UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO |
Commission File Number
(Exact name of Registrant as specified in its Charter)
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES
The number of shares of registrant’s common stock outstanding as of May 4, 2021 was
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements reflect, among other things:
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our current expectations and anticipated results of operations; |
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our expectations regarding the initiation, timing, progress and results of our research and development programs and preclinical and clinical studies, including our intention to file an Investigational New Drug, or IND, application for BEAM-101 during the second half of 2021, our plans to initiate IND-enabling studies for BEAM-102 and BEAM-201 during 2021, and our belief that we are on track to nominate our first development candidate from our liver portfolio in the second half of 2021; |
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our ability to develop a sustainable portfolio; |
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our ability to create a hub for partnering with other companies; |
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our plans for pre-clinical studies for product candidates in our pipeline; |
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our ability to advance any product candidates that we may develop and successfully complete any clinical studies, including the manufacture of any such product candidates; |
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our ability to pursue a broad suite of clinically validated delivery modalities; |
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our expectations regarding our ability to generate additional novel LNPs that we believe could accelerate novel nonviral delivery of gene editing payloads to tissues beyond the liver and our ability to expand the reach of gene editing, including as a result of our acquisition of Guide Therapeutics; |
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the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology; |
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developments related to our competitors and our industry; |
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the expected timing, progress and success of our collaborations with third parties and our ability to identify and enter into future license agreements and collaborations; |
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developments related to base editing technologies; |
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our ability to successfully develop our three distinct pipelines and obtain and maintain approval for our product candidates; |
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our ability to successfully establish and maintain a commercial-scale current Good Manufacturing Practice, or cGMP, manufacturing facility and that this facility will be operational in 2023; |
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regulatory developments in the United States and foreign countries; |
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our ability to attract and retain key scientific and management personnel; |
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our expectations regarding the strategic and other potential benefits of our acquisition of Guide Therapeutics, and |
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the impact of the coronavirus disease of 2019, or COVID-19, pandemic on our business. |
All of these statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, market trends, or industry results to differ materially from those expressed or implied by such forward-looking statements. Therefore, any statements contained herein that are not statements of historical fact may be forward-looking statements and should be evaluated as such. Without limiting the foregoing, the words “anticipate,” “expect,” “suggest,” “plan,” “believe,” “intend,” “project,” “forecast,” “estimates,” “targets,” “projections,” “should,” “could,” “would,” “may,” “might,” “will,” and the negative thereof and similar words and expressions are intended to identify forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in “Risk Factors” in Part II, Item 1A of this report. Unless legally required, we assume no obligation to update any such forward-looking information to reflect actual results or changes in the factors affecting such forward-looking information.
When we use the terms “Beam,” the “Company,” “we,” “us” or “our” in this Quarterly Report on Form 10-Q, we mean Beam Therapeutics Inc. and its subsidiaries on a consolidated basis, unless the context indicates otherwise.
Table of Contents
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Page |
PART I |
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Item 1. |
1 |
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1 |
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Condensed Consolidated Statements of Operations and Other Comprehensive Loss |
2 |
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3 |
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5 |
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7 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
22 |
Item 3. |
33 |
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Item 4. |
33 |
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PART II |
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Item 1. |
34 |
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Item 1A. |
34 |
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Item 2. |
38 |
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Item 6. |
39 |
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Beam Therapeutics Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands, except share and per share amounts)
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March 31, 2021 |
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December 31, 2020 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Marketable securities |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Restricted cash |
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Operating lease right-of-use assets |
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Other assets |
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Total assets |
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$ |
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$ |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued expenses and other current liabilities |
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Derivative liabilities |
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Current portion of lease liability |
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Current portion of equipment financing liability |
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Total current liabilities |
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Long-term lease liability |
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Long-term equipment financing liability |
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Contingent consideration liabilities |
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— |
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Other liabilities |
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Total liabilities |
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Commitments and contingencies (See Note 7, Leases, Note 9, License agreements and Note 10, Collaboration and license agreements) |
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Stockholders’ equity: |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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( |
) |
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( |
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Accumulated deficit |
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( |
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( |
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Total stockholders’ equity |
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Total liabilities, redeemable convertible preferred stock, and stockholders’ equity |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
1
Beam Therapeutics Inc.
Condensed Consolidated Statements of Operations and Other Comprehensive Loss
(Unaudited)
(in thousands, except share and per share amounts)
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Three Months Ended March 31, |
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2021 |
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2020 |
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License revenue |
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$ |
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$ |
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Operating expenses: |
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Research and development |
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General and administrative |
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Total operating expenses |
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Loss from operations |
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( |
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( |
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Other income (expense): |
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Change in fair value of derivative liabilities |
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( |
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( |
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Change in fair value of contingent consideration liabilities |
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( |
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— |
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Interest and other income, net |
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Total other income (expense) |
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( |
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Net loss |
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$ |
( |
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$ |
( |
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Unrealized loss on marketable securities |
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( |
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( |
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Comprehensive loss |
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$ |
( |
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$ |
( |
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Reconciliation of net loss to net loss attributable to common stockholders: |
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Net loss |
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$ |
( |
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$ |
( |
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Accretion of redeemable convertible preferred stock to redemption value, including dividends on preferred stock |
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— |
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( |
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Net loss attributable to common stockholders |
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$ |
( |
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$ |
( |
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Net loss per common share attributable to common stockholders, basic and diluted |
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$ |
( |
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$ |
( |
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Weighted-average common shares used in net loss per share attributable to common stockholders, basic and diluted |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
2
Beam Therapeutics Inc.
Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ (Deficit) Equity
(Unaudited)
(in thousands, except share amounts)
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Redeemable Convertible Preferred Stock |
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Common Stock |
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Additional Paid-in |
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Accumulated Other Comprehensive |
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Accumulated |
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Total Stockholders’ (Deficit) |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Loss |
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Deficit |
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Equity |
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Balance at December 31, 2019 |
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$ |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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Accretion of redeemable convertible preferred stock to redemption value |
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— |
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— |
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— |
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( |
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— |
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— |
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( |
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Conversion of redeemable convertible preferred stock to common stock upon closing of initial public offering |
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( |
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( |
) |
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— |
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— |
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Issuance of common stock from initial public offering, net of issuance costs of $ |
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— |
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— |
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— |
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— |
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Vesting of restricted common stock |
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— |
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— |
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( |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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Exercise of common stock options |
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— |
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— |
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— |
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— |
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Other comprehensive loss |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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( |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Balance at March 31, 2020 |
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— |
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$ |
— |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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3
Beam Therapeutics Inc.
Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ (Deficit) Equity - Continued
(Unaudited)
(in thousands, except share amounts)
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Common Stock |
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Additional Paid-in |
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Accumulated Other Comprehensive |
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Accumulated |
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Total Stockholders’ |
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Shares |
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Amount |
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Capital |
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Loss |
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Deficit |
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Equity |
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Balance at December 31, 2020 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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Issuance of common stock from private placement, net of issuance costs of $ |
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— |
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— |
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Issuance of common stock to acquire Guide |
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— |
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— |
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Vesting of restricted common stock |
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( |
) |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Exercise of common stock options |
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— |
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— |
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Other comprehensive loss |
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— |
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— |
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— |
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( |
) |
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— |
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( |
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Net loss |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Balance at March 31, 2021 |
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$ |
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$ |
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$ |
( |
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$ |
( |
) |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
4
Beam Therapeutics Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
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Three Months Ended March 31, |
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2021 |
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2020 |
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Operating activities |
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Net loss |
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$ |
( |
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$ |
( |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization |
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Amortization of investment discount (premiums) |
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( |
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In-process research and development charge |
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— |
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Stock-based compensation expense |
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Change in operating lease right-of-use assets |
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Non-cash research and development license expense, net |
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— |
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Change in fair value of derivative liabilities |
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Change in fair value of contingent consideration liabilities |
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— |
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Other |
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( |
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— |
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Changes in operating assets and liabilities: |
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Prepaid expenses and other current assets |
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( |
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( |
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Other long-term assets |
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( |
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( |
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Accounts payable |
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( |
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( |
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Accrued expenses and other liabilities |
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( |
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Operating lease liabilities |
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( |
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Other long-term liabilities |
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( |
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( |
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Net cash used in operating activities |
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( |
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( |
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Investing activities |
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Purchases of property and equipment |
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( |
) |
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( |
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Purchases of marketable securities |
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( |
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( |
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Maturities of marketable securities |
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Net cash acquired from Guide |
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— |
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Purchase of long-term investment |
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— |
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( |
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Net cash used in investing activities |
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( |
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( |
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Financing activities |
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Proceeds from initial public offering, net of underwriting discount |
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— |
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Proceeds from offering of common stock |
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— |
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Payment of equity offering costs |
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( |
) |
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( |
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Proceeds from equipment financings |
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— |
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Repayment of equipment financings |
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( |
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( |
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Proceeds from exercise of stock options |
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Net cash provided by financing activities |
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Net change in cash, cash equivalents and restricted cash |
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( |
) |
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Cash, cash equivalents and restricted cash—beginning of period |
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Cash, cash equivalents and restricted cash—end of period |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
5
Beam Therapeutics Inc.
Condensed Consolidated Statements of Cash Flows - Continued
(Unaudited)
(in thousands)
|
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Three Months Ended March 31, |
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2021 |
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2020 |
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Supplemental disclosure of cash flow information: |
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Cash paid for interest |
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$ |
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$ |
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Supplemental disclosure of noncash investing and financing activities: |
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Conversion of redeemable convertible preferred stock to common stock upon closing of the initial public offering |
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$ |
— |
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$ |
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Property and equipment additions in accounts payable and accrued expenses |
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$ |
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$ |
|
|
Operating lease liabilities arising from obtaining right-of-use assets |
|
$ |
|
|
|
$ |
|
|
Equity issuance costs in accounts payable and accrued expenses |
|
$ |
|
|
|
$ |
|
|
Contingent consideration liabilities assumed in asset acquisition |
|
$ |
|
|
|
$ |
— |
|
Fair value of equity instruments issued in connection with asset acquisition |
|
$ |
|
|
|
$ |
— |
|
Accretion of redeemable convertible preferred stock to redemption value, including dividends on preferred stock |
|
$ |
— |
|
|
$ |
|
|
The accompanying notes are an integral part of these condensed consolidated financial statements
6
Beam Therapeutics Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
1. Nature of the business and basis of presentation
Organization
Beam Therapeutics Inc. (the “Company” or “Beam”) is a biotechnology company committed to establishing the leading, fully integrated platform for precision genetic medicines. Beam’s vision is to provide life-long cures to patients suffering from genetic diseases. The Company was incorporated on January 25, 2017 (Inception) as a Delaware corporation and began operations in July 2017. Its principal offices are in Cambridge, Massachusetts.
In February 2021, the Company entered into an Agreement and Plan of Merger (“the Guide Merger Agreement”) to acquire Guide Therapeutics, or Guide. Pursuant to the Guide Merger Agreement,
Liquidity and capital resources
Since its inception, the Company has devoted substantially all of its resources to building its base editing platform and advancing development of its portfolio of programs, establishing and protecting its intellectual property, conducting research and development activities, organizing and staffing the Company, business planning, raising capital and providing general and administrative support for these operations. The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry including, but not limited to, technical risks associated with the successful research, development and manufacturing of product candidates, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Current and future programs will require significant research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure. Even if the Company’s drug development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.
In February 2020, the Company completed its initial public offering, or IPO, in which the Company issued and sold
In October 2020, the Company issued and sold
On January 16, 2021, the Company entered into a Securities Purchase Agreement with certain purchasers, pursuant to which the Company agreed to sell and issue to the purchasers, in a private placement, shares of common stock of the Company. The closing of the private placement occurred on January 21, 2021. The Company issued and sold
Since its inception, the Company has incurred substantial losses and had an accumulated deficit of $
The Company expects that its cash, cash equivalents, and marketable securities as of March 31, 2021 of $
7
COVID-19-related significant risks and uncertainties
With the ongoing concern related to the COVID-19 pandemic during 2020 and in the first three months of 2021, the Company has maintained and expanded its business continuity plans to address and mitigate the impact of the COVID-19 pandemic on its business. In March 2020, to protect the health of its employees, and their families and communities, the Company restricted access to its offices to personnel who performed critical activities that must be completed on-site, limited the number of such personnel that could be present at its facilities at any one time, and requested that most of its employees work remotely. In May 2020, as certain states eased restrictions,
The extent to which the COVID-19 pandemic impacts the Company’s business, its corporate development objectives, results of operations and financial condition, and the value of and market for its common stock, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements, and the effectiveness of actions taken globally to contain and treat the disease. Disruptions to the global economy, disruption of global healthcare systems, and other significant impacts of the COVID-19 pandemic could have a material adverse effect on the Company’s business, financial condition, results of operations and growth prospects.
While the COVID-19 pandemic did not significantly impact the Company’s business or results of operations during the three months ended March 31, 2021, the length and extent of the pandemic, its consequences, and containment efforts will determine the future impact on the Company’s operations and financial condition.
2. Summary of significant accounting policies
The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2020, and notes thereto, which are included in the Company’s Annual Report on Form 10-K that was filed with the Securities and Exchange Commission on March 15, 2021. Since the date of those financial statements, there have been no material changes to Beam’s significant accounting policies except as noted below.
Basis of presentation
The accompanying condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles, or GAAP. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification, or ASC, and Accounting Standards Update, or ASU, of the Financial Accounting Standards Board, or FASB.
Principles of consolidation
The accompanying condensed consolidated financial statements include the results of operations of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.
Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses, the determination of the fair value equity instruments and intangible assets acquired in an asset acquisition, and the disclosure of contingent assets and liabilities as of and during the reporting period. The Company bases its estimates and assumptions on historical experience, when available, and on various factors that it believes to be reasonable under the circumstances. The Company evaluates its estimates and assumptions on an ongoing basis. Actual results could differ from these estimates.
Cash, cash equivalents, and restricted cash
Cash and cash equivalents consist of standard checking accounts, money market accounts, and all highly liquid investments with a remaining maturity of three months or less at the date of purchase. Restricted cash represents collateral provided for letters of credit issued as security deposits in connection with the Company’s leases of its corporate and manufacturing facilities.
8
The following table reconciles cash, cash equivalents, and restricted cash reported within the Company’s condensed consolidated balance sheets to the total of the amounts shown in the condensed consolidated statements of cash flows (in thousands):
|
|
March 31, 2021 |
|
|
March 31, 2020 |
|
||
Cash and cash equivalents |
|
$ |
|
|
|
$ |
|
|
Restricted cash |
|
|
|
|
|
|
|
|
Total cash, cash equivalents, and restricted cash |
|
$ |
|
|
|
$ |
|
|
Asset Acquisitions
In 2018, the Company adopted ASU 2017-01, Business Combinations, or ASU 2017-01, which clarified the definition of a business. The Company measures and recognizes asset acquisitions that are not deemed to be business combinations based on the cost to acquire the assets, which includes transaction costs, and the consideration is allocated to the items acquired based on a relative fair value methodology. Goodwill is not recognized in asset acquisitions. In an asset acquisition, the cost allocated to acquire in-process research and development with no alternative future use is charged to research and development expense at the acquisition date.
At the time of acquisition, the Company determines if a transaction should be accounted for as a business combination or acquisition of assets.
Contingent Consideration Liabilities
The estimated fair value of contingent consideration liabilities, initially measured and recorded on the acquisition date, are considered to be a Level 3 instrument and are reviewed quarterly, or whenever events or circumstances occur that indicate a change in fair value. The contingent consideration liabilities are recorded at fair value at the end of each reporting period with changes in estimated fair values recorded in other income (expense) in the condensed consolidated statements of operations.
The estimated fair value is determined based on probability adjusted discounted cash flow models that include significant estimates and assumptions pertaining to technology and product development. Significant changes in any of the probabilities of success would result in a significantly higher or lower fair value measurement. Significant changes in the probabilities as to the periods in which milestones will be achieved would result in a significantly lower or higher fair value measurement.
Recent accounting pronouncements
In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements, or ASU 2018-18, which clarifies certain transactions between collaborative arrangement participants should be accounted for as revenue when the collaborative arrangement participant is a customer in the context of a unit of account and precludes recognizing as revenue consideration received from a collaborative arrangement participant if the participant is not a customer. ASU 2018-18 became effective for the Company on
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, or ASU 2016-13, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes may result in earlier recognition of credit losses. The Company adopted ASU 2016-13 on
9