2Seventy Bio Inc.
03/25/2025 | Press release | Distributed by Public on 03/25/2025 14:16
Annual Report for Fiscal Year Ending December 31, 2024 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing elsewhere in this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the section entitled "Risk Factors," our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. You should carefully read the section entitled "Risk Factors" to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section entitled "Special Note Regarding Forward-Looking Statements." 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 law.
Overview
We are a cell therapy company focused on the research, development, and commercialization of transformative treatments for cancer. We were incorporated in Delaware in April 2021 and are led by an accomplished team with significant expertise and experience in this field. In January 2024, we announced a strategic realignment to focus exclusively on the development and commercialization of idecabtagene vicleucel (ide-cel, marketed in the United States as Abecma). We, together with our partner BMS, are delivering Abecmato multiple myeloma patients in the United States following approval by the FDA of Abecmain March 2021 for the treatment of adults with multiple myeloma who have received at least four prior lines of therapy, including an immunomodulatory agent, a proteasome inhibitor and an anti-CD38 monoclonal antibody. On April 4, 2024 the FDA approvedAbecmafor the treatment of adult patients with relapsed or refractory multiple myeloma after two or more prior lines of therapy, including an immunomodulatory agent, a proteasome inhibitor, and an anti-CD38 monoclonal antibody. On September 25, 2024, following a joint decision we made with BMS earlier that week, we announced the discontinuation of enrollment in our ongoing Phase 3 KarMMa-9 study evaluating Abecmawith lenalidomide maintenance versus lenalidomide maintenance alone in patients with newly diagnosed multiple myeloma who have suboptimal response to autologous stem cell transplant.
Upon closing the Regeneron Transaction on April 1, 2024, Regeneron assumed all of the ongoing program infrastructure and personnel costs related to our solid tumor and other oncology and autoimmune cell therapy programs, including the bbT369 program in B-NHL, SC-DARIC33 in AML, MUC16 in ovarian cancer, MAGE-A4, autoimmune, and several unnamed targets. In June 2024, we announced the completion of an asset purchase agreement with Novo as part of our strategic realignment. Under the terms of the Novo Transaction, Novo acquired the Company's program for the research, development, manufacture, regulatory approval, and commercialization of gene therapy products exploiting the megaTAL Platform that is directed to the treatment, diagnosis and prevention of hemophilia (the "megaTAL Sale").
We have never been profitable and have incurred net losses since inception. Our net losses for the years ended December 31, 2024 and 2023 were $57.2 million and $217.6 million, respectively. We expect to continue to generate operating losses and negative operating cash flows for the near future.
We expect to incur significant expenses as we continue to (i) educate physicians on treatment sequencing and the emerging data supporting the use of BCMA-directed CAR Ts before other BCMA-targeted therapies, (ii) competitively differentiate Abecma's real-world safety, efficacy and product reliability and predictability profile and, (iii) continue to support the quality control of LVV. Accordingly, until we generate significant revenues from product sales, we may continue to seek to fund our operations through public or private equity or debt financings, strategic collaborations, or other sources. If we use our capital resources sooner than expected, we would evaluate further reductions in our expense or obtaining additional financing. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition and
our ability to develop and commercialize Abecma. Refer to sections Liquidity and Capital Resourcesand Funding Requirementsbelow for further discussion.
The Proposed BMS Transaction
On March 10, 2025, we entered into the BMS Merger Agreement, pursuant to which, and upon the terms and subject to the conditions thereof, a wholly-owned subsidiary of BMS will commence a tender offer to purchase all of our outstanding common stock at a cash price of $5.00 per share, less any applicable withholding taxes and without interest. In the event the tender offer conditions are satisfied and the tender offer is closed, the parties will consummate a merger that will result in our company being a wholly owned subsidiary of BMS. Upon completion of the merger, we will no longer be a publicly traded company, and the listing of our common stock on Nasdaq will have been terminated. Refer to Note 20 to our Consolidated Financial Statements regarding the BMS Merger Agreement, the transactions provided for thereunder, and the various conditions to closing the transaction. Refer to Item 1A. "Risk Factors" for a summary of risks related to the transaction.
Critical Accounting Policies and Significant Judgments and Estimates
Our management's discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our financial statements. Estimates and judgments are used in the following areas, among others: future undiscounted cash flows and subsequent fair value estimates used to assess potential and measure any impairment of long-lived assets, including intangible assets, the measurement of right-of-use assets, sales forecasts and corresponding expiry dates utilized to determine our contingent liabilities for obsolete and excess inventory reserves under our collaboration with BMS, contingent consideration, stock-based compensation expense, accrued expenses, income taxes, and the assessment of our ability to fund operations for at least the next twelve months from the date of issuance of our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. We base our estimates on historical experience, known trends and events and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. In making estimates and judgments, management employs critical accounting policies.
While our significant accounting policies are described in more detail in the notes to our audited consolidated financial statements, we believe the following accounting policies to be most critical to the judgments and estimates used in the preparation of our financial statements.
Revenue Recognition
Revenue Recognition
Under Topic 606, Revenue from Contracts with Customers,an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. We only apply the five-step model to contracts when it is probable that the entity will collect the consideration to which it is entitled in exchange for the goods or services it transfers to the customer.
Once a contract is determined to be within the scope of Topic 606, we assess the goods or services promised within each contract and determine those that are performance obligations. Arrangements that include rights to
additional goods or services that are exercisable at a customer's discretion are generally considered options. We assess if these options provide a material right to the customer and if so, they are considered performance obligations. The identification of material rights requires judgments related to the determination of the value of the underlying license relative to the option exercise price, including assumptions about technical feasibility and the probability of developing a candidate that would be subject to the option rights. The exercise of a material right is accounted for as a contract modification for accounting purposes.
We assess whether each promised good or service is distinct for the purpose of identifying the performance obligations in the contract. This assessment involves subjective determinations and requires management to make judgments about the individual promised goods or services and whether such are separable from the other aspects of the contractual relationship. Promised goods and services are considered distinct provided that: (i) the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (that is, the good or service is capable of being distinct) and (ii) the entity's promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (that is, the promise to transfer the good or service is distinct within the context of the contract). In assessing whether a promised good or service is distinct, we consider factors such as the license terms, the research, manufacturing and commercialization capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace. We also consider the intended benefit of the contract in assessing whether a promised good or service is separately identifiable from other promises in the contract. If a promised good or service is not distinct, an entity is required to combine that good or service with other promised goods or services until it identifies a bundle of goods or services that is distinct.
The transaction price is determined and allocated to the identified performance obligations in proportion to their stand-alone selling prices, or SSP, on a relative SSP basis. SSP is determined at contract inception and is not updated to reflect changes between contract inception and when the performance obligations are satisfied. Determining the SSP for performance obligations requires significant judgment. In developing the SSP for a performance obligation, we consider applicable market conditions and relevant entity-specific factors, including factors that were contemplated in negotiating the agreement with the customer and estimated costs. We validate the SSP for performance obligations by evaluating whether changes in the key assumptions used to determine the SSP will have a significant effect on the allocation of arrangement consideration between multiple performance obligations.
If the consideration promised in a contract includes a variable amount, we estimate the amount of consideration to which we will be entitled in exchange for transferring the promised goods or services to a customer. We determine the amount of variable consideration by using the expected value method or the most likely amount method. The amount of variable consideration included in the transaction price is constrained to the amount for which it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty related to the variable consideration is resolved. At the end of each subsequent reporting period, we re-evaluate the estimated variable consideration included in the transaction price and any related constraint, and if necessary, adjust our estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis in the period of adjustment.
If an arrangement includes development and regulatory milestone payments, we evaluate whether the milestones are considered probable of being reached and estimate the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within our control or the licensee's control, such as regulatory approvals, are generally not considered probable of being achieved until those approvals are received.
For arrangements with licenses of intellectual property that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, we recognize royalty revenue and sales-based milestones at the later of (i) when the related sales occur, or (ii) when the performance obligation to which the royalty has been allocated has been satisfied.
In determining the transaction price, we adjust consideration for the effects of the time value of money if the timing of payments provides us with a significant benefit of financing. We do not assess whether a contract has a
significant financing component if the expectation at contract inception is such that the period between payment by the licensees and the transfer of the promised goods or services to the licensees will be one year or less. We assessed each of our revenue generating arrangements in order to determine whether a significant financing component exists and concluded that a significant financing component does not exist in any of our arrangements.
We recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) each performance obligation is satisfied, either at a point in time or over time, and if over time recognition is based on the use of an output or input method.
We recognize revenue within the following financial statement captions:
Service Revenue
To date, our service revenue has primarily been generated from the elements of the collaboration arrangements with BMS and Novo that are accounted for pursuant to Topic 606, using the five-step model described above. We analyze our collaboration arrangements to assess whether they are within the scope of ASC 808 or Topic 606. For the elements of the arrangement which are more reflective of a vendor-customer relationship and therefore within the scope of Topic 606, we record the related revenue as service revenue on the consolidated statements of operations and comprehensive loss. Refer toFinancial Operations Overview - Revenue below for service revenue results for the years ended December 31, 2024 and 2023.
Collaborative Arrangement Revenue and Share of Collaboration Loss
We analyze our collaboration arrangements to assess whether they are within the scope of ASC 808, Collaborative Arrangements, ("ASC 808"), which includes determining whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities. This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement. For collaboration arrangements within the scope of ASC 808 that contain multiple elements, we first determine which elements of the collaboration are deemed to be within the scope of ASC 808 and those that are more reflective of a vendor-customer relationship and therefore within the scope of ASC 606, Revenue from Contracts with Customers, ("Topic 606" or "ASC 606"). For those elements of the arrangement that are accounted for pursuant to Topic 606, we apply the five-step model prescribed in Topic 606. For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently, generally by analogy to Topic 606. In arrangements where we do not deem our collaborator to be our customer, payments to and from our collaborator are presented in the consolidated statements of operations and comprehensive loss based on the nature of the payments, as summarized in the table and further described below. The calculation of collaborative activity to be recognized is performed on a quarterly basis and is independent of previous quarterly activity. This may result in fluctuations between revenue and expense recognition period over period, depending on the varying extent of effort performed by each party during the period.
| Nature of Payment | Statement of Operations Presentation | |||||||
| Our share of net profits in connection with commercialization of products | Collaborative arrangement revenue | |||||||
| Our share of net losses in connection with commercialization of products | Share of collaboration loss | |||||||
| Net reimbursement to us for research and development expenses | Collaborative arrangement revenue | |||||||
| Net reimbursement to the collaborator for research and development | Research and development expense | |||||||
Where the collaborator is the principal in the product sales, we recognize our share of any profits or losses, representing net product sales less cost of goods sold and shared commercial and other expenses, along with reimbursement by BMS of commercial costs incurred us, in the period in which such underlying sales occur and costs are incurred by the collaborator.
To date, collaborative arrangement revenue has been primarily generated from the collaboration arrangements with BMS and Regeneron, as further described in Note 11, Collaborative arrangements and strategic partnerships,
in the notes to our audited consolidated financial statements. Refer toFinancial Operations Overview - Revenue below for collaborative arrangement revenue results for the years ended December 31, 2024 and 2023.
The recognition of service revenue, collaborative arrangement revenue, and share of collaboration loss require management judgment due to the fact that the terms of our collaboration arrangements are complicated and the nature of the collaborative activities change over time. This process includes the identification of costs that we incur that relate to each particular collaboration arrangement, evaluating the nature of these costs (for example, whether the costs relate to a particular geography or territory or whether the costs relate to clinical or commercial activities), and applying the terms of the respective collaborative arrangement to determine the portion of such costs that are the responsibility of the collaboration partner, which in certain circumstances requires significant judgment.
Accrued Research and Development Expenses
As part of the process of preparing our financial statements, we are required to estimate our accrued expenses. This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost. The majority of our service providers invoice us monthly in arrears for services performed or when contractual milestones are met. We make estimates of our accrued expenses as of each balance sheet date in our financial statements based on facts and circumstances known to us at that time.
We recognize expenses related to clinical studies based on our estimates of the services received and efforts expended pursuant to contracts with multiple CROs that conduct and manage clinical studies on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the clinical expense. Payments under some of these contracts depend on factors such as the successful enrollment of subjects and the completion of clinical study milestones. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period and adjust accordingly.
Other examples of estimated accrued research and development expenses include fees paid to:
•collaboration partners for research performed in connection with ongoing collaboration arrangements;
•investigative sites in connection with clinical studies;
•vendors in connection with preclinical development activities; and
•vendors related to the development, manufacturing, and distribution of clinical trial materials.
Following the closing of the Novo Transaction and Regeneron Transaction, research and development expenses consist primarily of costs incurred for the development of Abecmain collaboration with BMS. Historical research and development expenses included costs for Abecma, as well as costs incurred for the development of product candidates that were sold to Regeneron and Novo in the second quarter of 2024.
Stock-based compensation
Our share-based compensation expense relates to stock options, restricted stock units, restricted stock awards, and shares issued under our employee stock purchase plan. Grants are awarded to employees and non-employees, including our board of directors.
We account for our stock-based compensation awards in accordance with FASB ASC Topic 718, Compensation-Stock Compensation, or ASC 718. ASC 718 requires all stock-based payments, including grants of stock options and restricted stock units and modifications to existing stock options, to be recognized in the consolidated statements of operations and comprehensive loss based on their fair values.
Our stock-based awards are subject to either service, performance-based, or market-based vesting conditions. Compensation expense related to awards with service-based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term. Compensation expense related to awards with performance-based vesting conditions is recognized based on the grant date fair value over the requisite service period using the accelerated attribution method to the extent achievement of the performance condition is probable.
We estimate the fair value of our option awards using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including (i) the expected stock price volatility, (ii) the calculation of expected term of the award, (iii) the risk-free interest rate, and (iv) expected dividends. Due to the lack of company specific historical and implied volatility data, we based our estimate of expected volatility on the estimate and expected volatilities of a representative group of publicly traded companies. For these analyses, we select companies with comparable characteristics to ours including enterprise value, risk profiles, position within the industry, and with historical share price information sufficient to meet the expected life of the stock-based awards. We will continue to apply this process until a sufficient amount of historical information regarding the volatility of our own stock price becomes available. For awards granted subsequent to the separation from bluebird bio, we have estimated the expected term of our employee stock options using the "simplified" method, whereby, the expected term equals the arithmetic average of the vesting term and the original contractual term of the option due to its lack of sufficient historical data. For stock options that were converted in accordance with the Employee Matters Agreement, as discussed above and as further described in Note 14, Stock-based compensation, to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K, we have estimated the expected term to be the remaining contractual term of the awards as of the date of the separation. The risk-free interest rates for periods within the expected term of the option are based on the U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. We have never paid, and do not expect to pay, dividends in the foreseeable future.
For performance-based restricted stock units that vest based on a total shareholder return metric, the vesting condition is considered a market condition as it vests based on the movement in share price of a company. The impact of the market condition is reflected in the award's fair value on the grant date, and the expense is recognized irrespective of whether the market condition is achieved as long as the required service is provided.
We account for forfeitures as they occur. Stock-based compensation expense recognized in the financial statements is based on awards for which performance or service conditions are expected to be satisfied.
Recently Issued Accounting Pronouncements
See Note 2, Summary of significant accounting policies and basis of presentation,in the notes to the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for a description of recent accounting pronouncements applicable to our business.
Financial Operations Overview
Revenue
Our revenues have been derived from collaboration arrangements and out-licensing arrangements, related to our collaboration arrangement with BMS as part of which we are jointly commercializing Abecmain the United States and our collaboration arrangement with Regeneron. To date, all revenue we have recognized relating to the sale of products has been the collaboration revenue derived from commercial sales of Abecmaby BMS, and we have not recognized any revenue from the sale of products by us.
For the years ended December 31, 2024 and 2023 service revenue consisted of the following (in thousands):
| Year ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| ide-cel ex-U.S. service revenue from BMS | $ | 10,611 | $ | 14,751 | |||||||
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Service revenue from December 2021 agreement with Novo
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3,507 | 5,765 | |||||||||
| Other | 4,000 | 3,628 | |||||||||
| Total service revenue | $ | 18,118 | $ | 24,144 | |||||||
For the years ended December 31, 2024 and 2023 collaborative arrangement revenue consisted of the following (in thousands):
| Year ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| U.S. Abecma collaboration with BMS | $ | 15,048 | $ | 50,010 | |||||||
| Collaboration with Regeneron | 4,696 | 21,591 | |||||||||
| Total collaborative arrangement revenue | $ | 19,744 | $ | 71,601 | |||||||
To date, Abecmais our only commercial product where the collaborator is the principal in the product sales and thus, all amounts shown within our consolidated statements of operations and comprehensive loss for share of collaboration loss relate to Abecma. The tables below summarize the impact of the AbecmaU.S. collaboration profit (loss) share on our consolidated statements of operations and comprehensive loss for the years ended December 31, 2024 and 2023 (in thousands). Note that these tables do not include research and development costs for Abecmashared between us and BMS - refer to Note 11, Collaborative arrangements and strategic partnerships,in the notes to the consolidated financial statements for information on Abecmaresearch and development costs.
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| Abecma U.S. Collaboration Profit (Loss) Share | March 31, 2024 | June 30, 2024 | September 30, 2024 |
December 31, 2024
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December 31, 2024
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| Our share of profits (losses), net of our share of BMS costs for commercial activities | $ | (1,975) | $ | 3,549 | $ | 9,617 | $ | (4,494) | $ | 6,697 | |||||||||||||||||||
| Reimbursement from BMS for our costs of commercial manufacturing and commercial activities | 745 | 815 | 1,067 | 1,171 | 3,798 | ||||||||||||||||||||||||
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Collaborative arrangement revenue (1)
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$ | - | $ | 4,364 | $ | 10,684 | $ | - | $ | 15,048 | |||||||||||||||||||
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Share of collaboration loss (1)
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$ | (1,230) | $ | - | $ | - | $ | (3,323) | $ | (4,553) | |||||||||||||||||||
| Costs of commercial manufacturing incurred by us, prior to BMS reimbursement | (1,428) | (1,141) | (1,567) | (1,309) | (5,445) | ||||||||||||||||||||||||
| Costs of commercial activities incurred by us, prior to BMS reimbursement | (63) | - | (83) | (89) | (235) | ||||||||||||||||||||||||
| Total impact of Abecma U.S. collaboration profit (loss) on our statements of operations and comprehensive income (loss) | $ | (2,721) | $ | 3,223 | $ | 9,034 | $ | (4,721) | $ | 4,815 | |||||||||||||||||||
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| Abecma U.S. Collaboration Profit (Loss) Share | March 31, 2023 | June 30, 2023 | September 30, 2023 |
December 31, 2023
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December 31, 2023 | ||||||||||||||||||||||||
| Our share of profits (losses), net of our share of BMS costs for commercial activities | $ | 21,581 | $ | 23,272 | $ | (582) | $ | 1,366 | $ | 45,637 | |||||||||||||||||||
| Reimbursement from BMS for our costs of commercial manufacturing and commercial activities | 1,380 | 1,271 | 1,118 | 604 | 4,373 | ||||||||||||||||||||||||
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Collaborative arrangement revenue (1)
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$ | 22,961 | $ | 24,543 | $ | 536 | $ | 1,970 | $ | 50,010 | |||||||||||||||||||
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Share of collaboration loss (1)
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$ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||
| Costs of commercial manufacturing incurred by us, prior to BMS reimbursement | (2,583) | (2,389) | (2,167) | (1,136) | (8,275) | ||||||||||||||||||||||||
| Costs of commercial activities incurred by us, prior to BMS reimbursement | (176) | (153) | (70) | (73) | (472) | ||||||||||||||||||||||||
| Total impact of Abecma U.S. collaboration profit (loss) on our statements of operations and comprehensive loss | $ | 20,202 | $ | 22,001 | $ | (1,701) | $ | 761 | $ | 41,263 | |||||||||||||||||||
(1) This calculation is performed on a quarterly basis and consists of our share of profits, net of our share of BMS costs for commercial activities, offset by reimbursement from BMS for our commercial activities. The calculation is independent of previous activity, which may result in fluctuations between revenue and expense recognition period over period. Collaborative arrangement revenue net of share of collaboration loss was $10.5 million and $50.0 million, for the years ended December 31, 2024 and 2023, respectively.
Nonrefundable license fees are recognized as revenue upon delivery of the license provided there are no unsatisfied performance obligations in the arrangement. License revenue has historically been generated from out-license agreements, under which we may also recognize revenue from potential future milestone payments and royalties.
For arrangements with licenses of intellectual property that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, we recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which the royalty has been allocated has been satisfied.
Research and Development Expenses
Following the closing of the Novo Transaction and Regeneron Transaction, research and development expenses consist primarily of costs incurred for the development of Abecmain collaboration with BMS. This includes costs associated with the following clinical studies:
•KarMMa study - an open label, single-arm, multi-center phase 2 study to examine the efficacy and safety of ide-cel in the treatment of patients with relapsed and refractory multiple myeloma. The costs incurred by BMS for this study are subject to the cost-sharing provisions of our BMS collaboration arrangement.
•KarMMa-2 study - a multi-cohort, open-label, multicenter phase 2 study to examine the safety and efficacy of ide-cel in the treatment of patients with relapsed and refractory multiple myeloma and in high-risk multiple myeloma. The costs incurred by BMS for this study are subject to the cost-sharing provisions of our BMS collaboration arrangement.
•KarMMa-3 study - a multicenter, randomized, open-label phase 3 study comparing the efficacy and safety of ide-cel versus standard triplet regimens in patients with relapsed and refractory multiple myeloma. The costs incurred by BMS for this study are subject to the cost-sharing provisions of our BMS collaboration arrangement.
•KarMMa-9 study - a multicenter, randomized, open-label phase 3 study comparing the efficacy and safety of ide-cel with Lenalidomide maintenance versus Lenalidomide maintenance therapy alone in adult participants with newly diagnosed multiple myeloma who have suboptimal response after autologous stem
cell transplantation. The costs incurred by BMS for this study are subject to the cost-sharing provisions of our BMS collaboration arrangement. In September 2024, we and BMS decided to discontinue enrollment in our ongoing Phase 3 KarMMa-9 study.
Historical research and development expenses included costs for Abecma, as discussed above, as well as costs incurred for the development of product candidates that were sold to Regeneron and Novo in the second quarter of 2024. Information about the historical costs we incurred on these programs can be found in our previous Form 10-Q and Form 10-K filings.
Research and development costs are expensed as incurred. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided by vendors and clinical sites. We cannot determine with certainty the duration and completion costs of the current or future clinical studies of Abecma. The duration, costs and timing associated with the development of Abecma depend on a variety of factors including:
•the scope, rate of progress, and expense of our ongoing clinical studies and other research and development activities we undertake;
•future clinical study results;
•uncertainties in clinical study enrollment rates and long-term follow up costs;
•new manufacturing processes or protocols that we may choose to or be required to implement in the manufacture of our lentiviral vector or drug product;
•regulatory feedback on requirements for regulatory approval, as well as changing standards for regulatory approval; and
•the timing and receipt of any regulatory approvals.
Cost of Manufacturing for Commercial Collaboration
Cost of manufacturing for commercial collaboration consists of quality and other manufacturing costs incurred by us to support the manufacture of Abecma inventory sold by our collaborative partner, BMS, in both the U.S. and ex-U.S. regions. These costs are subject to the cost sharing arrangement under the terms of our collaboration agreement (the Amended Ide-cel CCPS) with BMS. For further information on the Amended Ide-cel CCPS, please refer to Note 11, Collaborative arrangements and strategic partnerships,in the notes to our audited consolidated financial statements.
The reimbursement from BMS for their share of our U.S. quality and other manufacturing costs is recorded as collaborative arrangement revenue or share of collaboration loss in our consolidated statements of operations and comprehensive loss. The reimbursement from BMS for our ex-U.S. quality and other manufacturing costs is recorded as service revenue in our consolidated statements of operations and comprehensive loss.
Restructuring expenses
In September 2023, we announced our restructuring plan, or Restructuring Plan, to conserve financial resources and better align our workforce with current business needs. As part of the Restructuring Plan, our workforce was reduced by approximately 40%. Substantially all of the reduction in personnel was completed by December 31, 2023. In connection with the Restructuring Plan, we incurred one-time costs in the third quarter of 2023 relating to severance and retention packages and related benefits. These costs were recorded as restructuring expenses in our consolidated statements of operations and comprehensive loss. This plan was complete as of June 30, 2024.
In January 2024, we announced a strategic path forward to focus exclusively on the commercialization and development of Abecma. In connection with our strategic re-alignment, we entered into an asset purchase agreement with Regeneron to sell our oncology and autoimmune research and development programs, clinical manufacturing capabilities, and related platform technologies which closed on April 1, 2024. Approximately 62% of the workforce
transitioned to Regeneron as a part of the sale. Additionally, as part of the strategic re-alignment, our board of directors approved the 2024 Restructuring Plan to further reduce our remaining workforce by approximately 14%. We expect the 2024 Restructuring Plan to be substantially complete during the first half of 2025, as certain transition activities related to our strategic re-alignment will extend into 2025.
Additionally, as of December 31, 2024, we recognized expenses of $5.7 million representing our share of costs associated with BMS' early exit from a commercial manufacturing and supply agreement as a result of our transition to the use of suspension lentiviral vector in the manufacturing of Abecma. This was recorded within restructuring expenses in our consolidated statements of operations and comprehensive loss.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist primarily of salaries and related costs for personnel, including stock-based compensation and travel expenses for our employees in executive, operational, finance, legal, business development, commercial, information technology, and human resource functions. Other selling, general and administrative expenses include facility-related costs, insurance, IT costs, professional fees for accounting, tax, legal and consulting services, directors' fees and expenses associated with obtaining and maintaining patents.
Share of Collaboration Loss
Share of collaboration loss represents our share of net loss arising from product sales less cost of goods sold and shared commercial costs and other expenses related to the commercialization of a product where the collaborator is the principal in the product sales.
Cost of Royalty and Other Revenue
Cost of royalty and other revenue represents expenses associated with amounts owed to third-party licensors as a result of revenue recognized under our out-license arrangements.
Change in Fair Value of Contingent Consideration
On June 30, 2014, bluebird bio acquired Pregenen. All assets, liabilities and future obligations related to the Pregenen acquisition, including the resulting intangible assets, goodwill and contingent consideration, were assumed by us in connection with the separation. The agreement provided for up to $135.0 million in future contingent cash payments upon the achievement of certain preclinical, clinical and commercial milestones related to the Pregenen technology.
As of December 31, 2024, there were $99.9 million in future contingent cash payments related to commercial milestones. During 2024, we determined the probability of milestone achievement to be zero and as a result reduced the fair value of contingent consideration, classified within other non-current liabilities on our consolidated balance sheet, to zero. Please refer to Note 5, Fair value measurements, for further information.
Gain on sale to Novo
The gain on sale to Novo consists of upfront cash consideration received for the Novo Transaction, less consideration received and deferred related to transition services, combined with the derecognition of deferred revenue remaining from the Novo Collaboration Agreement.
Loss on assets held for sale to Regeneron
The loss on assets held for sale to Regeneron consists of fixed assets that ceased depreciation, measured at the lower of their carrying value or fair value less cost to sell.
Other Income, Net
Other income, net consists primarily of rental income from a third party, income recognized under our transition service agreements with bluebird bio, and sublease income from bluebird bio, which terminated in 2023.
Results of Operations
The following discussion summarizes the key factors we believe are necessary for an understanding of our consolidated financial statements.
Comparison of the years ended December 31, 2024 and 2023
| Year ended December 31, | |||||||||||||||||
| 2024 | 2023 | Change | |||||||||||||||
| Revenue: | |||||||||||||||||
| Service revenue | $ | 18,118 | $ | 24,144 | $ | (6,026) | |||||||||||
| Collaborative arrangement revenue | 19,744 | 71,601 | (51,857) | ||||||||||||||
| Royalty and other revenue | - | 4,642 | (4,642) | ||||||||||||||
| Total revenues | 37,862 | 100,387 | (62,525) | ||||||||||||||
| Operating expenses: | |||||||||||||||||
| Research and development | 76,917 | 230,758 | (153,841) | ||||||||||||||
| Cost of manufacturing for commercial collaboration | 18,010 | 14,819 | 3,191 | ||||||||||||||
| Selling, general and administrative | 43,924 | 69,414 | (25,490) | ||||||||||||||
| Share of collaboration loss | 4,553 | - | 4,553 | ||||||||||||||
|
Restructuring expenses
|
12,303 | 8,614 | 3,689 | ||||||||||||||
| Cost of royalty and other revenue | - | 2,099 | (2,099) | ||||||||||||||
| Change in fair value of contingent consideration | (2,415) | 235 | (2,650) | ||||||||||||||
|
Goodwill impairment charge
|
- | 12,056 | (12,056) | ||||||||||||||
| Total operating expenses | 153,292 | 337,995 | (184,703) | ||||||||||||||
| Loss from operations | (115,430) | (237,608) | 122,178 | ||||||||||||||
| Interest income, net | 10,875 | 12,413 | (1,538) | ||||||||||||||
| Other income, net | 4,347 | 7,625 | (3,278) | ||||||||||||||
|
Gain on sale of assets to Novo
|
47,987 | - | 47,987 | ||||||||||||||
| Loss on assets held for sale to Regeneron | (5,026) | - | (5,026) | ||||||||||||||
| Loss before income taxes | (57,247) | (217,570) | 160,323 | ||||||||||||||
| Income tax expense | - | - | - | ||||||||||||||
| Net loss | $ | (57,247) | $ | (217,570) | $ | 160,323 | |||||||||||
Revenue. Total revenue was $37.9 million for the year ended December 31, 2024, compared to $100.4 million for the year ended December 31, 2023. The decrease of $62.5 million was primarily attributable to a decrease in collaborative arrangement revenue recognized under our collaboration arrangement with BMS, driven by decreased Abecmasales. The decrease was also due to the termination of the Regeneron Collaboration Agreement concurrently with the close of the Regeneron Transaction, which occurred on April 1, 2024.
Research and Development Expenses. Research and development expenses were $76.9 million for the year ended December 31, 2024, compared to $230.8 million for the year ended December 31, 2023. The overall decrease of $153.8 million was primarily attributable to the following:
•$61.0 million ofdecreased employee compensation costs, primarily resulting from the Regeneron Transaction, as part of which a large portion of our research and development workforce transitioned to
Regeneron. Additionally, there was a 40% reduction to our workforce as part of our restructuring in September 2023 and an additional reduction to our workforce initiated in January 2024;
•$44.3 million of decreased facilities and IT costs largely due to the Regeneron Transaction, which resulted in Regeneron subleasing a significant portion of our current leased space in Cambridge and Seattle, reducing rent and associated facility costs;
•$34.3 million of decreased material production costs primarily related to decreased manufacturing activities of suspension lentiviral vector for ide-cel development. The decrease is also attributable to decreased plasmids and cell bank manufacturing costs, which were assumed by Regeneron as part of the Regeneron Transaction beginning in the second quarter of 2024;
•$13.7 million of decreased lab expenses and other platform costs primarily relating to a decrease in lab consumables costs which were assumed by Regeneron as part of the Regeneron Transaction beginning in the second quarter of 2024;
•$3.6 million of decreased license and milestone fees associated with a milestone paid to Medigene in the first quarter of 2023 for the continued development of our MAGE-A4 TCR program in solid tumors, which was being developed as part of our collaboration with Regeneron;
•$2.6 million decrease in consulting and professional service fees; and
•$1.7 million decrease in clinical trial and medical research costs.
These decreases were partially offset by a $7.3 million increase in net research and development expenses recognized under our collaboration with BMS.
Cost of Manufacturing for Commercial Collaboration. Cost of manufacturing for commercial collaboration was $18.0 million for the year ended December 31, 2024, compared to $14.8 million for the year ended December 31, 2023. The increase of $3.2 million was primarily due to increased costs allocated to Abecma in the second half of 2024 upon the completion of our strategic realignment to focus on the development and commercialization of Abecma.
Selling, General and Administrative Expenses. Selling, general and administrative expenses were $43.9 million for the year ended December 31, 2024, compared to $69.4 million for the year ended December 31, 2023. The decrease of $25.5 million was primarily due to the following:
•$22.8 million of decreased compensation expenses primarily resulting from the 40% reduction in our workforce announced in September 2023 and the additional reduction to our workforce announced in January 2024;
•$3.9 million decrease in costs associated with terminations and settlements related to license agreements; and
•$3.3 million of decreased consulting and professional service fees.
The decreases were partially offset by $5.0 million of increased facility related expenses allocated to selling, general, and administrative expense as a result of the sale of our research and development pipeline to Regeneron and Novo.
Share of Collaboration Loss. Share of collaboration loss represents our share of net loss arising from the commercialization of Abecmaunder the BMS collaboration during the first and fourth quarters of 2024. The collaboration resulted in collaborative arrangement revenue during the second and third quarters of 2024.
Restructuring Expenses. The increase in restructuring expenses is primarily due to our share of one-time costs incurred during the second and third quarters of 2024 of $5.7 million related to BMS' early exit from a commercial manufacturing and supply agreement as a result of the transition to suspension lentiviral vector for Abecma. The
remaining increase is attributable to costs incurred related to the reduction in our workforce as a part of our 2024 Restructuring Plan, initiated in January 2024.
Cost of Royalty and Other Revenue.There is no cost of royalty and other revenue for the year ended December 31, 2024, and total cost of royalty and other revenue was $2.1 million for the year ended December 31, 2023.
Change in Fair Value of Contingent Consideration.The change in fair value of contingent consideration of $2.7 million was primarily due to the change in significant unobservable inputs used in the fair value measurement of contingent consideration, including the probabilities of successful achievement of clinical and commercial milestones and discount rates. As of September 30, 2024, we determined the probability of milestone achievement to be zero and as a result we reduced the fair value of the contingent consideration liability to zero.
Goodwill Impairment Charge.During the third and fourth quarters of 2023, we experienced a sustained decline in the price of our common stock in part due to decreased external expectations for future Abecma sales resulting from increased competitive dynamics, which was considered a triggering event. We performed a goodwill impairment test that resulted in a non-cash impairment charge of $12.1 million.
Interest Income, Net.Interest income, net was $10.9 million and $12.4 million for the twelve months ended December 31, 2024 and 2023, respectively. The decrease of $1.5 million was due to a decline in the total securities held partially offset by an increase in income earned on securities compared to the prior year.
Gain on sale to Novo . In June 2024, we announced the completion of an asset purchase agreement with Novo. Refer to Note 3, Asset purchase agreements, in the notes to the consolidated financial statements for further detail regarding the gain on sale related to this transaction.
Loss on assets held for sale to Regeneron. The loss on assets held for sale consists of fixed assets that ceased depreciation, measured at the lower of their carrying value or fair value less cost to sell. Refer to Note 3, Asset purchase agreements, in the notes to the consolidated financial statements for further detail regarding this amount.
Other Income, Net. For the twelve months ended December 31, 2024 other income, net primarily consisted of rental income and income recognized under our transition service agreements with Regeneron from the Regeneron Transaction. For the twelve months ended December 31, 2023, other income, net consisted of rental income and income recognized under our transition service agreements with bluebird bio.
Liquidity and Capital Resources
As of December 31, 2024, we had cash, cash equivalents and marketable securities of $183.6 million. Based on our current operating plans, including with respect to the ongoing commercialization of Abecma, we expect our cash, cash equivalents and marketable securities will be sufficient to fund current planned operations for at least the next twelve months from the date of filing this Annual Report. Our current operating plan is based on various assumptions. If we use our capital resources sooner than expected, we would evaluate further reductions in expense or obtaining additional financing. This may include pursuing a combination of public or private equity offerings, debt financings, collaborations, strategic alliances or licensing arrangements with third parties. This may also include the potential sale of shares of our common stock of up to $150.0 million in gross proceeds under the ATM facility established in November 2022 with Cowen and Company, LLC. No sales of common stock have occurred under this ATM as of the date of this Annual Report and we do not have any current plans to sell shares under the ATM. There can be no assurance that such financing will be available in sufficient amounts or on acceptable terms, if at all, and some could be dilutive to existing stockholders. If we are unable to obtain additional funding on a timely basis, we may be forced to significantly curtail, delay, or discontinue one or more of our planned research or development programs or be unable to expand our operations.
We have incurred losses and have experienced negative operating cash flows for all periods presented. During the year ended December 31, 2024, we incurred a loss of $57.2 million and used $85.0 million of cash in operations. We expect to continue to generate operating losses and negative operating cash flows for the near future.
Cash Flows
The following table summarizes our cash flow activity:
| Year ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| (in thousands) | |||||||||||
| Net cash used in operating activities | $ | (84,998) | $ | (166,858) | |||||||
|
Net cash provided by investing activities
|
80,763 | 43,861 | |||||||||
| Net cash provided by financing activities | 417 | 127,390 | |||||||||
|
Increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents
|
$ | (3,818) | $ | 4,393 | |||||||
Cash Flows from Operating Activities
Net cash used in operating activities was $85.0 million for the year ended December 31, 2024 and primarily consisted of a net loss of $57.2 million adjusted for non-cash items, including:
•gain on sale to Novo of $48.0 million and loss on assets held for sale to Regeneron of $5.0 million;
•stock-based compensation of $12.2 million;
•depreciation and amortization of $7.1 million;
•change in fair value of contingent consideration of $2.4 million; and
•other non-cash items of $4.6, as well as the change in our net working capital.
Net cash used in operating activities was $166.9 million for the year ended December 31, 2023 and primarily consisted of a net loss of $217.6 million adjusted for non-cash items, including stock-based compensation of $32.2 million, goodwill impairment charges of $12.1 million, depreciation and amortization of $10.3 million, and the change in fair value of contingent consideration of $0.2 million, as well as the change in our net working capital.
Pursuant to the BMS Merger Agreement, we have agreed to various covenants and obligations, including, among others, to conduct our business in the ordinary course between the execution of the BMS Merger Agreement and the closing of the transactions described therein. Outside of certain limited exceptions, we may not take certain actions without BMS' consent, including (i) acquiring businesses and disposing of significant assets, (ii) incurring expenditures above specified thresholds; (iii) incurring or assuming any indebtedness, and (iv) issuing additional securities. We do not believe these restrictions will prevent us from meeting our ongoing costs of operations, working capital needs or capital expenditure requirements.
Cash Flows from Investing Activities
Net cash provided by investing activities for the year ended December 31, 2024 was $80.8 million and was due to:
•$166.5 million of proceeds from maturities of marketable securities;
•$25.1 million of proceeds from maturities of restricted investments; and
•proceeds from the Novo Transaction of $38.0 million and proceeds from the Regeneron Transaction of $5.0 million.
These cash inflows were partially offset by the purchase of marketable securities of $127.5 million, the purchase of restricted investments of $25.8 million, and the purchase of property, plant and equipment of $0.7 million.
Net cash provided by investing activities for the year ended December 31, 2023 was $43.9 million and was driven by $304.9 million of proceeds from maturities of marketable securities and $18.0 million of proceeds from maturities of restricted investments, which was offset by $246.7 million related to purchases of marketable securities, purchases of property, plant and equipment of $13.9 million, and the purchase of restricted investments of $18.4 million.
Cash Flows from Financing Activities
Net cash provided by financing activities for the year ended December 31, 2024 was $0.4 million and was primarily due to net proceeds relating to the exercise of stock options and ESPP contributions.
Net cash provided by financing activities for the year ended December 31, 2023 was $127.4 million and was primarily due to net proceeds received of $117.0 million from the issuance of common stock in a public offering in March 2023 along with net proceeds of $9.9 million from the issuance of common stock to Regeneron from the January 2023 Share Purchase Agreement.
Funding Requirements
We intend to incur costs in support of the ongoing commercialization of Abecma pursuant to our cost sharing arrangements with BMS, other capital expenditures, working capital requirements, and other general corporate activities.
Based on our current operating plans, including with respect to the ongoing commercialization of Abecma, we expect that our cash, cash equivalents and marketable securities will be sufficient to fund current planned operations for at least the next twelve months from the date of filing these financial statements. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.
Because of the numerous risks and uncertainties associated with the development and commercialization of Abecma, we are unable to estimate the exact amount of our working capital requirements. The scope of our future funding requirements will depend on, and could increase significantly as a result of, many factors, including:
▪the costs of activities, including clinical trials, sales, marketing, medical affairs, manufacturing and distribution, for Abecma;
▪the cost and timing of hiring new employees or contractors to support our activities;
▪the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; and
▪the timing, receipt and amount of sales of, or milestone payments related to or royalties on Abecma, if any.
A change in the outcome of any of these or other variables could significantly change the costs and timing associated with the development and commercialization of Abecma. Further, our operating plans may change in the future, and we may need additional funds to meet operational needs and capital requirements associated with such operating plans.
Until such time, if ever, as we can generate positive operating cash flows, we may need to finance our operations through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances or licensing arrangements with third parties. To the extent that we raise additional capital through the sale of equity or convertible debt securities, this could result in dilution and could adversely affect the rights of common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specified actions, such as incurring additional debt, making capital expenditures or declaring dividends. In addition, debt financing would result in increased fixed payment obligations.
If we raise funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or any future product candidates or grant licenses on terms that may not be favorable to us.
If we are unable to raise additional funds when needed, we may be required to delay, reduce or eliminate our product development for additional indications of Abecmaor future commercialization efforts.
Contractual Obligations and Commitments
As of December 31, 2024 we had contractual obligations and commitments relating to our lease obligations, milestone and royalty payments, business combinations, and certain purchase commitments.
Leases
We lease certain office and laboratory space, primarily located in Cambridge, Massachusetts and Seattle, Washington, which was assigned to us in connection with its separation from bluebird bio. The lease at 60 Binney Street, Cambridge, Massachusetts for 253,108 square feet (the "Prime Lease") was previously entered into by bluebird bio with ARE-MA Region No. 40, LLC on September 21, 2015. The lease at 188 East Blaine Street in Seattle, Washington for 36,126 square feet was previously entered into by bluebird bio on July 18, 2018.
In connection with the Regeneron Transaction, Regeneron agreed to sublease our facilities in Seattle, Washington and a portion of our facilities in Cambridge, Massachusetts. The expected sublease income will cover a majority of the future minimum commitments through 2027. Please refer to Note 8, Leases, in the notes to the consolidated financial statements included elsewhere in the Form 10-K for further information regarding our future minimum commitments under ASC 842 under our operating leases and Note 3, Asset Purchase Agreements,for further information on the closing on the transaction with Regeneron. Additionally, we were party to various contracts with contract research organizations and contract manufacturers that generally provide for termination on notice, with the exact amounts in the event of termination to be based on the timing of the termination and the terms of the agreement. The majority of these contracts were assumed by Regeneron upon or after closing of the Regeneron Transaction.
Contingent Milestone and Royalty Payments
Based on our development plans as of December 31, 2024, we may be obligated to make future development, regulatory and commercial milestone payments and royalty payments on future sales of specified products associated with our collaboration and license agreements. Payments under these agreements generally become due and payable upon achievement of such milestones or sales. Because the achievement of these milestones or sales had not occurred as of December 31, 2024, such contingencies have not been recorded in our financial statements. Amounts related to contingent milestone payments and sales-based royalties are not yet considered contractual obligations as they are contingent upon success.
•Under a license agreement with Biogen Inc., which was attributed to us in the separation, pursuant to which we license certain patents and patent applications related to ide-cel, we are required to make payments related to certain development milestone obligations and must report on our progress in achieving these milestones on a periodic basis. We may be obligated to pay up to $23.0 million in the aggregate for each licensed product upon the achievement of remaining milestones. Upon commercialization of Abecma, which is covered by the in-licensed intellectual property, we are obligated to pay a percentage of net sales as a royalty in the low single digits.
•Under a license agreement with the NIH, which was attributed to us in the separation, pursuant to which we license certain patent applications related to ide-cel, we have agreed to certain development and regulatory milestone obligations and must report on our progress in achieving these milestones on a periodic basis. We may be obligated to pay up to $9.7 million in the aggregate for a licensed product upon the achievement of these milestones. Upon commercialization of Abecma, which is covered by the in-licensed intellectual property, we are obligated to pay NIH a percentage of annual net sales as a royalty in the low single digits.
The royalties payable under this license agreement are subject to reduction for any third-party payments required to be made, with a minimum floor in the low single digits.
•Under a 2011 license agreement, Institut Pasteur granted a license to bluebird bio for the Licensed Pasteur IP. In February 2023, we entered into a partial assumption and assignment agreement with bluebird bio and Institut Pasteur, by which bluebird bio assigned us its rights, obligations and interests under the 2011 license agreement, to any and all uses of the Licensed Pasteur IP in connection with the prevention, diagnosis or treatment of oncological diseases or disorders and hemophilia. Prior to entering into the partial assignment and assumption agreement, the Licensed Pasteur IP was sublicensed by bluebird bio to us under the Intellectual Property License Agreement, dated as of November 3, 2021, entered into in connection with the Separation. After the expiration of the last valid patent covered by Licensed Pasteur IP, we terminated the agreement with Institut Pasteur, effective as of December 31, 2023.
•In connection with the separation, bluebird bio granted us a perpetual, worldwide, non-exclusive, royalty-free, fully paid-up license (or, as the case may be, including with respect to patents licensed to bluebird bio by Research Development Foundation, or RDF sublicense) to certain intellectual property to allow us to use such intellectual property in connection with our ongoing and future research and development activities and product candidates. We terminated the RDF sublicense, effective as of November 11, 2023.
•Concurrent with the sale of the manufacturing facility in Durham, North Carolina, bluebird bio entered into certain ancillary agreements, including two manufacturing agreements and a license agreement, or the "Resilience License Agreement", among others, which are collectively referred to as the "Ancillary Agreements". One of the manufacturing agreements, or the Development Manufacturing Supply Agreement, supportsongoing manufacturing for lentiviral vector for development candidates. The other manufacturing agreement for the future manufacturing of lentiviral vector for the commercial product marketed in collaboration with BMS, Abecma, or the Commercial Supply Agreement, was assigned by us to BMS on June 23, 2023. Certain rights and obligations under the Ancillary Agreements were assigned by bluebird bio to us on November 4, 2021 upon our separation of 2seventy bio from bluebird bio. The assignments under the Ancillary Agreements commit us to reimburse Resilience for an amount equal to 50% of the net operating losses of and relating to the manufacturing facility incurred during the twelve-month period ending on the first anniversary of the closing of the transaction, as calculated in accordance with the asset purchase agreement, subject to a cap of $15.0 million. During the second quarter of 2023, we paid a total of $14.2 million to Resilience for its share of net operating losses. The disposition of the net assets of the manufacturing facility previously assigned to us was reflected as a transfer to bluebird bio via a net parent investment as a result of bluebird bio's sale of such facility in our 2021 Annual Report on Form 10-K for the year ended December 31, 2021. As a result of the separation, our net parent investment balance was reclassified to additional paid-in capital. We are not a party to the sale of the manufacturing facility and, therefore, did not recognize any gain or loss arising from the transaction.
Contingent Consideration Related to Business Combinations
In connection with the Pregenen acquisition, bluebird bio agreed to make contingent cash payments to the former equity holders of Pregenen. All assets and liabilities related to the Pregenen acquisition, including the resulting goodwill and contingent consideration, was attributed to us in connection with the separation. In accordance with accounting guidance for business combinations, these contingent cash payments are recorded as a component of other non-current liabilities on our consolidated balance sheets at fair value. During the second quarter of 2017, a $5.0 million preclinical milestone was achieved, which resulted in a $5.0 million payment to the former equity holders of Pregenen during the third quarter of 2017. As of December 31, 2024 and 2023, the aggregate remaining undiscounted amount of contingent consideration potentially payable is $99.9 million. During 2024, we determined the probability of milestone achievement to be zero. As of December 31, 2024 and 2023, the fair value is zero and $2.4 million, respectively, reflected as a non-current liability in the consolidated balance sheets.
Other purchase commitments
Additionally, we are party to various contracts with contract research organizations and contract manufacturers that generally provide for termination on notice, with the exact amounts in the event of termination to be based on the timing of the termination and the terms of the agreement. As of December 31, 2024 there are no remaining purchase commitments to contract research organizations and contract manufacturers.
Emerging Growth Company Status
The Jumpstart Our Business Startups Act of 2012 permits an "emerging growth company" such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have elected not to "opt out" of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that we either (i) irrevocably elect to "opt out" of such extended transition period or (ii) no longer qualify as an emerging growth company. We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies.