnostic tests. Our inability to promptly obtain coverage and adequate reimbursement from third-party payors for the product candidates that we may develop and for which we obtain regulatory approval or any companion diagnostics that we or our collaborators may develop could have a material and adverse effect on our business, financial condition, results of operations, and prospects.

We face potential liability related to the privacy of personal information, including health information we utilize in the development of products developed from our ex vivo cell engineering platform, as well as information we may obtain from research institutions participating in our clinical trials and directly from individuals.

We and our partners and vendors are subject to various federal, state, and foreign data protection and privacy laws and regulations. If we fail, or are alleged to fail, to comply with these laws and regulations, we may be subject to litigation, regulatory investigations, enforcement notices, enforcement actions, fines, and criminal or civil penalties, as well as negative publicity, reputational harm, and potential loss of business.

In the United States, our and our partners’ and vendors’ operations are subject to numerous federal and state laws and regulations, including state data breach notification laws and federal and state data privacy laws and regulations that govern the collection, use, disclosure, and protection of health information and other personal information. For example, most healthcare providers, including research institutions from which we obtain patient health information, are subject to data privacy and security regulations promulgated under HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH). Depending on the facts and circumstances, we could be subject to significant penalties if we violate HIPAA. For example, under HIPAA, we could potentially face substantial criminal or civil penalties if we knowingly receive protected health information from a HIPAA-covered healthcare provider or research institution that has not satisfied HIPAA’s requirements for disclosure of such health information, or otherwise violate applicable HIPAA requirements related to the protection of such information. Even when HIPAA does not apply, failure to take reasonable steps to keep consumers’ personal information secure may constitute a violation of the Federal Trade Commission Act.

Certain of the materials we use in our therapeutic research and development efforts, as well as stem cell lines used as starting material in our ex vivo cell engineering product candidates, are derived from human sources, which may contain sensitive identifiable personal information regarding the donor. In addition, we or our partners or vendors may maintain or otherwise have access to sensitive identifiable personal information, including health information, that we receive throughout the clinical trial process, in the course of our research collaborations, and directly from individuals (or their healthcare providers) who may enroll in our patient assistance programs, if any. We may become subject to further obligations under HIPAA as a result of our access to such information.

In addition, our collection of personal information generally, including information of our employees, human donors, or patients, may subject us to state data privacy laws governing the processing of personal information and requiring notification to affected individuals and state regulators in the event of a data breach involving such personal information. For example, we may be subject to state laws such as the California Consumer Privacy Act (CCPA) and its related regulations, and the California Privacy Rights Act (CPRA), which establish data privacy rights for California residents, with corresponding obligations on businesses related to transparency, deletion, and opt-out of the selling of personal information, and grant a private right of action for individuals in the event of certain security breaches that has increased the likelihood of, and risks associated with, data breach litigation. The CPRA, which became effective on January 1, 2023, significantly modified the CCPA, including by expanding consumers’ rights with respect to certain sensitive personal information and imposing new audit requirements for higher risk data. The CPRA also created a new state agency that is vested with authority to implement and enforce the CCPA and the CPRA, which could result in increased privacy and information security enforcement. Additional compliance investment and potential business process changes may also be required. Numerous similar laws, and other laws governing privacy and information security, such as Washington’s My Health, My Data Act, have been passed and continue to be proposed at the state and federal level, reflecting a trend toward more stringent privacy legislation in the United States. Certain state laws may be more stringent or broader in scope, or offer greater individual rights, with respect to confidential, sensitive, and personal information than federal, international, or other state laws, and such laws may differ from each other and have potentially conflicting requirements that would make compliance challenging, require us to expend significant resources to achieve compliance, and restrict our ability to process certain personal information.

Any clinical trial programs, including related regulatory filings, and research collaborations that we engage in outside the United States may implicate international laws and regulations concerning data protection and privacy, including those governing various aspects of clinical research and, in the EU, the General Data Protection Regulation (GDPR). The GDPR imposes obligations in relation to the collection, use, sharing, disclosure, transfer, and other processing of data relating to an identifiable living individual within the European Economic Area (EEA), or “personal data,” including a principle of accountability and the obligation to demonstrate compliance through policies, procedures, training, and audit. The GDPR imposes stringent operational requirements for data controllers and data processors of personal data. Among other things, the GDPR requires that detailed notices be provided to clinical trial subjects and investigators, as well as maintenance of certain security levels for personal data and notification of data breaches or security incidents to appropriate data protection authorities or data subjects. Further, as a result of the UK’s withdrawal from the EU effective as of December 31, 2020, we are required to comply with both the GDPR and the GDPR as incorporated into UK national law (UK GDPR) with respect to any clinical trial data generated from the EU and the UK, respectively, which may have differing requirements. We may be subject to diverging requirements under EU member state laws and UK law, such as whether consent can be used as the legal basis for processing of clinical trial data and the roles, responsibilities, and liabilities and respective data protection obligations as between CROs, clinical trial sites, and sponsors. As these laws develop and the rules diverge, we may need to make operational changes to adapt, which could increase our costs and adversely affect our business.

The GDPR and UK GDPR regulate cross-border transfers of personal data out of the EEA and the UK, respectively. Recent legal developments in Europe have created complexity and uncertainty regarding the legality of and requirements with respect to transfers of personal data from the EEA and UK to the United States and other countries in which we or our partners or service providers may operate. Case law from the Court of Justice of the European Union (CJEU) states that reliance on the standard contractual clauses, which are a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism, alone may not necessarily be sufficient in all circumstances and that transfers must be assessed on a case-by-case basis. We currently rely and expect to rely in the future on the EU standard contractual clauses, the UK Addendum to the EU standard contractual clauses, and the UK International Data Transfer Agreement, as applicable, to transfer personal data outside of the EEA and the UK, including to the United States. Following a period of legal complexity and uncertainty regarding international personal data transfers, particularly to the United States, we expect that the regulatory guidance and enforcement landscape will continue to develop in relation to transfers to the United States and elsewhere. As a result, we may have to make certain operational changes and implement revised standard contractual clauses and other relevant documentation for existing data transfers within required time frames. If we are unable to transfer personal data between and among countries and regions in which we or our partners, collaborators, vendors, or clinical trial sites operate, it could adversely affect the manner in which we operate our business, affect the geographical location or segregation of our relevant systems and operations, and adversely affect our financial results.

These laws and regulations may also apply to service providers and vendors that store or otherwise process personal data on our behalf, such as CROs and other service providers that may support the conduct of our clinical trials and information technology or other vendors. If our data privacy or security measures fail to comply with applicable data privacy laws, or if a service provider or vendor misuses data we have provided to it or fails to safeguard such data, or otherwise fails to comply with such laws, we may be subject to litigation, regulatory investigations, enforcement notices, or enforcement actions imposing fines or requiring us to change the way we use personal data, as well as negative publicity, reputational harm, and potential loss of business. Failure to comply with the GDPR could result in penalties. Since we may be subject to the supervision of relevant data protection authorities under both the GDPR and the UK GDPR, we could be fined under each of those regimes independently in respect of the same breach. Penalties for certain breaches are up to the greater of €20 million (£17.5 million) or 4% of our global annual turnover. In addition to fines, GDPR noncompliance may result in regulatory investigations, reputational damage, orders to cease or change our data processing activities, enforcement notices, assessment notices for a compulsory audit, or civil claims, including class actions. As we continue to expand certain of our operations into foreign countries and jurisdictions, we may be subject to additional laws and regulations that may affect how we conduct business.

We expect that we will need to expend significant capital and other resources to ensure ongoing compliance with applicable data privacy and security laws. Claims that we have violated individuals’ privacy rights or breached our contractual obligations related to data privacy and security, even if we are not found liable, could be expensive and time-consuming to defend and could result in negative publicity that could harm our business. Moreover, even if we take all necessary action to comply with legal and regulatory requirements, we could be subject to a data breach or other unauthorized access to personal information, which could subject us to fines and penalties, as well as litigation and reputational damage.

If we fail to keep apprised of and comply with applicable international, federal, state, or local legal and regulatory requirements and changes thereto, we could be subject to a range of legal or regulatory actions that could affect our or any collaborators’ ability to develop and seek to commercialize our product candidates. Any threatened or actual government enforcement action, or litigation when private rights of action are available, could also generate negative publicity, damage our reputation, result in liabilities, fines, and loss of business, and require that we devote substantial resources that could otherwise be used in support of other aspects of our business.

We and third parties involved in our operations are subject to United States and certain foreign laws and regulations relating to export and import controls, sanctions, embargoes, anti-corruption, and anti-money laundering. Compliance with these legal standards could impair our ability to compete in domestic and international markets. We could face criminal liability and other serious consequences for violations, which would harm our business.

We are subject to export control and import laws and regulations, including the United States Export Administration Regulations, United States Customs regulations, various economic and trade sanctions regulations administered by the United States Treasury Department’s Office of Foreign Assets Controls, the United States Foreign Corrupt Practices Act of 1977, as amended (FCPA), the United States domestic bribery statute contained in 18 U.S.C. § 201, the United States Travel Act, the USA PATRIOT Act, and other state and national anti-bribery and anti-money laundering laws in the countries in which we conduct activities. International trade, tariff, and import/export laws and regulations may require us to obtain licenses or permits in order to complete certain activities necessary for the research, manufacture, and development of our product candidates. Moreover, we expect such laws and regulations, along with associated guidance and interpretations, to evolve over time in ways that may impact various aspects of our business. The process for obtaining any necessary licenses or permits may be lengthy and time-consuming, and if we are not able to obtain any such licenses or permits in a timely manner, we may experience delays in our ability to manufacture, develop, and commercialize our product candidates. Anti-corruption laws are interpreted broadly and prohibit companies and their employees, agents, contractors, collaborators, and other third parties from authorizing, promising, offering, or providing, directly or indirectly, improper payments or anything else of value to recipients in the public or private sector. We may engage third parties to sell products, if any, for which we receive regulatory approval outside the United States, to conduct clinical trials, or to obtain necessary permits, licenses, patent registrations, and other regulatory approvals. In the ordinary course of our business, we may have direct or indirect interactions with officials and employees of government agencies or government-affiliated hospitals, universities, and other organizations. We may be held liable for the corrupt or other illegal activities of our employees, agents, contractors, collaborators, and other third parties, even if we do not explicitly authorize or have actual knowledge of such activities. Any violations of the laws and regulations described above may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm, and other consequences.

In particular, there is currently significant uncertainty about the future relationship between the United States and various other countries, most significantly China, with respect to trade policies, including sanctions, treaties, tariffs, taxes, regulatory requirements, and other limitations on cross-border operations. The United States government has and continues to make significant additional changes in United States trade policy and may continue to take future actions that could negatively impact United States trade. We cannot predict what actions may ultimately be taken with respect to trade relations between the United States and China or other countries, what interactions, including products or services, may be subject to such actions, or what actions may be taken by the other countries in retaliation. If our interactions with parties affected by any such actions are limited or no longer possible, our business, liquidity, financial condition, or results of operations could be materially and adversely affected.

Third parties involved in our operations, including CDMOs and other service providers, partners, and collaborators, may also be impacted by various laws and regulations, including those described above, compliance with or the effect of which could negatively impact the ability of these third parties to perform their obligations under our agreements with or otherwise harm our relationships with such third parties. For example, recently proposed legislation and acts by United States lawmakers, including the proposed BIOSECURE Act, have called for limitations on certain interactions with certain Chinese biotechnology firms and review of certain of these firms for sanctions due to potential threats to United States national security. To the extent that any such legislation or other similar legislation becomes law or reviews or other actions are initiated, and any third parties involved in our operations are the subject of these laws or actions, then our relationships with these third parties, and our programs and business generally, could be materially negatively impacted.

Risks Related to Our Limited Operating History, Financial Condition, and Need for Additional Capital

We have incurred significant losses since our inception, and we expect to incur losses for the foreseeable future. We have no products approved for commercial sale and may never achieve or maintain profitability

We have a limited operating history. Biotechnology product development is a highly speculative undertaking and involves a substantial degree of risk. We have incurred significant losses since inception, have not generated any revenue from product sales, and have financed our operations historically through private placements of our convertible preferred stock and, more recently, through our initial public offering (IPO). We expect that it will be several years, if ever, before we have a commercialized product and generate revenue from product sales. We had net losses of $217.7 million and $195.1 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, we had an accumulated deficit of $1.6 billion, which includes cumulative non-cash charges related to the revaluation of our success payment liabilities and contingent consideration of $12.7 million and $60.6 million, respectively. Our losses have resulted principally from expenses incurred for the research and development of our ex vivo and in vivo cell engineering platforms, management and administrative costs, and other expenses incurred while building our business infrastructure.

We expect our operating losses and expenses will decline in 2024, excluding one-time items, as a result of our strategic repositioning in October 2023, and likely increase over the longer term from the 2024 level if our clinical trials are successful, and if we expand our research and development efforts. Our operating losses and expenses are, and will in the future likely be, driven by our ongoing operations and our potential future expanded operations, including if and as we:

We have devoted a significant portion of our financial resources and efforts to building our organization, developing our ex vivo and in vivo cell engineering platforms, identifying and developing potential product candidates, executing preclinical studies, establishing manufacturing capabilities, preparing for and commencing clinical trials of our product candidates, acquiring technologies, organizing and staffing the company, business planning, establishing and maintaining our intellectual property portfolio, raising capital, and providing general and administrative support for these operations. We are in the early stages of development of our product candidates and have not completed development or commercialization of any product candidate.

To become and remain profitable, we must succeed in identifying, developing, obtaining regulatory approval for, and eventually commercializing products that generate significant revenue. This will require us to be successful in a range of challenging activities, including completing preclinical studies and clinical trials of our product candidates, continuing to discover and develop additional product candidates, obtaining regulatory approval for any product candidates that successfully complete clinical trials, accessing manufacturing capacity, establishing marketing capabilities, and commercializing and ultimately selling any products for which we may obtain regulatory approval. We may never succeed in any or all of these activities and, even if we do, we may never generate revenue that is sufficient to achieve profitability. Even if we do achieve profitability, we may not be able to sustain profitability or meet outside expectations for our profitability. If any of the foregoing events were to occur, the value of our shares of common stock could be materially adversely affected.

Because of the numerous risks and uncertainties associated with biopharmaceutical product development, we are unable to accurately predict the timing or increases in the amount of expenses we will incur or when, or if, we will be able to achieve profitability. If we are required by the FDA or comparable foreign regulatory authorities to perform studies in addition to those we currently anticipate, or if there are any delays in commencing or completing our clinical trials or the development of any of our product candidates, our expenses could increase and our ability to obtain commercial revenue could be further delayed and become more uncertain, which will have a material adverse impact on our business.

We will require additional funding to finance our operations. If we are unable to raise capital when needed, or on acceptable terms, we could be forced to delay, reduce, or eliminate certain product development programs or commercialization efforts.

Developing biopharmaceutical products, including conducting preclinical studies and clinical trials, is a very time-consuming, expensive, and uncertain process that takes years to complete. As described above, our operations have consumed substantial amounts of cash since inception, and we expect our expenses to increase if and as our ongoing activities grow in scope and breadth. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce, or eliminate certain research and development programs or any future commercialization efforts with respect to such programs, and our business, results of operations, and financial condition would be adversely affected.

As of September 30, 2024, we had $199.0 million in cash, cash equivalents, and marketable securities. Based on our current business plans, we believe that our existing cash, cash equivalents, and marketable securities as of September 30, 2024 will be sufficient to fund our operating expenses and capital expenditure requirements for at least the next 12 months. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources more quickly than we currently expect, which could require us to seek additional funds sooner than planned, including through public or private equity or debt financings or other sources, such as strategic collaborations. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. For example, in August 2022, we entered into a sales agreement with Cowen and Company, LLC (Cowen), acting as sales agent, pursuant to which we may offer and sell through Cowen shares of our common stock having an aggregate offering price of up to $150.0 million from time to time in a series of one or more at the market equity offerings (collectively, the ATM facility). As of September 30, 2024, we had raised $28.6 million in net proceeds under the ATM facility. Further, on February 12, 2024, we completed an underwritten public offering pursuant to which we sold 21.8 million shares of our common stock, including 4.5 million shares pursuant to the full exercise of the underwriters’ option to purchase additional shares, and pre-funded warrants to purchase 12.7 million shares of our common stock (the Follow-On Offering). Moreover, we could use our capital resources more quickly than we currently expect, which could require us to seek additional funds sooner than planned, including through public or private equity or debt financings or other sources, such as strategic collaborations. Attempting to secure additional financing may divert our management from our day-to-day activities, which may adversely affect our ability to develop our product candidates.

Our ability to raise additional funds will depend on financial, economic, geo-political, and market conditions and other factors over which we may have no or limited control. Market volatility, including as a result of bank failures, including Silicon Valley Bank (SVB) and Signature Bank (Signature) in 2023, and measures taken in response thereto, and the resulting impact on the broader banking sector, geo-political and economic instability resulting from the escalation in conflict between Russia and Ukraine and in the Middle East, tensions in US-China relations, and the aftermath of the COVID-19 pandemic, or other factors, could also adversely impact our ability to access capital as and when needed. Furthermore, we hold significant balances of cash and cash equivalents, including as necessary to conduct our day-to-day operations, some of which are held in deposit accounts at commercial banks in excess of the government-provided deposit insurance, exposing such cash balances to additional risk of loss beyond our control. Additional funds may not be available when we need them, on terms and at a cost that are acceptable to us, or at all. If adequate funds are not available to us on a timely basis, or on terms and at a cost that are acceptable to us, we could be required to:

For example, as described elsewhere in these Risk Factors, we implemented the October 2023 strategic repositioning and associated workforce reduction in order to focus our resources on our ex vivo cell therapy product candidates, and correspondingly, reduce our near-term investment in our fusogen platform, which involves shifting our focus on fusogen to research activities. We will require additional funding and other resources in order to expand preclinical development and initiate clinical development for product candidates derived from our fusogen platform.

Raising additional capital may cause dilution to our stockholders, restrict our operations, or require us to relinquish rights to our technologies or product candidates.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations with our existing cash, cash equivalents, and marketable securities, proceeds from any future equity or debt financings, and upfront, milestone, and royalty payments received under any future licenses, collaborations, or other arrangements. Additional capital may not be available on terms that are reasonable or acceptable to us, if at all. If we raise additional capital through the sale of equity or debt securities, existing stockholders’ ownership interests will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our stockholders. In addition, any such issuance, or the possibility of such issuance, may cause the market price of our common stock to decline. Debt financing, if available, may result in increased fixed payment obligations and the existence of securities with rights that may be senior to those of our common stock, and involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, declaring dividends, or acquiring, selling, or licensing intellectual property rights or assets, which could adversely impact our ability to conduct our business.

If we raise additional funds through collaborations, strategic alliances, or marketing, distribution, or licensing arrangements with third parties, we may have to relinquish valuable rights to our intellectual property, technologies, future revenue streams, or product candidates or grant licenses on terms that may not be favorable to us. We could also be required to seek funds through arrangements with collaborators or others at an earlier stage than otherwise would be desirable. Any of these occurrences may have a material adverse effect on our business, operating results, and prospects.

Our success payment and contingent consideration obligations in our license and acquisition agreements may result in dilution to our stockholders, drain our cash resources, or require us to incur debt to satisfy the payment obligations.

We agreed to make success payments, payable in cash, pursuant to our license agreement with Harvard and contingent consideration and success payments, payable in cash or stock, pursuant to our acquisition agreement with Cobalt. Pursuant to the terms of our license agreement with Harvard, we may be required to make up to an aggregate of $175.0 million in success payments to Harvard (Harvard Success Payments), payable in cash, based on increases in the per share fair market value of our common stock. The potential Harvard Success Payments are based on multiples of increasing value ranging from 5x to 40x based on a comparison of the per share fair market value of our common stock relative to the original issuance price of $4.00 per share at ongoing pre-determined valuation measurement dates. The Harvard Success Payments can be achieved over a maximum of 12 years from the effective date of the agreement. If a higher success payment tier is met at the same time a lower tier is met, both tiers will be owed. Any previous Harvard Success Payments made are credited against the Harvard Success Payment owed as of any valuation measurement date so that Harvard does not receive multiple success payments in connection with the same threshold. As of September 30, 2024, a Harvard Success Payment had not been triggered. See Note 4, License and collaboration agreements to our consolidated financial statements included elsewhere in this Quarterly Report for more details on the various per share common stock values that trigger a Harvard Success Payment.

In connection with the Cobalt acquisition, we are obligated to pay to certain former Cobalt stockholders contingent consideration (Cobalt Contingent Consideration) of up to an aggregate of $500.0 million upon our achievement of certain pre-defined development milestones and a success payment (Cobalt Success Payment) of $500.0 million, each of which is payable in cash or stock. The Cobalt Success Payment is payable if, at pre-determined valuation measurement dates, our market capitalization equals or exceeds $8.1 billion, and we are advancing a program based on the fusogen technology in a clinical trial pursuant to an IND, or have filed for, or received approval for, a BLA or new drug application for a product based on the fusogen technology. The Cobalt Success Payment can be achieved over a maximum of 20 years from the date of the acquisition, but this period could be shorter upon the occurrence of certain events. A valuation measurement date would be triggered upon a change of control if at least one of our programs based on the fusogen technology is the subject of an active research program at the time of such change of control. If there is a change of control and our market capitalization is below $8.1 billion as of the date of the change of control, the amount of the potential Cobalt Success Payment will decrease, and the amount of potential Cobalt Contingent Consideration will increase. As of September 30, 2024, a Cobalt Success Payment had not been triggered. See Note 3, Acquisitions, to our consolidated financial statements included elsewhere in this Quarterly Report for details on the amount of the potential Cobalt Success Payment and potential Cobalt Contingent Consideration if there is a change of control based on various thresholds for our market capitalization on such change of control date.

In order to satisfy our obligations to make these success payments, if and when they are triggered, we may issue equity or convertible debt securities that may cause dilution to our stockholders, or we may use our existing cash or incur debt to satisfy the success payment obligations in cash, which may adversely affect our financial position. In addition, these success payments may impede our ability to raise money in future public offerings of debt or equity securities or to obtain a third-party line of credit.

The contingent consideration and success payment obligations in our license and acquisition agreements may cause our operating results, net losses, and financial condition as reported by United States generally accepted accounting principles to fluctuate significantly from quarter to quarter and year to year, which may reduce the usefulness of our financial statements.

Our success payment and contingent consideration obligations under our license and acquisition agreements are recorded as liabilities on our balance sheets. Under United States generally accepted accounting principles (GAAP), we are required to estimate the fair value of these liabilities as of each quarter end, with changes in the estimated fair value recorded in research and development-related success payments and contingent consideration. Factors that may lead to increases or decreases in the estimated fair value of the success payment liabilities include, among others, changes in the value of our common stock and market capitalization, changes in volatility, the estimated number and timing of valuation measurement dates, the term of the success payments, and changes in the risk-free interest rate. Factors that may lead to increases or decreases in the estimated fair value of our contingent consideration obligations include, among others, the estimated likelihood and timing within which milestones may be achieved and the estimated discount rates. A small change in the inputs and related assumptions with respect to our success payment liabilities and contingent consideration may result in a relatively large change in the estimated valuation and associated liabilities and resulting expense or gain. As a result, our operating results, net losses, and financial condition as reported by GAAP may fluctuate significantly from quarter to quarter and year to year for reasons unrelated to our operations, which may reduce the usefulness of our GAAP financial statements. For example, as of September 30, 2024 and December 31, 2023, the estimated aggregate fair value of the Cobalt Success Payment and Harvard Success Payment liabilities was $15.1 million and $12.8 million, respectively, and the estimated fair value of the Cobalt Contingent Consideration was $111.9 million and $109.6 million, respectively.

For the three months ended September 30, 2024, we recorded gains of $4.9 million and $0.8 million, respectively, related to the aggregate change in the estimated fair value of the Cobalt Success Payment and Harvard Success Payment liabilities. For the three months ended September 30, 2024, we recorded an expense of $0.2 million related to the change in the estimated fair value of the Cobalt Contingent Consideration. We have incurred net losses since our inception and expect to continue to incur net losses for the foreseeable future. It is possible that future fluctuations in the price of our common stock and market capitalization and the resulting change in the estimated fair value of our success payment liabilities could lead us to record net income in a future period despite us incurring operating losses and negative cash flows during such period. Alternatively, significant stock appreciation during a future period could lead to a significant increase in our recorded GAAP net loss.

Our limited operating history may make it difficult to evaluate our prospects and likelihood of success.

We have a limited operating history upon which to evaluate our business and prospects. Since our inception in July 2018, we have devoted substantially all of our resources and efforts to building our organization, developing our ex vivo and in vivo cell engineering platforms, identifying and developing potential product candidates, executing preclinical studies, establishing manufacturing capabilities, preparing for and conducting clinical trials of our product candidates, acquiring technologies, organizing and staffing the company, business planning, establishing and maintaining our intellectual property portfolio, raising capital, and providing general and administrative support for these operations. We have not yet demonstrated our ability to successfully complete any clinical trials, including Phase 3 or other pivotal clinical trials, obtain regulatory approvals, manufacture a commercial-scale product or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization. Additionally, we expect our financial condition and operating results to continue to fluctuate significantly from period to period due to a variety of factors, many of which are beyond our control. Consequently, predictions about our future success or viability are difficult to make and may not be as accurate as they could be if we had a longer operating history.

We operate in highly competitive and rapidly changing industries, which may result in others discovering, developing, or commercializing competing products before or more successfully than we do.

The biotechnology and pharmaceutical industries are highly competitive and subject to significant and rapid technological change. Our success is highly dependent on our ability to discover, develop, and obtain marketing approval for new and innovative products on a cost-effective basis and to market them successfully. In doing so, we face and will continue to face intense competition from a variety of businesses, including large pharmaceutical companies, biotechnology companies, academic institutions, government agencies, and other public and private research organizations. These organizations may have significantly greater resources than we do and conduct similar research, seek patent protection, and establish collaborative arrangements for research, development, manufacturing, and marketing of products that compete with our product candidates. Smaller and other early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources, including intellectual property that may be necessary or useful for the development and commercialization of our product candidates, being concentrated in our competitors and becoming unavailable to us on commercially reasonable terms or at all. Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in these industries.

With the proliferation of new drugs and therapies for our target indications, and as new technologies become available, we expect to face increasingly intense competition. If we fail to stay at the forefront of technological change, we may be unable to compete effectively. Any product candidates that we successfully develop and are able to commercialize, including those for the treatment of various cancers, B-cell mediated autoimmune diseases, and type 1 diabetes, will compete with existing therapies and new therapies that may become available in the future, which may include CAR T, cellular, antibody, small molecule, and other types of therapies. The highly competitive nature of and rapid technological changes in the biotechnology and pharmaceutical industries could render our product candidates or our technologies obsolete, less competitive, or uneconomical. Our competitors may, among other things:

Our business, financial condition, and results of operations could be materially adversely affected by any of the foregoing events.

In addition, our potential future collaborators may decide to market and sell products that compete with the product candidates that we have agreed to license to them, which could have a material adverse effect on our future business, financial condition, and results of operations. As described elsewhere in these Risk Factors and in the subsection titled “Business—Competition” in our 2023 Annual Report, we currently and in the future will compete with third parties in the development and commercialization of our product candidates.

Market opportunity and market growth for our product candidates may prove to be smaller than we initially estimated, and even if the markets in which we compete achieve the forecasted growth, our business may not grow at similar rates or at all, or we may otherwise be unable to capitalize on this opportunity.

We intend to initially focus our product candidate development on treatments for various diseases caused by missing or damaged cells. Our projections of addressable patient populations within any particular disease state that may benefit from treatment with our product candidates are based on our estimates. Market opportunity estimates and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates. These estimates, which have been derived from a variety of sources, including scientific literature, surveys of clinics, patient foundations, and market research, may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of these diseases. Additionally, the potentially addressable patient population for our product candidates may not ultimately be amenable to treatment with our product candidates, including if the cost of treatment with our product candidates, including any required co-payments, is expensive or higher than other available therapies. Our market opportunity may also be limited by future competitor therapies that enter the market. If any of our estimates proves to be inaccurate, the market opportunity for any product candidate that we or our strategic partners develop could be significantly diminished, which would have an adverse material impact on our business.

In particular, certain of our product candidates are intended to treat cancer, and, in particular, B cell malignancies. Cancer therapies are sometimes characterized as first-line, second-line, or third-line and beyond, and the FDA often approves new therapies initially only for a particular line of use. When cancer is detected early enough, first-line therapy is sometimes adequate to cure the cancer or prolong life without a cure. Whenever first-line therapy, which usually consists of chemotherapy, antibody drugs, tumor-targeted small molecules, hormone therapy, radiation therapy, surgery, or a combination of these, proves unsuccessful, second-line therapy may be administered. Second-line therapies often consist of more chemotherapy, antibody drugs, tumor-targeted small molecules, radiation therapy, or a combination of these. Third-line therapies can include chemotherapy, antibody drugs, and small molecule tumor-targeted therapies, more invasive forms of surgery, and new technologies. The use of certain classes of therapies, including CAR T therapies, has been limited to a subset of patients with relapsed or refractory disease. Our projections of both the number of people who have the cancers we are targeting, as well as the subset of people with these cancers who are in a position to receive a particular line of therapy and who have the potential to benefit from treatment with our product candidates, are based on our beliefs and estimates. Consequently, even if our product candidates are approved for a later line of therapy, the number of patients that may be eligible for treatment with our product candidates may turn out to be much lower than expected.

In addition, even if the market opportunity for our product candidates achieves or exceeds the level and growth we anticipate, we may be unable to grow our business at the rate or in the manner necessary to successfully capitalize on this opportunity, including due to limited financial, personnel, and other resources. Our ability to successfully commercialize our product candidates will also be affected by numerous factors beyond our control, including limitations on third-party resources and infrastructure and other factors discussed in these Risk Factors.

We currently have no marketing, sales, or distribution infrastructure and we intend to either establish a sales and marketing infrastructure or outsource this function to a third party. Each of these commercialization strategies carries substantial risks to us.

We currently have no marketing, sales, or distribution capabilities because all of our product candidates are in the early stages of development. If one or more of our product candidates complete clinical development and receive regulatory approval, we intend to either establish a sales and marketing organization with technical expertise and supporting distribution capabilities to commercialize our product candidates in a legally compliant manner, or to outsource this function to a third party, both of which involve significant risks.

If we elect to establish our own sales and marketing capabilities, we will incur significant additional costs, including to hire and retain qualified personnel to build out the organization, and we may be unable to build out this organization in a way that will enable us to successfully market our products and generate revenues. If we elect to enter into arrangements with third parties to perform sales and marketing with respect to our product candidates, we may be unable to identify suitable partners, and even if we do identify such partners, we may be unable to negotiate the terms of such arrangement in a timely manner or at all, which could delay our marketing efforts and our ability to generate revenues. To the extent that we are able to enter into collaboration agreements with respect to marketing, sales, or distribution, our product revenue may be lower than if we directly marketed or sold any approved products. Such collaborative arrangements with partners may place the commercialization of our products outside of our control and would subject us to a number of risks, including that we may not be able to control the amount or timing of resources that our collaborative partner devotes to our products or that our collaborator’s willingness or ability to complete its obligations, and our ability to complete our obligations under these arrangements, may be adversely affected by business combinations or significant changes in our collaborator’s business strategy. If we are unable to enter into these arrangements on acceptable terms, or at all, we may not be able to successfully commercialize any products for which we receive regulatory approval.

If we are not successful in commercializing any approved products, either on our own or through collaborations with one or more third parties, our ability to generate product revenue will suffer and we may incur significant additional losses, which would have a material adverse effect on our business, financial condition, and results of operations.

Our product candidates for which we intend to seek approval as biologic products may face competition sooner than anticipated.

The ACA includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 (BPCIA), which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product. Under the BPCIA, an application for a highly similar or “biosimilar” product may not be submitted to the FDA until four years following the date that the reference product was first approved by the FDA. In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first approved. During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing the applicant’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate substantial evidence that such product provides benefits that outweigh its known and potential risks for the intended patient population, as well as data that demonstrate that such product can be manufactured to a pre-defined standard.

We believe that any of our product candidates that may be approved as a biological product under a BLA should qualify for the 12-year period of exclusivity. However, there is a risk that this exclusivity could be shortened due to congressional action or otherwise, or that the FDA will not consider our product candidates to be reference products for competing products, potentially creating the opportunity for competition sooner than anticipated. Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the subject of litigation. Moreover, the extent to which a biosimilar, once approved, will be substituted for any one of our reference products in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing.

Jurisdictions outside the United States have also established abbreviated pathways for regulatory approval of biological products that are biosimilar to earlier approved reference products. For example, the EU has had an established regulatory pathway for biosimilars since 2004. However, biosimilars can only be authorized once the period of data exclusivity on the reference biological medicine has expired.

The increased likelihood of biosimilar competition has increased the risk of loss of innovators’ market exclusivity. As a result of this and uncertainties regarding patent protection, we are not currently able to predict with certainty the length of market exclusivity for any particular product candidate that may receive marketing approval based solely on the expiration of the relevant patent(s) or the current forms of regulatory exclusivity. There may also be future changes in United States regulatory law that might reduce biological product regulatory exclusivity. The loss of market exclusivity for any product for which we receive regulatory approval could materially and negatively affect or prevent our ability to generate revenues, which could prevent us from achieving or sustaining profitability.

Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.

As of September 30, 2024, our executive officers, directors, holders of 5% or more of our capital stock, and their respective affiliates, beneficially owned, in the aggregate, approximately 52.8% of our common stock. Therefore, these stockholders have the ability to influence us through this ownership position. These stockholders may be able to determine all matters requiring stockholder approval. For example, these stockholders may be able to control elections of directors, amendments to our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that other stockholders may feel are in their best interests.

Future sales of our securities by us in the public market could cause our common stock price to fall.

At any time in the future we may sell a large number of shares of our common stock or rights to acquire a large number of shares of our common stock. Such sales, or the perception that such sales could occur, could cause our common stock price to decline as a result of, among other things, dilution from these sales, including pursuant to the exercise or conversion of rights to acquire our common stock, or discounts to the trading price of our common stock associated with such sales. In addition, transactions involving a large number of shares of our common stock, or the possibility that these transactions may occur, may also make it more difficult for us to sell equity securities in the future at a time and price that we deem appropriate.

We expect that we will need significant additional capital in the future to support our planned operations, including conducting clinical trials, manufacturing, and other research and development activities, commercializing any product candidates for which we may obtain regulatory approval, and continuing to operate as a public company. To raise capital, we may sell shares of our common stock, warrants, convertible securities, or other securities in one or more transactions at prices and in a manner we determine from time to time. For example, as described elsewhere in these Risk Factors, we have sold shares of common stock in the ATM facility and shares of common stock and pre-funded warrants in the Follow-On Offering. If we sell additional securities in the future, whether in the ATM facility, in future public offerings, or otherwise, you could experience material dilution. In addition, such sales could result in new investors gaining rights, preferences, and privileges senior to the holders of our common stock.

In addition, in the future, we may issue additional shares of common stock, or other equity or debt securities convertible into common stock, in connection with a financing, acquisition, employee arrangement, or otherwise. Any such issuance could result in substantial dilution to our existing stockholders and could cause the price of our common stock to decline.

Sales of a substantial number of shares of our common stock by our existing stockholders in the public market, or the perception that such sales could occur, could cause our stock price to fall.

If our existing stockholders sell, indicate an intention to sell, or there is a perception in the market that they intend to sell, a large number of shares of our common stock, the trading price of our common stock could decline. As of September 30, 2024, 223.1 million shares of our common stock were outstanding, which excludes shares of common stock sold in the ATM facility and shares of common stock issued upon exercise of outstanding equity awards, in each case, after September 30, 2024, and 42.8% of such shares were beneficially owned by holders of 5% or more of our common stock. In addition, shares of common stock that are either subject to outstanding options or reserved for future issuance under our employee benefit plans will become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, applicable lock-up agreements, and Rule 144 and Rule 701 under the Securities Act of 1933, as amended (Securities Act). If these additional shares of common stock are sold, or there is a perception that they will be sold, in the public market, the trading price of our common stock could decline. Further, certain holders of shares of our common stock are entitled to rights with respect to the registration of their shares under the Securities Act. Registration of these shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act, except for shares held by affiliates, as defined in Rule 144 under the Securities Act. Any sales of securities by these stockholders could have a material adverse effect on the trading price of our common stock.

We do not currently intend to pay dividends on our common stock and, consequently, our stockholders’ ability to achieve a return on their investment will depend on appreciation of the value of our common stock.

We have never declared or paid cash dividends on our common stock. We currently intend to retain all available funds and any future earnings to support operations and to finance the growth and development of our business. We do not intend to declare or pay any cash dividends on our capital stock in the foreseeable future. As a result, any investment return on our common stock will depend upon increases in the value of our common stock, which is not certain.

Provisions in our amended and restated certificate of incorporation and our amended and restated bylaws and Delaware law might discourage, delay, or prevent a change in control of our company or changes in our management and, therefore, depress the market price of our common stock.

Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that could depress the market price of our common stock by acting to discourage, delay, or prevent a change in control of our company or changes in our management that the stockholders of our company may deem advantageous. These provisions, among other things:

As a Delaware corporation, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which prohibits a Delaware corporation from engaging in a business combination specified in the statute with an interested stockholder (as defined in the statute) for a period of three years after the date of the transaction in which the person first becomes an interested stockholder, unless the business combination is approved in advance by a majority of the independent directors or by the holders of at least two-thirds of the outstanding disinterested shares. The application of Section 203 of the Delaware General Corporation Law could also have the effect of delaying or preventing a change of control of our company.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum, to the fullest extent permitted by law, for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a breach of a fiduciary duty owed by any director, officer, or other employee to us or our stockholders, (iii) any action asserting a claim against us or any director, officer, or other employee arising pursuant to the Delaware General Corporation Law, (iv) any action to interpret, apply, enforce, or determine the validity of our second amended and restated certificate of incorporation or amended and restated bylaws, or (v) any other action asserting a claim that is governed by the internal affairs doctrine, shall be the Court of Chancery of the State of Delaware (or another state court or the federal court located within the State of Delaware if the Court of Chancery does not have or declines to accept jurisdiction), in all cases subject to the court’s having jurisdiction over indispensable parties named as defendants. In addition, our amended and restated certificate of incorporation provides that the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, but that the forum selection provision will not apply to claims brought to enforce a duty or liability created by the Securities Exchange Act of 1934, as amended (Exchange Act).

Although we believe these provisions benefit us by providing increased consistency in the application of Delaware law for the specified types of actions and proceedings, the provisions may have the effect of discouraging lawsuits against us or our directors and officers. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, financial condition, and operating results. For example, under the Securities Act, federal courts have concurrent jurisdiction over all suits brought to enforce any duty or liability created by the Securities Act, and investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Any person or entity purchasing or otherwise acquiring any interest in our shares of capital stock will be deemed to have notice of and consented to this exclusive forum provision, but will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.

Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.

Under the Tax Cuts and Jobs Act of 2017 (Tax Act), as modified by the Coronavirus Aid, Relief, and Economic Stability Act (CARES Act), our federal net operating losses (NOLs) generated in tax years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such federal NOLs is limited to 80% of taxable income. In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the Code), if a corporation undergoes an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a three-year period, the corporation’s ability to use its pre-change NOL and other pre-change tax attributes, such as research and development tax credits, to offset its post-change income or taxes may be limited. We may have experienced ownership changes in the past and may experience ownership changes as a result of subsequent shifts in our stock ownership, some of which are outside our control. As a result, our ability to use our pre-change NOLs and tax credits to offset post-change taxable income, if any, could be subject to limitations. Similar provisions of state tax law may also apply. In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed. As a result, even if we attain profitability, we may be unable to use and gain the benefit of a material portion of our NOLs and tax credits.

Changes in U.S. and foreign tax laws could have a material adverse effect on our business, cash flow, results of operations, or financial conditions.

We are subject to tax laws, regulations, and policies of the United States federal, state, and local governments and of comparable taxing authorities in foreign jurisdictions. Changes in tax laws, and in the administration of such laws, could adversely affect our effective tax rate, our cashflow, our operating results, or our reported financial condition. For example, the Tax Act eliminated the option to deduct research and development expenditures currently and requires taxpayers to capitalize and amortize those expenditures over five or fifteen years pursuant to Code Section 174. If and when we come profitable, these changes may cause us to pay federal income taxes earlier under the revised tax law than under the prior law and may increase our total federal tax liability attributable to orphan drug programs and other research and development activities. There can be no assurance that our effective tax rate, tax obligations, tax credits, including the orphan drug designation credit, or incentives will not be adversely affected by these or other developments or changes in law.

Our quarterly operating results may fluctuate significantly or may fall below the expectations of investors or securities analysts, each of which may cause our stock price to fluctuate or decline.

We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors, including:

If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially. Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our stock to fluctuate substantially. We believe that quarterly comparisons of our financial results are not necessarily meaningful and should not be relied upon as an indication of our future performance.

Our stock price may be volatile or may decline regardless of our operating performance, which may result in substantial losses for investors and may potentially subject us to securities class action litigation, which is expensive and could divert management’s attention.

The market price of our common stock, as well as investor perceptions of our business and its value, may be highly volatile and may fluctuate substantially as a result of a variety of factors, some of which are related in complex ways, and many of which are beyond our control, including the factors listed below and other factors described in these Risk Factors:

The stock market in general, and biopharmaceutical companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance. If the market price of our common stock does not exceed your purchase price, you may not realize any return on, and may lose some or all of, your investment. In addition, because the biotechnology industry is complex and subject to heightened risks as compared to many other industries, investors may be reluctant to place value in and invest in our company and choose instead to prioritize investment in other companies and industries, including those that may be perceived as more stable or that prioritize initiatives that may not be relevant to our industry or practical for us to prioritize at this stage in our development.

In the past, securities class action litigation has often been instituted against companies following periods of volatility in the market price of a company’s securities. The market price of our common stock has fluctuated since our IPO and may continue in the future to be volatile. This type of litigation, if instituted, could result in substantial costs and a diversion of management’s attention and resources, which would harm our business, operating results, or financial condition.

Market and economic conditions may negatively impact our business, financial condition, and share price.

Concerns about inflation, interest rates, energy costs, geo-political issues, the United States mortgage market and a declining real estate market, unstable global credit markets and financial conditions, and volatile oil prices have led to periods of significant economic instability, diminished liquidity and credit availability, declines in investment in industries perceived as complex or higher risk, such as biotechnology, declines in consumer confidence and discretionary spending, diminished expectations for the global economy and expectations of slower global economic growth going forward, increased unemployment rates, and increased credit defaults in recent years. Our general business strategy may be adversely affected by any such economic downturns, volatile business environments, and continued unstable or unpredictable economic and market conditions, including as a result of a prolonged government shutdown, or the perception or possibility that such a shutdown may occur. The closures of SVB and Signature in 2023 and their placement into receivership with the Federal Deposit Insurance Corporation created bank-specific and broader financial institution liquidity risk and concerns. Although government intervention ultimately provided depositors at SVB and Signature with access to their funds, adverse developments with respect to specific financial institutions or the broader financial services industry that have occurred or may occur in the future may lead to market-wide liquidity shortages, impair our ability to access near-term working capital needs, and create additional market and economic uncertainty. There can be no assurance that future credit and financial market instability and a deterioration in confidence in economic conditions will not occur, and we cannot predict the impact or follow-on effects of these insolvencies more broadly or on our business in particular. Further, there is no guarantee that the government will intervene to provide depositors with access to funds if similar events occur in the future. If other banks and financial institutions with which we have commercial relationships enter receivership or become insolvent in the future, our ability to access our existing cash, cash equivalents, and investments may be threatened, which could adversely affect our business and financial condition.

Given the depth and breadth of our portfolio, we assess and prioritize our programs on an ongoing basis based on various factors, including internal and external opportunities and constraints, which may result in our decision to advance certain programs ahead or instead of others. Given the volatility in our stock price and the increased difficulty in accessing global credit markets and raising capital due to the market and economic conditions described above, we have adjusted our pipeline prioritization strategy and resource allocation in order to enable the success of our most advanced product candidates. In particular, we have gated investment in our programs, with future investment dependent on our achievement of certain milestones. Even if our programs achieve the required milestones, development and potential commercialization of our product candidates may be delayed, which could harm our competitive position. In order to manage resource constraints, we may be required to make decisions regarding how to prioritize our programs based on limited data. As a result, we may be required to delay or halt the development of potentially promising earlier stage programs to focus our resources on a limited number of more advanced programs with higher probabilities of success in the shorter term. Such decisions have, and in the future would, reduce the breadth and diversity of our portfolio and investments therein, potentially limit the long-term growth of our pipeline, and increase the risk and extent of the negative impact on our business if such programs are not successful.

In addition, if any of the events described occur, or if the market and economic conditions described above continue to deteriorate or do not improve, it may make any necessary debt or equity financing more difficult to complete, more costly, and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance, and stock price. As a result, we may be required to further adjust our pipeline prioritization strategy and resource allocation in order to extend our cash runway and enable the success of certain of our product candidates, which may require that we make adjustments based on limited information and slow or stop the development of certain product candidates. Additionally, rising rates of inflation in recent years have increased the costs associated with conducting our business, including by causing substantial increases in the costs of materials, including raw materials and consumables, equipment, services, and labor. Given that we do not currently generate revenue from sales of any of our product candidates, we do not have an ability to offset these increases in our costs. Moreover, given the unpredictable nature of the current economic climate, including future changes in rates of inflation, it may be increasingly difficult for us to predict and control our future expenses, which may harm our ability to conduct our business.

We or the third parties upon whom we depend may be adversely affected by natural disasters, including earthquakes, fires, typhoons, and floods, public health epidemics, telecommunications or electrical failures, geo-political actions, including war and terrorism, political and economic instability, and other events beyond our control, and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.

We or our partners, CROs, CDMOs, or other service providers, may experience interruptions to our operations, including the conduct of our research and development programs, clinical trials, and manufacturing operations, due to natural disasters, including earthquakes, fires, typhoons, and floods, public health epidemics, such as the COVID-19 pandemic, hardware, software, telecommunication or electrical failures, geo-political actions, including war and terrorism, or political and economic instability, which could significantly disrupt or harm our business.

Our corporate headquarters and other facilities, including the site of our planned manufacturing facility, are located in areas that have experienced significant natural disasters, including the San Francisco Bay Area and Seattle, Washington, each of which have experienced severe effects from wildfires and, in the case of the San Francisco Bay Area, severe earthquakes. We do not carry earthquake insurance. Earthquakes, wildfires, or other natural disasters could severely disrupt our operations, and could materially and adversely affect our business, financial condition, results of operations, and prospects. If a natural disaster, electrical failure, or other event occurs that prevents us from using all or a significant portion of our headquarters, damages critical infrastructure, or otherwise disrupts operations, it may be difficult or, in certain cases, impossible, for us to continue our business for a substantial period of time. For example, a prolonged electrical failure could result in damage to or destruction of materials that are critical for our research and manufacturing operations, including our master cell banks, which would delay the advancement of our programs and materially harm our business, operating results, prospects, or financial condition. In addition, a failure of our computing systems could result in the loss of research or preclinical data important to our research or development programs, interrupt the conduct of ongoing research, or otherwise impair our ability to operate, which could delay the advancement of our programs or cause us to incur costs to recover or reproduce lost data. In addition, if in the future a natural disaster, power outage, or other event occurred that prevented us from using all or a significant portion of our manufacturing capabilities, we may not be able to manufacture sufficient supply of our product candidates required to conduct our clinical trials or commercialize our products in accordance with our timelines or at all. The disaster recovery and business continuity plans we currently have in place are limited and are unlikely to prove adequate in the event of a serious disaster or similar event. We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans, which, together with our lack of earthquake insurance in particular, could have a material adverse effect on our business.

Integral parties in our supply chain are similarly vulnerable to natural disasters or other sudden, unforeseen, and severe adverse events. In addition, our supply chain is vulnerable to changes in the geo-political and economic climate, including changes in relationships between the United States and countries from which we may need to source materials and other resources necessary for the preclinical evaluation of our product candidates, including animal models, and specifically non-human primate models, or to manufacture our product candidates, including raw and intermediate materials and consumables. If any such event or change were to affect our supply chain, it could have a material adverse effect on our business.

As a result of the COVID-19 pandemic and related public health guidance measures, we experienced and may in the future experience disruptions that could materially and adversely impact our preclinical and clinical studies and development and our business, financial condition, and results of operations. Potential disruptions resulting from the COVID-19 pandemic or another pandemic, epidemic, or infectious disease outbreak may include delays or disruptions in our research, preclinical, clinical, manufacturing, and regulatory activities, including due to limitations on employee or other resources both internally and at third parties, including government agencies, or delays in procuring, or inability to procure, necessary supplies, materials, and equipment. The extent to which the impact of the COVID-19 pandemic and any other pandemic, epidemic, or other outbreak may affect our preclinical studies, clinical trials, business, financial condition, and results of operations will depend on future developments, which continue to be highly uncertain and unpredictable.

Furthermore, geo-political actions, such as the escalation of conflict in Ukraine and the Middle East, trade restrictions, and the resulting political and economic instability, could negatively impact our operations. Although it is difficult to anticipate the impact of any of the foregoing on our company in particular, such geo-political actions, and any actions taken in response thereto, could increase our costs, disrupt our supply chain, impair our ability to raise or access additional capital when needed on acceptable terms, if at all, or otherwise adversely affect our business, financial condition, and results of operations.

If securities or industry analysts either do not publish research about us or publish inaccurate or unfavorable research about us, our business, our market, or our competitors, or if they adversely change their recommendations regarding our common stock, the trading price or trading volume of our common stock could decline.

The trading market for our common stock is influenced in part by the research and reports that securities or industry analysts may publish about us, our business, our market, or our competitors. We do not have any control over the analysts or the content and opinions included in their research and reports. If one or more of these analysts issue an unfavorable rating or downgrade our common stock, provide a more favorable recommendation about our competitors, or publish inaccurate or unfavorable research about our business, our common stock price would likely decline. If any analyst who may cover us were to cease such coverage or fail to regularly publish reports on us, we could lose visibility in the financial markets and demand for our common stock could decrease, which could cause the trading price or trading volume of our common stock to decline.

We are an emerging growth company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors.

We are an “emerging growth company” as defined in the JOBS Act, and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to emerging growth companies, including:

Our status as an emerging growth company will end as soon as any of the following takes place:

We cannot predict if investors will find our common stock less attractive as a result of our decision to rely on any of the exemptions afforded to emerging growth companies. If some investors find our common stock less attractive because we rely on any of these exemptions, there may be a less active trading market for our common stock and the market price of our common stock may be more volatile.

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to use this extended transition period for any new or revised accounting standards during the period in which we remain an emerging growth company (or we affirmatively and irrevocably opted out of the extended transition period); however, we may adopt certain new or revised accounting standards early. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

The requirements of being a public company may strain our resources, result in an increased risk of litigation, and divert management’s attention.

As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of Nasdaq, and other applicable securities rules and regulations. Complying with these rules and regulations has increased and will increase our legal and financial compliance costs, make some activities more difficult, time-consuming, or costly, and increase demand on our systems and resources. The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and operating results. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. We are required to disclose changes made in our internal control and procedures on a quarterly basis. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet the requirements of the Sarbanes-Oxley Act, significant resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could adversely affect our business and operating results. We may also need to hire additional employees or engage outside consultants to comply with these requirements, which will increase our costs and expenses.

In addition, changing laws, regulations, and standards relating to corporate governance and public disclosure create uncertainty for public companies, increase legal and financial compliance costs, and make some activities more time-consuming. These laws, regulations, and standards are subject to varying interpretations, in many cases due to their lack of specificity and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to continue to invest resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from potential revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations, and standards fail to meet the requirements of the applicable regulatory or governing bodies, including due to ambiguities related to their application in practice, regulatory authorities may initiate legal proceedings against us, and our business may be adversely affected.

New laws, rules, and standards and our efforts necessary to comply may make it more expensive for us to obtain director and officer liability insurance and, in the future, we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation and talent committee, and qualified executive officers. Additionally, the dramatic increase in the cost of such insurance may cause us to opt for lower overall policy limits or to forgo insurance that we may otherwise rely on to cover defense costs, settlements, and damages awarded to plaintiffs in connection with any securities litigation.

By disclosing information in the periodic filings required of a public company, our business and financial condition are more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties. If those claims are successful, our business could be seriously harmed. Even if the claims do not result in litigation or are resolved in our favor, the time and resources needed to resolve them could divert our management’s resources and seriously harm our business.

If we fail to maintain proper and effective internal controls over financial reporting, our ability to produce accurate and timely financial statements could be impaired.

Pursuant to Section 404 of the Sarbanes-Oxley Act, our management is required to report upon the effectiveness of our internal control over financial reporting. When we lose our status as an “emerging growth company,” our independent registered public accounting firm will be required to attest to the effectiveness of our internal control over financial reporting. The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing, and possible remediation. To comply with the requirements of being a reporting company under the Exchange Act, we have implemented and may need to continue to implement additional financial and management controls, reporting systems, and procedures, and may need to hire additional accounting and finance staff.

We cannot guarantee that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, results of operations, or cash flows. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by Nasdaq, the SEC, or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.

Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

We are subject to the periodic reporting requirements of the Exchange Act. We must design our disclosure controls and procedures to reasonably assure that information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated to management, and recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. For example, our directors or executive officers could inadvertently fail to disclose a new relationship or arrangement with a related party, which could cause us to fail to make a required related party transaction disclosure. Additionally, controls can, depending on the circumstances, be circumvented by the acts of a single individual, by collusion of two or more people, or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may occur and not be detected.

The withdrawal of the United Kingdom from the European Union, commonly referred to as “Brexit,” may adversely impact our ability to obtain regulatory approvals of our product candidates in the United Kingdom or European Union, result in restrictions or imposition of taxes and duties for importing our product candidates into the United Kingdom or European Union, and may require us to incur additional expenses in order to develop, manufacture, and commercialize our product candidates in the United Kingdom or European Union.

The UK left the EU on January 31, 2020, commonly referred to as “Brexit.” Pursuant to the formal withdrawal arrangements agreed between the UK and EU, the UK and EU negotiated a framework for partnership for the future in their Trade and Cooperation Agreement (TCA), which became effective on January 1, 2021. The TCA includes specific provisions concerning pharmaceuticals, including the mutual recognition of cGMP inspections of manufacturing facilities for medicinal products and cGMP documents issued, but does not foresee wholesale mutual recognition of UK and EU pharmaceutical regulations.

Because a significant proportion of the regulatory framework in the UK applicable to our business and our product candidates is derived from EU directives and regulations, Brexit could materially impact the regulatory regime with respect to the development, manufacture, importation, approval, and commercialization of our product candidates in the UK. In general, the EU laws that have been transposed into UK law through secondary legislation remain applicable in Great Britain. However, these rules may have diverged or may in the future diverge from the EU rules, and general uncertainty regarding the future of the relationship between the UK and EU, as well as the laws and rules in each such jurisdiction, remains.

As of January 1, 2021, the Medicines and Healthcare Products Regulatory Agency (MHRA) is the UK’s standalone medicines and medical devices regulator. As a result of the Northern Ireland protocol, different rules apply in Northern Ireland than in Great Britain; broadly, Northern Ireland continues to follow the EU regulatory regime, but its national competent authority remains the MHRA. However, on February 27, 2023, the UK Government and the European Commission reached political consensus on the “Windsor Framework,” which will revise the Northern Ireland protocol in order to address some of the perceived shortcomings. Under the proposed changes, Northern Ireland would be reintegrated under the regulatory authority of the MHRA with respect to medicinal products. The implementation of the Windsor Framework will occur in various stages, with new arrangements relating to the supply of medicines into Northern Ireland due to take effect in 2025. There could be additional uncertainty and risk around what these changes will mean for any of our business operations in the UK.

Following the Transition Period, the UK is no longer covered by the centralized procedures for obtaining EU-wide marketing authorization from the EMA and companies established in the UK must follow one of the UK national authorization procedures or one of the remaining post-Brexit international cooperation procedures to obtain marketing authorization to commercialize a product in the UK. The MHRA may rely on a decision taken by the European Commission with respect to the approval of a new (centralized procedure) marketing authorization when making a determination with respect to an application for a Great Britain marketing authorization, or use the MHRA’s decentralized or mutual recognition procedures, which enable marketing authorizations approved in EU member states (or Iceland, Liechtenstein, or Norway) to be granted in Great Britain. Any delay in obtaining, or an inability to obtain, any marketing approvals in the UK or EU, as a result of Brexit or otherwise, could prevent us from commercializing our product candidates in the UK or EU and restrict our ability to generate revenue and achieve and sustain profitability. In addition, we may be required to pay taxes or duties or be subjected to other requirements, some of which could be significant, in connection with the importation of our product candidates into the UK or EU, or we may incur expenses in establishing a manufacturing facility in the UK or EU in order to circumvent such requirements. If any of these outcomes occur, we may be forced to restrict or delay efforts to seek regulatory approval for our product candidates in the UK or EU or incur significant additional expenses to operate our business, which could significantly and materially harm or delay our ability to generate revenues or achieve profitability. Any further changes in international trade, tariff, and import/export regulations, as a result of Brexit or otherwise, may impose unexpected duty costs or other non-tariff barriers on us. These developments, or the perception that any of them could occur, may significantly reduce global trade and, in particular, trade between the impacted nations and the UK.

We did not sell any unregistered securities in the three months ended September 30, 2024.

On February 3, 2021, our Registration Statement on Form S-1 (File No. 333-252061) relating to our IPO was declared effective. On February 8, 2021, we closed our IPO and issued 27.0 million shares of common stock, including 3.5 million shares of common stock sold pursuant to the underwriters’ full exercise of their option to purchase additional shares, at a public offering price of $25.00 per share, for aggregate net proceeds of $626.4 million. Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLS, J.P. Morgan Securities LLC, and BofA Securities, Inc. acted as joint bookrunning managers of the IPO and as representatives of the underwriters. No offering expense were paid directly or indirectly to any of our directors or officers (or their associates) or persons owning 10.0% or more of any class of our equity securities or to any other affiliates.

As of September 30, 2024, we have used all of the net proceeds from the IPO. There was no material change in the actual use of the net proceeds from the IPO from that described in the prospectus filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act.

On November 4, 2024, we announced a strategic repositioning to prioritize clinical and preclinical development in type 1 diabetes, B-cell mediated autoimmune diseases, refractory B-cell malignancies, and the fusogen platform for generating in vivo CAR T cells. We will suspend development of SC291, our HIP-modified CD19 allogeneic CAR T therapy, in oncology and SC379, our glial progenitor cell program, as we seek partnerships for these programs. The strategic repositioning resulted in a workforce reduction of approximately 45%. We anticipate that the portfolio update and associated reduction in force will be substantially complete in the first quarter of 2025.

In connection with the strategic repositioning, we anticipate we will incur approximately $5.0 million and $1.4 million of cash-based expenses related to employee severance, benefits, and related costs in the fourth quarter of 2024 and the first quarter of 2025, respectively. We will file a Current Report on Form 8-K if amounts differ materially from these estimates.

† Certain portions of this document that constitute confidential information have been redacted in accordance with Regulation S-K Item 601(b)(10).

+ This certification is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report, irrespective of any general incorporation language contained in such filing.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


德拉瓦	83-1381173
（州或其他司法管辖区成立或组织）	（国税局雇主识别号）
东布莱恩街188号, Suite 400 西雅图, 华盛顿	98102
（主要行政办公室地址）	(Zip代码）


每个班级的标题	交易符号	注册的每个交易所的名称
普通股，每股面值0.0001美金	SANA	的纳斯达克证券市场有限责任公司


		页面
第一部分.	财务资料
项目1.	财务报表（未经审计）	5
	精简合并资产负债表	5
	简明合并经营报表	6
	简明综合全面收益表（亏损）	7
	简明合并股东权益报表	8
	简明综合现金流量表	10
	未经审计简明合并财务报表附注	11
项目2.	管理层对财务状况和经营成果的讨论和分析	22
项目3.	关于市场风险的定量和定性披露	34
项目4.	控制和程式	35
第二部分.	其他信息
项目1.	法律诉讼	36
项目1A.	危险因素	36
项目2.	股权证券的未登记销售和收益的使用	110
项目3.	优先证券	110
项目4.	矿山安全披露	110
项目5.	其他信息	110
项目6.	展品	111
	签名	112


	2024年9月30日			2023年12月31日
	（未经审计）
资产
易变现资产：
现金及现金等价物	$	126,996		$	133,517
有价证券		72,011			71,678
受限制现金		3,832			3,832
预付费用和其他易变现资产		7,310			4,488
易变现资产总额		210,149			213,515
财产和设备，净值		82,826			70,689
经营租赁使用权资产		61,040			74,903
无形资产		59,195			59,195
商誉		140,627			140,627
其他非易变现资产		5,555			6,370
总资产	$	559,392		$	565,299
负债和股东权益
流动负债：
应付帐款	$	2,991		$	4,108
应计报酬		18,050			23,722
应计费用和其他流动负债		15,362			23,462
经营租赁负债		10,601			13,195
流动负债总额		47,004			64,487
经营租赁负债，扣除流动部分		85,483			90,901
或然代价		111,856			109,606
成功付款负债		15,115			12,799
其他非流动负债		7,456			-
总负债		266,914			277,793
承诺和或有事项（注9）
股东权益：
优先股，美金0.0001 面值; 50,000 授权股份; 零截至2024年9月30日和2023年12月31日已发行和发行股票		-			-
普通股，美金0.0001 面值; 750,000 授权股份; 223,108 和 197,857 分别截至2024年9月30日和2023年12月31日已发行和发行股票		22			20
借记资本公积		1,848,183			1,625,637
累计其他综合收益（损失）		54			(60	)
累计赤字		(1,555,781	)		(1,338,091	)
股东权益总额		292,478			287,506
负债总额和股东权益	$	559,392		$	565,299


	截至9月30日的三个月，						截至9月30日的九个月，
	2024			2023			2024			2023
运营费用：
研发	$	53,206		$	65,613		$	170,528		$	205,823
与研发相关的成功付款和或有对价		(5,497	)		(82,615	)		4,566			(55,816	)
一般及行政		14,052			19,183			46,763			52,515
总运营支出		61,761			2,181			221,857			202,522
经营亏损		(61,761	)		(2,181	)		(221,857	)		(202,522	)
利息收入，净		2,579			2,862			8,815			7,212
其他收入（费用），净额		(742	)		303			(4,648	)		172
净利润（亏损）	$	(59,924	)	$	984		$	(217,690	)	$	(195,138	)
每股普通股净利润（亏损）-基本	$	(0.25	)	$	0.00		$	(0.95	)	$	(1.01	)
加权平均普通股数-基本		235,412			196,978			229,076			193,605
每股普通股净利润（亏损）-稀释	$	(0.25	)	$	0.00		$	(0.95	)	$	(1.01	)
加权平均普通股数-稀释		235,412			200,473			229,076			193,605


☒	根据1934年《证券交易法》第13或15（d）条的季度报告


☐	根据1934年《证券交易所法》第13或15（d）条提交的过渡报告


大型加速文件夹	☐	加速编报公司	☒

非加速归档	☐	小型上市公司	☐

新兴成长型公司	☒


	普通股				额外实收			积累其他全面			积累			总股东
	股份		量		资本			收入（损失）			赤字			股权
截至2023年12月31日余额		197,857	$	20	$	1,625,637		$	(60	)	$	(1,338,091	)	$	287,506
在市场发售时发行普通股，扣除发行成本美金113		150		-		1,037			-			-			1,037
通过后续发行和随附的预融资证发行普通股，扣除发行成本美金9,741		21,773		2		180,006			-			-			180,008
限制性股票的归属		386		-		-			-			-			-
股票期权的行使		1,120		-		4,929			-			-			4,929
基于股票的补偿费用		-		-		9,092			-			-			9,092
待售未实现收益证券，净值		-		-		-			45			-			45
净亏损		-		-		-			-			(107,475	)		(107,475	)
截至2024年3月31日余额		221,286	$	22	$	1,820,701		$	(15	)	$	(1,445,566	)	$	375,142
与普通股融资相关的费用		-		-		(16	)		-			-			(16	)
限制性股票的归属		52		-		-			-			-			-
股票期权的行使		548		-		2,361			-			-			2,361
与员工股票购买计划相关的普通股发行		323		-		1,077			-			-			1,077
基于股票的补偿费用		-		-		11,380			-			-			11,380
待售未实现损失证券，净值		-		-		-			(4	)		-			(4	)
净亏损		-		-		-			-			(50,291	)		(50,291	)
截至2024年6月30日余额		222,209	$	22	$	1,835,503		$	(19	)	$	(1,495,857	)	$	339,649
与普通股融资相关的费用		-		-		(29	)		-			-			(29	)
限制性股票的归属		84		-		-			-			-			-
股票期权的行使		815		-		1,939			-			-			1,939
基于股票的补偿费用		-		-		10,770			-			-			10,770
待售未实现收益证券，净值		-		-		-			73			-			73
净亏损		-		-		-			-			(59,924	)		(59,924	)
截至2024年9月30日余额		223,108	$	22	$	1,848,183		$	54		$	(1,555,781	)	$	292,478


控制权变更后的Sana市值及其对Cobalt Success的影响付款和额外潜在的钴或有考虑因素	钴的成功支付		额外潜在钴特遣队审议
	(in数百万）
等于或超过美金8.11000亿美元	$	500	$	-
等于或超过美金7.4 10亿，但不到81美金		150		350
等于或超过美金6.8 10亿美金，但不到74美金		100		400
低于$6.8 亿		-		500


发行时股权价值的倍数	5x		10x		20x		30x		40x
支付所需的每股普通股价格	$	20.00	$	40.00	$	80.00	$	120.00	$	160.00
成功付款（以百万计）	$	5.0	$	15.0	$	30.0	$	50.0	$	75.0


	按时期划分的应付款项
	少于1年		1至3年		3至5年		5年以上		总
	(in数千）
经营租赁义务	$	19,850	$	43,156	$	30,492	$	82,933	$	176,431


Exhibit Number		Description

3.1		Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-39941), filed with the SEC on February 9, 2021).

3.2		Amended and Restated Bylaws (incorporated herein by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No. 001-39941), filed with the SEC on February 9, 2021).

4.1		Reference is made to Exhibits 3.1 through 3.2.

4.2		Form of Common Stock Certificate (incorporated herein by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-1 (File No. 333-252061), filed with the SEC on January 28, 2021).

4.3		Form of Pre-Funded Warrant (incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 001-39941), filed with the SEC on February 8, 2024).

10.1*†		Amendment No. 2 to Amended and Restated License Agreement by and between the Company and the University of Rochester, dated as of May 30, 2024.

10.2*†		Sixth Amendment to License Agreement by and between the Company and President and Fellows of Harvard College, dated as of August 28, 2024.

31.1*		Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*+		Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)


	SANA BIOTECHNOLOGY, INC.

Date: November 8, 2024	By:	/s/ Steven D. Harr, M.D.
		Steven D. Harr, M.D.
		President and Chief Executive Officer (Principal Executive Officer and Principal Financial Officer, and duly authorized to sign on behalf of the registrant)


	普通股				额外实收			积累其他全面			积累			股东总数
	股份		量		资本			损失			赤字			股权
截至2022年12月31日余额		191,022	$	19	$	1,558,459		$	(4,327	)	$	(1,054,836	)	$	499,315
与市场发售时发行普通股相关的费用		-		-		(200	)		-			-			(200	)
限制性股票的归属		154		-		-			-			-			-
股票期权的行使		233		-		331			-			-			331
基于股票的补偿费用		-		-		8,751			-			-			8,751
待售未实现收益证券，净值		-		-		-			2,188			-			2,188
净亏损		-		-		-			-			(82,123	)		(82,123	)
截至2023年3月31日余额		191,409	$	19	$	1,567,341		$	(2,139	)	$	(1,136,959	)	$	428,262
在市场发售时发行普通股，扣除发行成本美金985		4,586		1		27,247			-			-			27,248
限制性股票的归属		119		-		-			-			-			-
股票期权的行使		357		-		691			-			-			691
与员工股票购买计划相关的普通股发行		409		-		1,705			-			-			1,705
基于股票的补偿费用		-		-		9,848			-			-			9,848
待售未实现收益证券，净值		-		-		-			1,274			-			1,274
净亏损		-		-		-			-			(113,999	)		(113,999	)
截至2023年6月30日余额		196,880	$	20	$	1,606,832		$	(865	)	$	(1,250,958	)	$	355,029
与市场发售时发行普通股相关的费用		-		-		(19	)		-			-			(19	)
限制性股票的归属		81		-		-			-			-			-
股票期权的行使		103		-		192			-			-			192
基于股票的补偿费用		-		-		9,003			-			-			9,003
待售未实现收益证券，净值		-		-		-			663			-			663
净收入		-		-		-			-			984			984
截至2023年9月30日余额		197,064	$	20	$	1,616,008		$	(202	)	$	(1,249,974	)	$	365,852


	截至9月30日的九个月，
	2024			2023
运营活动：
净亏损	$	(217,690	)	$	(195,138	)
将净亏损与经营活动中使用的净现金进行调节的调整：
折旧		11,698			13,293
基于股票的补偿费用		31,242			27,602
或有对价的估计公允价值变化		2,250			(47,223	)
成功付款负债估计公允价值的变化		2,316			(8,593	)
经营租赁使用权资产的非现金费用		7,501			10,031
其他非现金项目，净额		(7,853	)		(9,962	)
经营资产和负债变化：
预付费用和其他资产		(6,781	)		5,560
经营租赁使用权资产和负债		7,591			2,129
应付帐款		(904	)		2,363
应计费用和其他负债		(5,362	)		(1,685	)
经营活动所用现金净额		(175,992	)		(201,623	)
投资活动：
购买有价证券		(212,988	)		(131,617	)
有价证券到期收益		216,347			294,305
购买财产和设备		(32,994	)		(5,986	)
投资活动提供（用于）的净现金		(29,635	)		156,702
融资活动：
员工股票购买计划和行使股票期权的收益		10,306			2,919
股权融资发行普通股所得收益，净额		181,000			27,009
租户改善贷款收益，净		7,800			-
融资活动提供的净现金		199,106			29,928
现金、现金等值物和限制性现金净减少		(6,521	)		(14,993	)
现金、现金等值物和期末限制现金		137,349			187,273
期末现金、现金等值物和限制现金	$	130,828		$	172,280
补充现金流量信息：
为换取租赁义务而获得的经营租赁使用权资产	$	-		$	8,984
计入应付帐款和应计负债的财产和设备购买	$	258		$	9,933
收到的租户改善津贴现金	$	7,344		$	2,298
因租赁终止而终止确认经营租赁使用权资产	$	-		$	(14,204	)
因租赁修改而终止确认经营租赁使用权资产	$	(6,362	)	$	-


	2024年9月30日			2023年12月31日
	(in数千）
实验室设备	$	56,632		$	51,643
租赁物业装修		33,847			31,361
在建工程		40,229			26,332
计算机设备、软体和其他		5,061			3,124
财产和设备总数，按成本计算		135,769			112,460
减：累计折旧		(52,943	)		(41,771	)
财产和设备，净值	$	82,826		$	70,689


	截至9月30日的三个月，
	2024		2023		变化
	(in数千）
研究和实验室	$	6,423	$	12,482	$	(6,059	)
人员		22,391		27,083		(4,692	)
第三方制造		1,799		5,374		(3,575	)
设施和其他分配费用		15,168		16,529		(1,361	)
临床开发		5,938		2,442		3,496
其他		1,487		1,703		(216	)
研发费用总额	$	53,206	$	65,613	$	(12,407	)