Editas Medicine, Inc.

TABLE OF CONTENTSCONTENTS

References to Editas

Throughout this Annual Report on Form 10-K, the “Company,” “Editas,” “Editas Medicine,” “we,” “us,” and “our,” except where the context requires otherwise, refer to Editas Medicine, Inc. and its consolidated subsidiary, and “our board of directors” refers to the board of directors of Editas Medicine, Inc.

Special Note Regarding Forward-Looking Statements and Industry Data

This Annual Report on Form 10-K contains forward-looking statements regarding, among other things, our future discovery and development efforts, our future operating results and financial position, our business strategy, and other objectives for our operations. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. There are a number of important risks and uncertainties that could cause our actual results to differ materially from those indicated by forward-looking statements. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Annual Report on Form 10-K, particularly in the section entitled “Risk Factors” in Part I that could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments that we may make.

You should read this Annual Report on Form 10-K and the documents that we have filed as exhibits to this Annual Report on Form 10-K completely and with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained in this Annual Report on Form 10-K are made as of the date of this Annual Report on Form 10-K,and we do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

This Annual Report on Form 10-K includes statistical and other industry and market data, which we obtained from our own internal estimates and research, as well as from industry and general publications and research, surveys, and studies conducted by third parties. Industry publications, studies, and surveys generally state that they have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe that each of these studies and publications is reliable, we have not independently verified market and industry data from third‑party sources. While we believe our internal company research is reliable and the market definitions are appropriate, neither such research nor these definitions have been verified by any independent source.

PART I

ITEMItem 1.  Business

Overview

We are a leading genome editing company dedicated to treating patientsdeveloping transformative genomic medicines with genetically defined diseasesthe aim to treat a broad range of serious diseases. The promise of genomic medicines is supported by correcting their disease‑causing genes.the advancing knowledge of the human genome, and harnessing the progress in technologies for cell therapy, gene therapy, and, most recently, genome editing. We believe that wethis progress sets the stage for us to create unprecedented medicines with the potential to have entered a new era of genomic medicine asdurable benefit for patients. At Editas Medicine, our core capability in genome editing uses the growth of genomic information in recent decades has significantly expanded the understanding of genetically defined diseases. A new technology known as CRISPR (clustered, regularly interspaced, short palindromic repeats)/Cas9 (CRISPR associated protein 9) has the potential to achieve precise, directed changes in with which we can create molecules that efficiently and specifically edit DNA. The confluence of these two streams of scientific endeavor, understanding genetic defects and having the tools to be able to address them, creates the opportunity for us to achieve a longstanding goal of medicine: to treat the root causes of diseases at the genetic level. Our mission is to translate the promise of ourthis science into a broad class of transformative genomic medicines to benefithelp people living with serious diseases around the greatest number of patients.world.

We are developinghave developed a proprietary genome editing platform based on CRISPR/Cas9 technology. CRISPR/Cas9CRISPR technology and we continue to expand its capabilities. CRISPR uses a protein‑RNA complex composed of thean enzyme, including either Cas9 enzyme(CRISPR associated protein 9) or Cpf1 (CRISPR from Prevotella and Francisella 1), bound to a guide RNA molecule designed to recognize a particular DNA sequence. Once the complex binds to the DNA sequence that requires repair. Once there,it was designed to recognize, the complex makes a specific cut in the DNA, ultimately triggering the cell’s DNA repair machinery to addresschange the genetic defect.targeted sequence. Our platform consists of four interrelated components: nuclease and guide RNA engineering, delivery, control and specificity, and directed editing. These interrelated components are designed to develop medicines that specifically address a wide variety of genetic targets, reach the site of disease safely and effectively, tightly and specifically control the editing process, and drive the right kind of genetic repair. Our preclinical drug discovery

We believe we are the only human genome editing company with a platform uses the flexibilitythat includes CRISPR/Cas9, CRISPR/Cpf1, and engineered forms of CRISPR/Cas9 technology to enable rapid reprogrammingboth of these CRISPR systems. Because of the Cas9‑guide RNA complex with the potential to direct it tobroad nature of this platform, we believe we can create genome editing molecules for almost any site in the human genome. Using thisEach of our product candidates derives from our platform, and we aimplan to developcontinue to use our platform to create and advance a broad range of therapiesexperimental medicines for both genetically defined and genetically treatable diseases.

Our initial product development strategy is to primarily target genetically defined diseases with an initiala focus on debilitating illnesses where there are poor or no approved treatments and where the genetic basis of disease is well understood. WeA genetically defined disease may be treated by correcting a disease causing gene, whereas a genetically treatable disease is a disease that does not necessarily have a single, disease causing gene, but which nonetheless may be treated by editing genes to ameliorate or eliminate the signs or symptoms of that disease.  While our discovery efforts have ranged across several different diseases and therapeutic areas, the two areas where our programs are advancing over a dozen discovery research programs that we have selected based onmore mature are ocular diseases and engineered cell medicines.

 In ocular diseases, our assessment of the structure of the genetic mutation and edit required, our ability to deliver the product candidate to the site of disease, the severity of the disease, the ability to identify appropriate patients, and the availability of informative preclinical assays and models and suitable clinical endpoints. Our most advanced research program is designed to address Leber Congenital Amaurosis type 10 or LCA10,(“LCA10”), which is a specific genetic form of progressivevision loss that leads to blindness within childhood. LCA10 has no availableapproved therapies or potential treatments in clinical trials in either the United States or European Union. The localizationUnion, and we are aware of only one potential treatment in clinical trials in the United States and Europe. LCA10 patients have a mutation in the CEP290 gene that causes the disease. We have demonstrated that our lead product candidate, EDIT-101, can achieve high levels of editing of the CEP290 gene in human retinal tissue that has been explanted and maintained in vitro and in the retinas of non-human primates in vivo.  We have initiated a clinical natural history study to evaluate the clinical course and characteristics of LCA10 disease in the eye allows us to efficiently apply our technology in a context that is confinedmore extensively, and relatively uncomplicated compared to many of the systemic illnesses we also anticipate treating over time. We aim to initiate a clinical trial in this program in 2017.file an investigational new drug application (“IND”) by mid-2018 for EDIT-101. We believe achievement of proof‑of‑conceptresults to date in a disease of the eye has the potential toLCA10 validate our platform technology, including its potential application to other ocular diseases, such as Usher Syndrome 2A (“USH2A”) and recurrent ocular Herpes Simplex Virus 1 (“HSV-1”) infection, as well as diseases of other organs and tissues.

In March 2017 we entered into a strategic alliance and option agreement with Allergan Pharmaceuticals International Limited (“Allergan”), which we believe has the potential to expand and enhance our research and development efforts for ocular diseases. Our additional research programs address genetic, infectious,Under this agreement, Allergan received exclusive access and oncologic diseasesthe option to license up to five of the liver, lung, blood, eye, and muscle.

We believe our genome editing technologiesocular programs, including our lead program for LCA10, and will be responsible for development and commercialization of any program with respect to which it exercises its option. For

LCA10 and one additional program, we retain the option to co-develop and co-commercialize products in the United States. We received an upfront payment of $90.0 million and have the potential to receive greater than $1.0 billion in contingent milestone payments, as well as high single-digit royalties. With Allergan, we aim to advance a broad portfolio of first-in-class genome editing medicines to treat serious diseases of the eye.

In addition to developing medicines for ocular diseases, the development of engineered cell medicines is a core part of our research effort and product pipeline. We believe that advances in genome editing will both improve the characteristics of current cellular therapies, including engineeredmedicines and also expand the universe of cellular medicines that can be created. To this end, we have developed capabilities to efficiently and specifically edit T cells and hematopoietic stem cells, which we believe have the potential to treat cancer. To realize this potential, inlead to best-in-class medicines for cancer and hemoglobinopathies. More broadly, we believe that our editing capabilities can be applied to many additional cell types.

In May 2015 we entered intoestablished a collaboration with Juno Therapeutics, a leader inInc. (“Juno Therapeutics”) to develop engineered T cell medicines for cancer. These therapies have the emergingpotential to substantially advance the field of immuno‑oncology.cancer immunotherapy and expand the range of cancers that can be treated with engineered T cells. Under the collaboration, we received an upfront payment of $25.0 million, and we have received two milestone payments totaling $5.0 million related to technical progress in research programs under the collaboration. We also have the potential to receive approximately $700.0 million in aggregate in potential milestone payments, as well as tiered royalties. In addition, we are eligible to receive research support of up to $22.0 million over athe initial five year period across three programs and approximately $700 millionresearch term, subject to adjustment in aggregate in potential research, regulatory, and commercial sales milestone payments for eachaccordance with the terms of the first products developedcollaboration.

We are also developing multiple gene editing approaches to treating hemoglobinopathies. These programs take advantage of our genome editing capabilities in each ofhematopoietic stem cells (“HSCs”), which include two distinct genome editing approaches at the three research programs. By working with Juno Therapeutics, we hope that together we will be able to discover and develop the next generation of engineered T cell therapies that have the potential to substantially advance the field of cancer immunotherapy.hemoglobin gene locus. We believe this collaboration exemplifies our strategyone or both of selectively establishing alliances with leaders in their fields to realize the full therapeutic potential of genome editing.

We believe that our values, culture, and team are critical to our success. The lifeblood of our company is exceptional scientists and company‑builders with experience across leading biopharmaceutical companies and academic research laboratories. Our company is distinguished by our team’s substantial experience in translating groundbreaking scientific platforms into therapeutic products and product candidates in many different diseases. This experience extends to our board of directors, which is composed of people with deep experience in guiding biotechnology companies through rapid growth and the development of complex, breakthrough science.

Our Strategy

and Long Term Goals

We aim to transform the treatment of a broad range of genetically definedserious diseases by building an integrated genomic medicine company focused on creating a novel class of therapeutics to meet patients’ needs.company. Key elements of our strategy are to:

transfers new DNA into cells, however it does not remove or modify the defective DNA and it generally introduces the new genetic material in a location where it is not subject to the cell’s normal control and feedback mechanisms. This approach is suited for a finite set of genetically defined diseases.

diseases

Genome editing is the process of revising, removing, or repairing defective DNA in situ. GenomeIn general, genome editing corrects the defective DNA in its native location, and consequently the repaired genetic region retains the cell’s normal control and feedback mechanisms. Genome editing typically takes advantage of naturally occurring DNA repair mechanisms, including non-homologous end joining (“NHEJ”) and homology directed repair (“HDR”), to achieve its desired therapeutic outcome. Edits that are repaired by NHEJ typically disrupt a gene or eliminate a disease causing mutation. Edits that are repaired by HDR, including targeted insertion, aim to correct or replace aberrant DNA sequences. The diversity of genetic drivers of disease demands a variety of solutions. Genome editing has the potential to deliver a variety of types of genome modification to address a broad range of genetically defined diseases.

At its core, genome editing is a two‑step process. In the first step, an enzyme is brought to the desired site and makes a specific cut. This enzyme, which is called a DNA endonuclease, is capable of cutting one or both strands in the double‑stranded DNA. After the desired cut or cuts are made, the cell’s DNA repair machinery responds to complete the edit through one of two possible mechanisms—non‑homologous end joining or homology directed repair—that can be harnessed for therapeutic effect in a range of ways. These types of edits could be applied to one or both alleles of the gene in the cell depending on the nature of the mutation.

We believe that the developments we have made in our genome editing platform position us to be able to identify and develop innovative genome editing therapies targeting a wide variety of diseases. All of our programs to develop medicines leverage aspects of this platform while also providing insights that help improve our ongoing and future drug development capabilities. We believe our genome editing platform forms the basis for our ongoing leadership in the field and differentiates us from other companies working in genome editing.

Nuclease and Guide RNA Engineering

We use our genome editing platform to identify and optimize both the enzyme, including Cas9 and Cpf1, as well as advanced forms of each, and the guide RNA molecule, to create what we believe will be the optimal endonuclease‑guide RNA complex for a given disease target. We have made substantial advances in the characterization and modification of different natural and engineered variants of Cas9 and Cpf1 enzymes and in the design, synthesis, modification, analysis, and characterization of guide RNAs. We believe the diversity of the Cas9 and Cpf1 enzymes that we are currently employing and those that we are continuing to further develop and characterize have the potential to provide us with a competitive advantage as we develop a range of products with different technical needs. We believe our systematic approach to measurement of both the efficiency and specificity of multiple possible enzyme and guide RNA combinations enables us to optimize the identification of lead molecules to progress into more advanced testing. Our aim is to continue to develop new engineered Cas9 and Cpf1 enzymes with altered PAM specificities, different DNA cutting capabilities, and additional advanced properties. For example, we are using directed evolution, a form of guided protein engineering, to develop Cas9 enzymes that have higher fidelity than naturally occurring Cas9. We believe that further developing medicines based on CRISPR/Cas9 technology provides opportunities across aour nuclease and guide RNA engineering capabilities will allow us to further broaden the range of diseases we can treat while at the same time ensuring that our products have the best possible safety profiles.

We have characterized different genetically defined diseases. We aimCas9 and Cpf1 enzymes for several reasons. Firstly, a smaller enzyme will have advantages for delivering the endonuclease using a viral vector due to developthe inherent size limitations of most such delivery systems. For example, the Cas9 enzyme from Staphylococcus aureus (“S. aureus” or “SaCas9”) is significantly smaller than that from Streptococcus pyogenes (“S. pyogenes” or “SpCas9”) (3,159 vs. 4,104 base pairs), and commercialize biologic medicines for patientsthis is important when working with these typesadeno-associated virus (“AAV”) as a delivery vector, which has an effective packaging limit of diseases. Where appropriate or necessary,approximately 4,700 base pairs. Secondly, identifying Cas9 and Cpf1 enzymes with different editing properties will expand the number of potential editing sites in the human genome. As shown below, the range of natural and engineered variants of Cas9 and Cpf1 have significantly expanded the number of sites in the human genome that we may do socan potentially target. As compared to the most commonly used, naturally occurring version of Cas9, from the bacterial species S. pyogenes, the range of endonucleases in collaboration with strategic partners. If successful,our platform can target approximately ten times as many genomic sites. Thus, while the S. pyogenes Cas9 can target approximately 1 in 10 bases in the human genome, we believe our research programs have the potential to yield therapies comprising a combinationhit over 95% of elements that may include protein, DNA, and RNA components, which are collectively often referredall bases due to as biologics, and which differ from traditional small molecule pharmaceuticals in their greater complexity of manufacturing and delivery. As shown below, as we expand the technical capabilities of our platform, the number of potential patients andwide range of diseases that can potentially be addressed will grow. Our first programs to develop genome editing medicines take advantage of the efficiency of making either NHEJ‑mediated indels or NHEJ‑mediated deletions of small segments between two cuts. Over time, we expect to expand the repertoire of clinically feasible edits, including increasing larger NHEJ‑mediated deletions and more complex, HDR‑mediated edits. We also intend to develop the ability to achieve HDR‑mediated replacement of entire DNA segments, which we believe will enable substantial expansion of the number of patients we can treat.

endonucleases at our disposal.

In this chart, each figure is intended to represent approximately 5,000 potential patients.

Comparison of Number of Genomic Sites Targetable by Various Enzymes and Variants

In order to accelerate and standardize the selection of guide RNAs, we have created proprietary analytical software that supports guide RNA design through single nucleotide polymorphism analysis, specificity prediction, and assessment of relative importance of potential off target sites.

Of critical importance in determining the activity and specificity of an endonuclease-guide RNA complex is understanding the quality and composition of the guide RNA. The ability to understand the quality and composition of the guide RNA will be an essential component to developing product candidates that have the potential to be safe and efficacious medicines. We have developed significant analytical and synthetic capabilities as a result of acquiring assets and capabilities of i2 Pharmaceuticals, Inc. and certain of its affiliated companies in January 2018. In addition to state of the art mass spectrometry and sequencing methodologies to understand the absolute composition of our guide RNAs, we have developed two-step synthesis methods which results in guide RNAs which we believe are significantly superior to those generated by other approaches. This method allows us to independently synthesize and purify guide RNAs in multiple parts and covalently couple them using a proprietary catalyst-free chemistry. These covalently coupled, dual guide RNAs retain the advantages afforded by a single guide RNA and we believe are of higher quality than a guide RNA made by a single synthesis reaction. We believe this method will lead to higher quality genome editing medicines.

Delivery

Our genome editing platform includes multiple modular delivery modes that can be efficiently adapted to deliver different CRISPR genome editing components to address the specific needs of each disease targeted. Our strategy is to leverage existing delivery technologies to target cell types of interest while developing next generation capabilities as warranted. We are currently exploring, and will continue to explore, a variety of delivery approaches, including AAVs, lipid nanoparticles (“LNPs”), and the use of electroporation. For example, we have taken advantage of the smaller S. aureus Cas9 and existing AAV technology to construct an “all‑in‑one” viral vector that is able to deliver the DNA coding for the nuclease protein and one or two guide RNAs directly to cells. We believe our ability to configure all the components for genome editing in an “all‑in‑one” AAV vector has substantial advantages for manufacturing and delivery compared to approaches that rely on multiple vectors. In addition, we have also made substantial advances in the ex vivo delivery of CRISPR systems to mature human T cells and hematopoietic stem cells derived from the bone marrow. We have been able to demonstrate greater than 90% ex vivo editing on multiple genetic targets simultaneously in human T cells and greater than 75% ex vivo editing in hematopoietic stem cells using ribonucleoprotein complexes, which consist of the Cas9 or Cpf1 endonuclease complexed with its guide RNA. These results are consistent across multiple cell donors and multiple target genes.

Control and Specificity

Control of cellular exposure to the endonuclease‑guide RNA complex and specificity of the DNA cut are important to optimizing the location and duration of editing activity. We believe these features are critical to designing medicines that are both safe and effective, and we are developing and applying technologies in these areas. We strive to identify, measure, and eliminate off‑target activity in a systematic and scalable manner as we optimize our molecules. To

accomplish this, we have combined multiple orthogonal methods in the design, testing, and optimization process. Our strategy to assess specificity during the research stage includes:

To optimize the specificity of our product candidates, there are a number of different aspects of the product configuration that we customize in addition to the sequence and quality of the guide RNA, including the length of the guide RNA, the type of Cas9 or Cpf1 enzyme, the delivery vector, the use of tissue‑selective promoters, and the duration of exposure all contribute to overall specificity. For example, to reduce the potential persistence of genome editing activity, we are developing self‑regulating genome editing systems designed to deliver not only the endonuclease‑guide RNA complex, but also an “off switch” that reduces the presence of the endonuclease‑guide RNA complex over time. We have completed studies of these systems that demonstrate the ability to both maintain on‑target editing and also reduce levels of editing components once the on‑target edit is expected to have been completed.

Directed Editing

There are different mechanisms that a cell can use to repair cuts in DNA. Each mechanism results in different kinds of genetic changes. We are developing approaches to selectively harness specific DNA repair mechanisms to be able to drive the appropriate type of repair for a given disease. The ability to direct the DNA repair mechanism and influence the utilization of a DNA repair template is critical to achieving the broadest potential for our platform. We believe that our ability to understand and direct the repair mechanisms used by cells creates opportunities to improve our existing programs and opens up new opportunities to develop medicines, including medicines that rely on specific template utilization events.

We have achieved significant levels of DNA template directed genetic change in ex vivo edited primary human T cells and hematopoietic stem cells. Using long single stranded DNA template molecules, we have achieved greater than 40% directed editing. Using vial donor templates, we have achieved greater than 70% targeted insertion at specific genomic locations. We believe that these advancements will enable us to create medicines that may be superior to traditional gene therapy.

Our Genomic Medicine Programs

We have initiated a diversified range of research programs across multiple therapeutic areas. Since our scientificOur initial product development strategy is to optimizeprimarily target genetically defined diseases with a focus on debilitating illnesses where there

are poor or no approved treatments and where the genetic basis of disease is well understood. While our genome editing platform in the context of specific product developmentdiscovery efforts we selected early programs requiringhave ranged across several different types of genome editingdiseases and DNA repair—both NHEJtherapeutic areas, the two areas where programs are more mature are ocular diseases and HDR. Furthermore, our initial programs use, and will allow us to further optimize, a range of delivery modalities such as local injection, including using an AAV vector, or ex vivo genome modification, where cells are removed from the body, edited, and given back to the patient.engineered cell medicines. We believe the therapeutic programs and delivery technologies we have chosen to date will demonstrate the depth and breadth of our ability to deploy our genome editing platform to treat patients in need. The current statusneed with either genetically defined or genetically treatable diseases. A summary of our programsexperimental medicines under development is summarizedpresented in the table below:

following graphic:

Eye Diseases

We have granted Allergan an exclusive option to exclusively license from us up to five collaboration development programs for the treatment of ocular disorders, including our LCA10 program, subject to our right to elect to participate in a profit-sharing arrangement with Allergan in the United States with respect to our LCA10 program and up to one other collaboration development program. See “Our Collaboration and Licensing Strategy" below for more information.

Leber Congenital Amaurosis 10

Leber Congenital Amaurosis or LCA,(“LCA”) is a heterogeneous group of inherited retinal dystrophies caused by mutations in at least 18 different genes and is the most common cause of inherited childhood blindness, with an incidence of two to three per 100,000 live births worldwide. Symptoms of LCA appear within the first year of life with significant vision loss, rapid involuntary movements of the eyes, painful eye response to bright light, and absence of measurable electroretinogram recordings due to progressive lossa lack of functional photoreceptor cells. Imaging studies of LCA patients have shown that the intracranial visual pathways remain intact into early adulthood even though photoreceptor cells have already experienced damage. As a result, we believe that therapeutic approaches aimed at restoring function of the remaining photoreceptor cells could arrest the further loss of vision in LCA patients, provided that treatment can be initiated prior to complete vision loss.

The most common form of the disease referred to asis LCA10, is a monogenic disorder andthat represents approximately 20‑30%20-30% of all LCA subtypes. LCA10 is caused by an autosomal recessive mutationmutations in the CEP290 gene, CEP290, which encodes a protein required for the survival and proper function of photoreceptor cells. The most frequently found mutation within the CEP290 gene, occurring in approximately 85% of north and west European patients with LCA10, is an A to G nucleotide change that disrupts normal splicing, or processing, of the

normal splicing, or processing, of the gene message, ultimately resulting in the generationa deficiency of a smaller and nonfunctionalfunctional CEP290 protein. Decreased CEP290 functionprotein leads to loss of photoreceptor function and cells over time, which leads to blindness.

We assessed LCA10 comprehensively and found that it fits well with our genome editing approach and criteria to product development. These criteria include:

We are developing a genome editing therapeutic for LCA10 that uses an AAVAAV5 vector to deliver the DNA encoding Cas9 and two guide RNAs to photoreceptor cells in the eye. In order to deliver this therapy directlyOur product candidate is called EDIT-101 and specifically to the site of disease, we are assessing the most well‑established and relevant variants of AAV for retinal delivery. These variants have been shown by others to be effective delivery modalities in clinical trials for various other diseases, including retinal diseases.

therapies for these other eye diseases. For example, the successful construction, packaging, and testing of the components of the AAV vector we are pursuing for LCA10 will continue to inform our approach to treating the most common cause of USH2A.

Herpes Simplex Virus 1

HSV‑1 causes lifelong infections mainly leading to ocular and oral disease. Infected individuals develop persistent latent infections, mainly in the nerves in the affected part of the body. During latency, the HSV‑1 DNA does not integrate into the infected individual’s genome, but rather it remains within the individual’s cells as independent viral genomic material. The latent HSV‑1 virus can then be reactivated by illness, emotional or physical stress, and other conditions. Ocular infection with HSV‑1 is a major health problem, especially in developed countries. It is the most common infectious cause of blindness in developed economies with over 25,000 recurrent cases each year. Recurrent activation of HSV-1 virus causes corneal damage and scarring, which impairs the ability to see. Existing therapies have only partial benefit in preventing the initial HSV‑1 infection or recurrences. As a result, there is a need for an effective therapy that prevents or reduces reactivation of latent HSV‑1. Our ongoing research program aims to deliver the CRISPR molecular machinery to the eye and specifically cleave and inactivate latent HSV‑1 DNA with the goal of eliminating or reducing reactivation.

Usher Syndrome 2a

2A

USH2A gene mutations are the most common cause of Usher syndrome, a form of retinitis pigmentosa. The U.S. population prevalence of Usher syndrome is estimated to be one in 6,000 individuals, and USH2A gene mutations account for an estimated 25‑30% of all cases of Usher syndrome.pigmentosa that also includes hearing loss. Loss of the usherin protein encoded by the USH2A gene leads to a degeneration of the retina and progressive vision loss. More than 200 mutations have been identified for this gene. Our initial goal in this research program is to address mutations within exon 13, which is the location of the highest percentage of USH2A gene mutations. We believe there are approximately 14,000 USH2A patients including up to approximately 4,000 Usher syndrome patients with the mutation we aim to correct.

In addition,proteins are important potential targets for cancer immunotherapy. With Juno Therapeutics, we observed on average approximately 75%have demonstrated in preclinical studies that disruption of the natural T cell viability four days following delivery,receptor combined with the introduction of an Engineered TCR resulted in significantly improved in vitro T cell function. Furthermore, the elimination of the natural T cell receptor (“TCR”) has the potential to make a safer medicine as shown in the figure below.Engineered TCR will not be able to interact with the natural TCR to create new, and potentially unwanted, functionality. We believe this is a sufficiently favorable result to support further advancement of this program.

Cell Viability of Human T Cells Following

Delivery of Cas9‑Guide RNA Complexes

We and Juno Therapeutics have selected a number of targetsinnovation may broaden the therapeutic opportunity for editing using both NHEJ‑ and HDR‑based approaches to evaluate the effects on safety and efficacy of CAR/TCR engineered T cells, both ex vivo and in vivo. These studies are designed to facilitate the selection of therapeutic programs to be pursued under our collaboration with Juno Therapeutics.cells.

Additional Research Programs

Non‑malignant Hematologic Diseases

We intend to developare developing approaches for genome editing in hematopoietic stem cellsHSCs to support the advancement of otherresearch programs to treat non‑malignantnon-malignant hematological diseases. We are investigating the correction of the human beta globin, or HBB, gene in order to treat genetic disorders such as beta thalassemia and sickle cell disease. In an ex vivo study, Cas9‑guide RNA complexes directed against the HBB gene were delivered into hematopoietic stem cells obtained from three separate donors and evaluated against untreated control cells to assess editing activity as well as effects on the cells’ viability, proliferation, and ability to differentiate into different types of blood cells. As shown in the figure below, we observed approximately 55‑60% editing of the HBB gene in cells treated with Cas9‑guide RNA complexes as compared to no editing observed in the control cells. We observed no substantial differences between the treated cells and the untreated control cells in their viability, proliferation, or ability to differentiate into different types of blood cells.

cells will require efficient editing of these cells and development of advanced pulmonary delivery modalities. We planaim to establish multiple collaborations with academics, foundations, and other companies developing novel lung delivery approaches to achieve these goals.

To that end, in May 2016 we entered into an award agreement with Cystic Fibrosis Foundation Therapeutics, Inc. (“CFFT”) pursuant to which CFFT has agreed to pay us up to $5.0 million over the agreement’s three year term to support our CF development program and related technology research and development. Under the terms of the agreement, we are required to contribute additional funds to the program in an amount equal to the funds contributed by CFFT and to pay certain amounts to CFFT upon the achievement of specified events.

Alpha‑1 Antitrypsin Deficiency

Alpha‑1 antitrypsin deficiency is a genetic disease that causes defectivecaused by production of the Alpha‑an abnormal alpha‑1 Antitrypsin, or A1ATantitrypsin (“A1AT”) protein, leading to lung and liver disease. A1AT is one of the primary proteins made in the liver and its normal activity protects the lungs from pro‑inflammatory enzymes. This disease affects about one in 1,500 to 3,500 individuals withof European ancestry. Mutations in A1AT lead to accumulation of A1AT aggregates in the liver and may cause cirrhosis. In addition, loss of A1AT activity in the lung may result in liver and lung disease.emphysema. The current standards of care are weekly intravenous infusions of functional A1AT protein obtained from human donor plasma, and lung or liver transplant for severe cases. Our genome editing approach starts with deleting, through NHEJ, the gene in the liver to prevent liver disease, followed by gene correction in the liver to address both liver and lung disease.

Our Genome Editing Platform in Detail

We are developing a proprietary genome editing platform consisting of four interrelated components that are designed to address four key goals of genome editing:

We believe that the developments we have made in our genome editing platform position us to be able to identifyCollaborations and develop innovative genome editing therapies targeting a wide variety of genetically defined diseases. All of our programs to develop medicines leverage aspects of this platform while also providing insights that help improve our ongoing and future drug development capabilities. We believe our genome editing platform forms the basis for our ongoing leadership in the field and differentiates us from other companies working in genome editing.

Nuclease Engineering

We use our genome editing platform to identify and optimize both Cas9 enzymes and guide RNA molecules to create what we believe will be the optimal Cas9‑guide RNA complex for a given disease target. We have made substantial advances in the characterization and modification of different natural and engineered variants of Cas9 enzymes and in the design, synthesis, modification, analysis, and characterization of guide RNAs. We believe the diversity of the Cas9 enzymes that we are currently employing and those that we are continuing to further develop has the potential to provide us with a competitive advantage as we develop a range of products with different technical needs. We believe our systematic approach to measurement of both the efficiency and specificity of multiple possible Cas9 enzyme and guide RNA combinations enables us to optimize the identification of lead molecules to progress into more advanced testing. Our aim is to continue to develop new engineered Cas9 enzymes with altered specificities,

During the research program term and except pursuant to the collaboration agreement, we may not conduct or participate in, and may not license, fund or otherwise enable a third party to conduct or participate in, research, development, manufacture, or commercialization of CAR and TCR engineered T cells in the exclusive field.Exclusive Field. In addition, we may not enter into any collaboration, license, or other relationship with a third party to use our genome editing technology with respect to CAR and TCR engineered T cells in any other field, excluding the diagnosis, treatment, or prevention of medullary cystic kidney disease 1, unless we first provide written notice to Juno Therapeutics and provide Juno Therapeutics an opportunity to discuss a comparable collaboration, license, or other relationship. Juno Therapeutics has agreed to certain exclusivity obligations with us with respect to certain gene editing technologies.

During the term of the collaboration agreement and except pursuant to the collaboration agreement, we may not conduct or participate in, and may not license, fund, or otherwise enable a third party to conduct or participate in, research, development, manufacturing, or commercialization activities involving the use of our genome editing technology, or any genome editing technology similar to ours, with respect to the gene targets selected by Juno Therapeutics during the research program term for further research and development in the exclusive field.Exclusive Field. During the term of the collaboration agreement and except pursuant to the collaboration agreement, we may not conduct or participate in, and may not license, fund, or otherwise enable a third party to conduct or participate in, research, development, manufacturing, or commercialization activities with respect to a certain type of CAR or TCR engineered T cell product for use in the exclusive field,Exclusive Field, where such product targets a protein designated by Juno Therapeutics during the research program term as a target for Juno Therapeutics’ further research and development of that certain type of CAR or TCR engineered T cell product.

Juno Therapeutics and we each must use diligent efforts to perform all activities for which Juno Therapeutics or we are responsible under the collaboration. Juno Therapeutics also is required to achieve certain regulatory objectives with respect to the engineered T cells in each of the three programs by specified dates. Under the agreement, if Juno Therapeutics does not meet its initial regulatory objective by the required date with respect to an engineered T cell in a specified program, then we can, as our exclusive remedy to Juno Therapeutics’ failure, convert the exclusive license we granted to Juno Therapeutics to a non‑exclusive license to Juno Therapeutics with respect to the particular program to which Juno Therapeutics’ failure relates. If Juno Therapeutics does not meet a subsequent regulatory objective with

country‑by‑country basis upon the later of the tenth anniversary of the first commercial sale of such licensed product and the expiration of the last to expire valid claim within the licensed patents covering such licensed product. If Juno Therapeutics is required to pay royalties on net sales of a licensed product to a third party because the licensed product is covered under the third party’s patent, then Juno Therapeutics can credit a certain percentage of its payments to the third party against the royalties it owes us, subject to certain maximum deduction limits.

We will own any inventions developed by our employees and agents during our collaboration with Juno Therapeutics. Juno Therapeutics and we will jointly own any inventions made jointly by employees or agents of Juno Therapeutics and us during our collaboration with Juno Therapeutics. We retain control, at our own cost, of the prosecution and maintenance of our solely owned patents. Juno Therapeutics and we will be jointly responsible for the prosecution and maintenance of any jointly owned patents. We hold the final decision making authority with respect to claims of jointly owned patents relating to our genome editing technology and Juno Therapeutics holds the final decision making authority with respect to claims of jointly owned patents relating to CAR and TCR engineered T cell products.

Unless terminated earlier, the term of the collaboration agreement will expire on a product‑by‑product and country‑by‑country basis until the date no further payments are due to us from Juno Therapeutics. Juno Therapeutics may terminate the agreement for convenience in its entirety upon six months’ written notice to us. Either Juno Therapeutics or we may terminate the agreement if the other party is in material breach and fails to cure such breach within the specified cure period. Either Juno Therapeutics or we may terminate the agreement in the event of insolvency or bankruptcy of the other party.

If Juno Therapeutics terminates the agreement as a result of our uncured material breach, Juno Therapeutics’ rights and licenses to our specified patent rights, Juno Therapeutics’ obligations to pay us certain research milestones and royalties, and Juno Therapeutics’ rights to prosecute, maintain, and enforce certain patent rights each continue as set forth under the agreement. If Juno Therapeutics terminates the agreement for convenience or we terminate the agreement as a result of Juno Therapeutics’ uncured material breach, the licenses we granted to Juno Therapeutics will terminate.

As of the date of this Annual Report on Form 10-K, Juno Therapeutics has been acquired by Celgene Corporation. We do not anticipate that this acquisition will have a significant impact on our collaboration with Juno Therapeutics.

Allergan Strategic Alliance and Option Agreement

In March 2017, we entered into a strategic alliance and option agreement with Allergan to discover, develop, and commercialize new gene editing medicines for a range of ocular disorders. Over a seven-year research term, Allergan will have an exclusive option to exclusively license from us up to five collaboration development programs for the treatment of ocular disorders (each, a “Collaboration Development Program”), including our LCA10 Program. We will use commercially reasonably efforts to develop at least five Collaboration Development Programs and deliver preclinical results and data meeting specified criteria with respect to each Collaboration Development Program (each, an “Option Package”) to Allergan. We will generally have responsibility for the conduct of each Collaboration Development Program and sole responsibility for all development costs of each Collaboration Development Program prior to any exercise by Allergan of its option to acquire an exclusive license to such Collaboration Development Program under the terms of the agreement. If at the end of the seven-year research term we have not delivered five Collaboration Development Programs that satisfy the Option Package criteria for each such program, the research term shall automatically extend by one-year increments until such obligation is satisfied, up to three additional years (the “Research Term”). In connection with entering into this agreement, Allergan paid us a one-time up-front payment of $90.0 million. In addition, within 45 days of the acceptance by the applicable regulatory authority of our submission of an investigational new drug application with respect to the LCA10 Program, Allergan is required to pay us a one-time payment of $25.0 million, whether or not Allergan exercises its option under the agreement to acquire an exclusive license with respect to the LCA10 Program.

Upon delivery of an Option Package with respect to a Collaboration Development Program to Allergan, Allergan is entitled, for specified periods of time thereafter (each, an “Initial Option Period”), to exercise an option (an “Option”) to acquire from us an exclusive (even as to us and our affiliates) world-wide right and license to our background intellectual property and our interest in the Collaboration Development Program intellectual property to

Competition

The biotechnologydevelop, commercialize, make, have made, use, offer for sale, sell, and pharmaceutical industries, includingimport any gene editing therapy product that results from such Collaboration Development Program during the term of the agreement (a “Licensed Product”) in any category of human diseases and conditions other than the gene therapydiagnosis, treatment or prevention of any cancer in humans through the use of engineered T-cells and genome‑editing fields, are characterized by rapidly advancing technologies, intense competition, and a strong emphasis onsubject to specified other limitations. Following the exercise of an Option, Allergan will have the right to grant sublicenses subject to specified terms, under Allergan’s exclusive license to our background intellectual property and proprietary products. Whileour interest in the Collaboration Development Program intellectual property, to develop, commercialize, make, have made, use, offer for sale, sell, and import Licensed Products. 

Upon the exercise of an Option within the Initial Option Period, Allergan is required to pay to us an option exercise fee of $15.0 million. At any time during the Initial Option Period, Allergan may also elect to extend the period of time in which it may exercise the Option to permit additional development work with respect to the Collaboration Development Program, and in connection with such extension Allergan will be required to pay us an option extension fee of $5.0 million. If, following such an extension, Allergan exercises the Option following the Initial Option Period, Allergan will be required to pay us a higher option exercise fee of $22.5 million plus specified costs incurred by us in connection with the additional development work. If Allergan does not exercise an Option within a specified option exercise period and any extension thereof, such Option will terminate.

In addition, subject to specified limitations, at the end of the Research Term, Allergan will have the right, for a specified period of time, to exercise an Option with respect to each Collaboration Development Program for which we believe that our technology,have not yet delivered an Option Package. Upon the exercise by Allergan of any such option, Allergan is required to pay to us an option exercise fee in the low-seven digits. 

Following the exercise by Allergan of an Option with respect to a Collaboration Development Program, Allergan will be responsible for the development, experience,manufacturing and scientific knowledge provide us with competitive advantages, we face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical,commercialization of any Licensed Products thereunder and biotechnology companies, academic institutions and governmental agencies, and public and private research institutions. Any product candidates that we successfullywill be required to use commercially reasonable efforts to develop, obtain regulatory approval for and commercialize at least one Licensed Product thereunder. If Allergan exercises its Option for the LCA10 Program, subject to Allergan’s financial responsibility and final decision-making authority with respect to any development activities following such exercise, we will competeremain primarily responsible for conducting the LCA10 Program through the acceptance for filing of the first IND application with existing therapiesrespect to the LCA10 Program.

We are entitled to receive clinical, regulatory, and new therapies that may become availablelaunch milestone payments from Allergan up to a low-nine-digit amount in the future.

We competeaggregate and further commercial milestone payments up to a high-eight-digit amount in the segmentsaggregate with respect to each Collaboration Development Program for which Allergan exercises its Option, with certain of such milestone payments subject to reduction under certain circumstances. In the aggregate, we are eligible to receive clinical, regulatory, launch, and commercial milestone payments that could exceed $200.0 million for an indication in the first field per Collaboration Development Program, as well as the potential for additional regulatory milestones for indications in up to two additional fields. We are also entitled to receive royalties in the high-single digit percentages with respect to net sales of Licensed Products, subject to certain reductions under specified circumstances, and we will remain obligated to pay all license fees, milestone payments, and royalties due to its upstream licensors based on Allergan’s exercise of its license rights with respect to Licensed Products. Allergan’s obligation to pay royalties will expire on a country-by-country/Licensed Product-by-Licensed Product basis upon the latest of the pharmaceutical, biotechnology,expiration of patent-based exclusivity with respect to the applicable Licensed Product in the applicable country, expiration of regulatory-based exclusivity with respect to the applicable Licensed Product in the applicable country and the tenth anniversary of the first commercial sale by Allergan of the applicable Licensed Product in the applicable country. We are generally required to pay to Allergan royalties in the low- to mid-single digit percentages on net sales of products developed under Collaboration Development Programs that Allergan terminated following exercise of its Option, in each case over royalty terms equivalent to those for the royalties due to us under the agreement.

With respect to the LCA10 Program and up to one other related markets that utilize technologies encompassing genomic medicinesCollaboration Development Program of our choosing, following the exercise by Allergan of its Option to create therapies, including genome editingsuch programs, we will have the right to elect to participate in a profit-sharing arrangement with Allergan in the United States, on terms mutually agreed by us and gene therapy. There are additional companies that are workingAllergan and subject to develop therapiesa right of Allergan to reject such election under certain circumstances, under which we and Allergan would share equally in areas related to our research programs.

Our platformnet profits and product focus is the development of therapies using CRISPR/Cas9 technology. Other companies developing CRISPR/Cas9 technology include Caribou Biosciences, CRISPR Therapeutics, and Intellia Therapeutics. In addition, there have been and may continuelosses on specific terms to be discoveriesagreed between us and Allergan, in lieu of new CRISPR‑based gene editing technologies, such asAllergan paying royalties on net sales of any applicable Licensed Products in the recently discovered nuclease Cpf1. Cpf1 is early in its scientific characterization; however, its researchers have asserted that it might provide advantages over Cas9 in genome editing applications, including that Cpf1 requires only one guide RNA in contrast to the two guide RNAs required with Cas9, which could simplify the designUnited States and delivery of genome‑editing tools, and that Cpf1 generates staggered DNA cuts in contrast to the blunt‑end cuts generated by Cas9, which could be advantageous for facilitating NHEJ‑based gene insertion.

There are additional companies developing therapies using additional genome editing technologies, including TALENs, meganucleases, Mega‑TALs, and zinc finger nucleases. Potential advantages of these additional genome editing technologies include their degree of scientific characterization to date, which may allow for more rapid development of subsequent programs; the range of sites that each is able to recognize and the location of the DNA cut relative to the recognition sequence, each of which may allow for a different range of targets to be addressed; and the orientation of the DNA ends that are left behind after cutting. The companies developing these additional genome editing technologies include bluebird bio, Cellectis, Poseida Therapeutics, Precision Biosciences, and Sangamo Biosciences. Additional companies developing gene therapy products include Abeona Therapeutics, AGTC Therapeutics, Avalanche Biotechnologies, Dimension Therapeutics, REGENXBIO, Spark Therapeutics, uniQure, and Voyager Therapeutics. In addition to competition from other genome editing therapies or gene therapies, any products that we develop may also face competition from other types of therapies, such as small molecule, antibody, or protein therapies.

Caribou Biosciences, CRISPR Therapeutics, and Intellia Therapeutics have all reported that they have obtained licenses to a family of patent applications that was filed by the University of California, the University of Vienna, and Emmanuelle Charpentier and has an earliest priority date which pre‑dates the priority dates of our in‑licensed patents and patent applications. CRISPR Therapeutics has reported that it has an exclusive license to patent rights from Emmanuelle Charpentier. Caribou Biosciences has reported that it has an exclusive license to patent rights from the University of California and the University of Vienna. Intellia Therapeutics has reported that it has an exclusive license to such rights from Caribou Biosciences in certain fields. The University of California derives rights in such applications from an assignment by Dr. Jennifer Doudnaevent Allergan’s milestone payment obligations would be reduced, with our being eligible to receive clinical, regulatory, and certain other inventors listed on such applications. Dr. Doudna was a founder of our company and entered into a consulting agreement with us at the time of our founding. However, Dr. Doudna gave notice of termination of that agreement in May 2014 after less than seven months of service, and she has had no further engagement in our business since that time. Dr. Doudna is also a founder of Caribou Biosciences and has been publicly identified as an advisor to Intellia Therapeutics. For more information regarding the risks associated with third party intellectual property, please see “Item 1A. Risk Factors—Risks Related to Our Intellectual Property.”

In addition, many of our current or potential competitors, either alone or with their collaboration partners, have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, and marketing approved products than we do. Mergers and acquisitions in the pharmaceutical, biotechnology, and gene therapy industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller or early‑stage companies may also prove to be significant competitors, particularly launch milestone

through collaborative arrangementspayments up to a low nine-digit amount in the aggregate and further commercial milestone payments up to a high-eight digit amount in the aggregate, subject to reduction under certain circumstances. If we elect to participate in a profit-sharing arrangement, we are obligated to reimburse Allergan for half of the development costs incurred by Allergan with largerespect to the applicable Collaboration Development Program and established companies. These competitors also competeAllergan will retain control of all development and commercialization activities for the applicable Licensed Products. Under the agreement, we and Allergan will establish an alliance steering committee (“ASC”) comprised of three members from each of us and Allergan, which will have review, oversight and decision-making responsibility for selecting the targets and indications and certain Option Package criteria for the Collaboration Development Programs and determining whether the Option Package criteria for a Collaboration Development Program have been satisfied. With respect to a given Collaboration Development Program, all decisions of the ASC will be made by consensus, subject to specified final decision-making rights, with each of us and Allergan having one vote.

During the Research Term, neither we nor any of our affiliates will, subject to specified exceptions in the agreement, develop, manufacture or commercialize any gene editing therapy in the ocular field, or grant a license or sublicense to develop, manufacture or commercialize any gene editing therapy in the ocular field. During the Research Term, neither Allergan nor any of its affiliates will, subject to specified exceptions in the agreement, develop, manufacture or commercialize, or grant a license or sublicense to develop, manufacture or commercialize, any gene editing therapy in the ocular field directed to any ocular indication to which any gene editing therapy in any non-terminated Collaboration Development Program is directed or the same target to which any gene editing therapy in any non-terminated Collaboration Development Program is directed. After the Research Term, neither we, Allergan nor any of their respective affiliates will, subject to specified exceptions in the agreement, develop, manufacture or commercialize, or grant a license or sublicense to develop, manufacture or commercialize, any gene editing therapy in the ocular field directed to any ocular indication to which any Licensed Product is directed or any target to which any Licensed Product is directed.    

Unless earlier terminated, the term of the agreement will expire upon (i) the expiration of the Research Term if Allergan does not exercise any Option or (ii) the expiration of all payment obligations under the agreement. In addition to other termination rights, Allergan has the right to terminate the agreement (i) in its entirety for an uncured material breach by us and (ii) in its entirety for any reason on a program-by-program basis for the Collaboration Development Programs for which Allergan has exercised its Option with 90 days’ written notice. Additionally, Allergan may terminate the Research Term (a) on a Collaboration Development Program-by-Collaboration Development Program basis upon written notice to us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registrationthe event of a change of control of us or (b) for clinical trials, as well as in acquiring technologies complementaryall Collaboration Development Programs, provided that, Allergan will not have any right to or necessaryexercise any Option for any such Collaboration Development Program following any such termination. If Allergan terminates the Agreement for our programs.material breach, subject to Allergan’s continued payment, reporting, and audit obligations under the agreement, Allergan has the right to retain all licenses granted under the agreement and Allergan will no longer have any diligence obligations with respect to the Licensed Products.

Intellectual Property Licenses

We are a party to a number of license agreements under which we license patents, patent applications, and other intellectual property from third parties. The licensed intellectual property covers, in part, CRISPR and transcription activator‑like effector (“TALE”)‑related compositions of matter and their use for genome editing. These licenses impose various diligence and financial payment obligations on us. We expect to continue to enter into these types of license agreements in the future. We consider the following license agreements to be material to our business.

The Broad Institute and President and Fellows of Harvard College License Agreement

In October 2014, we entered into a license agreement with The Broad Institute, Inc. (“Broad”) and the President and Fellows of Harvard College (“Harvard”), for specified patent rights. In December 2016, we amended and restated this license agreement and further amended the agreement in March 2017 (the “Cas9‑I License Agreement”). Among other things, the Cas9‑I License Agreement amended the original license agreement by excluding additional fields from the scope of the exclusive license granted to us; converting the exclusive license to three specified targets to a non‑exclusive license, subject to specified limitations; revising certain provisions relating to the rights of Harvard and Broad to grant further licenses under specified circumstances to third parties that wish to develop and commercialize

products that target a particular gene and that otherwise would fall within the scope of our exclusive license; and providing Harvard and Broad with certain rights to designate, and reserve all rights to, gene targets for which the designating institution has an interest in researching and developing products that would otherwise be covered by rights licensed to us. The licenses granted to us under the Cas9‑I License Agreement include rights to certain patents solely owned by Harvard (the “Harvard Cas9‑I Patent Rights”), certain patents co‑owned by the Massachusetts Institute of Technology (“MIT”) and Broad, certain patents co-owned by MIT, The Rockefeller University (“Rockefeller”), and Broad, and certain patents co‑owned by MIT, Broad and Harvard. We refer to all the patents and patent applications licensed to us under the Cas9‑I License Agreement as the Harvard/Broad Cas9‑I Patent Rights.

Certain patent applications in the Harvard/Broad Cas9-I Patent Rights are jointly owned by Rockefeller. In February 2017, Broad and Rockefeller entered into an inter-institutional agreement pursuant to which Rockefeller authorized Broad to act as its sole and exclusive agent for the purposes of licensing Rockefeller’s rights in such Harvard/Broad Cas9-I Patent Rights and any additional related patents or patent applications that Rockefeller may jointly own with Broad. The March 2017 amendment to the Cas9-I License Agreement included a license to Rockefeller’s rights in such patents and patent applications.

The Harvard/Broad Cas9‑I Patent Rights are directed, in part, to certain CRISPR/Cas9 and TALE‑related compositions of matter and their use for genome editing and to certain CRISPR/Cas9 and TALE‑related delivery technologies. Pursuant to the Cas9‑I License Agreement, and as of December 31, 2017, we have certain rights under 37 U.S. patents, 64 pending U.S. patent applications, 11 European patents and related validations, 38 pending European patent applications, and other related patent applications in jurisdictions outside of the United States and Europe.

Pursuant to the Cas9‑I License Agreement, Harvard and Broad granted us an exclusive, worldwide, royalty‑bearing, sublicensable license to the Harvard/Broad Cas9‑I Patent Rights to make, have made, use, sell, offer for sale, have sold, import, and export products and services in the field of the prevention and treatment of human disease, subject to certain limitations and retained rights. The exclusive license granted by Broad and Harvard excludes certain fields, including the modification of animals or animal cells for the creation and sale of organs suitable for xenotransplantation into humans; the research, development and commercialization of products or services in the field of livestock applications; plant‑based agricultural products; and, subject to certain limitations, products providing nutritional benefits. Moreover, the license granted by Broad is non‑exclusive with respect to the treatment of medullary cystic kidney disease 1 and three other specified targets, subject to the limitation that for such three targets, each of Broad and Harvard is only permitted to grant a non‑exclusive license to one third party at a time with respect to each such target within the field of exclusive license granted to us. Harvard and Broad also granted us a non‑exclusive, worldwide, royalty‑bearing, sublicensable license to the Harvard/Broad Cas9‑I Patent Rights for all purposes, with the exception that the non‑exclusive license to certain Harvard Cas9‑I Patent Rights excludes the modification of animals or animal cells for the creation and sale of organs suitable for xenotransplantation into humans and the development and commercialization of products or services in the field of livestock applications. In addition to the exclusions described above, the following are excluded from the scope of both the exclusive and non‑exclusive licenses granted to us under the Cas9‑I License Agreement: human germline modification; the stimulation of biased inheritance of particular genes or traits within a population of plants or animals; the research, development, manufacturing, or commercialization of sterile seeds; and the modification of the tobacco plant with specified exceptions.

We are obligated to use commercially reasonable efforts to research, develop, and commercialize products for the prevention or treatment of human disease under the Cas9‑I License Agreement. Also, we are required to achieve certain development milestones within specified time periods for products incorporating the CRISPR/Cas9, TAL, and delivery‑related technologies covered by the Harvard/Broad Cas9‑I Patent Rights. Harvard and Broad have the right to terminate our license with respect to the Harvard/Broad Cas9‑I Patent Rights covering the technology or technologies with respect to which we fail to achieve these development milestones.

The licenses granted by Broad and Harvard to us under the Cas9‑I License Agreement are subject to retained rights of the U.S. government in the Harvard/Broad Cas9‑I Patent Rights and the rights retained by Broad, Harvard, MIT, and Rockefeller on behalf of themselves and other academic, government and non‑profit entities, to practice the Harvard/Broad Cas9‑I Patent Rights for research, educational, or teaching purposes. In addition, certain rights granted to us under the Cas9‑I License Agreement are further subject to a non‑exclusive license to the Howard Hughes Medical Institute for research purposes. Our commercial opportunity couldexclusive license rights also are subject to rights retained by Broad, Harvard, MIT,

and Rockefeller any third party to research, develop, make, have made, use, offer for sale, sell, have sold, import or otherwise exploit the Harvard/Broad Cas9‑I Patent Rights and licensed products as research products or research tools, or for research purposes.

We have the right to sublicense our licensed rights provided that the sublicense agreement must be reduced or eliminated if our competitorsin compliance and consistent with the terms of the Cas9‑I License Agreement. Any sublicense agreement cannot include the right to grant further sublicenses without the written consent of Broad and Harvard. In addition, any sublicense agreements must contain certain terms, including a provision requiring the sublicensee to indemnify Harvard, Broad, MIT, and Howard Hughes Medical Institute according to the same terms as are provided in the Cas9‑I License Agreement and a statement that Broad, Harvard, MIT, and Howard Hughes Medical Institute are intended third party beneficiaries of the sublicense agreement for certain purposes.

Under the agreement, Harvard and Broad also retained rights to grant further licenses under specified circumstances to third parties, other than specified entities, that wish to develop and commercialize products that target a particular gene and that otherwise would fall within the scope of our exclusive license from Harvard and Broad. If a third party requests a license under the Harvard/Broad Cas9‑I Patent Rights for the development and commercialization of a product that would be subject to our exclusive license grant from Harvard and Broad under the Cas9‑I License Agreement, Harvard and Broad may notify us of the request (the “Cas9‑I Third Party Proposed Product Requests”). A Cas9‑I Third Party Proposed Product Request must be accompanied by a research, development and commercialization plan reasonably satisfactory to Harvard and Broad, including evidence that the third party has, or reasonably expects to have, access to any necessary intellectual property and funding. Harvard and Broad may not grant a Cas9‑I Third Party Proposed Product Request (i) if we, directly or through any of our affiliates, sublicensees, or collaborators are safer, more effective,researching, developing, or commercializing a product directed to the same gene target that is the subject of the Cas9‑I Third Party Proposed Product Request (“Cas9‑I Licensee Product”) and we can demonstrate such ongoing efforts to Harvard’s and Broad’s reasonable satisfaction, or (ii) if we, directly or through any of our affiliates or sublicensees, wish to do so either alone or with a collaboration partner, and we can demonstrate to Harvard and Broad’s reasonable satisfaction that we are interested in researching, developing, and commercializing the Cas9‑I Licensee Product, that we have fewera commercially reasonable research, development, and commercialization plan to do so, and we commence and continue reasonable commercial efforts under such plan. If we, directly or less severe side effects,through any of our affiliates, sublicensees, or collaborators, are more convenientnot researching, developing, or are less expensive than anycommercializing a Cas9‑I Licensee Product nor able to develop and implement a plan reasonably satisfactory to Harvard and Broad, Harvard and Broad may grant an exclusive or non‑exclusive license to the third party on a gene target‑by‑gene target basis. Beginning in December 2018, our process to address Cas9‑I Third Party Proposed Product Requests will conform to the process established in our Cpf1 license agreement described below.

The Cas9‑I License Agreement also provides Broad with the right, after a specified period of time and subject to certain limitations, to designate gene targets for which Broad, whether alone or together with an affiliate or third party, has an interest in researching and developing products that would otherwise be covered by rights licensed to us under the Cas9‑I License Agreement. Broad may not so designate any gene target for which we, directly or through any of our affiliates, sublicensees, or collaborators, are researching, developing, or commercializing a product, or for which we can demonstrate to Broad’s reasonable satisfaction that we are interested in researching, developing, and commercializing a product, that we have a commercially reasonable research, development, and commercialization plan to do so, and we commence and continue reasonable commercial efforts under such plan. If we directly or through any of our affiliates, sublicensees, or collaborators, are not researching, developing, or commercializing a product directed toward the gene target designated by Broad and are not able to develop and implement a plan reasonably satisfactory to Broad, Broad is entitled to reserve all rights under the Cas9‑I License Agreement, including the right to grant exclusive or non‑exclusive licenses to third parties, to develop and commercialize products directed to such gene target and our license granted with respect to such gene target will terminate, and we will not be entitled under the Cas9‑I License Agreement to develop and commercialize products directed to that gene target.

Under the Cas9‑I License Agreement, we paid Broad and Harvard an upfront license fee in the low six figures and issued a single‑digit percentage of shares of our common stock to Broad (with Broad holding a right to request re‑issuance to its designees, including MIT or MIT’s designee) and Harvard. We also must pay an annual license maintenance fee ranging from the low‑ to mid‑five figures to the low‑six figures, depending on the calendar year. This annual license maintenance fee is creditable against royalties owed on licensed products and services in the same year as

the maintenance fee is paid. We are obligated to reimburse Broad and Harvard for expenses associated with the prosecution and maintenance of the Harvard/Broad Cas9‑I Patent Rights, including expenses associated with any interference proceedings in the USPTO, any opposition proceedings in the EPO, or any other inter partes or other post grant proceedings in these or other jurisdictions where we are seeking patent protection. Therefore, we are obligated to reimburse Broad and/or Harvard for expenses associated with the interference and opposition proceedings involving patents licensed to us under this agreement (described in more detail under “Legal Proceedings” in Part I, Item 3 of this Annual Report on Form 10-K).

Broad and Harvard are collectively entitled to receive clinical and regulatory milestone payments totaling up to $14.8 million in the aggregate per licensed product approved in the United States, the European Union and Japan for the prevention or treatment of a human disease that afflicts at least a specified number of patients in the aggregate in the United States. If we undergo a change of control during the term of the Cas9‑I License Agreement, these clinical and regulatory milestone payments will be increased by a certain percentage in the mid double‑digits. We are also obligated to make additional payments to Broad and Harvard, collectively, of up to an aggregate of $54.0 million upon the occurrence of certain sales milestones per licensed product for the prevention or treatment of a human disease that afflicts at least a specified number of patients in the aggregate in the United States. Broad and Harvard are collectively entitled to receive clinical and regulatory milestone payments totaling up to $4.1 million in the aggregate per licensed product approved in the United States and at least one jurisdiction outside the United States for the prevention or treatment of a human disease that afflicts fewer than a specified number of patients in the aggregate in the United States or a specified number of patients per year in the United States, which we refer to as an ultra‑orphan disease. We are also obligated to make additional payments to Broad and Harvard, collectively, of up to an aggregate of $36.0 million upon the occurrence of certain sales milestones per licensed product for the prevention or treatment of an ultra‑orphan disease.

Broad and Harvard, collectively, are entitled to receive mid single‑digit percentage royalties on net sales of licensed products for the prevention or treatment of human disease, and ranging from low single‑digit to high single‑digit percentage royalties on net sales of other licensed products and services, made by us, our affiliates, or our sublicensees. The royalty percentage depends on the licensed product and licensed service, and whether such licensed product or licensed service is covered by a valid claim within the Harvard/Broad Cas9‑I Patent Rights. If we are legally required to pay royalties to a third party on net sales of our licensed products because such third party holds patent rights that cover such licensed product, then we can credit up to a mid double‑digit percentage of the amount paid to such third party against the royalties due to Harvard and Broad in the same period. Our obligation to pay royalties will expire on a product‑by‑product and country‑by‑country basis upon the later of the expiration of the last to expire valid claim of the Harvard/Broad Cas9‑I Patent Rights that cover the composition, manufacture, or use of each covered product or service in each country or the tenth anniversary of the date of the first commercial sale of the licensed product or licensed service. If we sublicense any of the Harvard/Broad Cas9‑I Patent Rights to a third party pursuant to our exclusive license under the Cas9‑I License Agreement, Broad and Harvard, collectively, have the right to receive a low double‑digit percentage of the sublicense income, which percentage decreases to a high single‑digit percentage for licensed products for the prevention or treatment of human disease under sublicenses executed after we meet certain clinical milestones.

Broad and Harvard retain control of the prosecution of their respective patent rights. If an interference is declared or a derivation proceeding is initiated, with respect to any Harvard/Broad Cas9‑I Patent Rights, then our prosecution related rights, including our right to receive correspondence from a patent office, will be suspended with respect to the patent rights involved in the interference or derivation proceeding until, under some circumstances, we enter into a common interest agreement with that institution. Nevertheless, we remain responsible for the cost of such interference or derivation proceeding. An interference was filed with respect to 12 U.S. patents and one U.S. patent application that are co-owned by Broad and MIT, and in some cases, Harvard, in-licensed by us under the Cas9-I License Agreement. For more information regarding this interference proceeding, see Intellectual Property below, “Risk Factors—Risks Related to Our Intellectual Property” in Part I, Item 1A, and “Legal Proceedings” in Part I, Item 3. We are responsible for the cost of the interference proceeding and appeal with respect to these patents and this patent application. Broad and Harvard are required to maintain any application or patent within the Harvard/Broad Patents Rights so long as we meet our obligation to reimburse Broad and Harvard for expenses related to prosecution and there is a good faith basis for doing so. If we cease payment for the prosecution of any Harvard/Broad Patent Right, then any license granted to us with respect to such Harvard/Broad Patent Right will terminate.

We have the first right, but not the obligation, to enforce the Harvard/Broad Cas9‑I Patent Rights with respect to our licensed products so long as certain conditions are met, such as providing Broad and Harvard with evidence demonstrating a good faith basis for bringing suit against a third party. We are solely responsible for the costs of any lawsuits we elect to initiate and cannot enter into a settlement without the prior written consent of Broad and Harvard (and MIT and Rockefeller, if applicable). Any sums recovered in such lawsuits will be shared between us, Broad, and Harvard.

Unless terminated earlier, the term of the Cas9‑I License Agreement will expire on a country‑by‑country basis, upon the expiration of the last to expire valid claim of the Harvard/Broad Cas9‑I Patent Rights in such country. However, our royalty obligations, discussed above, may survive expiration or termination. We have the right to terminate the agreement at will upon four months’ written notice to Broad and Harvard. Broad and Harvard may terminate the agreement upon a specified period of notice in the event of our uncured material breach, such notice period varying depending on the nature of the breach. Both Broad and Harvard may terminate the Cas9‑I License Agreement immediately if we challenge the enforceability, validity, or scope of any Harvard/Broad Patent Right or assist a third party to do so, or in the event of our bankruptcy or insolvency. Neither Broad nor Harvard acting alone has the right to terminate the Cas9‑I License Agreement. However, Broad and Harvard may separately terminate the licenses granted to us with respect to their respective patent rights upon the occurrence of the same events that would give rise to the right of both institutions acting collectively to terminate the Cas9‑I License Agreement.

The Broad Institute—Cpf1 License Agreement

In December 2016, we entered into a license agreement with Broad, for specified patent rights (“Cpf1 Patent Rights”) related primarily to Cpf1 compositions of matter and their use for gene editing (the “Cpf1 License Agreement”). Pursuant to the Cpf1 License Agreement, Broad, on behalf of itself, Harvard, MIT, Wageningen University (“Wageningen”), and the University of Tokyo (“Tokyo” and collectively with the other institutions, the “Cpf1 Institutions”) granted us an exclusive, worldwide, royalty‑bearing, sublicensable license to the Cpf1 Patent Rights, to make, have made, use, have used, sell, offer for sale, have sold, export and import products solely in the field of the prevention or treatment of human disease using gene therapy, editing of genetic material, or targeting of genetic material, subject to certain limitations and retained rights (collectively, the “Exclusive Cpf1 Field”), as well as a non‑exclusive, worldwide, royalty‑bearing, sublicensable license to the Cpf1 Patent Rights for all other purposes, subject to certain limitations and retained rights. The licenses granted to us under the Cpf1 License Agreement exclude certain fields, including human germline modification; the stimulation of biased inheritance of particular genes or traits within a population of plants or animals; the research, development, manufacturing, or commercialization of sterile seeds; and the modification of the tobacco plant with specified exceptions.

Tokyo and the National Institute of Health (“NIH”) are joint owners on certain Cpf1 Patent Rights. Broad has only granted a license to us with respect to its interests and to Tokyo’s interests in these U.S. patent applications but not to any foreign equivalents thereof. Broad does not, and does not purport to, grant any rights in NIH’s interest in these U.S. patent applications under our agreement. As a result, we may develop. Our competitors also may obtain FDA or other regulatory approval for their products more rapidly thannot have exclusive rights under any U.S. patents that issue from these U.S. patent applications and we may obtain approvalnot have any rights under any foreign patents that issue from any foreign equivalents thereof.

Pursuant to the Cpf1 License Agreement, and as of December 31, 2017, we have certain rights under one U.S. patent, three pending U.S. patent applications, one European patent and related validations, two pending European patent applications, five pending PCT patent applications, and other related patent applications in jurisdictions outside of the United States and Europe.

We are obligated to use commercially reasonable efforts to research, develop, and commercialize licensed products in the Exclusive Cpf1 Field. We are also required to achieve certain development milestones within specified time periods for ours, which could resultproducts covered by the Cpf1 Patent Rights, with Broad having the right to terminate the Cpf1 License Agreement if we fail to achieve these milestones within the required time periods. We have the right to sublicense our licensed rights provided that the sublicense agreement must be in compliance and consistent with the terms of the Cpf1 License Agreement. Any sublicense agreement cannot include the right to grant further sublicenses without the written consent of Broad. In addition, any sublicense agreements must contain certain terms, including a provision requiring the sublicensee to indemnify the Cpf1 Institutions according to the same terms as are provided in the Cpf1 License

Agreement and a statement that the Cpf1 Institutions are intended third party beneficiaries of the sublicense agreement for certain purposes.

The licenses granted to us under the Cpf1 License Agreement are subject to retained rights of the U.S. government in the Cpf1 Patent Rights and rights retained by the Cpf1 Institutions on behalf of themselves and other academic, government and non‑profit entities, to practice the Cpf1 Patent Rights for research, teaching, or educational purposes. Our exclusive license rights also are subject to rights retained by the Cpf1 Institutions for themselves and any third party to research, develop, make, have made, use, offer for sale, sell, have sold, import or otherwise exploit the Cpf1 Patent Rights and licensed products as research products or research tools, or for research purposes.

Under the Cpf1 License Agreement, Broad also retained rights to grant further licenses under specified circumstances to third parties that wish to develop and commercialize products that target a particular gene and that otherwise would fall within the scope of our competitors establishingexclusive license from Broad. Beginning in December 2018, if a strong market position beforethird party requests a license under the Cpf1 Patent Rights for the development and commercialization of a product that would be subject to our exclusive license grant from Broad (a “Cpf1 Third Party Proposed Product Request”), Broad may notify us of such request. A Cpf1 Third Party Proposed Product Request must be accompanied by a research, development and commercialization plan reasonably satisfactory to Broad, including evidence that the third party has, or reasonably expects to have, access to any necessary intellectual property and funding. Broad may not grant a Cpf1 Third Party Proposed Product Request (i) if we, directly or through any of our affiliates, sublicensees, or collaborators are researching, developing, or commercializing a product directed to the same gene target that is the subject of the Cpf1Third Party Proposed Product Request (“Cpf1 Licensee Product”) and we can demonstrate such ongoing efforts to Broad’s reasonable satisfaction, or (ii) if we, directly or through any of our affiliates or sublicensees, wish to do so either alone or with a collaboration partner, and we can demonstrate to Broad’s reasonable satisfaction that we are interested in researching, developing, and commercializing a Cpf1 Licensee Product, that we have a commercially reasonable research, development, and commercialization plan to do so, and we commence and continue reasonable commercial efforts under such plan. If we, directly or through any of our affiliates, sublicensees, or collaborators, are not researching, developing, or commercializing a Cpf1 Licensee Product nor able to enterdevelop and implement a plan reasonably satisfactory to Broad, Broad may grant an exclusive or non‑exclusive license to the market. third party on a gene target‑by‑gene target basis.

The key competitive factors affectingCpf1 License Agreement also provides Broad with the right, beginning in December 2017 and subject to certain limitations, to designate gene targets for which Broad, whether alone or together with a Cpf1 Institution, affiliate or third party, has an interest in researching and developing products that would otherwise be covered by rights licensed to us under the Cpf1 License Agreement. Broad may not so designate any gene target for which we, directly or through any of our affiliates, sublicensees, or collaborators, are researching, developing, or commercializing a product, or for which we can demonstrate to Broad’s reasonable satisfaction that we are interested in researching, developing, and commercializing a product, that we have a commercially reasonable research, development, and commercialization plan to do so, and we commence and continue reasonable commercial efforts under such plan. If we, directly or through any of our affiliates, sublicensees, or collaborators, are not researching, developing, or commercializing a product directed toward the gene target designated by Broad and are not able to develop and implement a plan reasonably satisfactory to Broad, Broad is entitled to reserve all rights under the Cpf1 License Agreement, including the right to grant exclusive or non‑exclusive licenses to third parties, to develop and commercialize products directed to such gene target, our license with respect to such gene target will terminate, and we will not be entitled under the Cpf1 License Agreement to develop and commercialize products directed to such gene target.

Under the Cpf1 License Agreement, we paid Broad and Wageningen an aggregate upfront license fee in the mid seven digits and issued to Broad and Wageningen promissory notes (the “Initial Promissory Notes”) in an aggregate principal amount of $10.0 million. The Initial Promissory Notes bore interest at 4.8% per annum. Principal and interest on the Initial Promissory Notes were payable on the first anniversary of the issuance date (or if earlier, a specified period of time following a sale of our company). We could elect to make any payment of amounts outstanding under the Initial Promissory Notes either in the form of cash or, subject to certain conditions, in shares of our common stock of equal value, with such shares being valued for such purpose at the closing price of our common stock as reported the Nasdaq Stock Market for the trading day immediately preceding the date of such payment if our common stock was then listed on the Nasdaq Stock Market. In the event of a change of control of our company or a sale of our company, we were required to pay all remaining principal and accrued interest on the Initial Promissory Notes in cash within a specified

period following such event. We settled the Initial Promissory Notes in shares of our common stock in 2017 and they are no longer outstanding.

Broad and Wageningen are collectively entitled to receive clinical and regulatory milestone payments totaling up to $20.0 million in the aggregate per licensed product approved in the United States, the European Union and Japan for the prevention or treatment of a human disease that afflicts at least a specified number of patients in the aggregate in the United States. If we undergo a change of control during the term of the Cpf1 License Agreement, certain of these clinical and regulatory milestone payments will be increased by a certain percentage in the mid double‑digits. We are also obligated to make additional payments to Broad and Wageningen, collectively, of up to an aggregate of $54.0 million upon the occurrence of certain sales milestones per licensed product for the prevention or treatment of a human disease that afflicts at least a specified number of patients in the aggregate in the United States. Broad and Wageningen are collectively entitled to receive clinical and regulatory milestone payments totaling up to $6.0 million in the aggregate per licensed product approved in the United States, the European Union and Japan for the prevention or treatment of an ultra‑orphan disease. We are also obligated to make additional payments to Broad and Wageningen, collectively, of up to an aggregate of $36.0 million upon the occurrence of certain sales milestones per licensed product for the prevention or treatment of an ultra‑orphan disease.

Broad and Wageningen, collectively, are entitled to receive mid single‑digit percentage royalties on net sales of products for the prevention or treatment of human disease, and ranging from sub single‑digit to high single‑digit percentage royalties on net sales of other products and services, made by us, our affiliates, or our sublicensees. The royalty percentage depends on the product and service, and whether such licensed product or licensed service is covered by a valid claim within the Cpf1 Patent Rights. If we are legally required to pay royalties to a third party on net sales of our products because such third party holds patent rights that cover such licensed product, then we can credit up to a mid double‑digit percentage of the amount paid to such third party against the royalties due to Broad and Wageningen in the same period. Our obligation to pay royalties will expire on a product‑by‑product and country‑by‑country basis upon the later of the expiration of the last to expire valid claim of the Cpf1 Patent Rights that covers each licensed product or licensed service in each country or the tenth anniversary of the date of the first commercial sale of the product or service. If we sublicense any of the Cpf1 Patent Rights to a third party, Broad and Wageningen, collectively, have the right to receive high single‑digit to low double‑digit percentages of the sublicense income, depending on the stage of development of the products or services in question at the time of the sublicense.

Under the Cpf1 License Agreement, Broad and Wageningen are also entitled, collectively, to receive success payments in the event our market capitalization reaches specified thresholds ascending from a high nine digit dollar amount to $10.0 billion (“Market Cap Success Payments”) or sale of our company for consideration in excess of those thresholds, (“Company Sale Success Payments,” which with the Market Cap Success Payments, the “Success Payments”). The Success Payments that may be paid to Broad and Wageningen range from a mid-seven digit dollar amount to a mid-eight digit dollar amount, and collectively will not exceed, in aggregate, $125.0 million, which maximum would be payable only if we achieve a market capitalization threshold of $10.0 billion and have at least one product candidate covered by a claim of a patent right licensed to us under either the Cpf1 License Agreement or the Cas9‑I License Agreement that is or was the subject of a clinical trial pursuant to development efforts by us or any of our affiliates or sublicensees. Market Cap Success Payments are payable by us in cash or in the form of promissory notes on substantially the same terms and conditions as the Initial Promissory Notes, except that the maturity date of such notes will, subject to certain exceptions, be 150 days following issuance. Following a change in control of our company, Market Cap Success Payments are required to be made in cash. Company Sale Success Payments are payable solely in cash.

In March 2017, a Market Cap Success Payment in the amount of $5.0 million under the Cpf1 License Agreement became due upon our market capitalization reaching $750 million, and we issued promissory notes to Broad and Wageningen in the aggregate original principal amount of $5.0 million (the “March Success Payment Notes”). The principal and interest on the March Success Payment Notes was due and payable in August 2017. In August 2017, we issued an aggregate of 271,347 shares of our common stock to Broad and paid $0.4 million to Wageningen as payment of all outstanding principal and interest under the March Success Payment Notes. Upon such issuance and payment, the March Success Payment Notes were cancelled. In September 2017, Wageningen designated Broad as the recipient of any future promissory notes that are owed to Wageningen pursuant to the Cpf1 License Agreement.

In December 2017, a success payment in the amount of $5.0 million under the Cpf1 License Agreement became due upon our market capitalization reaching $1.0 billion for a specified period of time, and we issued a promissory note to Broad in the original principal amount of $5.0 million (the “December Cpf1 Success Payment Note”). The principal and interest on the December Cpf1 Success Payment Note was due and payable in May 2018. In January 2018, we issued 150,606 shares of our programscommon stock to Broad as payment of all outstanding principal and interest under the December Cpf1 Success Payment Note. Upon such issuance and payment, the December Cpf1 Success Payment Note was cancelled.

In addition, in the event that a sale of our company or change of control has occurred and the maximum amount of potential Success Payments under the Cpf1 License Agreement has not been paid to Broad and Wageningen, Broad and Wageningen are likelyentitled to receive, upon the subsequent achievement of specified regulatory milestones, percentages ranging from high single digits to mid‑to‑low double digits of the remaining unpaid maximum amount of Success Payments. Broad and Wageningen are further entitled to receive up to the full remaining unpaid maximum amount of Success Payments upon the subsequent achievement of specified sales milestones. All such post‑sale or post‑change of control milestone payments are required to be made in cash.

Broad retains control of the prosecution and maintenance of the Cpf1 Patent Rights. We have the right to provide input in the prosecution of the Cpf1 Patent Rights, including to direct Broad to file and prosecute patents in certain countries. We are also obligated to reimburse Broad and Wageningen for all unreimbursed expenses incurred by them in connection with the prosecution and maintenance of the Cpf1 Patent Rights prior to the date of the Cpf1 License Agreement, and to reimburse Broad for expenses associated with the prosecution and maintenance of the Cpf1 Patent Rights following the date of the Cpf1 License Agreement.

We have the first right, but not the obligation, to enforce the Cpf1 Patent Rights with respect to our licensed products in the Exclusive Cpf1 Field so long as certain conditions are met, such as providing Broad and the applicable Cpf1 Institutions with evidence demonstrating a good faith basis for bringing suit against a third party. We are solely responsible for the costs of any lawsuits we elect to initiate and cannot enter into a settlement without the prior written consent of Broad. Any sums recovered in such lawsuits will be shared between Broad, Wageningen, and us.

Unless terminated earlier, the term of the Cpf1 License Agreement will expire on a country‑by‑country basis, upon the expiration of the last to expire valid claim of the Cpf1 Patent Rights in such country. However, our royalty obligations, discussed above, may survive expiration or termination. We have the right to terminate the Cpf1 License Agreement at will upon four months’ written notice to Broad. Either party may terminate the Cpf1 License Agreement upon a specified period of notice in the event of the other party’s uncured material breach of a material obligation, such notice period varying depending on the nature of the breach. Broad may terminate the Cpf1 License Agreement immediately if we challenge the enforceability, validity, or scope of any Cpf1 Patent Right or assist a third party to do so, or in the event of our bankruptcy or insolvency.

The Broad Institute—Cas9‑II License Agreement

In December 2016, we entered into a license agreement with Broad for specified patent rights (the “Cas9‑II Patent Rights”) related primarily to certain Cas9 compositions of matter and their efficacy, safety, convenience,use for gene editing (the “Cas9‑II License Agreement”). Pursuant to the Cas9‑II License Agreement, Broad, on behalf of itself, MIT, Harvard, and availabilitythe University of reimbursement.Iowa Research Foundation (“Iowa,” and collectively with the other institutions, the “Cas9‑II Institutions”), granted us an exclusive, worldwide, royalty‑bearing sublicensable license to certain of the Cas9‑II Patent Rights in the field of the prevention or treatment of human disease using gene therapy, editing of genetic material, or targeting of genetic material, subject to certain limitations and retained rights, as well as a non‑exclusive, worldwide, royalty‑bearing sublicensable license to all of the Cas9‑II Patent Rights for all purposes, subject to certain limitations and retained rights, in each case on terms substantially similar to the licenses granted to us under Cpf1 License Agreement, except that:

Pursuant to the Cas9‑II License Agreement, and as of December 31, 2017, we have certain rights under 13 pending U.S. patent applications, 13 pending European patent applications, and other related patent applications in jurisdictions outside of the United States and Europe. 

IfIn December 2017, a success payment in the amount of $2.5 million under our current programsCas9-II License Agreement became due upon our market capitalization reaching $1.0 billion for a specified period of time, and we issued a promissory note to Broad in the original principal amount of $2.5 million (the “December Cas9-II Success Payment Note”). The principal and interest on the December Cas9-II Success Payment Note was due and payable in May 2018. In January 2018, we issued 75,303 shares of our common stock to Broad as payment of all outstanding principal and interest under the December Cas9-II Success Payment Note. Upon such issuance and payment, the December Cas9-II Success Payment Note was cancelled.

The General Hospital Corporation License Agreements

In August 2014, we entered into a license agreement with The General Hospital Corporation, d/b/a Massachusetts General Hospital (“MGH”), for specified patent rights (the “First License MGH Patent Rights”) and specified know‑how and biological materials (the “First MGH License Agreement”). The First License MGH Patent Rights are approveddirected, in part, to CRISPR/Cas9 and TALE‑related compositions of matter and their use for genome editing. Pursuant to the First MGH License Agreement, and as of December 31, 2017, we have certain rights under two U.S. patents, 14 pending U.S. patent applications, one European patent and related validations, ten pending European patent applications, and other related patent applications in jurisdictions outside of the United States and Europe.

Pursuant to the First MGH License Agreement, MGH granted us an exclusive, worldwide, royalty‑bearing, sublicensable license to the First License MGH Patent Rights, to make, have made, use, have used, sell, offer for sale, and import products and processes in the fields of the prevention or treatment of human or animal disease and agriculture, which includes plants and animals bred and raised for human consumption (such field, the “First MGH Exclusive License Field”). Products and processes used for clinical diagnostic assays, and the research, development and sale of research tools, kits, and reagents in the field of agriculture are specifically excluded from our exclusive license to the First License MGH Patent Rights. MGH also granted us a non‑exclusive, worldwide, royalty‑bearing, sublicensable license to the First License MGH Patent Rights to make, have made, use, have used, sell, offer for sale, and import products and processes in substantially all fields other than the First MGH Exclusive License Field. Products and processes used for clinical diagnostic assays are specifically excluded from our non‑exclusive license to the First License MGH Patent Rights. In addition, MGH granted us a non‑exclusive, worldwide, royalty‑bearing sublicensable license under specified MGH know‑how and biological materials to make, have made, use, have used, sell, offer for sale, and import products and processes in all fields, except for products and processes used for clinical diagnostic assays. The licenses granted to us by MGH under the First MGH License Agreement are subject to retained rights of the U.S. government in the First License MGH Patent Rights and a royalty‑free right of MGH, academic, and not‑for‑profit institutions, to practice the First License MGH Patent Rights for educational, research, and clinical purposes.

We are obligated to use commercially reasonable efforts to research, develop, and commercialize products and processes in the exclusive license field and outside the First MGH Exclusive License Field under the First MGH License Agreement. Also, we are required to achieve certain development milestones within specified time periods for products and processes in the First MGH Exclusive License Field and outside the First MGH Exclusive License Field. MGH has the right to terminate our license if we fail to achieve these development milestones.

Under the First MGH License Agreement, we paid MGH an upfront license fee in the low six digit dollar amount and issued less than one percent of our common stock to MGH. We also must pay an annual license maintenance fee ranging from low‑ to mid‑five digit dollar amount, depending on the calendar year, beginning in 2017. We are obligated to reimburse MGH for expenses associated with the prosecution and maintenance of the First License MGH Patent Rights, including expenses associated with any interference proceedings in the USPTO, any opposition proceedings in the EPO, or any other inter partes or other post grant proceedings in these or other jurisdictions where we are seeking patent protection.

MGH is entitled to receive clinical, regulatory, and commercial milestone payments totaling up to $1.4 million in the aggregate for the first licensed product or process, clinical, and regulatory milestone payments totaling up to $125,000 in the aggregate for each of the second, third, and fourth indications for which we are currently planningconduct clinical trials they may compete withof a licensed product or process and commercial milestone payments totaling up to $625,000 in the aggregate for each of the second, third, and fourth licensed products or process we introduce into the market. We are obligated to make additional payments to MGH of up to an aggregate of $1.8 million upon the occurrence of certain sales milestones.

We are also obligated to pay MGH low single‑digit percentage royalties on net sales of products for the prevention or treatment of human disease, and ranging from low single‑digit to low double‑digit percentage royalties on net sales of other products currentlyand services made by us, our affiliates, or our sublicensees. The royalty percentage depends on the product and service, and whether such licensed product or licensed service is covered by a valid claim within the First License MGH Patent Rights. If we pay royalties to a third party on net sales of our products, then we can credit up to a mid double‑digit percentage of the amount paid to such third party against the royalties due to MGH. Our obligation to pay royalties will expire on a product‑by‑product and country‑by‑country basis upon the later of the expiration of the

last to expire valid claim of the First License MGH Patent Rights that cover the composition, manufacture or use of each covered product or service in each country or the tenth anniversary of the date of the first commercial sale of the product or service. If we sublicense any of the First License MGH Patent Rights or know‑how or materials licensed under development,the First MGH License Agreement to a third party in the First MGH Exclusive License Field, MGH has the right to receive a low double‑digit percentage of the sublicense income, which percentage decreases to a high single‑digit percentage after a specified period of time. If we sublicense any of the First License MGH Patent Rights or know‑how or materials licensed under the First MGH License Agreement to a third party in the field of research products or processes, MGH has the right to receive a high double‑digit percentage of the sublicense income. If we sublicense any of the First License MGH Patent Rights or know‑how or materials licensed under the First MGH License Agreement to a third party in any field outside the First MGH Exclusive License Field and outside the field of research products or processes, MGH has the right to receive a low double‑digit percentage of the sublicense income.

MGH retains control of the prosecution and maintenance of the First License MGH Patent Rights. We have the right to provide input in the prosecution of the First License MGH Patent Rights, including genome editingdirecting MGH to file and gene therapy products. Competitionprosecute patents in certain countries. MGH controls the enforcement of the First License MGH Patent Rights, except for the enforcement of the rights exclusively licensed to us, which we control at our expense. We may not enter into any settlement without the prior written consent of MGH. We also retain the first right to defend against any legal or administrative action taken by a third party against a First License MGH Patent Right at our own costs.

Unless terminated earlier, the term of the First MGH License Agreement will expire, on a country‑by‑country basis, upon the expiration or abandonment of all First License MGH Patent Rights in such country. However, our royalty obligations, discussed above, may survive expiration or termination. We have the right to terminate the First MGH License Agreement at will upon 90 days’ written notice to MGH. MGH may terminate the First MGH License Agreement upon a specified period of written notice in the event of our uncured material breach, such notice period varying depending on the nature of the breach. MGH also may terminate the First MGH License Agreement immediately if we challenge the enforceability, validity, or scope of any First License MGH Patent Right or assist a third party to do so, or in the event of our bankruptcy or insolvency.

In August 2016, we entered into a second license agreement with MGH for specified patent rights (the “Second License MGH Patent Rights” and such agreement, the “Second MGH License Agreement”). Pursuant to the Second MGH License Agreement, and as of December 31, 2017, we have certain rights under two issued U.S. patents, six pending U.S. patent applications, one pending European patent application, one pending PCT patent application, and other related patent applications in jurisdictions outside of the United States and Europe. The Second License MGH Patent Rights are directed, in part, to CRISPR/Cas9 compositions of matter and their use for genome editing.

Pursuant to the Second MGH License Agreement, MGH granted us an exclusive, worldwide, royalty‑bearing, sublicensable license to the Second License MGH Patent Rights, to make, have made, use, have used, sell, offer for sale and have sold products currentlyand processes in the fields of the prevention and treatment of human and animal disease, or collectively, the Second MGH Exclusive Field. MGH also granted us a non‑exclusive, worldwide, royalty‑bearing, sublicensable license to use research data and other information pertaining to the Second License MGH Patent Rights to make, have made, use, have used, sell, offer for sale and have sold products and processes in the Second MGH Exclusive Field. The licenses granted to us by MGH under the Second MGH License Agreement are subject to retained rights of the U.S. government in the Second License MGH Patent Rights and the royalty‑free right of MGH, its affiliates, and academic, government, and not‑for‑profit institutions to practice the Second License MGH Patent Rights for research and educational purposes.

We are obligated under the Second MGH License Agreement to use commercially reasonable efforts to research, develop, and commercialize products and processes in the Second MGH Exclusive Field. As part of these obligations, we are required to achieve certain development milestones within specified time periods, with MGH having the right to terminate the Second MGH License Agreement if we fail to achieve these milestones within the required time periods.

Under the Second MGH License Agreement, we paid MGH an upfront license fee in the high six digits. We also must pay an annual license maintenance fee beginning in 2018 that increases over time within a specified dollar range in the low six digits, with such maintenance fee being creditable against any royalties due to MGH under the

Second MGH License Agreement in the same calendar year. We are obligated to reimburse MGH for expenses associated with the prosecution and maintenance of the Second License MGH Patent Rights.

MGH is entitled to receive clinical and regulatory milestone payments totaling less than $1.0 million in the aggregate for up to four licensed products or processes to achieve the specified clinical and regulatory milestones. In addition, MGH is entitled to receive commercial sales milestone payments totaling up to $4.9 million in the aggregate upon the achievement of milestones relating to first commercial sales of up to four licensed products or processes in the United States and abroad as well as milestones relating to annual net sales of products or processes meeting specified thresholds.

We are also obligated to pay MGH royalties of less than 1% on net sales of products and processes for the prevention or treatment of human disease, and royalties of a low single‑digit percentage on net sales of products and processes for the prevention or treatment of a non‑human animal disease, made by us, our affiliates, or our sublicensees. Our obligation to pay royalties will expire on a product/process‑by‑product/process and country‑by‑country basis upon the later of the expiration of the last to expire valid claim of the Second License MGH Patent Rights that covers the applicable product or process and the tenth anniversary of the date of the first commercial sale of the applicable product or process. The royalty percentages that we are obligated to pay are subject to reduction if at the time of sale the applicable product or process is not covered by a valid claim within the Second License MGH Patent Rights. If we pay royalties to a third party on net sales of a product or process for which a royalty is due under both First MGH License Agreement and the Second MGH License Agreement, we can credit up to a mid double‑digit percentage of the amount paid to such third party against the royalties due to MGH under the Second MGH License Agreement, provided that the royalties due to MGH under the Second MGH License Agreement may include competition fornot be reduced by more than a low to mid double‑digit percentage.

Under the Second MGH License Agreement, MGH is also entitled to receive certain payments in the event our market capitalization reaches specified thresholds ranging from low to high ten digit dollar amounts (the “MGH Market Cap Success Payments”). The MGH Market Cap Success Payments payable to MGH range from a low seven digit dollar amount to a low eight digit dollar amount, which low eight digit dollar amount would be payable only if we achieve at least market capitalization of a high ten digit dollar amount and if we have one licensed product that (i) is the subject of a Phase 1 clinical trial sites, patient recruitment,of which we or one of our affiliates or sublicensees is the sponsor, (ii) was the subject of a Phase 1 clinical trial of which we or one of our affiliates or sublicensees was the sponsor with us having determined to conduct a subsequent clinical trial with respect to such product candidate, or (iii) has been approved for sale in either the United States or the European Union. In addition, in the event of an asset sale or merger of our company to a third party for consideration in excess of one or more market capitalization thresholds, we must pay MGH all MGH Market Cap Success Payments corresponding to such market capitalization thresholds that have not previously been paid (the “MGH Company Sale Success Payments”). MGH Market Cap Success Payments are payable in cash or shares of our common stock at our discretion, and product sales.MGH Company Sale Success Payments are payable solely in cash. In December 2017, an MGH Market Cap Success Payment of $2.0 million became due under our Second MGH License Agreement in connection with our market capitalization reaching $1.0 billion, which we settled in January 2018 through the issuance of 80,000 shares of our common stock to MGH.

MGH retains control of the prosecution and maintenance of the Second License MGH Patent Rights. We have the right to provide input in the prosecution of the Second License MGH Patent Rights, including to direct MGH to file and prosecute patents in certain countries at our cost. We control, at our expense, the enforcement of the rights exclusively licensed to us. We may not enter into any settlement without the prior written consent of MGH. We also retain the first right to defend against any legal or administrative action taken by a third party against a Second License MGH Patent Right at our own cost.

Unless terminated earlier, the term of the Second MGH License Agreement will expire upon the expiration or abandonment of all the Second License MGH Patent Rights. However, our royalty obligations may survive expiration or termination. We have the right to terminate the Second MGH License Agreement at will upon 90 days written notice to MGH. MGH may terminate the Second MGH License Agreement upon specified periods of written notice in the event of our uncured material breach, with the length of such notice period varying depending on the nature of the breach. MGH also may terminate the license agreement immediately if we challenge the validity of any Second License MGH Patent Rights or in the event of our bankruptcy or insolvency.

Intellectual Property

Our success depends in part on our ability to obtain and maintain proprietary protection for our platform technology, programs, and know‑how related to our business, defend and enforce our intellectual property rights, in particular, our patent rights, preserve the confidentiality of our trade secrets, and operate without infringing valid and enforceable intellectual property rights of others. We seek to protect our proprietary position by, among other things, exclusively licensing and filing U.S. and certain foreign patent applications related to our platform technology, existing and planned programs, and improvements that are important to the development of our business, where patent protection is available. We also rely on trade secrets, know‑how, continuing technological innovation, and confidential information to develop and maintain our proprietary position and protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection. We seek to protect our proprietary technology and processes, in part, by confidentiality agreements with our employees, consultants, scientific advisors, and contractors. We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems.

Our in‑licensed patents and patent applications cover various aspects of our genome editing platform technology, including CRISPR/CRISPR systems that employ Cas9 including S. aureus Cas9, high‑fidelity Cas9 nucleases and Cas9 PAM variants, self‑inactivating forms of Cas9, Cas9 nickases, CRISPR systems that employ Cpf1 including Cpf1 nickases and other variants and self‑inactivating forms of Cpf1, and also CRISPR systems that employ viral vectors for delivery, single guide RNAs, or modified guide RNAs, S. aureus Cas9, or a Cas9 nickase. In addition, weRNAs. We also have filed patent applications and have in‑licensed rights to filed patent applications directed to each of the four components of our genome editing platform technology. We intend to pursue, when possible, additional patent protection, including composition of matter, method of use, and process claims, directed to each component of our platform technology. We also intend to obtain rights to existing delivery technologies through one or more licenses from third parties.

Notwithstanding these efforts, we cannot be sure that patents will be granted with respect to any patent applications we have licensed or filed or may license or file in the future, and we cannot be sure that any patents we have licensed or patents that may be licensed or granted to us in the future will not be challenged, invalidated, or circumvented or that such patents will be commercially useful in protecting our technology. Moreover, trade secrets can be difficult to protect. While we have confidence in the measures we take to protect and preserve our trade secrets, such measures can be breached, and we may not have adequate remedies for any such breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors. For more information regarding the risks related to our intellectual property, please see “Item 1A. Risk“Risk Factors—Risks Related to Our Intellectual Property.”

As of February 29, 2016,December 31, 2017, we owned twoone U.S patent, 19 pending U.S. non‑provisional patent applications, 1416 pending European patent applications, 16 pending U.S. provisional patent applications, and 1516 pending Patent Cooperation Treaty or PCT,(“PCT”) patent applications, and other related patent applications in jurisdictions outside the United States and Europe, which include claims to compositions of matter and methods of use. With respect to oneOne of these pending U.S. non‑provisional applicationspatents and its corresponding pending PCT application,U.S. and foreign counterpart applications are co‑owned with Broad and Iowa and we have determined that certain of the claims of such applications cover subject matter invented jointly by us and other third parties, which will result in certain third parties holding co‑ownership rights in such applications. Therefore, we intend to update these applications to reflect such joint inventorship and seek aobtained an exclusive license to such co‑ownership rights from suchthese third parties.parties in the field of prevention or treatment of human disease using gene therapy or genome editing. In addition, three of these pending PCT patent applications and four of these pending U.S. provisional patent applications are co‑owned with certain of our collaborators because they encompass inventions developed under our collaborations. We intend to pursue, when possible,

to us with respect to its interests and to Tokyo’s interests in these applications) include Rockefeller as a joint applicant.U.S. patent applications but not to any foreign equivalents thereof. Broad does not and does not purport to grant any rights in Rockefeller’sNIH’s interest in these U.S. patent applications under our agreement. As a result, Broadwe may not be the sole andhave exclusive owner ofrights under any U.S. patents that issue from these U.S. patent applications.applications and we may not have any rights under any foreign patents that issue from any foreign equivalents thereof. For more information regarding these license agreements, please see “Item 1. Business—License Agreements.the section of this Annual Report on Form 10-K titled “Business —Intellectual Property Licenses.”

On January 11, 2016, the Patent Trial and Appeal Board of the USPTO or PTAB,(the “PTAB”) declared an interference between a pending U.S. patent application (U.S. Serial No. 13/842,859) that is owned by the University of California, the University of Vienna, and Emmanuelle Charpentier and 12 U.S. patents (U.S. Patent Nos. 8,697,359; 8,771,945; 8,795,965; 8,865,406; 8,871,445; 8,889,356; 8,895,308; 8,906,616; 8,932,814; 8,945,839; 8,993,233; and 8,999,641) that are co‑owned by Broad and MIT, and in some cases Harvard, and in‑licensed by us. On March 17, 2016, the PTAB re-declaredre‑declared the interference to add a pending U.S. patent application (U.S. Serial No. 14/704,551) that is co‑owned by Broad, MIT, and Harvard, and in‑licensed by us. An interference is a proceeding within the USPTO to determine priority of invention of the subject matter of patent claims filed by different parties. Prior toIn the declaration of interference, the University of California, acting on behalf of itself and the University of Vienna and Emmanuelle Charpentier filed a “Suggestion of Interference” in the USPTO on April 13, 2015, which requestedasserted that an interference be declared between certain claims in their pending U.S. patent application (U.S. Serial No. 13/842,859) and certain claims in 10 U.S. patents, which we have in‑licensed from Broad acting on behalf of itself, MIT, and Harvard. A Supplemental Suggestion of Interference was filed by the University of California and Emmanuelle Charpentier on November 5, 2015, which requested that an interference be declared between certain claims in their same pending U.S. patent application (U.S. Serial No. 13/842,859) and certain claims in two additional U.S. patents and five pending U.S. patent applications (including U.S. Serial No. 14/704,551 which has now been added to the interference), which we have in‑licensed from Broad, acting on behalf of itself, MIT, and Harvard. The 12 U.S. patents referred to in the Suggestion of Interference and Supplemental Suggestion of Interference are the same as those included in the declaration of interference. The Suggestion of Interference and Supplemental Suggestion of Interference assert that the inventors from the University of California and the University of Vienna, and Emmanuelle Charpentier made certain inventions claimed in the Broad, MIT and Harvard patents before the inventors from Broad, and MIT and, in certain cases, Harvard, which will be evaluatedHarvard. The declaration of interference defined the invention that was subject to the declaration of interference, also referred to as “the count,” as relating to a method that involves contacting a target DNA in a eukaryotic cell with certain defined CRISPR/Cas9 components for the purpose of cleaving or editing a target DNA molecule or modulating transcription of at least one gene encoded thereon. All of the claims in the pending U.S. patent application that is owned by the University of California, the University of Vienna, and Emmanuelle Charpentier and all of the claims in the 12 U.S. patents and one pending U.S. patent application that are co-owned by Broad and MIT, and in some cases, Harvard, and in-licensed by us were implicated in the interference.

On February 15, 2017, the PTAB held that there is no interference‑in‑fact between the parties for the subject matter of the count. A judgment of no interference‑in‑fact means that no interference is needed to resolve priority between the parties because the PTAB determined that our in-licensed claims are directed to subject matter that is patentably distinct from those of the University of California, the University of Vienna, and Emmanuelle Charpentier. The interference proceeding has therefore ended. Therefore, the 12 U.S. patents and one U.S. patent application that we have in‑licensed from Broad, acting on behalf of itself, MIT, and Harvard, as well as the U.S. patent application owned by the University of California, the University of Vienna, and Emmanuelle Charpentier, with respect to which the PTAB had declared an interference were not modified or revoked as a result of this interference proceeding.

Having filed a notice of appeal on April 12, 2017, the University of California, the University of Vienna, and Emmanuelle Charpentier filed an appeal brief to the Court of Appeals for the Federal Circuit on July 25, 2017 for review of the no interference-in-fact decision made by the PTAB in the interference proceeding. Broad filed its responsive brief on October 25, 2017. The University of California, derives rightsthe University of Vienna and Emmanuelle Charpentier filed a reply brief on November 22, 2017. It is uncertain when or in U.S. Serial No. 13/842,859 from an assignment by Dr. Jennifer Doudna andwhat manner the Federal Circuit will act on this appeal. A final, non‑appealable judgment of no interference‑in‑fact bars any further interference between the same parties for claims to the same invention as the count of the interference. However, as discussed below, certain of these 12 U.S. patents and one U.S. patent application are, or may in the other inventors listed on such application. Dr. Doudna was a founder of our companyfuture be, subject to further intellectual property proceedings and entered into a consulting agreement with us at the time of our founding. However, Dr. Doudna gave notice of termination of that agreement in May 2014 after less than seven months of service, and she has had no further engagement in our business since that time. Dr. Doudna is also a founder of Caribou Biosciences and has been publicly identified as an advisor to Intellia Therapeutics, each of which is one of our competitors.

disputes, including interference proceedings.

Separately, ToolGen Inc. (“Toolgen”) filed Suggestions of Interference in the USPTO on April 13, 2015, which became publicly available on November 12, 2015 and December 3, 2015 suggesting that it believes some of the claims pending in its applications (U.S. Serial No. 14/685,568 and U.S. Serial No. 14/685,510, respectively)685,510) interfere with certain claims in five U.S. patents, which we have in‑licensed from Broad, acting on behalf of itself, MIT, and Harvard. These five U.S. patents are among the 12 U.S. patents with respect to which the PTAB hashad declared an interference.interference with the pending U.S. patent application (U.S. Serial No. 13/842, 859) that is owned by the University of California, the University of Vienna, and Emmanuelle Charpentier. The Suggestions of Interference that were filed by ToolGen are still pending, and it is uncertain when and in what manner the USPTO will act on them.

A request for ex parte re‑examination was filed with the USPTO on February 16, 2016 against one patent that we have in‑licensed from Broad, acting on behalf of itself and MIT (U.S. Patent No. 8,771,945), which was subject to

A request for ex parte re-examination was filed with the USPTO on February 16, 2016 against oneinterference proceeding involving the University of California, the patents with respect to whichUniversity of Vienna, and Emmanuelle Charpentier and referenced in the PTAB has declared an interference (U.S. Patent No. 8,771,945). This patent is also one of the patents that ToolGen has included in its Suggestions of Interference.Interference filed by ToolGen. Ex parte re-examinationre‑examination is a procedure through which a third party can anonymously request the USPTO to re-examinere‑examine a granted patent because the third party believes the granted patent may not be patentable over prior art in the form of a printed publication or another patent. Before the USPTO will re-examinere‑examine a granted patent, the third party requestor must establish that the submitted prior art establishes a substantial and new question of patentability. If the USPTO determines there is a substantial and new question of patentability, it will grantgrants the re-examinationre‑examination request and re-examinere‑examines the patent in question.after giving the patent owner the option of filing an initial statement. The request for ex parte re‑examination of U.S. Patent No. 8,771,945 was granted on May 9, 2016 thereby initiating a re‑examination procedure between the USPTO and Broad, acting on behalf of itself and MIT. The third party requestor does not participate in the re-examinationre‑examination procedure after filing the request. The request for ex parte re-examination is still pending, andexcept that it has the option of responding if the patent owner chooses to file an initial statement. On May 12, 2016, the PTAB suspended the re‑examination of U.S. Patent No. 8,771,945 noting that it has jurisdiction over any file that involves a patent involved in the interference. It is uncertain when andthe PTAB will lift the suspension, however the PTAB may do so in what mannerlight of the USPTO will act on it.PTAB’s no interference‑in‑fact holding. If Broad is unsuccessful during the re‑examination, U.S. Patent No. 8,771,945 may be revoked or narrowed.

The 12 in‑licensed U.S. patents and pendingone in‑licensed U.S. patent application that arewere the subject of the interference with the pending U.S. patent application (U.S. Serial No. 13/842,859) that is owned by the University of California, the University of Vienna, and Emmanuelle Charpentier (which includes the five in‑licensed U.S. patents that are the subject of the Suggestions of Interference filed by ToolGen and the one in-licensedin‑licensed U.S. patent that is the subject of the request for ex parte re-examination)re‑examination) relate generally to the CRISPR/Cas9 system and its use in eukaryotic cells. The claims of the 12 in‑licensed U.S. patents and pendingone in‑licensed U.S. patent application vary in scope and coverage and include claims that are directed to CRISPR/Cas9 systems that employ viral vectors for delivery, single guide RNAs, modified guide RNAs, S. aureus Cas9, or a Cas9 nickase and are relevant to our genome editing platform technology. The loss or narrowing in scope of one or more of these in‑licensedin-licensed patents could have a material adverse effect on the conduct of our business.

In addition, we or our licensors may be subject to claims that former employees, collaborators, or other third parties have an interest in our owned or in‑licensed patents, patent applications, or other intellectual property as an inventor or co‑inventor. For example, we have determined that certain of the claims of one of our pending U.S. non‑provisional patent applications, and its corresponding pending PCT application, cover subject matter invented jointly by us and other third parties, which will result in certain third parties holding co‑ownership rights in such applications. If we are unable to obtain an exclusive license to any such third party co‑owners’ interest in such patents or patent applications, such co‑owners may be able to license their rights to other third parties, including our competitors. In addition, we may need the cooperation of any such co‑owners to enforce anysuch patents that issue from such patent applications against third parties, and such cooperation may not be provided to us. We are also aware of one third party, Rockefeller, that has independently filed a U.S. patent application (U.S. Serial No. 14/324,960) as a continuation of a U.S. patent application that we have in‑licensed from Broad, acting on behalf of itself and MIT (U.S. Serial No. 14/183,429, which has since issued as U.S. Patent No. 8,771,945). In contrast to a Suggestion of Interference, a U.S. continuation patent application does not seek to challenge the priority date of an existing patent, rather it is a new filing of an existing U.S. patent application, which contains the same priority date as the existing application. However, it may provoke the declaration of an interference. In that regard, the U.S. continuation patent application filed by Rockefeller lists one of its employees as a co‑inventor alongside Dr. Feng Zhang, who is an employee of Broad in addition to being one of our founders. The U.S. continuation patent application was filed by Rockefeller with copies of claims from one U.S. patent and one U.S. patent application, which we have in‑licensed from Broad, acting on behalf of itself and MIT (U.S. Patent No. 8,697,359 and U.S. Serial No. 14/183,429, which has since issued as U.S. Patent No. 8,771,945). The U.S. continuation patent application filed by Rockefeller may provoke the declaration of an interference by the USPTO with these or other patents that we have in‑licensed from Broad, acting on behalf of itself, MIT, and Harvard. The U.S. continuation application filed by Rockefeller may also prompt a derivation proceeding in the USPTO or litigation in court regarding such continuation patent application. In addition, if the USPTO were to grant a patent based on this U.S. continuation patent application including the Rockefeller employee as an inventor, then Rockefeller could license its rights to such patent to one of our competitors or to another third party such that they may have freedom‑to‑operate under such patent and may commercialize similar or identical products and technology to us. We may also need the cooperation of Rockefeller to enforce such patent against third parties, and such cooperation may not be provided to us.

We or our licensors are subject to and may alsoin the future become a party to similar proceedings or priority disputes in Europe or other foreign jurisdictions. We are aware of nine oppositions filed by different third parties againstOn January 17, 2018, the European Patent Office Opposition Division (the “Opposition Division”) revoked in the European Patent Office (the “EPO”) a European patent that we have in‑licenselicensed from Broad, acting on behalf of itself, MIT and Harvard (European Patent No. EP 2,771,468 B1). On January 18, 2018, Broad, acting on behalf of itself, MIT and Harvard filed a notice of appeal to the Boards of Appeal of the EPO for review of the Opposition Division’s decision to revoke this patent. It is uncertain when or in what manner the Boards of Appeal will act on this appeal. The European Patent Office Opposition Division or EPO OD, has sent a Communicationalso initiated opposition proceedings against six other European patents that we have in‑licensed from Broad, acting on behalf of Noticeitself, MIT and Harvard (European Patent Nos. EP 2,784,162 B1, EP 2,896,697 B1, EP 2,898,075 B1, EP 2,921,557 B1, EP 2,931,898 B1, and EP 3,009,511 B1), one European patent that we have in‑licensed from Broad, acting on behalf of Opposition

have not yet been made available to the public. The loss of priority for, or the loss of, these European patents could have a material adverse effect on the conduct of our business.

For more information regarding the risks associated with the declared interference, the Suggestions of Interference, the continuation patent application filed by Rockefeller, the European oppositions, the request for ex partere-examination, re‑examination, the European oppositions, and other potential third party intellectual property related disputes, please see “Item 1A. Risk“Risk Factors—Risks Related to Our Intellectual Property.”

The term of individual patents depends upon the legal term for patents in the countries in which they are granted. In most countries, including the United States, the patent term is 20 years from the earliest claimed filing date of a non‑provisional patent application in the applicable country. In the United States, a patent’s term may, in certain cases, be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the USPTO in examining and granting a patent, or may be shortened if a patent is terminally disclaimed over a commonly owned patent or a patent naming a common inventor and having an earlier expiration date. The Drug Price Competition and Patent Term Restoration Act of 1984 extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent applicable to each regulatory review period may be extended and only those claims covering the approved drug or a method for using it may be extended.

CRISPR/Cas9

CRISPR

As of February 29, 2016,December 31, 2017, we owned twoone U.S. patent, 19 pending U.S. non‑provisional patent applications, 1416 pending European patent applications, 16 pending U.S. provisional patent applications, and 1516 pending PCT patent applications, and other related patent applications in jurisdictions outside the United States and Europe that are related to our CRISPR/Cas9CRISPR technology and which include claims directed to our genome editing platform, including our directed editing component, as well as composition of matter and method of use claims for our therapeutic programs, including LCA10 and other genetic and infectious eye disorders, and engineered T cells. With respect to oneOne of these pending U.S. non‑provisional applicationspatents and its corresponding pending PCT application,U.S. and foreign counterpart applications is co‑owned with Broad and Iowa and we have determined that certain of the claims of such applications cover subject matter invented jointly by us and other third parties, which will result in certain third parties holding co‑ownership rights in such applications. Therefore, we intend to update these applications to reflect such joint inventorship and seek aobtained an exclusive license to such co‑ownership rights from suchthese third parties.parties in the field of prevention or treatment of human disease using gene therapy or genome editing. In addition, three of these pending PCT patent applications and four of these pending U.S. provisional patent applications are co‑owned with certain of our collaborators because they encompass inventions developed under our collaborations. If issued as U.S. patents, and if the appropriate maintenance fees are paid, thesethe U.S. patent applications would be expected to expire between 2034 and 2036,2038, excluding any additional term for patent term adjustments or patent term extensions.

As of February 29, 2016,December 31, 2017, we in‑licensed 2035 U.S. patents, four11 European patents and related validations, and over 300500 pending patent applications, including 62approximately 91 pending U.S. non‑provisional patent applications, 3557 pending European patent applications, six pending PCT patent applications, and other related patent applications in jurisdictions outside the United States and Europe that are related to our CRISPR/Cas9CRISPR technology collectively from Broad, Harvard, MIT, MGH,various universities and Duke, as more fully described below.institutions. The claims from our in‑licensed portfolio include claims to compositions of matter, methods of use, and certain processes. These include claims directed to CRISPR/CRISPR systems that employ Cas9 including Cas9 nickases, S. aureus Cas9, high‑fidelity Cas9 nucleases, Cas9 PAM variants and self‑inactivating forms of Cas9, CRISPR systems that employ Cpf1 including Cpf1 nickases and other variants and self-inactivating forms of Cpf1, and also CRISPR systems that employ viral vectors for delivery, single guide RNAs, or modified guide RNAs, S. aureus Cas9, or a Cas9 nickase.RNAs. Our current in‑licensed U.S. patents, if the appropriate maintenance fees are paid, are expected to expire between 2033 and 2034,2036, excluding any additional term for patent term adjustments or patent term extensions.

LCA10

As of February 29, 2016,December 31, 2017, we owned two pending U.S. non‑provisional patent applications, one pending U.S.European patent application, one pending Canadian patent application, and one pending PCT patent application which are directed to compositions of matter, including guide RNAs directed to CEP290, and methods of use for the treatment of LCA10. If issued as a U.S. patent, and if the appropriate maintenance fees are paid, the U.S. patent

We

Trademarks

As of December 31, 2017, our registered trademark portfolio consisted of registrations in the United States for EDITAS, EDITAS in Stylized Letters and the Infinity Logo, registrations in Australia, China, the European Union, Japan and Switzerland for EDITAS, registrations in Australia, the European Union and Switzerland for the Infinity Logo and a registration in the European Union for UDITAS.

Competition

The biotechnology and pharmaceutical industries, including in the gene therapy and genome‑editing fields, are obligated to use commercially reasonable efforts tocharacterized by rapidly advancing technologies, intense competition, and a strong emphasis on intellectual property and proprietary products. While we believe that our technology, development experience, and scientific knowledge provide us with competitive advantages, we face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical, biotechnology companies, governmental agencies, and public and private research institutions. Any product candidates that we successfully develop and commercialize products formay compete with existing therapies and new therapies may become available in the prevention or treatment of human disease underfuture.

We compete in the license agreement. Also, we are required to achieve certain development milestones within specified time periods for products incorporating the CRISPR/Cas9, TAL, and delivery‑related technologies covered by the Harvard/Broad Patent Rights. Harvard and Broad have the right to terminate our license with respect to the Harvard/Broad Patent Rights covering the technology or technologies with respect to which we fail to achieve these development milestones.

The licenses granted by Broad and Harvard to us under the license agreement are subject to any retained rightssegments of the U.S. governmentpharmaceutical, biotechnology, and other related markets that utilize technologies encompassing genomic medicines to create therapies, including genome editing and gene therapy. There are additional companies that are working to develop therapies in areas related to our research programs. Our platform and product focus is the development of therapies using CRISPR technology. Other companies developing CRISPR technology include Caribou Biosciences, Casebia Therapeutics, CRISPR Therapeutics, ERS Genomics, Exonics Therapeutics, Intellia Therapeutics, and TRACR Hematology. In addition, there have been and may continue to be discoveries of new CRISPR‑based gene editing technologies. There are additional companies developing therapies using other genome editing technologies, including TALENs, meganucleases, Mega‑TALs, and zinc finger nucleases. The companies developing these other genome editing technologies include bluebird bio, Cellectis, Poseida Therapeutics, Precision Biosciences, and Sangamo Therapeutics. Additional companies developing gene therapy products include Abeona Therapeutics, Adverum Biotechnologies, AGTC Therapeutics, Audentes Therapeutics, Homology Medicines, Nightstar Therapeutics, REGENXBIO, Spark Therapeutics, uniQure, and Voyager Therapeutics. In addition to competition from other genome editing therapies or gene therapies, any products that we develop may also face competition from other types of therapies, such as small molecule, antibody, protein, oligonucleotide, or ribonucleic acid therapies.

In addition, many of our current or potential competitors, either alone or with their collaboration partners, may have greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, and marketing approved products than we do. Mergers and acquisitions in the Harvard/Broad Patent Rightspharmaceutical, biotechnology, and the rights retained by Broad, Harvard,gene therapy industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller or early‑stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and MIT on behalf of themselvesestablished companies. These competitors also compete with us in recruiting and other academic, governmentretaining qualified scientific and non‑profit entities,management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, practice the Harvard/Broad Patent Rightsor necessary for, research, educational,our programs. Our commercial opportunity could be reduced or teaching uses. In addition, certain rights granted to us under the license agreement are further subject to a non‑exclusive license to the Howard Hughes Medical Institute for research purposes. Our exclusive license rights also are subject to rights retained by Broad, Harvard, and MIT and any third party to research, develop, make, have made, use, offer for sale, sell, have sold, import or otherwise exploit the Harvard/Broad Patent Rights and licensed products as research products or research tools, or for research purposes. In addition, Broad does not and does not purport to grant any rights in Rockefeller’s interest in the patent applications licensed to us by Broad (including a continuation of one of these applications) that include Rockefeller as a joint applicant.

We have the right to sublicenseeliminated if our licensed rights provided that the sublicense agreement must be in compliance and consistent with the terms of the license agreement. Any sublicense agreement cannot include the right to grant further sublicenses without the written consent of Broad and Harvard. In addition, any sublicense agreements must contain certain terms, including a provision requiring the sublicensee to indemnify Harvard, Broad, MIT, and Howard Hughes Medical Institute according to the same terms as are provided in our license agreement and a statement that Broad, Harvard, MIT, and Howard Hughes Medical Institute are intended third party beneficiaries of the sublicense agreement for certain purposes.

Under the agreement, Harvard and Broad also retained rights to grant further licenses under specified circumstances to third parties, other than specified entities, that wish tocompetitors develop and commercialize products that targetare safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop. Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a particular gene and that otherwise would fall withinstrong market position before we are able to enter the scopemarket. The key competitive factors affecting the success of all of our exclusive license from Harvardprograms are likely to be their efficacy, safety, convenience, and Broad. availability of reimbursement.

If after a specified period of time, a third party requests a license under the Harvard/Broad Patent Rightsour current programs are approved for the development and commercialization of a product that would be subject to our exclusive license grant from Harvard and Broad, Harvard and Broad may notify us of the request. We refer to these requests as Third Party Proposed Product Requests. A Third Party Proposed Product Request must be accompanied by a research, development and commercialization plan reasonably satisfactory to Harvard and Broad, including evidence that the third party has, or reasonably expects to have, access to any necessary intellectual property and funding. Harvard and Broad may not grant a Third Party Proposed Product Request if our collaborators orindications for which we are researching, developing, or commercializing acurrently planning clinical trials, they may compete with other products currently under development, including genome editing and gene therapy products. Competition with other related products currently under development may include competition for clinical trial sites, patient recruitment, and product directed to the same gene target as the product that is the subject of the Third Party Proposed Product Request. If we, directly or through any of our affiliates or sublicensees, are not researching, developing or commercializing a product directed to the same gene target that is the subject of the Third Party Proposed Product Request, which we refer to as a Licensee Product, and we wish to do so either alone or with a collaboration partner, Harvard and Broad may not grant the Third Party Proposed Product Request if we can demonstrate to Harvard and Broad’s reasonable satisfaction that we are interested in researching, developing, and commercializing a Licensee Product, that we have a commercially reasonable research, development, and commercialization plan to do so, and we commence and continue reasonable commercial efforts under the plan. If our collaborators and we are neither researching, developing or commercializing a Licensee Product nor able to develop and implement a plan reasonably satisfactory to Harvard and Broad, Harvard and Broad may grant a license to the third party on a gene target‑by‑gene target basis. If the license granted to the third party is exclusive, it shall be on milestone and royalty terms that taken as a whole are no more favorable to the third party than those provided in our license agreement and shall require such third party to use commercially reasonable efforts to implement the research, development and commercialization plan submitted by the third party to Harvard and Broad.sales.

Under the license agreement, we paid Broad and Harvard an upfront license fee in the low six figures and issued a single‑digit percentage of shares of our common stock to Broad (with Broad holding a right to request re‑issuance to its designees, including MIT or MIT’s designee) and Harvard. We also must pay an annual license maintenance fee ranging from the low‑ to mid‑five figures to the low‑six figures, depending on the calendar year, beginning in 2016. This annual

license maintenance fee is creditable against royalties owed on products and services in the same year as the maintenance fee is paid. We are obligated to reimburse Broad and Harvard for expenses associated with the prosecution and maintenance of the Harvard/Broad Patent Rights, including expenses associated with any interference proceedings in the USPTO, any opposition proceedings in the European Patent Office, or EPO, or any other inter partes or other post grant proceedings in these or other jurisdictions where we are seeking patent protection. Therefore, we are obligated to reimburse Broad and/or Harvard for expenses associated with the interference and opposition proceedings involving patents licensed to us under this agreement (described in more detail in “Item 3. Legal Proceedings”).

Broad and Harvard are collectively entitled to receive clinical and regulatory milestone payments totaling up to $14.8 million in the aggregate per licensed product approved in the United States, European Union and Japan for the prevention or treatment of a human disease that afflicts at least a specified number of patients in the aggregate in the United States. If we undergo a change of control during the term of the license agreement, these clinical and regulatory milestone payments will be increased by a certain percentage in the mid double‑digits. We are also obligated to make additional payments to Broad and Harvard, collectively, of up to an aggregate of $54.0 million upon the occurrence of certain sales milestones per licensed product for the prevention or treatment of a human disease that afflicts at least a specified number of patients in the aggregate in the United States. Broad and Harvard are collectively entitled to receive clinical and regulatory milestone payments totaling up to $4.1 million in the aggregate per licensed product approved in the United States and at least one jurisdiction outside the United States for the prevention or treatment of a human disease that afflicts fewer than a specified number of patients in the aggregate in the United States or a specified number of patients per year in the United States, which we refer to as an ultra‑orphan disease. We are also obligated to make additional payments to Broad and Harvard, collectively, of up to an aggregate of $36.0 million upon the occurrence of certain sales milestones per licensed product for the prevention or treatment of an ultra‑orphan disease.

Broad and Harvard, collectively, are entitled to receive mid single‑digit percentage royalties on net sales of products for the prevention or treatment of human disease, and ranging from low single‑digit to high single‑digit percentage royalties on net sales of other products and services, made by us, our affiliates, or our sublicensees. The royalty percentage depends on the product and service, and whether such licensed product or licensed service is covered by a valid claim within the Harvard/Broad Patent Rights. If we are legally required to pay royalties to a Third Party on net sales of our products because such third party holds patent rights that cover such licensed product, then we can credit up to a mid double‑digit percentage of the amount paid to such third party against the royalties due to Harvard and Broad in the same period. Our obligation to pay royalties will expire on a product‑by‑product and country‑by‑country basis upon the later of the expiration of the last to expire valid claim of the Harvard/Broad Patent Rights that cover the composition, manufacture, or use of each covered product or service in each country or the tenth anniversary of the date of the first commercial sale of the product or service. If we sublicense any of the Harvard/Broad Patent Rights to a third party pursuant to our exclusive license under the license agreement, Broad and Harvard, collectively, have the right to receive a low double‑digit percentage of the sublicense income, which percentage decreases to a high single‑digit percentage for products for the prevention or treatment of human disease under sublicenses executed after we meet certain clinical milestones.

Broad and Harvard retain control of the prosecution of their respective patent rights. If an interference is declared or a derivation proceeding is initiated, with respect to any Harvard/Broad Patent Rights, then our prosecution related rights, including our right to receive correspondence from a patent office, will be suspended with respect to the patent rights involved in the interference or derivation proceeding until, under some circumstances, we enter into a common interest agreement with that institution. Nevertheless, we remain responsible for the cost of such interference or derivation proceeding. On January 11, 2016, the PTAB declared an interference between a pending U.S. patent application (U.S. Serial No. 13/842,859) that is owned by the University of California, the University of Vienna, and Emmanuelle Charpentier and 12 U.S. patents (U.S. Patent Nos. 8,697,359; 8,771,945; 8,795,965; 8,865,406; 8,871,445; 8,889,356; 8,895,308; 8,906,616; 8,932,814; 8,945,839; 8,993,233; and 8,999,641) that are co‑owned by Broad and MIT, and in some cases Harvard, and in‑licensed by us under this license agreement. On March 17, 2016, the PTAB re-declared the interference to add a pending U.S. patent application (U.S. Serial No. 14/704,551) that is co-owned by Broad, MIT, and Harvard, and also in-licensed by us under this license agreement. We will be responsible for the cost of the interference proceeding with respect to these patents and this patent application. Broad and Harvard are required to maintain any application or patent within the Harvard/Broad Patents Rights so long as we meet our obligation to reimburse Broad and Harvard for expenses related to prosecution and there is a good faith basis for doing so. If we cease

process, may subject an applicant to delays in the conduct of the study, regulatory review and approval, and/or administrative or judicial sanctions. These sanctions may include, but are not limited to, the U.S. Food and Drug Administration’s, or FDA’s refusal to allow an applicant to proceed with clinical testing, refusal to approve pending applications, license suspension, or revocation, withdrawal of an approval, warning letters, adverse publicity, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, and civil or criminal investigations and penalties brought by the FDA or the Department of Justice or DOJ, or(“DOJ”) and other governmental entities.

entities, including state agencies.

An applicant seeking approval to market and distribute a new biologic in the United States generally must satisfactorily complete each of the following steps:

An IND is an exemption from the FDCA that allows an unapproved product candidate to be shipped in interstate commerce for use in an investigational clinical trial and a request for FDA authorization to administer such investigational product to humans. The IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions about the product or conduct of the proposed clinical trial, including concerns that human research subjects will be exposed to unreasonable health risks. In that case, the IND sponsor and the FDA must resolve any outstanding FDA concerns before the clinical trials can begin.

As a result, submission of the IND may result in the FDA not allowing the trials to commence or allowing the trial to commence on the terms originally specified by the sponsor in the IND. If the FDA raises concerns or questions either during this initial 30‑day period, or at any time during the IND process, it may choose to impose a partial or complete clinical hold. This order issued by the FDA would delay either a proposed clinical study or cause suspension of an ongoing study, until all outstanding concerns have been adequately addressed and the FDA has notified the company that investigations may proceed. This could cause significant delays or difficulties in completing planned clinical studies in a timely manner.

With gene therapy protocols, if the FDA allows the IND to proceed, but the Recombinant DNA Advisory Committee or RAC,(“RAC”) of the National Institute of Health, or NIH decides that full public review of the protocol is warranted, the FDA will request at the completion of its IND review that sponsors delay initiation of the protocol until after completion of the RAC review process. The FDA also may impose clinical holds on a biologic product candidate at any time before or during clinical trials due to safety concerns or non‑compliance. If the FDA imposes a clinical hold, trials may not recommence without FDA authorization and then only under terms authorized by the FDA.

Human Clinical Trials in Support of a BLA

Clinical trials involve the administration of the investigational product candidate to healthy volunteers or patients with the disease to be treated under the supervision of a qualified principal investigator in accordance with GCP requirements. Clinical trials are conducted under study protocols detailing, among other things, the objectives of the study, inclusion and exclusion criteria, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND.

A sponsor who wishes to conduct a clinical trial outside the United States may, but need not, obtain FDA authorization to conduct the clinical trial under an IND. IfWhen a foreign clinical trial is conducted under an IND, all FDA IND requirements must be met unless waived. When a foreign clinical trial is not conducted under an IND, the sponsor may submit data frommust ensure that the clinical trial tocomplies with certain regulatory requirements of the FDA in order to use the trial as support for an IND or application for marketing approval. Specifically, the FDA requires that such trials be conducted in accordance with GCP, including review and approval by an independent ethics committee and informed consent from subjects. The GCP requirements encompass both ethical and data integrity standards for clinical trials. The FDA’s regulations are intended to help ensure the protection of human subjects enrolled in non-IND foreign clinical trials, as well as the quality and integrity of the BLA so long as the clinical trial isresulting data. They further help ensure that non-IND foreign trials are conducted in compliance with an international guidelinea manner comparable to that required for the ethical conduct of clinical research known as the Declaration of Helsinki and/or the laws and regulations of the country or countries in which the clinical trial is performed, whichever provides the greater protection to the participantstrials in the clinical trial.United States.

Further, each clinical trial must be reviewed and approved by an independent institutional review board, or IRB either centrally or individually at each institution at which the clinical trial will be conducted. The IRB will consider, among other things, clinical trial design, patient informed consent, ethical factors, the safety of human subjects, and the possible liability of the institution. An IRB must operate in compliance with FDA regulations. The FDA, IRB, or the

Committee in accordance with NIH Guidelines for Research Involving Recombinant or Synthetic Nucleic Acid Molecules.

Clinical trials typically are conducted in three sequential phases, but the phases may overlap or be combined. Additional studies may be required after approval.

In some cases, the FDA may approve a BLA for a product candidate but require the sponsor to conduct additional clinical trials to further assess the product candidate’s safety and effectiveness after approval. Such post‑approval trials are typically referred to as Phase 4 clinical trials. These studies are used to gain additional experience from the treatment of patients in the intended therapeutic indication and to document a clinical benefit in the case of biologics approved under accelerated approval regulations. If the FDA approves a product while a company has ongoing clinical trials that were not necessary for approval, a company may be able to use the data from these clinical trials to meet all or part of any Phase 4 clinical trial requirement or to request a change in the product labeling. Failure to exhibit due diligence with regard to conducting Phase 4 clinical trials could result in withdrawal of approval for products.

Special Regulations and Guidance Governing Gene Therapy Products

It is possible that the procedures and standards applied to gene therapy products and cell therapy products may be applied to any CRISPR/Cas9CRISPR product candidates we may develop, but that remains uncertain at this point. The FDA has defined a gene therapy product as one that mediates its effects by transcription and/or translation of transferred genetic material and/or by integrating into the host genome and which are administered as nucleic acids, viruses, or genetically engineered microorganisms. The products may be used to modify cells in vivo or transferred to cells ex vivo prior to administration to the recipient. Within the FDA, the Center for Biologics Evaluation and Research or CBER,(“CBER”) regulates gene therapy products. Within the CBER, the review of gene therapy and related products is consolidated in the Office of Cellular, Tissue and Gene Therapies, and the FDA has established the Cellular, Tissue and Gene Therapies Advisory Committee to advise CBER on its reviews. The CBER works closely with the NIH and the RAC, which makes recommendations to the NIH on gene therapy issues and engages in a public discussion of scientific, safety, ethical, and societal issues related to proposed and ongoing gene therapy protocols. The FDA and the NIH have published guidance documents with respect to the development and submission of gene therapy protocols. The FDA also has published

each of the above stages of development and relate to, among other things, the proper preclinical assessment of gene therapies; the chemistry, manufacturing, and control information that should be included in an IND application; the proper design of tests to measure product potency in support of an IND or BLA application; and measures to observe delayed adverse effects in subjects who have been exposed to investigational gene therapies when the risk of such effects is high. Further, the FDA usually recommends that sponsors observe subjects for potential gene therapy‑related delayed adverse events for a 15‑year period, including a minimum of five years of annual examinations followed by 10 years of annual queries, either in person or by questionnaire.

If a gene therapy trial is conducted at, or sponsored by, institutions receiving the NIH funding for recombinant DNA research, a protocol and related documentation must be submitted to, and the study registered with, the NIH Office of Biotechnology Activities or OBA,(“OBA”) pursuant to the NIH Guidelines for Research Involving Recombinant DNA Molecules prior to the submission of an IND to the FDA. In addition, many companies and other institutions not otherwise subject to the NIH Guidelines voluntarily follow them. The NIH will convene the Recombinant DNA Advisory Committee, or RAC, a federal advisory committee, to discuss protocols that raise novel or particularly important scientific, safety or ethical considerations at one of its quarterly public meetings. The OBA will notify the FDA of the RAC’s decision regarding the necessity for full public review of a gene therapy protocol. RAC proceedings and reports are posted to the OBA web site and may be accessed by the public.

Finally, to facilitate adverse event reporting and dissemination of additional information about gene therapy trials, the FDA and the NIH established the Genetic Modification Clinical Research Information System or GeMCRIS. Investigators and sponsors of a human gene transfer trials can utilize this web‑based system to report serious adverse events and annual reports. GeMCRIS also allows members of the public to access basic reports about human gene transfer trials registered with the NIH and to search for information such as trial location, the names of investigators conducting trials, and the names of gene transfer products being studied.

Compliance with cGMP and GTP Requirements

Before approving a BLA, the FDA typically will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in full compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. The PHSA emphasizes the importance of manufacturing control for products like biologics whose attributes cannot be precisely defined.

For a gene therapy product, the FDA also will not approve the product if the manufacturer is not in compliance with GTP. These standards are found in FDA regulations and guidances that govern the methods used in, and the facilities and controls used for, the manufacture of human cells, tissues, and cellular and tissue based products or (“HCT/Ps,Ps”), which are human cells or tissue intended for implantation, transplant, infusion, or transfer into a human recipient. The primary intent of the GTP requirements is to ensure that cell and tissue based products are manufactured in a manner designed to prevent the introduction, transmission, and spread of communicable disease. FDA regulations also require tissue establishments to register and list their HCT/Ps with the FDA and, when applicable, to evaluate donors through screening and testing.

Manufacturers and others involved in the manufacture and distribution of products must also register their establishments with the FDA and certain state agencies. Both domestic and foreign manufacturing establishments must register and provide additional information to the FDA upon their initial participation in the manufacturing process. Any product manufactured by or imported from a facility that has not registered, whether foreign or domestic, is deemed

Review and Approval of a BLA

The results of product candidate development, preclinical testing, and clinical trials, including negative or ambiguous results as well as positive findings, are submitted to the FDA as part of a BLA requesting license to market the product. The BLA must contain extensive manufacturing information and detailed information on the composition of the product and proposed labeling as well as payment of a user fee.

Under federal law, the submission of most BLAs is subject to an application user fee, which for federal fiscal year 2018 is $2,421,495 for an application requiring clinical data. The sponsor of an approved BLA is also subject to an annual program fee, which for fiscal year 2018 is $304,162. Certain exceptions and waivers are available for some of these fees, such as an exception from the application fee for products with orphan designation and a waiver for certain small businesses.

The FDA has 60 days after submission of the application to conduct an initial review to determine whether it is sufficient to accept for filing based on the agency’s threshold determination that it is sufficiently complete to permit substantive review. Once the submission has been accepted for filing, the FDA begins an in‑depth review of the application. Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act, or the PDUFA, the FDA has ten months in which to complete its initial review of a standard application and respond to the applicant, and six months for a priority review of the application. The FDA does not always meet its PDUFA goal dates for standard and priority BLAs. The review process may often be significantly extended by FDA requests for additional information or clarification. The review process and the PDUFA goal date may be extended by three months if the FDA requests or if the applicant otherwise provides additional information or clarification regarding information already provided in the submission within the last three months before the PDUFA goal date.

Under the PHSA, the FDA may approve a BLA if it determines that the product is safe, pure, and potent and the facility where the product will be manufactured meets standards designed to ensure that it continues to be safe, pure, and potent.

On the basis of the FDA’s evaluation of the application and accompanying information, including the results of the inspection of the manufacturing facilities and any FDA audits of non‑clinical and clinical trial sites to assure compliance with GCPs, the FDA may issue an approval letter or a complete response letter. An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications. If the application is not approved, the FDA will issue a complete response letter, which will contain the conditions that must be met in order to secure final approval of the application, and when possible will outline recommended actions the sponsor might take to obtain approval of the application. Sponsors that receive a complete response letter may submit to the FDA information that represents a complete response to the issues identified by the FDA. Such resubmissions are classified under PDUFA as either Class 1 or Class 2. The classification of a resubmission is based on the information submitted by an applicant in response to an action letter. Under the goals and policies agreed to by the FDA under PDUFA, the FDA has two months to review a Class 1 resubmission and six months to review a Class 2 resubmission. The FDA will not approve an application until issues identified in the complete response letter have been addressed.

The FDA may also refer the application to an advisory committee for review, evaluation, and recommendation as to whether the application should be approved. In particular, the FDA may refer applications for novel biologic products or biologic products that present difficult questions of safety or efficacy to an advisory committee. Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates, and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

If the FDA approves a new product, it may limit the approved indications for use of the product. It may also require that contraindications, warnings or precautions be included in the product labeling. In addition, the FDA may call for post‑approval studies, including Phase 4 clinical trials, to further assess the product’s safety after approval. The agency may also require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms, including REMS, to help

circumstances, special monitoring, and the use of patent registries. The FDA may prevent or limit further marketing of a product based on the results of post‑market studies or surveillance programs. After approval, many types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval.

Fast Track, Breakthrough Therapy, and Priority Review and Regenerative Advanced Therapy Designations

The FDA is authorized to designate certain products for expedited review if they are intended to address an unmet medical need in the treatment of a serious or life‑threatening disease or condition. These programs are referred to as fast track designation, breakthrough therapy designation, and priority review designation and regenerative advanced therapy designation.

Specifically, the FDA may designate a product for fast track review if it is intended, whether alone or in combination with one or more other products, for the treatment of a serious or life‑threatening disease or condition, and it demonstrates the potential to address unmet medical needs for such a disease or condition. For fast track products, sponsors may have greater interactions with the FDA and the FDA may initiate review of sections of a fast track product’s application before the application is complete. This rolling review may be available if the FDA determines, after preliminary evaluation of clinical data submitted by the sponsor, that a fast track product may be effective. The sponsor must also provide, and the FDA must approve, a schedule for the submission of the remaining information and the sponsor must pay applicable user fees. However, the FDA’s time period goal for reviewing a fast track application does not begin until the last section of the application is submitted. In addition, the fast track designation may be withdrawn by the FDA if the FDA believes that the designation is no longer supported by data emerging in the clinical trial process.

Second, in 2012, Congress enacted the Food and Drug Administration Safety and Innovation Act or FDASIA.(“FDASIA”). This law established a new regulatory scheme allowing for expedited review of products designated as “breakthrough therapies.” A product may be designated as a breakthrough therapy if it is intended, either alone or in combination with one or more other products, to treat a serious or life‑threatening disease or condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. The FDA may take certain actions with respect to breakthrough therapies, including holding meetings with the sponsor throughout the development process; providing timely advice to the product sponsor regarding development and approval; involving more senior staff in the review process; assigning a cross‑disciplinary project lead for the review team; and taking other steps to design the clinical trials in an efficient manner.

Third, the FDA may designate a product for priority review if it is a product that treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness. The FDA determines, on a case‑by‑case basis, whether the proposed product represents a significant improvement when compared with other available therapies. Significant improvement may be illustrated by evidence of increased effectiveness in the treatment of a condition, elimination or substantial reduction of a treatment‑limiting product reaction, documented enhancement of patient compliance that may lead to improvement in serious outcomes, and evidence of safety and effectiveness in a new subpopulation. A priority designation is intended to direct overall attention and resources to the evaluation of such applications, and to shorten the FDA’s goal for taking action on a marketing application from ten months to six months.

With passage of the 21st Century Cures Act (the “Cures Act”) in December 2016, Congress authorized the FDA to accelerate review and approval of products designated as regenerative advanced therapies. A product is eligible for this designation if it is a regenerative medicine therapy that is intended to treat, modify, reverse or cure a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product has the potential to address unmet medical needs for such disease or condition. The benefits of a regenerative advanced therapy designation include early interactions with FDA to expedite development and review, benefits available to breakthrough therapies, potential eligibility for priority review and accelerated approval based on surrogate or intermediate endpoints.

Accelerated Approval Pathway

The FDA may grant accelerated approval to a product for a serious or life‑threatening condition that provides meaningful therapeutic advantage to patients over existing treatments based upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit. The FDA may also grant accelerated approval for such a condition when the product has an effect on an intermediate clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality or IMM,(“IMM”) and that is reasonably likely to predict an effect on IMM or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability

the FDA will conduct laboratory research related to the safety, purity, potency, and effectiveness of pharmaceutical products.

Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved

States and for which there is no reasonable expectation that the cost of developing and making available the biologic for the disease or condition will be recovered from sales of the product in the United States.

Orphan drug designation qualifies a company for tax credits and market exclusivity for seven years following the date of the product’s marketing approval if granted by the FDA. An application for designation as an orphan product can be made any time prior to the filing of an application for approval to market the product. A product becomes an orphan when it receives orphan drug designation from the Office of Orphan Products Development or OOPD, at the FDA based on acceptable confidential requests made under the regulatory provisions. The product must then go through the review and approval process like any other product.

A sponsor may request orphan drug designation of a previously unapproved product or new orphan indication for an already marketed product. In addition, a sponsor of a product that is otherwise the same product as an already approved orphan drug may seek and obtain orphan drug designation for the subsequent product for the same rare disease or condition if it can present a plausible hypothesis that its product may be clinically superior to the first drug. More than one sponsor may receive orphan drug designation for the same product for the same rare disease or condition, but each sponsor seeking orphan drug designation must file a complete request for designation.

The period of exclusivity begins on the date that the marketing application is approved by the FDA and applies only to the indication for which the product has been designated. The FDA may approve a second application for the same product for a different use or a second application for a clinically superior version of the product for the same use. The FDA cannot, however, approve the same product made by another manufacturer for the same indication during the market exclusivity period unless it has the consent of the sponsor or the sponsor is unable to provide sufficient quantities.

Pediatric Studies and Exclusivity

Under the Pediatric Research Equity Act of 2003, a BLA or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric

patent protection cover the product are extended by six months. This is not a patent term extension, but it effectively extends the regulatory period during which the FDA cannot approve another application.

Biosimilars and Exclusivity

The 2010 Patient Protection and Affordable Care Act, which was signed into law in March 2010, included a subtitle called the Biologics Price Competition and Innovation Act of 2009 or BPCIA.(“BPCIA”). The BPCIA established a regulatory scheme authorizing the FDA to approve biosimilars and interchangeable biosimilars. To date, oneAs of January 1, 2018, the FDA has approved nine biosimilar product has been approved by the FDAproducts for use in the United States. No interchangeable biosimilars, however, have been approved. The FDA has issued several guidance documents outlining an approach to review and approval of biosimilars. Additional guidances are expected to be finalized by the FDA in the near term.

Under the BPCIA, a manufacturer may submit an application for licensure of a biologic product that is “biosimilar to” or “interchangeable with” a previously approved biological product or “reference product.” In order for the FDA to approve a biosimilar product, it must find that there are no clinically meaningful differences between the reference product and proposed biosimilar product in terms of safety, purity, and potency. For the FDA to approve a biosimilar product as interchangeable with a reference product, the agency must find that the biosimilar product can be expected to produce the same clinical results as the reference product, and (for products administered multiple times) that the biologic and the reference biologic may be switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.

Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date of approval of the reference product. The FDA may not approve a biosimilar product until 12 years from the date on which the reference product was approved. Even if a product is considered to be a reference product eligible for exclusivity, another company could market a competing version of that product if the FDA approves a full BLA for such product containing the sponsor’s own preclinical data and data from adequate and well‑controlled clinical trials to demonstrate the safety, purity, and potency of their product. The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products. At this juncture, it is unclear whether products deemed “interchangeable” by the FDA will, in fact, be readily substituted by pharmacies, which are governed by state pharmacy law.

Under the FDCA, in vitro diagnostics, including companion diagnostics, are regulated as medical devices. In the United States, the FDCA and its implementing regulations, and other federal and state statutes and regulations govern, among other things, medical device design and development, preclinical and clinical testing, premarket clearance or approval, registration and listing, manufacturing, labeling, storage, advertising and promotion, sales and distribution, export and import, and post‑market surveillance. Unless an exemption applies, diagnostic tests require marketing clearance or approval from the FDA prior to commercial distribution.

The FDA previously has required in vitro companion diagnostics intended to select the patients who will respond to the product candidate to obtain pre-market approval (“PMA”) simultaneously with approval of the therapeutic product candidate. The PMA process, including the gathering of clinical and preclinical data and the submission to and review by the FDA, can take several years or longer. It involves a rigorous premarket review during which the applicant must prepare and provide the FDA with reasonable assurance of the device’s safety and effectiveness and information about the device and its components regarding, among other things, device design, manufacturing and labeling. PMA applications are subject to an application fee, which exceeds $250,000 for most PMAs; for federal fiscal year 2018, the standard fee for review of a PMA is $310,764 and the small business fee is $77,691.

After a device is placed on the market, it remains subject to significant regulatory requirements. Medical devices may be marketed only for the uses and indications for which they are cleared or approved. Device manufacturers must also establish registration and device listings with the FDA. A medical device manufacturer’s manufacturing processes and those of its suppliers are required to comply with the applicable portions of the Quality System Regulation, which covers the methods and documentation of the design, testing, production, processes, controls, quality assurance, labeling, packaging and shipping of medical devices. Domestic facility records and manufacturing processes are subject to periodic unscheduled inspections by the FDA. The FDA also may inspect foreign facilities that export products to the United States.

The 21st Century Cures Act

On December 13, 2016, President Obama signed the Cures Act into law. The Cures Act is designed to modernize and personalize healthcare, spur innovation and research, and streamline the discovery and development of new therapies through increased federal funding of particular programs. It authorizes increased funding for the FDA to spend on innovation projects. The new law also amends the Public Health Service Act (“PHSA”) to reauthorize and expand funding for the NIH. The Cures Act establishes the NIH Innovation Fund to pay for the cost of development and implementation of a strategic plan, early stage investigators and research. It also charges the NIH with leading and coordinating expanded pediatric research. Further, the Cures Act directs the Centers for Disease Control and Prevention to expand surveillance of neurological diseases.

With amendments to the FDCA and the PHSA, Title III of the Cures Act seeks to accelerate the discovery, development, and delivery of new medicines and medical technologies. To that end, and among other provisions, the Cures Act reauthorizes the existing priority review voucher program for certain drugs intended to treat rare pediatric diseases until 2020; creates a new priority review voucher program for drug applications determined to be material national security threat medical countermeasure applications; revises the FDCA to streamline review of combination product applications; requires the FDA to evaluate the potential use of “real world evidence” to help support approval of new indications for approved drugs; provides a new “limited population” approval pathway for antibiotic and antifungal drugs intended to treat serious or life-threatening infections; and authorizes the FDA to designate a drug as a “regenerative advanced therapy,” thereby making it eligible for certain expedited review and approval designations.

Regulation and Procedures Governing Approval of Medicinal Products in the European Union

In order to market any product outside of the United States, a company must also comply with numerous and varying regulatory requirements of other countries and jurisdictions regarding quality, safety and efficacy and governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of products. Whether or not it obtains FDA approval for a product, an applicant will need to obtain the necessary approvals by the comparable foreign regulatory authorities before it can commence clinical trials or marketing of the product in those countries or jurisdictions. Specifically, the process governing approval of medicinal products in the European Union or EU, generally follows the same lines as in the United States. It entails satisfactory completion of preclinical studies and adequate and

well‑controlled clinical trials to establish the safety and efficacy of the product for each proposed indication. It also requires the submission to the relevant competent authorities of a marketing authorization application or MAA,(“MAA”) and granting of a marketing authorization by these authorities before the product can be marketed and sold in the EU.

European Union.

Clinical Trial Approval

Pursuant to the currently applicable Clinical Trials Directive 2001/20/EC and the Directive 2005/28/EC on GCP, a system for the approval of clinical trials in the EUEuropean Union has been implemented through national legislation of the member states. Under this system, an applicant must obtain approval from the competent national authority of an EUa European Union member state in which the clinical trial is to be conducted, or in multiple member states if the clinical trial is to be conducted in a number of member states. Furthermore, the applicant may only start a clinical trial at a specific study site after the competent ethics committee has issued a favorable opinion. The clinical trial application or CTA, must be accompanied by an investigational medicinal product dossier with supporting information prescribed by Directive 2001/20/EC and Directive 2005/28/EC and corresponding national laws of the member states and further detailed in applicable guidance documents.

for the treatment of certain diseases, including products for the treatment of cancer. For products with a new active substance indicated for the treatment of other diseases and products that are highly innovative or for which a centralized process is in the interest of patients, the centralized procedure may be optional.

Specifically, the grant of marketing authorization in the European Union for products containing viable human tissues or cells such as gene therapy medicinal products is governed by Regulation 1394/2007/EC on advanced therapy medicinal products, read in combination with Directive 2001/83/EC of the European Parliament and of the Council, commonly known as the Community code on medicinal products. Regulation 1394/2007/EC lays down specific rules concerning the authorization, supervision, and pharmacovigilance of gene therapy medicinal products, somatic cell therapy medicinal products, and tissue engineered products. Manufacturers of advanced therapy medicinal products must demonstrate the quality, safety, and efficacy of their products to EMA which provides an opinion regarding the application for marketing authorization. The European Commission grants or refuses marketing authorization in light of the opinion delivered by EMA.

Under the centralized procedure, the Committee for Medicinal Products for Human Use, or the CHMP established at the EMA is responsible for conducting an initial assessment of a product. Under the centralized procedure in the European Union, the maximum timeframe for the evaluation of an MAA is 210 days, excluding clock stops when additional information or written or oral explanation is to be provided by the applicant in response to questions of the CHMP. Accelerated evaluation may be granted by the CHMP in exceptional cases, when a medicinal product is of major interest from the point of view of public health and, in particular, from the viewpoint of therapeutic innovation. If the CHMP accepts such a request, the time limit of 210 days will be reduced to 150 days, but it is possible that the CHMP may revert to the standard time limit for the centralized procedure if it determines that it is no longer appropriate to conduct an accelerated assessment.

Regulatory Data Protection in the European Union

In the European Union, new chemical entities approved on the basis of a complete independent data package qualify for eight years of data exclusivity upon marketing authorization and an additional two years of market exclusivity pursuant to Regulation (EC) No 726/2004, as amended, and Directive 2001/83/EC, as amended. Data exclusivity prevents regulatory authorities in the European Union from referencing the innovator’s data to assess a generic (abbreviated) application for a period of eight years. During the additional two‑year period of market exclusivity, a

Regulatory Requirements after Marketing Authorization

Following approval, the holder of the marketing authorization is required to comply with a range of requirements applicable to the manufacturing, marketing, promotion and sale of the medicinal product. These include compliance with the EU’sEuropean Union’s stringent pharmacovigilance or safety reporting rules, pursuant to which post‑authorization studies and additional monitoring obligations can be imposed. In addition, the manufacturing of authorized products, for which a separate manufacturer’s license is mandatory, must also be conducted in strict compliance with the EMA’s GMP requirements and comparable requirements of other regulatory bodies in the EU,European Union, which mandate the methods, facilities, and controls used in manufacturing, processing and packing of drugs to assure their safety and identity. Finally, the marketing and promotion of authorized products, including industry‑sponsored continuing medical education and advertising directed toward the prescribers of drugs and/or the general public, are strictly regulated in the European Union under Directive 2001/83EC, as amended.

Orphan Drug Designation and Exclusivity

Regulation (EC) No 141/2000 and Regulation (EC) No. 847/2000 provide that a product can be designated as an orphan drug by the European Commission if its sponsor can establish: that the product is intended for the diagnosis, prevention or treatment of (1) a life‑threatening or chronically debilitating condition affecting not more than five in ten thousand persons in the EUEuropean Union when the application is made, or (2) a life‑threatening, seriously debilitating or serious and chronic condition in the EUEuropean Union and that without incentives it is unlikely that the marketing of the drug in the EUEuropean Union would generate sufficient return to justify the necessary investment. For either of these conditions, the applicant must demonstrate that there exists no satisfactory method of diagnosis, prevention, or treatment of the condition in question that has been authorized in the EUEuropean Union or, if such method exists, the drug will be of significant benefit to those affected by that condition.

An orphan drug designation provides a number of benefits, including fee reductions, regulatory assistance, and the possibility to apply for a centralized EUEuropean Union marketing authorization. Marketing authorization for an orphan drug leads to a ten‑year period of market exclusivity. During this market exclusivity period, neither the EMA nor the European Commission or the member states can accept an application or grant a marketing authorization for a “similar medicinal product.” A “similar medicinal product” is defined as a medicinal product containing a similar active substance or substances as contained in an authorized orphan medicinal product, and which is intended for the same therapeutic indication. The market exclusivity period for the authorized therapeutic indication may, however, be reduced to six years

significant portion of the cost of such product candidates. Even if any product candidates we may develop are approved, sales of such product candidates will depend, in part, on the extent to which third‑party payors, including government health programs in the United States such as Medicare and Medicaid, commercial health insurers, and managed care organizations, provide coverage, and establish adequate reimbursement levels for, such product candidates. The process for determining whether a payor will provide coverage for a product may be separate from the process for setting the price or reimbursement rate that the payor will pay for the product once coverage is approved. Third‑party payors are increasingly challenging the prices charged, examining the medical necessity, and reviewing the cost‑effectiveness of medical products and services and imposing controls to manage costs. Third‑party payors may limit coverage to specific products on an approved list, also known as a formulary, which might not include all of the approved products for a particular indication.

In order to secure coverage and reimbursement for any product that might be approved for sale, a company may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost‑effectiveness of the product, in addition to the costs required to obtain FDA or other comparable marketing approvals. Nonetheless, product candidates may not be considered medically necessary or cost effective. A decision by a third‑party payor not to cover any product candidates we may develop could reduce physician utilization of such product candidates once approved and have a material adverse effect on our sales, results of operations and financial condition. Additionally, a payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved. Further, one payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage and reimbursement for the product, and the level of coverage and reimbursement can differ significantly from payor to payor. Third‑party reimbursement and coverage may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development.

The containment of healthcare costs also has become a priority of federal, state and foreign governments and the prices of pharmaceuticals have been a focus in this effort. Governments have shown significant interest in implementing cost‑containment programs, including price controls, restrictions on reimbursement, and requirements for substitution of generic products. Adoption of price controls and cost‑containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit a company’s revenue generated from the sale of any approved products. Coverage policies and third‑party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which a company or its collaborators receive marketing approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

Outside the United States, ensuring adequate coverage and payment for any product candidates we may develop will face challenges. Pricing of prescription pharmaceuticals is subject to governmental control in many countries. Pricing negotiations with governmental authorities can extend well beyond the receipt of regulatory marketing approval for a product and may require us to conduct a clinical trial that compares the cost effectiveness of any product candidates we may develop to other available therapies. The conduct of such a clinical trial could be expensive and result in delays in our commercialization efforts.

In the European Union, pricing and reimbursement schemes vary widely from country to country. Some countries provide that products may be marketed only after a reimbursement price has been agreed. Some countries may require the completion of additional studies that compare the cost‑effectiveness of a particular product candidate to currently available therapies (so called health technology assessments, or HTAs)assessments) in order to obtain reimbursement or

has been obtained. Reference pricing used by various European Union member states, and parallel trade (arbitrage between low‑priced and high‑priced member states), can further reduce prices. There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products, if approved in those countries.

Healthcare Law and Regulation

Healthcare providers and third‑party payors play a primary role in the recommendation and prescription of pharmaceutical products that are granted marketing approval. Arrangements with providers, consultants, third‑party payors, and customers are subject to broadly applicable fraud and abuse, anti‑kickback, false claims laws, reporting of payments to physicians and teaching physicians and patient privacy laws and regulations and other healthcare laws and regulations that may constrain our business and/or financial arrangements. Restrictions under applicable federal and state healthcare laws and regulations, include the following:

Healthcare Reform

A primary trend in the U.S. healthcare industry and elsewhere is cost containment. There have been a number of federal and state proposals during the last few years regarding the pricing of pharmaceutical and biopharmaceutical products, limiting coverage and reimbursement for drugs and other medical products, government control and other changes to the healthcare system in the United States.

By way of example, the United States and state governments continue to propose and pass legislation designed to reduce the cost of healthcare. In March 2010, the United States Congress enacted the PPACA, which, among other things, includes changes to the coverage and payment for products under government health care programs. Among the provisions of the PPACA of importance to our potential product candidates are:

the legislation’s automatic reduction to several government programs. This includes aggregate reductions of Medicare payments to providers of up to 2% per fiscal year, which went into effect in April 2013 and will remain in effect through 2024 unless additional Congressional action is taken. In January 2013, President Obama signed into law theThe American Taxpayer Relief Act of 2012, which was enacted in January 2013, among other things, further reduced Medicare payments to several providers, including hospitals, imaging centers, and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

These new laws may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for any of our product candidates for which we may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used. Further, there have been several recent U.S. congressional inquiries and proposed state and federal legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the costs of drugs under Medicare and reform government program reimbursement methodologies for drug products. At the federal level, Congress and the Trump administration have each indicated that it will continue to seek new legislative and/or administrative measures to control drug costs. At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. In addition, regional health care authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other health care programs. These measures could reduce the ultimate demand for our products, once approved, or put pressure on our product pricing.

Further, since enactment of the PPACA, there have been numerous legal challenges and Congressional actions to repeal and replace provisions of the law. For example, with enactment of the Tax Cuts and Jobs Act of 2017, which was signed by the President on December 22, 2017, Congress repealed the “individual mandate.” The repeal of this provision, which requires most Americans to carry a minimal level of health insurance, will become effective in 2019. According to the Congressional Budget Office, the repeal of the individual mandate will cause 13 million fewer Americans to be insured in 2027 and premiums in insurance markets may rise. Additionally, on January 22, 2018, President Trump signed a continuing resolution on appropriations for fiscal year 2018 that delayed the implementation of certain PPACA-mandated fees, including the so-called “Cadillac” tax on certain high cost employer-sponsored insurance plans, the annual fee imposed on certain health insurance providers based on market share, and the medical device excise tax on non-exempt medical devices. The Congress will likely consider other legislation to replace elements of the PPACA, during the next Congressional session.

The Trump Administration has also taken executive actions to undermine or delay implementation of the PPACA. In January 2017, President Trump signed an Executive Order directing federal agencies with authorities and responsibilities under the PPACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the PPACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices. In October 2017, the President signed a second Executive Order allowing for the use of association health plans and short-term health insurance, which may provide fewer health benefits than the plans sold through the PPACA exchanges. At the same time, the Administration announced that it will discontinue the payment of cost-sharing reduction (“CSR”) payments to insurance companies until Congress approves the appropriation of funds for such CSR payments. The loss of the CSR payments is expected to increase premiums on certain policies issued by qualified health plans under the PPACA. A bipartisan bill to appropriate funds for CSR payments was introduced in the Senate, but the future of that bill is uncertain.

There have been, and likely will continue to be, additional 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. Such reforms could have an adverse effect on anticipated revenues from product candidates that we may successfully develop and for which we may obtain marketing approval and may affect our overall financial condition and ability to develop product candidates.

Additional regulation

In addition to the foregoing, state, and federal laws regarding environmental protection and hazardous substances, including the Occupational Safety and Health Act, the Resource Conservation and Recovery Act, and the Toxic Substances Control Act, affect our business. These and other laws govern the use, handling, and disposal of various biologic, chemical, and radioactive substances used in, and wastes generated by, operations. If our operations result in contamination of the environment or expose individuals to hazardous substances, we could be liable for damages and governmental fines. Equivalent laws have been adopted in third countries that impose similar obligations.

Foreign Operations

We did not have any foreign operations in any of the fiscal years ended December 31, 2017, 2016 and 2015.

Employees

As of March 18, 2016,January 1, 2018, we had 67 full-time112 full‑time employees, including 2741 employees with M.D. or Ph.D. degrees. Of these full-timefull‑time employees, 4775 employees are engaged in research and development activities. None of our employees is represented by a labor union or covered by a collective bargaining agreement. We consider our relationship with our employees to be good.

Segment Reporting and Financial and Geographical Information

We are engaged solely in the discovery and development of medicines in the field of genome editing. Accordingly, we have determined that we operate in one operating segment. For segment and geographical financial information, see Note 2, Summary of Significant Accounting Policies, to the financial statements appearing elsewhere in this Annual Report on Form 10-K, which are incorporated herein by reference. Financial information about our research and development expenses in each of the last three fiscal years is provided in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and is incorporated herein by reference.  

Our Corporate Information

   We were incorporated under the name Gengine, Inc. inas a Delaware corporation in September 2013, and we changed our name to Editas Medicine, Inc. in November 2013. Our executive offices are located at 300 Third Street, First Floor,11 Hurley St., Cambridge, Massachusetts, 02142,02141, and our telephone number is (617) 401-9000.

Available Information

We maintain an internet website at www.editasmedicine.com and make available free of charge through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act of 1934, or the Exchange Act. We make these reports available through our website as soon as reasonably practicable after we electronically file such reports with, or furnish such reports to, the Securities and Exchange Commission, or the SEC. You can find, copy and inspect information we file at the SEC’s public reference room, which is located at 100 F Street, N.E., Room 1580, Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for more information about the

ITEMItem 1A.  Risk Factors

Our business is subject to numerous risks. The following important factors, among others, could cause our actual results to differ materially from those expressed in forward-looking statements made by us or on our behalf in this Annual Report on Form 10-K and other filings with the Securities and Exchange Commission, or the SEC, press releases, communications with investors, and oral statements. Actual future results may differ materially from those anticipated in our forward-looking statements. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

Risks Related to Our Financial Position and Need for Additional Capital

We have incurred significant losses since inception. We expect to incur losses for the foreseeable future and may never achieve or maintain profitability.

Since inception, we have incurred significant operating losses. Our net losses were $72.9$120.3 million, $13.7$97.2 million, and $1.8$72.9 million for the years ended December 31, 20152017, 2016 and 2014 and the period ended December 31, 2013,2015, respectively. As of December 31, 2015,2017, we had an accumulated deficit of $88.3$305.9 million. We have financed our operations primarily through the public offeringofferings of our common stock, private placements of our preferred stock, and our collaboration with Juno Therapeutics.Therapeutics, Inc. (“Juno Therapeutics”), and an upfront payment from Allergan Pharmaceuticals International Limited (“Allergan”). We have devoted all of our efforts to research and development. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. The net losses we incur may fluctuate significantly from quarter to quarter. We anticipate that our expenses will increase substantially if and as we:

We have not initiated clinical development of any product candidate and expect that it will be many years, if ever, before we have a product candidate ready for commercialization. To become and remain profitable, we must

develop and eventually commercialize a medicine or medicines with significant market potential. This will require us to

We have never generated revenue from product sales and may never be profitable.

Our ability to generate revenue from product sales and achieve profitability depends on our ability, alone or with collaborative partners, to successfully complete the development of, and obtain the regulatory approvals necessary

Risks Related to Discovery, Development, and Commercialization

We intend to identify and develop product candidates based on a novel genome editing technology, which makes it difficult to predict the time and cost of product candidate development. No therapeutic products that utilize genome editing technology have been approved in the United States or in Europe, and there have only been a limited number of human clinical trials of a genome editing product candidate. Moreover, none of those trials has involved CRISPR/Cas9 technology.

We have concentrated our research and development efforts on our genome editing platform, which uses CRISPR/Cas9CRISPR technology. Our future success depends on the successful development of this novel genome editing therapeutic approach. To date, no therapeutic product that utilizes genome editing, including CRISPR technology, has been approved in the United States or Europe. ThereEurope and there have been only a limited number of clinical trials involving the use of a therapeutic utilizing genome editing technologies, however no product candidates have been approved, and nonetechnologies. For example, we are aware of thesea limited number of groups initiating clinical trials involved product candidates that utilize CRISPR/Cas9 genome editingusing CRISPR technology. In addition, becauseBecause our programs are all in the research or preclinical stage, we have not yet been able to assess safety in humans, and there may be long‑term effects from treatment with any of our future product candidates that we cannot predict at this time. Any product candidates we may develop will act at the level of DNA, and, because animal DNA differs from human DNA, it will be difficult for us to test our future product candidates in animal models for either safety or efficacy. Also, animal models do not exist for some of the diseases we expect to pursue in our programs. As a result of these factors, it is more difficult for us to predict the time and cost of product candidate development, and we cannot predict whether the application of our genome editing platform, or any similar or competitive genome editing platforms, will result in the identification, development, and regulatory approval of any medicines. There can be no assurance that any development problems we experience in the future related to our genome editing platform or any of our research programs will not cause significant delays or unanticipated costs, or that such development problems can be solved. We may also experience delays in developing a sustainable, reproducible, and scalable manufacturing process or transferring that process to commercial partners. Any of these factors may prevent us from completing our preclinical studies or any clinical trials that we may initiate or commercializing any product candidates we may develop on a timely or profitable basis, if at all.