10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number: 001-38550

Translate Bio, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	61-1807780
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

29 Hartwell Avenue Lexington, Massachusetts	02421
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (617) 945-7361

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	TBIO	The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of August 3, 2020, the registrant had 74,243,943 shares of common stock, $0.001 par value per share, outstanding.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION		1
Item 1.	Financial Statements (Unaudited)		1
	Condensed Consolidated Balance Sheets		1
	Condensed Consolidated Statements of Operations		2
	Condensed Consolidated Statements of Comprehensive Loss		3
	Condensed Consolidated Statements of Stockholders’ Equity		4
	Condensed Consolidated Statements of Cash Flows		6
	Notes to Condensed Consolidated Financial Statements (Unaudited)		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		39
Item 4.	Controls and Procedures		39
PART II.	OTHER INFORMATION		40
Item 1.	Legal Proceedings		40
Item 1A.	Risk Factors		40
Item 6.	Exhibits		83
Signatures			84

i

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

The forward-looking statements in this Quarterly Report on Form 10-Q include, among other things, statements about:

• the impacts of the COVID-19 pandemic;

• the initiation, timing, progress and results of our current and future preclinical studies and clinical trials and our research and development programs;

• our estimates regarding expenses, future revenue, capital requirements and need for additional financing;

• our expectations regarding our ability to fund our operating expenses and capital expenditure requirements with our cash, cash equivalents and short-term investments and the period in which we expect that such cash, cash equivalents and short-term investments will enable us to fund such operating expenses and capital expenditure requirements;

• our plans to develop our product candidates;

• the timing of and our ability to submit applications for, obtain and maintain regulatory approvals for our product candidates;

• the potential advantages of our product candidates;

• the rate and degree of market acceptance and clinical utility of our product candidates;

• our estimates regarding the potential market opportunity for our product candidates;

• our commercialization, marketing and manufacturing capabilities and strategy;

• our expectations regarding our ability to obtain and maintain intellectual property protection for our product candidates;

• our ability to identify additional products, product candidates or technologies with significant commercial potential that are consistent with our commercial objectives;

• the impact of government laws and regulations;

• our competitive position;

• developments relating to our competitors and our industry; and

• our ability to establish collaborations or obtain additional funding.

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 Quarterly Report on Form 10-Q, particularly in the “Risk Factors” section, that we believe 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 we may make.

You should read this Quarterly Report on Form 10-Q and the documents that we reference herein and have filed or incorporated by reference hereto 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 Quarterly Report on Form 10-Q are made as of the date hereof, and we do not assume any obligation to update any forward-looking statements except as required by applicable law.

ii

This Quarterly Report on Form 10-Q includes certain statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties as well as our own estimates of potential market opportunities. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. Our estimates of the potential market opportunities for our product candidates include several key assumptions based on our industry knowledge, industry publications, third-party research and other surveys, which may be based on a small sample size and may fail to accurately reflect market opportunities. While we believe that our internal assumptions are reasonable, no independent source has verified such assumptions.

iii

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

TRANSLATE BIO, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands, except share and per share amounts)

	June 30, 2020			December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	272,193		$	84,580
Short-term investments		20,029			104,098
Collaboration receivables		15,131			4,596
Prepaid expenses and other current assets		7,918			9,391
Restricted cash		950			950
Total current assets		316,221			203,615
Property and equipment, net		15,154			12,539
Right-of-use assets, net		10,130			10,400
Goodwill		21,359			21,359
Intangible assets, net		81,280			85,536
Other assets		10,134			2,752
Total assets	$	454,278		$	336,201
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	12,912		$	15,968
Accrued expenses		11,126			7,072
Current portion of deferred revenue		27,109			18,100
Current portion of operating lease liability		619			530
Total current liabilities		51,766			41,670
Contingent consideration		109,550			103,655
Deferred revenue, net of current portion		9,818			25,256
Operating lease liability, net of current portion		11,751			12,084
Total liabilities		182,885			182,665
Commitments and contingencies (Notes 3, 4 and 12)
Stockholders’ equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized as of June 30, 2020 and December 31, 2019, respectively; no shares issued and outstanding as of June 30, 2020 and December 31, 2019		—			—
Common stock, $0.001 par value; 200,000,000 shares authorized as of June 30, 2020 and December 31, 2019; 69,359,509 shares and 60,022,067 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively		69			60
Additional paid-in capital		680,850			512,231
Accumulated deficit		(410,066	)		(359,496	)
Accumulated other comprehensive income		540			741
Total stockholders’ equity		271,393			153,536
Total liabilities and stockholders’ equity	$	454,278		$	336,201

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

TRANSLATE BIO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In thousands, except share and per share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Collaboration revenue	$	16,319		$	1,174		$	20,974		$	2,648
Operating expenses:
Research and development		29,002			16,625			50,442			34,048
General and administrative		8,601			7,850			16,060			14,403
Change in fair value of contingent consideration		15,347			4,889			5,895			16,591
Total operating expenses		52,950			29,364			72,397			65,042
Loss from operations		(36,631	)		(28,190	)		(51,423	)		(62,394	)
Interest income		343			358			853			878
Loss before benefit from income taxes		(36,288	)		(27,832	)		(50,570	)		(61,516	)
Benefit from income taxes		—			—			—			486
Net loss	$	(36,288	)	$	(27,832	)	$	(50,570	)	$	(61,030	)
Net loss per share—basic and diluted	$	(0.58	)	$	(0.57	)	$	(0.83	)	$	(1.30	)
Weighted average common shares outstanding—basic and diluted		62,282,291			48,749,627			61,145,254			46,866,842

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

TRANSLATE BIO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)

(In thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Net loss	$	(36,288	)	$	(27,832	)	$	(50,570	)	$	(61,030	)
Other comprehensive income (loss):
Unrealized gains (losses) on available-for-sale securities, net of tax of $0		(315	)		219			(201	)		374
Comprehensive loss	$	(36,603	)	$	(27,613	)	$	(50,771	)	$	(60,656	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

TRANSLATE BIO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

(In thousands, except share amounts)

	Common Stock				Additional Paid-in		Accumulated			Accumulated Other Comprehensive			Total Stockholders’
	Shares		Amount		Capital		Deficit			Income			Equity
Balances at December 31, 2019		60,022,067	$	60	$	512,231	$	(359,496	)	$	741		$	153,536
Exercise of stock options		15,596		—		132		—			—			132
Stock-based compensation expense		—		—		3,172		—			—			3,172
Unrealized gains on available-for-sale securities		—		—		—		—			114			114
Net loss		—		—		—		(14,282	)		—			(14,282	)
Balances at March 31, 2020		60,037,663		60		515,535		(373,778	)		855			142,672
Issuance of common stock in connection with public offerings, net of underwriting discounts and commissions and offering costs		8,544,982		9		153,602		—			—			153,611
Exercise of stock options		776,864		—		5,699		—			—			5,699
Stock-based compensation expense		—		—		6,014		—			—			6,014
Unrealized losses on available-for-sale securities		—		—		—		—			(315	)		(315	)
Net loss		—		—		—		(36,288	)		—			(36,288	)
Balances at June 30, 2020		69,359,509	$	69	$	680,850	$	(410,066	)	$	540		$	271,393

	Common Stock					Additional Paid-in			Accumulated			Accumulated Other Comprehensive		Total Stockholders’
	Shares			Amount		Capital			Deficit			Income		Equity
Balances at December 31, 2018		45,139,955		$	45	$	371,257		$	(246,203	)	$	196	$	125,295
Exercise of stock options		154,484			—		897			—			—		897
Stock-based compensation expense		—			—		1,959			—			—		1,959
Unrealized gains on available-for-sale securities		—			—		—			—			155		155
Net loss		—			—		—			(33,198	)		—		(33,198	)
Balances at March 31, 2019		45,294,439			45		374,113			(279,401	)		351		95,108
Issuance of common stock in connection with private placement, net of placement agent fees and offering costs		5,582,940			6		44,128			—			—		44,134
Issuance of common stock in connection with a former employee letter agreement		67,406			—		847			—			—		847
Forfeited restricted common stock		(1,334	)		—		(1	)		—			—		(1	)
Exercise of stock options		66,917			—		519			—			—		519
Stock-based compensation expense		—			—		2,703			—			—		2,703
Unrealized gains on available-for-sale securities		—			—		—			—			219		219
Net loss		—			—		—			(27,832	)		—		(27,832	)
Balances at June 30, 2019		51,010,368		$	51	$	422,309		$	(307,233	)	$	570	$	115,697

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

TRANSLATE BIO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)

	Six Months Ended June 30,
	2020			2019
Cash flows from operating activities:
Net loss	$	(50,570	)	$	(61,030	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		5,617			1,960
Stock-based compensation expense		9,186			5,509
Change in fair value of contingent consideration		5,895			16,591
Deferred income tax benefit		—			(486	)
Changes in operating assets and liabilities:
Collaboration receivables		(10,535	)		177
Prepaid expenses and other assets		(5,909	)		(1,766	)
Right-of-use assets		270			234
Accounts payable		(2,783	)		(1,858	)
Accrued expenses		4,013			600
Lease liability		(244	)		(170	)
Deferred revenue		(6,429	)		(1,206	)
Net cash used in operating activities		(51,489	)		(41,445	)
Cash flows from investing activities:
Purchases of investments		(27,409	)		(38,438	)
Sales and maturities of investments		111,277			55,756
Purchases of property and equipment		(4,446	)		(1,793	)
Net cash provided by investing activities		79,422			15,525
Cash flows from financing activities:
Proceeds from public offerings, net of underwriting discounts and commissions		154,292			—
Payments of public offering costs		(443	)		—
Proceeds from private placement, net of placement agent fees		—			44,608
Payments of private placement offering costs		—			(474	)
Proceeds from option exercises		5,831			1,416
Net cash provided by financing activities		159,680			45,550
Net increase in cash, cash equivalents and restricted cash:		187,613			19,630
Cash, cash equivalents and restricted cash at beginning of period		85,530			56,224
Cash, cash equivalents and restricted cash at end of period	$	273,143		$	75,854
Cash, cash equivalents and restricted cash at end of period:
Cash and cash equivalents	$	272,193		$	74,904
Restricted cash		950			950
Total cash, cash equivalents and restricted cash at end of period	$	273,143		$	75,854
Supplemental disclosure of non-cash investing and financing activities:
Purchases of property and equipment included in accounts payable and accrued expenses	$	718		$	59
Offering costs included in accrued expenses	$	238		$	—
Deferred offering costs included in accounts payable and accrued expenses	$	—		$	123
Issuance of common stock in connection with a former employee letter agreement	$	—		$	847

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

TRANSLATE BIO, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Nature of the Business and Basis of Presentation

Translate Bio, Inc. (the “Company”) is a clinical-stage messenger RNA (“mRNA”) therapeutics company developing a new class of potentially transformative medicines to treat diseases caused by protein or gene dysfunction. Using its proprietary mRNA therapeutic platform (“MRT platform”), the Company creates mRNA that encodes functional proteins. The Company’s mRNA is designed to be delivered to the target cell where the cell’s own machinery recognizes it and translates it, restoring or augmenting protein function to treat or prevent disease. The Company is primarily focused on applying its MRT platform to treat pulmonary diseases caused by insufficient protein production or where production of proteins can modify disease. The Company is also pursuing the applicability of its MRT platform for the development of mRNA vaccines for infectious diseases under a collaboration with Sanofi Pasteur Inc. (“Sanofi”), the vaccines global business unit of Sanofi S.A. The Company’s MRT platform may also be applied to produce various classes of treatments, such as therapeutic antibodies for infectious diseases and other diseases. 

The outbreak of a novel strain of coronavirus named SARS-CoV-2 (severe acute respiratory syndrome 2), which causes coronavirus disease (“COVID-19”) has presented a substantial public health and economic challenge around the world and is affecting the Company’s employees, patients, communities and business operations, as well as the U.S. economy and financial markets. While the Company has progressed certain of its preclinical programs, specifically in therapeutics for pulmonary diseases and in vaccine development under its collaboration with Sanofi, as further discussed below, enrollment and dosing has been paused in the Company’s Phase 1/2 clinical trial in patients with cystic fibrosis (“CF”) as a consequence of the response to the COVID-19 pandemic. The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations and financial condition will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning COVID-19, the actions taken in an effort to contain it or to potentially treat or vaccinate against COVID-19 and the economic impact on local, regional, national and international markets. The Company is actively monitoring this situation and the possible effects on its financial condition, liquidity, operations, suppliers, industry and workforce.

The Company is developing MRT5005 for the treatment of CF. The Company is conducting a Phase 1/2 clinical trial to evaluate the safety and tolerability of single and multiple-ascending doses of MRT5005. Percent predicted forced expiratory volume in one second (“ppFEV1”), which is a well-defined and accepted endpoint measuring lung function, is also being measured at pre-defined timepoints throughout the trial. In April 2019, the Company completed dosing of all patients in the single-ascending dose (“SAD”) portion of the Phase 1/2 clinical trial and in July 2019, the Company reported interim data from the SAD portion of the clinical trial through one-month follow up post dosing. MRT5005 was generally well-tolerated at low and mid-dose levels with no serious adverse events reported at any dose level. Marked increases in ppFEV1 were observed after a single dose of MRT5005, primarily at the mid-dose level. Based on the analysis of the interim results, the Company has amended the clinical trial protocol to include one additional SAD dose group and two additional dose groups in the ongoing multiple-ascending dose (“MAD”) portion of this trial. The Company began dosing patients in the MAD portion of the trial in early 2019. In April 2020, the Company announced that enrollment and dosing have been paused in the ongoing Phase 1/2 clinical trial in patients with CF as a consequence of the response to the COVID-19 pandemic. The Company and the clinical trial sites are assessing the potential for patients to safely return to the clinic for study enrollment and dosing. At this time the Company is unable to predict the timing for reporting data.

The Company is leveraging its lung delivery platform and focusing its preclinical research efforts on identifying lead product candidates for a next-generation CF program, as well as beyond CF in additional pulmonary diseases with unmet medical need, including primary ciliary dyskinesia, idiopathic pulmonary fibrosis and pulmonary arterial hypertension.

The Company has a collaboration with Sanofi to develop infectious disease vaccines using the Company’s mRNA technology. Under the collaboration, the Company and Sanofi will jointly conduct research and development activities to advance mRNA vaccines targeting up to seven infectious disease pathogens (see Note 14). Two of the target pathogens under development are SARS-CoV-2 and influenza. Multiple COVID-19 vaccine candidates are being evaluated in vivo for immunogenicity and neutralizing antibody activity to support lead candidate selection with the goal to initiate a first-in-human clinical trial in the fourth quarter of 2020. The Company is conducting preclinical studies with a lead candidate for influenza to support an anticipated investigational new drug filing with clinical trial initiation anticipated mid-year 2021.  

6

The Company is subject to risks common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Product candidates currently under development will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

The preparation of the accompanying condensed consolidated financial statements requires the Company to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis the Company evaluates its estimates, judgments and methodologies. The Company bases its estimates on historical experience and on various other assumptions that it believes are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenues and expenses. The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations and financial condition, including revenue, expenses, reserves and allowances, manufacturing, clinical trials, research and development costs and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken in an effort to contain it or to potentially treat or vaccinate against COVID-19, as well as the economic impact on local, regional, national and international customers and markets. The Company has made estimates of the impact of COVID-19 within its financial statements and have determined them to be immaterial. There may be changes to those estimates in future periods. Actual results may differ from these estimates.

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its two wholly owned subsidiaries, Translate Bio MA, Inc. and Translate Bio Securities Corporation, from their date of incorporation. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated balance sheet as of June 30, 2020, the unaudited condensed consolidated statements of operations and of comprehensive loss for the three and six months ended June 30, 2020 and 2019, the unaudited condensed consolidated statements of stockholders’ equity for the three and six months ended June 30, 2020 and 2019 and the unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2020 and 2019 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. The accompanying balance sheet as of December 31, 2019 has been derived from the Company’s audited financial statements for the year ended December 31, 2019. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K that was filed with the SEC on March 12, 2020.

The accompanying unaudited interim condensed consolidated financial presentation has been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflects all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of June 30, 2020, the results of its operations for the three and six months ended June 30, 2020 and 2019, and its cash flows for the six months ended June 30, 2020 and 2019. The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2020 and 2019 are also unaudited. The results for the three and six months ended June 30, 2020 are not necessarily indicative of results to be expected for the year ending December 31, 2020, any other interim periods, or any future year or period.

Sales of Common Stock

In July 2019, the Company filed a universal shelf registration statement on Form S-3 with the SEC (the “2019 Shelf”) to register for sale from time to time up to $250.0 million of common stock, preferred stock, debt securities, warrants and/or units in one or more offerings, which became effective on July 19, 2019 (File No. 333-232543).  

In July 2019, the Company entered into an Open Market Sale AgreementSM (the “Sales Agreement”) with Jefferies LLC (“Jefferies”) under which the Company may issue and sell shares of its common stock, from time to time, having an aggregate offering price of up to $50.0 million. The offer and sales of shares under the Sales Agreement were also registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the 2019 Shelf. 

7

On March 13, 2020, the Company filed a universal shelf registration statement on Form S-3 with the SEC (the “2020 Shelf”) to register for sale from time to time up to $350.0 million of common stock, preferred stock, debt securities, warrants and/or units in one of more offerings (File No. 333-237159). This registration statement was declared effective on May 4, 2020. Upon the effectiveness of the 2020 Shelf, the Company deregistered the 2019 Shelf and no more sales may be made pursuant to the 2019 Shelf.

On March 13, 2020, the Company entered into Amendment No. 1 to the Open Market Sale AgreementSM with Jefferies, which increased the aggregate dollar amount of shares of common stock that the Company may issue and sell pursuant to the Sales Agreement from $50.0 million to $100.0 million, which became effective when the 2020 Shelf was declared effective. As of June 30, 2020, the Company has issued and sold an aggregate of 2,863,163 shares of its common stock, resulting in gross proceeds of $37.9 million, before deducting commissions of $1.1 million and other offering expenses of $0.2 million. In the future, $62.1 million of shares of common stock remain available to be sold pursuant to the Sales Agreement, which sales, if any, would be made under the 2020 Shelf.

On June 24, 2020, the Company filed a registration statement on Form S-3ASR, which became automatically effective upon filing with the SEC (File No. 333-239405) (the “June 2020 Registration Statement”). The June 2020 Registration Statement registered for sale from time to time common stock, preferred stock, debt securities, warrants and/or units in one or more offerings. On June 30, 2020, the Company issued and sold 5,681,819 shares of common stock and a stockholder of the Company sold 6,824,992 shares of common stock through a public offering pursuant to the June 2020 Registration Statement. The price to the public was $22.00 per share, resulting in gross proceeds to the Company of $125.0 million, before deducting underwriting discounts and commissions of $7.5 million and other offering expenses of $0.5 million. The Company did not receive any proceeds from the sale of shares of common stock by the stockholder.

Sanofi Pasteur Collaboration and Licensing Agreement

In 2018, the Company entered into a collaboration and license agreement with Sanofi (the “Original Sanofi Agreement”) to develop mRNA vaccines for up to five infectious disease pathogens (the “Licensed Fields”). On March 26, 2020, the Company and Sanofi amended the Original Sanofi Agreement (the “First Sanofi Amendment”) to include vaccines against SARS-CoV-2 as an additional Licensed Field, increasing the number of infectious disease pathogens to up to six. On June 22, 2020, the Company and Sanofi agreed to further amend the Original Sanofi Agreement to expand the scope of the collaboration and licenses granted to Sanofi (the “Second Sanofi Amendment”) (see Note 14). The Original Sanofi Agreement, as amended by the First Sanofi Amendment and the Second Sanofi Amendment, is referred to as the “Amended Sanofi Agreement.”

Pursuant to the Amended Sanofi Agreement, the Company and Sanofi have agreed to jointly conduct research and development activities to advance mRNA vaccines targeting up to seven infectious disease pathogens. The term of the collaboration expires in June 2022 with an option for Sanofi to extend for one additional year. If Sanofi elects to so extend, the collaboration may be further expanded to jointly conduct research and development activities to advance mRNA vaccines for up to an additional three infectious disease pathogens, bringing the total to ten pathogens.

Under the terms of the Amended Sanofi Agreement, the Company has granted to Sanofi exclusive, worldwide licenses under applicable patents, patent applications, know-how and materials, including those arising under the collaboration, to develop, commercialize and manufacture mRNA vaccines to prevent, treat or cure diseases, disorders or conditions in humans caused by any infectious disease pathogens, with certain specified exceptions.

Pursuant to the Second Sanofi Amendment, Sanofi agreed to pay the Company an additional upfront payment of $300.0 million, which was received in August 2020. Additionally, in connection with the execution of the Second Sanofi Amendment, the Company and Sanofi, a French corporation, and an affiliate of Sanofi (the “Investor”) entered into a securities purchase agreement (the “Securities Purchase Agreement”) for the sale and issuance of 4,884,434 shares of the Company’s common stock to the Investor at a price of $25.59 per share representing a 50 percent premium to the 20-day moving average share price prior to signing, for an aggregate purchase price of approximately $125.0 million. The closing of the transaction contemplated by the Securities Purchase Agreement was consummated on July 20, 2020, the effective date (see Note 14).

Liquidity

In accordance with Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.

8

The Company’s financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities in the ordinary course of business. Through June 30, 2020, the Company has funded its operations primarily through sales of equity securities and research and development collaboration agreements. The Company has incurred recurring losses and cash outflows from operations since its inception, including net losses of $50.6 million and $61.0 million for the six months ended June 30, 2020 and 2019, respectively. In addition, the Company had an accumulated deficit of $410.1 million as of June 30, 2020. The Company expects to continue to generate operating losses for the foreseeable future.

As of August 6, 2020, the date of issuance of these unaudited interim condensed consolidated financial statements, the Company expects that its cash, cash equivalents and short-term investments of $292.2 million as of June 30, 2020, together with the upfront payment of $300.0 million from Sanofi under the Second Sanofi Amendment and the aggregate purchase price of approximately $125.0 million from the Investor under the Securities Purchase Agreement, both received as of August 6, 2020, will be sufficient to fund its operating expenses and capital expenditure requirements for at least the next 36 months. The future viability of the Company beyond that point is dependent on the Company’s ability to raise additional capital to finance its operations.

Although the Company has been successful in raising capital in the past, there is no assurance that it will be successful in obtaining such additional financing on terms acceptable to the Company, if at all. The Company expects that its expenses will increase in connection with its ongoing business activities. As a result, the Company will need substantial additional funding to support its continuing operations and pursue its growth strategy. Until such time as the Company can generate significant revenue from product sales, if ever, it expects to finance its operations through the sale of equity, debt financings or other capital sources, including collaborations with other companies or other strategic transactions. The Company may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If the Company is unable to obtain funding, the Company will be forced to delay, reduce or eliminate some or all of its research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect its business prospects, or the Company may be unable to continue operations.

2. Summary of Significant Accounting Policies

The significant accounting policies and estimates used in preparation of the consolidated financial statements are described in the Company’s audited financial statements as of and for the year ended December 31, 2019, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K. During the six months ended June 30, 2020, there were no material changes to the Company’s significant accounting policies.

Recently Adopted Accounting Pronouncements

In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2017-04, Intangibles—Goodwill and Other: Simplifying the Test for Goodwill Impairment (Topic 350), which provides for the elimination of Step 2 from the goodwill impairment test. If impairment charges are recognized, the amount recorded will be the amount by which the carrying amount exceeds the reporting unit’s fair value with certain limitations. The Company adopted this new standard as of the required effective date of January 1, 2020, and its adoption had no impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. This new standard removes the disclosure requirement for the amount and reasons for transfers between Level 1 and Level 2 fair value measurements as well as the process for Level 3 fair value measurements. In addition, the ASU adds the disclosure requirements for changes in unrealized gains and losses included in other comprehensive income (loss) for recurring Level 3 fair value measurements held at the end of the reporting period as well as the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The Company adopted this new standard as of the required effective date of January 1, 2020, and its adoption had no impact on the Company’s consolidated financial statements.

In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606. This update provides clarification on the interaction between Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), and ASC 808, Collaborative Arrangements (“ASC 808”), including the alignment of unit of account guidance between the two topics. The Company adopted this new standard as of the required effective date of January 1, 2020, and its adoption had no impact on the Company’s consolidated financial statements.

9

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The guidance requires that credit losses be reported using an expected losses model rather than the incurred losses model that is currently used, and establishes additional disclosures related to credit risks. For available-for-sale debt securities with unrealized losses, the standard now requires allowances to be recorded instead of reducing the amortized cost of the investment. This standard will be effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact that the adoption of this new standard will have on its consolidated financial statements and disclosures.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes-Simplifying the Accounting for Income Taxes. This new standard eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for annual periods beginning after December 15, 2020 and interim periods within, with early adoption permitted. Adoption of the standard requires certain changes to be made prospectively, with some changes to be made retrospectively. The Company does not expect the adoption of this new standard to have a material impact on its consolidated financial statements.

3. Collaboration Agreement

Sanofi Collaboration and License Agreement

In 2018, the Company and Sanofi entered into the Original Sanofi Agreement to develop mRNA vaccines and an mRNA vaccine platform for up to five infectious disease pathogens. In March 2020, the Company and Sanofi entered into the First Sanofi Amendment to include vaccines against SARS-CoV-2 as an additional Licensed Field, increasing the number of infectious disease pathogens to up to six. On June 22, 2020, the Company and Sanofi entered into the Second Sanofi Amendment, which became effective on July 20, 2020, to expand the scope of the collaboration and licenses granted to Sanofi (see Note 14). In this Note 3, the Company is describing matters in relation to the Original Sanofi Agreement, as amended by the First Sanofi Amendment. Certain of those matters have been amended in accordance with the Second Sanofi Amendment, resulting in rights and obligations that may be different than those set forth in this Note 3, as further described in Note 14.

Pursuant to the Original Sanofi Agreement, as amended by the First Sanofi Amendment, the Company and Sanofi  agreed to collaborate to perform certain research and development activities to advance mRNA vaccines and mRNA vaccine platform development during a three-year research term, which could have been extended by mutual agreement. The Company was obligated to manufacture and supply certain non-clinical and clinical product until the Company transferred such manufacturing capabilities to Sanofi, which the Company originally estimated to take up to eight years to complete. The collaboration activities were subject to a collaboration plan to be updated annually. During March 2020, the joint steering committee revised the collaboration timeline and the Company estimated the completion of the transfer of manufacturing capabilities to be six years from the date of the Original Sanofi Agreement, or 2024.

Pursuant to the Original Sanofi Agreement, as amended by the First Sanofi Amendment, the Company and Sanofi agreed to a governance structure, including committees and working groups, to manage the activities under the collaboration. If the Company and Sanofi did not mutually agree on certain decisions, Sanofi would be able to break a deadlock without the Company’s consent. The collaboration included an estimated budget. Sanofi was responsible for paying reimbursable development costs, including the Company’s employee costs, out-of-pocket costs paid to third parties and manufacturing costs, up to a specified amount for the Licensed Field. During the second quarter of 2020, the joint steering committee revised the estimated budget to include reimbursable manufacturing costs for development of the vaccine against SARS-CoV-2.

Under the terms of the Original Sanofi Agreement, as amended by the First Sanofi Amendment, the Company granted to Sanofi exclusive, worldwide licenses under applicable patents, patent applications, know-how and materials, including those arising under the collaboration, to develop, commercialize and manufacture mRNA vaccines to prevent, treat or cure diseases, disorders or conditions in humans caused by any of four of the Licensed Fields. In addition, pursuant to the terms of the Original Sanofi Agreement, as amended by the First Sanofi Amendment, and subject to certain limitations, Sanofi had options to add up to two additional infectious disease pathogens within the granted licenses to the Licensed Fields by exercising either option or both options during a specified option term and paying the Company a $5.0 million fee per added pathogen, subject to certain limitations on the pathogens. If, prior to the exercise of the options by Sanofi, the Company received a bona fide third-party offer to acquire rights to the field to which an option relates, the Company was required to notify Sanofi of such offer, and if Sanofi did not exercise its option as to the applicable field, such field would no longer be subject to the option.

10

The Company and Sanofi retained the rights to perform their respective obligations and exercise their respective rights under the Original Sanofi Agreement, as amended by the First Sanofi Amendment. Sanofi also granted the Company non-exclusive, sublicensable licenses under patent rights claiming certain improvements that Sanofi could have made to the technology the Company had licensed to it or claiming certain technology arising from the collaboration and owned by Sanofi. The Company could have exercised such licenses to develop, manufacture and commercialize products, other than products that use a vaccine to prevent, treat or cure a disease, disorder or condition in humans caused by an infectious disease pathogen. Sanofi could have terminated these licenses to the Company if the Company materially breached the terms of the license and the breach remained uncured for a specified period, which could have been extended in certain circumstances.

The Original Sanofi Agreement, as amended by the First Sanofi Amendment, provided that the Company was eligible to receive aggregate potential payments of up to $805.0 million from Sanofi, which included the $45.0 million upfront payment the Company received in 2018, potential milestone payments and potential option exercise payments. Sanofi would also pay the Company $5.0 million with respect to each additional Licensed Field for which it exercised an option. Under the First Sanofi Amendment, Sanofi did not pay an upfront fee to the Company with respect to the addition of SARS-CoV-2 as a Licensed Field. As part of the Original Sanofi Agreement, Sanofi had also agreed to pay the Company milestone payments upon the achievement of specified development, regulatory and commercialization milestones. In particular, the Company was entitled to receive development and regulatory milestone payments of up to $63.0 million per Licensed Field and sales milestone payments of up to $85.0 million per Licensed Field. In addition, the Company was entitled to receive a $10.0 million milestone payment from Sanofi following completion of the technology and process transfer.

Notwithstanding the foregoing, milestone payments provisions of the Original Sanofi Agreement, as amended by the First Sanofi Agreement, did not apply to vaccine products for the prevention, treatment or cure of SARS-CoV-2 that are purchased by a governmental authority while SARS-CoV-2 is a declared pandemic. Among other changes to the provisions described in this Note 3, this provision regarding milestone payments has been amended under the Second Sanofi Amendment (see Note 14).

Pursuant to the Original Sanofi Agreement, as amended by the First Sanofi Amendment, Sanofi had agreed to pay the Company a tiered royalty on worldwide net sales of all mRNA vaccines within each Licensed Field ranging from a high single-digit percentage to a low teens percentage, depending on quarterly net sales by Sanofi, its affiliates and its sublicensees. The royalty percentage payable to the Company could have been reduced with respect to a product once the relevant licensed patent rights expired or if additional licensed technology was required, but such royalty percentage could not fall below the Company’s royalty obligations to third parties plus a royalty of a low single-digit percentage. Royalty payments were payable on a product-by-product and country-by-country basis beginning on the launch of the product in the country until the later of the expiration of the last valid claim covering such product or 10 years after the launch of such product in such country. Notwithstanding the foregoing, pursuant to the Original Sanofi Agreement, as amended by the First Sanofi Amendment, royalty payments would not apply to vaccine products for the prevention, treatment or cure of SARS-CoV-2 that are purchased by a governmental authority while SARS-CoV-2 is a declared pandemic, and instead the parties would negotiate in good faith royalty terms to apply to such vaccine products, which royalty terms were to reflect the economic conditions applicable to commercializing such vaccine products, and in no event would be higher than those set out in the Original Sanofi Agreement. Among other changes to the provisions described in this Note 3, the provision regarding royalties payable in respect of SARS-CoV-2 vaccine products has been amended under the Second Sanofi Amendment (see Note 14).

The Original Sanofi Agreement, as amended by the First Sanofi Amendment, provided that it would remain in effect until terminated in accordance with its terms. Either the Company or Sanofi could have terminated the Original Sanofi Agreement, as amended by the First Sanofi Amendment, in its entirety if the other party was subject to certain insolvency proceedings. Either party could have terminated the Original Sanofi Agreement, as amended by the First Sanofi Amendment, in its entirety or with respect to a particular Licensed Field, country or product if the other party materially breached the Original Sanofi Agreement, as amended by the First Sanofi Amendment, and the breach remained uncured for a specified period, which could have been extended in certain circumstances. Sanofi could have also terminated the Original Sanofi Agreement, as amended by the First Sanofi Amendment, in its entirety or with respect to a particular Licensed Field, country or product for safety reasons or for convenience, in each case after a specified notice period. After termination of the Original Sanofi Agreement, as amended by the First Sanofi Amendment, Sanofi could have continued to manufacture and commercialize the terminated products for a specified period of time, subject to Sanofi’s payment obligations.

Moreover, under the Original Sanofi Agreement, as amended by the First Sanofi Amendment, in the event that the Company and Sanofi were unable to mutually agree on terms relating to the conduct of clinical development and commercialization of a product related to SARS-CoV-2 vaccine products, the Company had the right to terminate and revoke the license granted to Sanofi with respect to SARS-CoV-2 with sixty (60) days written notice, and SARS-CoV-2 would have ceased to be a Licensed Field. Upon any such termination and revocation by the Company, the Company and Sanofi had agreed to negotiate in good faith a termination agreement with respect to the Company’s use of any technology arising from the collaboration that was owned by Sanofi or jointly owned by the Company and Sanofi, that was necessary or useful to the further development or commercialization of a product directed to SARS-CoV-2. Among other changes to the provisions described in this Note 3, the provision regarding termination of the SARS-CoV-2 Licensed Field has been amended under the Second Sanofi Amendment (see Note 14). Sanofi has sole responsibility for all commercialization activities for mRNA vaccines in the Licensed Fields and is obligated to bear all costs in connection with any such commercialization.

11

The Company and Sanofi entered into a separate supply agreement on June 22, 2020, with an effective date of December 20, 2019, governing the terms of the supply of products by the Company (the “Supply Agreement”). Pursuant to the Supply Agreement, the Company has agreed to use commercially reasonable efforts to manufacture and supply Sanofi with non-clinical and clinical supply of products and other research materials in certain Licensed Fields. The Supply Agreement will remain in effect until terminated in accordance with its terms. However, the Company’s obligation to manufacture and supply products is limited to a defined duration based on the Licensed Field of the applicable product. The Supply Agreement may be terminated by the mutual consent of the parties. Sanofi may terminate the Supply Agreement for convenience after a specified notice period, or in the event that the Company does not provide the supply in a timely manner. The Company may terminate the Supply Agreement in the event of a breach by Sanofi of its payment obligations and such breach remains uncured for a specified period. As part of the Second Sanofi Amendment, the Company and Sanofi agreed to negotiate in good faith and enter into a further supply agreement in respect of supply of products in the SARS-CoV-2 Licensed Field for use in Phase 3 clinical trials or commercial supply.

Accounting for the Sanofi Collaboration

The Company accounts for the Original Sanofi Agreement, as amended by the First Sanofi Amendment, under ASC 606. In determining the appropriate amount of revenue to be recognized under ASC 606, the Company performed the following steps: (i) identified the promised goods or services in the contract; (ii) determined whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

The Company identified the following promised goods or services contained in the Original Sanofi Agreement, as amended by the First Sanofi Amendment: (i) the license it conveyed to Sanofi with respect to the Licensed Fields, (ii) the licensed know-how to be conveyed to Sanofi with respect to the Licensed Fields, (iii) its obligation to perform research and development on the Licensed Fields, (iv) its obligation to transfer licensed materials to Sanofi, (v) its obligation to manufacture and supply certain non-clinical and clinical mRNA vaccines and materials containing mRNA until the Company transfers such manufacturing capabilities to Sanofi; and (vi) the technology and process transfer. The Company assessed whether each of these promised goods or services are distinct performance obligations on their own or if they need to be combined with other promises to create a bundle that is a distinct performance obligation. The Company determined that the promised goods and services do not have standalone value and are highly interrelated. Accordingly, the promised goods and services represent one performance obligation. Sanofi’s right to exercise options for up to two additional infectious disease pathogens within the granted licenses to the Licensed Fields are accounted for separately as they do not represent material rights, based on the criteria of ASC 606. Upon the exercise of any option by Sanofi, the contract promises associated with an option target would use a separate proportional performance model for purposes of revenue recognition under ASC 606. There is no significant financing component or non-cash consideration included in the Original Sanofi Agreement, as amended by the First Sanofi Amendment.

Under ASC 606, at the end of each reporting period, the Company re-evaluates the probability that the consideration associated with each milestone or reimbursement will not be subject to a significant reversal in the cumulative amount of revenue recognized, and, if necessary, adjusts the estimate of the overall transaction price. The estimated collaboration budget is consistently re-evaluated and changes to the budget, if any, require approval by the Joint Steering Committee. If an approved change occurs, the Company will re-evaluate the transaction price which could potentially affect the cumulative amount of revenue recognized. In March 2020 and in June 2020, the joint steering committee agreed to a revised budget and collaboration plan. As a result, during the six months ended June 30, 2020, the Company increased the overall transaction price by $42.9 million. The transaction price includes the upfront, non-refundable payment of $45.0 million for the transfer of the combined license, supply and development obligations under the Original Sanofi Agreement, an estimated $34.3 million in reimbursable employee costs, an estimated $100.7 million in reimbursable development costs including out-of-pocket costs paid to third parties and manufacturing costs and an estimated $14.0 million in milestone payments.

Under ASC 606, the Company recognized revenue using the cost-to-cost input method, which it believes best depicts the transfer of control to the customer. Under the cost-to-cost input method, the extent of progress towards completion is measured based on the ratio of actual costs incurred to the total estimated costs expected upon satisfying the identified performance obligation. Under this method, revenue is recorded as a percentage of the estimated transaction price based on the extent of progress towards completion. The estimate of the Company’s measure of progress and estimate of variable consideration to be included in the transaction price will be updated at each reporting date as a change in estimate. The amount related to the unsatisfied portion will be recognized as that portion is satisfied over time.

12

The following table summarizes the Company’s collaboration revenue (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Collaboration revenue	$	16,319	$	1,174	$	20,974	$	2,648

The following table presents the balance of the Company’s contract liabilities (in thousands):

	June 30, 2020		December 31, 2019
Contract liabilities
Deferred revenue	$	36,927	$	43,356

The Company considers the total consideration expected to be earned in the next 12 months for services to be performed as short-term deferred revenue, and consideration that is expected to be earned subsequent to 12 months from the balance sheet date as long-term deferred revenue. The Company expects to complete its obligations and recognize all net revenues from the collaboration over six years. Revenue recognized from contract liabilities was $6.4 million and $1.2 million during the six months ended June 30, 2020 and 2019, respectively.

4. Intangible Assets and Goodwill

Acquisition of Shire’s MRT Program

In December 2016, the Company entered into an asset purchase agreement (as amended in June 2018) with Shire Human Genetic Therapies, Inc. (“Shire”), a subsidiary of Takeda Pharmaceutical Company Ltd., pursuant to which Shire sold equipment to and assigned to the Company all of its rights to certain patent rights, permits, real property leases, contracts, regulatory documentation, books and records, and materials related to Shire’s mRNA therapy platform (the “MRT Program”), including its cystic fibrosis transmembrane conductance regulator program.

Intangible Assets, Net

The acquisition of Shire’s MRT Program was accounted for in accordance with the acquisition method of accounting for business combinations. The total purchase consideration transferred was allocated to the tangible and identifiable intangible assets acquired based on their estimated fair values. The tables below present the Company’s definite-lived intangible assets that are subject to amortization and indefinite-lived intangible assets:

	June 30, 2020
	Estimated Life		Gross Carrying Amount		Accumulated Amortization			Impairment Charge		Net Carrying Amount
			(In thousands)
Definite-lived intangible assets:
MRT		6 years	$	45,992	$	(7,003	)	$	—	$	38,989
Indefinite-lived intangible assets:
IPR&D - CF		Indefinite		42,291		—			—		42,291
Total intangible assets, net			$	88,283	$	(7,003	)	$	—	$	81,280

	December 31, 2019
	Estimated Life		Gross Carrying Amount		Accumulated Amortization			Impairment Charge			Net Carrying Amount
			(In thousands)
Definite-lived intangible assets:
MRT		8 years	$	45,992	$	(2,747	)	$	—		$	43,245
Indefinite-lived intangible assets:
IPR&D - CF		Indefinite		42,291		—			—			42,291
IPR&D - OTC		Indefinite		18,559		—			(18,559	)		—
Total intangible assets, net			$	106,842	$	(2,747	)	$	(18,559	)	$	85,536

13

Identifiable intangible assets acquired in the acquisition of Shire’s MRT Program consisted of in-process research and development (“IPR&D”), which included ongoing projects that could further the Company’s preclinical and clinical development activities related to CF, ornithine transcarbamylase (“OTC”) deficiency and other potential rare diseases. As of the date of acquisition, the IPR&D was determined to be indefinite-lived.

Upon commencement of the Original Sanofi Agreement, the IPR&D - MRT intangible asset was reclassified from indefinite-lived to definite-lived intangible assets and the Company began amortization of this intangible asset. Amortization will be recorded over the intangible asset’s estimated life based on an economic consumption model. The Company recorded amortization expense of $3.6 million and $0.3 million during the three months ended June 30, 2020 and 2019, respectively, and $4.3 million and $0.8 million during the six months ended June 30, 2020 and 2019, respectively, related to the definite-lived MRT intangible asset. The estimated aggregate amortization expense for each of the five succeeding fiscal years is $11.6 million, $8.3 million, $8.4 million, $10.9 million and $4.0 million for the years ending December 31, 2020, 2021, 2022, 2023 and 2024, respectively.

Indefinite-lived IPR&D is not subject to amortization, but is tested annually for impairment or more frequently if there are indicators of impairment. The Company tests its indefinite-lived IPR&D annually for impairment on October 1st. The Company determined that the discontinuation of the development of MRT5201 in September 2019 was an indicator of impairment and as a result, retested the indefinite-lived IPR&D related to the OTC deficiency program for impairment. The Company is not investing any additional funds in this program and has reallocated all resources previously dedicated to the OTC deficiency program to other programs within the Company. The Company determined that there was no residual value to the indefinite-lived IPR&D related to the OTC deficiency program and, as a result, the Company recorded an impairment charge of $18.6 million during the year ended December 31, 2019, representing the entire value of the indefinite-lived IPR&D related to the OTC deficiency program. Concurrent with the impairment charge, the Company removed the contingent consideration liability related to this program (see Note 5). As a result of the termination of the planned Phase 1/2 clinical trial for MRT5201 in patients with OTC deficiency, the Company had recorded $0.9 million in short-term receivables, which was received during the quarter ended June 30, 2020, related to refundable advance payments for this program with one of the Company’s contract research organizations.

Goodwill

The excess of the fair value of the consideration transferred over the fair value of identifiable assets acquired in the acquisition of Shire’s MRT Program was allocated to goodwill in the amount of $21.4 million. There have been no changes to the carrying amount of goodwill during the six months ended June 30, 2020. Goodwill is not subject to amortization, but is tested annually for impairment or more frequently if there are indicators of impairment. The Company tests its goodwill annually for impairment on October 1st. During the six months ended June 30, 2020 and 2019, the Company did not recognize any impairment charges related to goodwill.

5. Fair Value of Financial Assets and Liabilities

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis (in thousands):

	Fair Value Measurements as of June 30, 2020 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	—	$	191,447	$	—	$	191,447
U.S. government agency bonds		—		20,029		—		20,029
	$	—	$	211,476	$	—	$	211,476
Liabilities:
Contingent consideration	$	—	$	—	$	109,550	$	109,550
	$	—	$	—	$	109,550	$	109,550

14

	Fair Value Measurements as of December 31, 2019 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	—	$	56,591	$	—	$	56,591
U.S. government agency bonds		—		104,098		—		104,098
	$	—	$	160,689	$	—	$	160,689
Liabilities:
Contingent consideration	$	—	$	—	$	103,655	$	103,655
	$	—	$	—	$	103,655	$	103,655

During the six months ended June 30, 2020 and the year ended December 31, 2019, there were no transfers between Level 1, Level 2 and Level 3.

Cash equivalents as of June 30, 2020 and December 31, 2019 consisted of money market funds totaling $191.4 million and $56.6 million, respectively. The money market funds were valued using inputs observable in active markets for similar securities, which represent a Level 2 measurement in the fair value hierarchy. The Company’s short-term investments as of June 30, 2020 and December 31, 2019 consisted of U.S. government agency bonds and were classified as available-for-sale securities. The U.S. government agency bonds were valued using inputs observable in active markets for similar securities, which represent a Level 2 measurement in the fair value hierarchy. As of June 30, 2020, the Company’s short-term investments had an amortized cost of $19.5 million, an unrealized gain of $0.5 million and a fair value of $20.0 million. All of these securities have a maturity of one year or less.

Valuation of Contingent Consideration

The contingent consideration liability related to the acquisition of Shire’s MRT Program in 2016 was classified as a Level 3 measurement within the fair value hierarchy. The Company may be required to pay future consideration to Shire contingent upon the achievement of potential future milestones and earnout payments.

The fair value of the liability to make potential future milestone and earnout payments was estimated by the Company at each reporting date based, in part, on the results of a third-party valuation using a discounted cash flow analysis based on various assumptions, including the probability of achieving specified events, discount rates, and the period of time until earnout payments are payable and the conditions triggering the milestone payments are met. The actual settlement of contingent consideration could differ from current estimates based on the actual occurrence of these specified events.

The following table presents the unobservable inputs and fair value of the components of the contingent consideration (dollar amounts in thousands):

	Unobservable Inputs		Fair Value at
	Projected Year of Payment		June 30, 2020		December 31, 2019
Earnout payments		2026 - 2039		101,570	$	96,097
Milestone payments		2026 - 2030		7,980		7,558
			$	109,550	$	103,655

The discount rate used in the third-party valuation was 13.5% as of June 30, 2020 and December 31, 2019.

The following table presents a roll-forward of the total acquisition-related contingent consideration liability (in thousands):

	Fair Value
Balance as of December 31, 2019	$	103,655
Increase in fair value of contingent consideration		5,895
Balance as of June 30, 2020	$	109,550

The increase in the fair value of contingent consideration was primarily due to  the time value of money due to the passage of time.

15

6. Property and Equipment, Net

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

	June 30, 2020			December 31, 2019
Laboratory equipment	$	10,500		$	9,044
Computer equipment		893			779
Office equipment		883			883
Leasehold improvements		5,635			5,635
Construction in progress		5,865			3,460
		23,776			19,801
Less: Accumulated depreciation and amortization		(8,622	)		(7,262	)
	$	15,154		$	12,539

Depreciation and amortization expense related to property and equipment was $0.7 million and $0.6 million during the three months ended June 30, 2020 and 2019, respectively, and $1.4 million and $1.1 million during the six months ended June 30, 2020 and 2019, respectively.

7. Accrued Expenses

Accrued expenses consisted of the following (in thousands):

	June 30, 2020		December 31, 2019
Accrued employee compensation and benefits	$	3,244	$	3,547
Accrued external research and development expenses		2,820		1,763
Accrued consultant and professional fees		2,165		1,390
Other		2,897		372
	$	11,126	$	7,072

Included in other accrued expenses is $2.8 million representing income taxes withheld from exercises of stock options during the three months ended June 30, 2020.

8. Incentive Stock Options and Restricted Stock

2018 Equity Incentive Plan

On March 7, 2018, the Company’s Board of Directors (the “Board of Directors”), subject to stockholder approval, adopted, and on June 15, 2018, its stockholders approved, the 2018 Equity Incentive Plan (the “2018 Plan”), which became effective on June 27, 2018. The 2018 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards.

The number of shares initially reserved for issuance under the 2018 Plan is the sum of 2,512,187, plus the number of shares (up to 1,013,167 shares) equal to the sum of (i) the number of shares remaining available for issuance under the 2016 Stock Incentive Plan, as amended (the “2016 Plan”), upon the effectiveness of the 2018 Plan, which was 360,514 shares, and (ii) the number of shares of common stock subject to outstanding awards under the 2016 Plan that expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right. The number of shares of common stock that may be issued under the 2018 Plan will automatically increase on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2019 and continuing for each fiscal year until, and including, the fiscal year ending December 31, 2028, by an amount equal to the lowest of (i) 3,349,582 shares, (ii) 4% of the outstanding shares of common stock on such date and (iii) an amount determined by the Board of Directors. As of December 31, 2019, there were 4,829,847 shares of common stock reserved for issuance under the 2018 Plan. On January 1, 2020, the number of shares of common stock that may be issued under the 2018 Plan increased by 2,400,829 shares of common stock. During the six months ended June 30, 2020, a total of 35,233 shares issued under the 2016 Plan have been cancelled and rolled over to the 2018 Plan, such that there are a total of 7,265,909 shares of common stock reserved for issuance under the 2018 Plan as of June 30, 2020. The shares of common stock underlying any awards that are forfeited, canceled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, repurchased or are otherwise terminated by the Company under the 2018 Plan will be added back to the shares of common stock available for issuance under the 2018 Plan.

16

The 2018 Plan is administered by the Board of Directors. The exercise prices, vesting periods and other restrictions are determined at the discretion of the Board of Directors, except that the exercise price per share of options may not be less than 100% of the fair market value of the common stock on the date of grant. Stock options awarded under the 2018 Plan expire 10 years after the grant date, unless the Board of Directors sets a shorter term. Awards granted to employees, officers, members of the Board of Directors and consultants typically vest over a period of one to four years.

Typically, unvested stock options are forfeited upon the recipient ceasing to provide services to the Company.

2018 Employee Stock Purchase Plan

On March 7, 2018, the Board of Directors, subject to stockholder approval, adopted, and on June 15, 2018, the Company’s stockholders approved the 2018 Employee Stock Purchase Plan (the “2018 ESPP”), which became effective on June 27, 2018. A total of 418,697 shares of common stock were initially reserved for issuance under this plan. The number of shares of common stock that may be issued under the 2018 ESPP will automatically increase on the first day of each fiscal year, beginning with the fiscal year commencing on January 1, 2019 and continuing for each fiscal year until, and including, the fiscal year commencing on January 1, 2029, by an amount equal to the lowest of (i) 837,395 shares, (ii) 1% of the outstanding shares of common stock on such date and (iii) an amount determined by the Board of Directors. In December 2019, the Board of Directors elected to add no shares of common stock to the 2018 ESPP. As of June 30, 2020, 870,096 shares of common stock were reserved for issuance under this plan and no shares had been issued under the 2018 ESPP.

2016 Stock Incentive Plan

The 2016 Plan provided for the grant of stock options, stock appreciation rights, restricted stock and restricted stock units. Shares that are expired, terminated, surrendered or canceled under the 2016 Plan without having been exercised will be available for future grants of awards under the 2018 Plan. In addition, shares of common stock that are tendered to the Company by a participant to exercise an award are added to the number of shares of common stock available for the grant of awards under the 2018 Plan.

The 2016 Plan is administered by the Board of Directors. The exercise prices, vesting periods and other restrictions were determined at the discretion of the Board of Directors, except that the exercise price per share of options could not be less than 100% of the fair market value of the common stock on the date of grant. Stock options awarded under the 2016 Plan expire 10 years after the grant date, unless the Board of Directors set a shorter term. Stock options and restricted stock granted to employees, officers, members of the Board of Directors and consultants typically vest over a four-year period.

Upon the effectiveness of the 2018 Plan on June 27, 2018, no further awards will be made under the 2016 Plan, but awards outstanding under the 2016 Plan will continue to be governed by their existing terms.

Stock Options

The following table summarizes the Company’s stock option activity since December 31, 2019 (in thousands, except share and per share amounts):

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Intrinsic Value
						(in years)
Outstanding as of December 31, 2019		8,646,378		$	8.06		8.42	$	3,687
Granted		2,861,118		$	8.98
Exercised		(792,460	)	$	7.36
Forfeited		(220,047	)	$	7.98
Outstanding as of June 30, 2020		10,494,989		$	8.37		8.21	$	100,634
Exercisable as of June 30, 2020		4,422,596		$	7.94		7.56	$	44,150
Vested and expected to vest as of June 30, 2020		10,494,989		$	8.37		8.21	$	100,634

The aggregate intrinsic value of options is calculated as the difference between the exercise price of the options and the fair value of the Company’s common stock for those options that had exercise prices lower than the fair value of the Company’s common stock. The aggregate intrinsic value of stock options exercised during the six months ended June 30, 2020 and 2019 was $10.7 million and $0.6 million, respectively.

17

The weighted average grant-date fair value per share of stock options granted was $5.50 and $5.56 during the six months ended June 30, 2020 and 2019, respectively.

Stock Option Valuation

The fair value of stock option grants is estimated using the Black-Scholes option-pricing model. The Company completed its IPO in July 2018 and therefore lacks company-specific historical and implied volatility information before that date. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. For options with service-based vesting conditions, the expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The expected term of stock options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

The following table presents, on a weighted average basis, the assumptions used in the Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted to employees and directors:

	Six Months Ended June 30,
	2020			2019
Risk-free interest rate		0.79	%		2.42	%
Expected term (in years)		6.1			6.0
Expected volatility		68.6	%		73.3	%
Expected dividend yield		0	%		0	%

Restricted Common Stock

The following table summarizes the Company’s restricted stock activity since December 31, 2019:

	Number of Shares			Weighted Average Grant-Date Fair Value
Unvested restricted common stock outstanding as of December 31, 2019		34,168		$	1.28
Forfeited restricted common stock		—		$	—
Vested restricted common stock		(32,477	)	$	1.28
Unvested restricted common stock outstanding as of June 30, 2020		1,691		$	1.28

Stock-Based Compensation

Stock-based compensation expense was classified in the condensed consolidated statements of operations as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Research and development expenses	$	4,091	$	1,284	$	5,545	$	2,153
General and administrative expenses		1,923		2,265		3,641		3,356
	$	6,014	$	3,549	$	9,186	$	5,509

Included in research and development stock-based compensation expense for the three and six months ended June 30, 2020 was $2.4 million related to the modification of options in connection with the resignation of the Company’s former Executive Vice President and Founder (“EVP and Founder”). In connection with this resignation the Company entered into a separation agreement with the EVP and Founder. Under the terms of the separation agreement, vesting of options for the purchase of 176,266 shares of common stock held by the EVP and Founder was accelerated with no change to the exercise price of such options. Stock options for the purchase of 550,278 shares of common stock, representing all of the options held by the  EVP and Founder, will be exercisable for 18 months following his resignation.

18

As of June 30, 2020, total unrecognized compensation cost related to the unvested stock-based awards was $31.4 million, which is expected to be recognized over a weighted average period of 2.6 years.

9. Income Taxes

The Company recognized an income tax benefit of $0 and $0.5 million during the six months ended June 30, 2020 and 2019, respectively. There was no income tax benefit recognized during the three months ended June 30, 2020 and 2019. The income tax benefits recognized during the six months ended June 30, 2019 resulted from a reduction in the deferred tax liabilities recorded as part of the Company’s acquisition of the MRT Program as well as deferred tax assets recorded for net operating losses generated that have an unlimited carryforward period. Net operating losses generated in 2018 and years thereafter can be carried forward indefinitely. 

10. Net Loss per Share

Basic and diluted net loss per share attributable to common stockholders was calculated as follows (in thousands, except share and per share amounts):

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Numerator:
Net loss	$	(36,288	)	$	(27,832	)	$	(50,570	)	$	(61,030	)
Denominator:
Weighted average common shares outstanding—basic and diluted		62,282,291			48,749,627			61,145,254			46,866,842
Net loss per share—basic and diluted	$	(0.58	)	$	(0.57	)	$	(0.83	)	$	(1.30	)

The Company excluded 3,790 shares and 147,914 shares of restricted common stock, presented on a weighted average basis, from the calculations of basic net loss per share attributable to common stockholders for the three months ended June 30, 2020 and 2019, respectively, because those shares had not vested. The Company excluded 11,149 shares and 172,941 shares of restricted common stock, presented on a weighted average basis, from the calculations of basic net loss per share attributable to common stockholders for the six months ended June 30, 2020 and 2019, respectively, because those shares had not vested.

The Company’s potentially dilutive securities, which include stock options and unvested restricted common stock, have been excluded from the computation of diluted net loss per share attributable to common stockholders as the effect would be to reduce the net loss per share. Therefore, the weighted average number of shares of common stock outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same.

The Company excluded the following potential shares of common stock, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

	June 30,
	2020		2019
Options to purchase common stock		10,494,989		8,548,660
Unvested restricted common stock		1,691		119,988
		10,496,680		8,668,648

19

11. Leases

Suite Retention and Development Agreement

In September 2019, the Company entered into a suite retention and development agreement with Albany Molecular Research, Inc. (“AMRI”) under which a series of cleanroom suites will be built at AMRI’s manufacturing facility in accordance with the Company’s objectives (“AMRI Agreement”). The Company will have exclusive use of the space once the build-out is completed and a certificate of occupancy is obtained. The build-out is expected to be completed during the third quarter of 2020. The AMRI Agreement shall continue for five years after the build-out is completed, and the Company has the right to extend for an additional three years. Under the AMRI Agreement, the Company agreed to provide $6.0 million to finance the costs of the build-out (“Build-Out Costs”). In the event the Build-Out Costs exceed $6.0 million, the Company and AMRI will share overage costs equally, up to $11.0 million. The Company will be responsible for any Build-Out Costs exceeding $11.0 million. The Company has paid $10.1 million towards the Build-Out Costs, which is included in other long-term assets in the condensed consolidated balance sheets as of June 30, 2020, and paid $1.2 million for certain initial deliverables, which is included in prepaid expenses and other current assets in the condensed consolidated balance sheets as of June 30, 2020. Beginning with the month following the build-out completion, the Company will pay monthly fees of $1.0 million, which are subject to a 3% increase on January 1 of each calendar year following the first anniversary of the build-out completion. The Company has determined this is a lease under ASU No. 2016-02, Leases (Topic 842) (“ASC 842”). As of June 30, 2020, the Company has determined that it does not have control of the space, as defined in ASC 842, during the build-out and as such, this lease was not included in the right-of-use assets or lease liabilities on the Company’s condensed consolidated balance sheet.

12. Commitments and Contingencies

Research, Supply and License Agreements

Roche Master Supply Agreement

The Company is a party to a master supply agreement with Roche Diagnostics Corporation (“Roche”) pursuant to which Roche will custom manufacture certain products for the Company. The agreement requires the Company to purchase from Roche specified manufactured products and the related raw materials in an amount equal to the greater of (i) quantities of raw materials in the Company’s annual forecast to be purchased or (ii) 80% of the Company’s demand for products as the same or similar type (the “Purchase Commitment”). In June 2017, the Company exercised its option under the agreement to extend the agreement through December 31, 2024. In September 2018, the Company and Roche amended the agreement to remove and replace the Purchase Commitment for certain manufactured products and related raw materials supplied by Roche. The agreement, as amended, specifies a minimum purchase requirement for certain custom manufactured products. As of June 30, 2020, the Company’s purchase commitments under the agreement totaled $14.0 million, with $3.5 million committed as payments each year from 2021 to 2024. Research and development expenses related to this agreement totaled $1.3 million and $1.0 million during the three months ended June 30, 2020 and 2019, respectively, and $2.6 million and $3.5 million during the six months ended June 30, 2020 and 2019, respectively.

MIT Research Agreement

In September 2019, the Company entered into a research agreement with the Massachusetts Institute of Technology (“MIT”) pursuant to which the Company is obligated to reimburse MIT up to $4.1 million for specified direct and indirect costs to be incurred from January 2020 through December 2022 for specified research activities conducted for the Company (the “2019 MIT Agreement”). As of June 30, 2020, the Company paid MIT $1.2 million towards the total committed amount. Research and development expenses related to this agreement during the three and six months ended June 30, 2020 were $0.3 million and $0.7 million, respectively. There were no amounts payable by the Company under the agreement as of June 30, 2020. The 2019 MIT Agreement expires in December 2022 and may be extended thereafter by mutual agreement of the parties.

MIT Exclusive Patent License Agreement

The Company is a party to at least one exclusive patent license agreement with MIT pursuant to which the Company received an exclusive license under the licensed patent rights to develop, manufacture and commercialize any product containing both (i) any RNA sequences, including mRNA, that encode a protein or peptide suitable for human therapeutic use which may include operably linked non-coding sequences that facilitate translation of the coding portion of such RNA sequence, but such non-coding sequences do not include nucleic acids that function through an RNA interface mechanism or transcriptional activation mechanism (the “coding RNA component”), and (ii) products covered by the licensed patent rights (the “lipid products”). A product containing both a coding RNA component and a lipid product is referred to as a “licensed product.” Under the licensed patent rights, the Company is permitted to develop, manufacture and commercialize the licensed products for the delivery of coding RNA components to treat disease in humans.

20

The Company has the right to grant sublicenses under this license. The patent rights licensed to the Company by MIT include claims that cover certain of the Company’s customized lipid-based nanoparticles used for delivery of coding RNA components in its MRT platform, including products that may be developed under the Company’s collaboration with Sanofi.

Under the license agreement, the Company is obligated to make annual license maintenance payments to MIT, payable on January 1 of each calendar year, of up to $0.2 million, which may be credited against royalties subsequently due on net sales of licensed products earned in the same calendar year. The Company paid no annual license maintenance fees to MIT during each of the three months ended June 30, 2020 and 2019 and paid $0.2 million during each of the six months ended June 30, 2020 and 2019.

The Company is also obligated to make milestone payments to MIT aggregating up to $1.375 million upon the achievement of specified clinical and regulatory milestones with respect to each licensed product and $1.250 million upon the Company’s first commercial sale of each licensed product, and to pay royalties of a low single-digit percentage to MIT based on the Company’s, and any of its affiliates’ and sublicensees’, net sales of licensed products. The royalties are payable on a product-by-product and country-by-country basis, and may be reduced in specified circumstances. The Company’s obligation to make royalty payments extends with respect to a licensed product in a country until  four years past the expiration of the last-to-expire patent or patent application licensed from MIT covering the licensed product in the country. In addition, the Company is obligated to pay MIT a low double-digit percentage of the portion of income from sublicensees that the Company ascribes to the MIT-licensed patents, excluding royalties on net sales and research support payments. In 2019, pursuant to such provision, the Company paid $0.7 million to MIT as MIT’s share of sublicense income with respect to the upfront payment received under the Original Sanofi Agreement. Additionally, the Company will be required to pay MIT a portion of the $300.0 million upfront payment from Sanofi and a portion of the 50 percent premium payment in consideration for the common stock purchased by the Investor under the Securities Purchase Agreement (see Note 14), as well as future option and milestone payments that the Company may receive pursuant to the Second Sanofi Amendment. The amounts that the Company may owe to MIT will depend upon the relative value of the patents the Company licensed from MIT and sublicensed to Sanofi as compared to the other rights that the Company licensed to Sanofi (see Notes 3 and 14). The determination of the relative value of such rights is subject to a process described in the Company’s license agreement with MIT.

The agreement obligates the Company to use commercially reasonable efforts and expend a minimum amount of resources each year to develop licensed products in accordance with a development plan, and a development milestone timetable specified in the agreement; to use commercially reasonable efforts to commercialize licensed products; and upon commercialization, to make the licensed products reasonably available to the public.

MIT has the right to terminate the agreement if the Company fails to pay amounts when due or otherwise materially breaches the agreement and fails to cure such nonpayment or breach within specified cure periods or in the event the Company ceases to carry on its business related to the agreement. In the event of a termination due to the Company’s breach caused by a due diligence failure of a licensed product, but where the Company has fulfilled its obligations with respect to a different licensed product, MIT may not terminate the agreement with respect to the different licensed product. MIT may immediately terminate the agreement if the Company or any of its affiliates brings specified patent challenges against MIT or assists others in bringing a patent challenge against MIT. The Company has the right to terminate the agreement for its convenience at any time on three months’ prior written notice to MIT and payment of all amounts due to MIT through the date of termination.

The Company’s patent rights, and the rights of its affiliates and sublicensees, in specified licensed products may also terminate, if the Company, its affiliates or MIT receives a request from a third party to develop such licensed product for which the Company is unable to, within nine months of receiving notice of any such request, either demonstrate that the Company has initiated a fully funded project for the commercial development of such licensed product, and provide a business plan with acceptable milestones; demonstrate that the licensed product proposed by such third party would be competitive with a licensed product for which the Company has initiated a fully funded project; or enter into a sublicense agreement with such third party on commercially reasonable terms, and, in each case, MIT, in its sole discretion, grants a license to such third party for the specified patent rights.

21

Research and development expenses related to this agreement totaled less than $0.1 million during each of the three months ended June 30, 2020 and 2019 and $0.1 million during each of the six months ended June 30, 2020 and 2019, respectively. As of June 30, 2020 and December 31, 2019, there were no liabilities recorded by the Company related to this agreement.

Indemnification Agreements

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company does not believe that the outcome of any claims under indemnification arrangements will have a material effect on its financial position, results of operations or cash flows, and it has not accrued any liabilities related to such obligations in its consolidated financial statements as of June 30, 2020 and December 31, 2019.

Legal Proceedings

The Company is not a party to any litigation and does not have contingency reserves established for any litigation liabilities.

13. Related Party Transactions

Private Placement

In connection with a private placement of the Company’s common stock in May 2019, entities affiliated with Baupost Group, L.L.C. (“Baupost”), a substantial stockholder, purchased 2,352,941 shares of the Company’s common stock at a price per share of $8.50 for an aggregate purchase price of $20.0 million.

Public Offerings

In connection with a public offering of the Company’s common stock in September 2019, Baupost purchased 5,000,000 shares of the Company’s common stock at a price per share of $10.00 for an aggregate purchase price of $50.0 million.

In connection with a public offering of the Company’s common stock in June 2020, Baupost purchased 500,000 shares of the Company’s common stock at a price per share of $22.00 for an aggregate purchase price of $11.0 million.  

14. Subsequent Events

Second Amendment to Sanofi Collaboration and License Agreement

On June 22, 2020, the Company and Sanofi entered into the Second Sanofi Amendment. The Second Sanofi Amendment became effective on July 20, 2020, following early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 by the Federal Trade Commission.

Pursuant to the Second Sanofi Amendment, the Company and Sanofi have agreed to jointly conduct research and development activities to advance mRNA vaccines targeting up to seven infectious disease pathogens. The parties have agreed to extend the collaboration term until June 2022 (the “Collaboration Term”), with an option for Sanofi to extend the Collaboration Term for one additional year. If Sanofi elects to so extend, the collaboration may be further expanded to jointly conduct research and development activities to advance mRNA vaccines for up to an additional three infectious disease pathogens, bringing the total to ten pathogens. In connection with the Second Sanofi Amendment, the Company and Sanofi entered into the Supply Agreement on June 22, 2020, with an effective date of December 20, 2019, for non-clinical and clinical supply of products in the SARS-CoV-2 Licensed Field. Sanofi will pay the Company for the non-clinical and clinical supply at the Company’s cost to manufacture plus a specified markup (see Note 3).

Under the terms of the Second Sanofi Amendment, the Company has agreed to expand the licenses granted under the Original Sanofi Agreement to grant to Sanofi exclusive, worldwide licenses under applicable patents, patent applications, know-how and materials, including those arising under the collaboration, to develop, commercialize and manufacture mRNA vaccines to prevent, treat or cure diseases, disorders or conditions in humans caused by any infectious disease pathogens, with certain specified exceptions.

22

As a result, the license option in the Original Sanofi Agreement, as amended by the First Sanofi Amendment, under which Sanofi had an option to obtain licenses to two additional pathogens from the Company, has been removed from the Amended Sanofi Agreement.

Pursuant to the Second Sanofi Amendment, the Company and the investor entered into the Securities Purchase Agreement, further described below, and Sanofi agreed to pay the Company an additional upfront payment of $300.0 million, which was received in August 2020. If Sanofi chooses to exercise its option to extend the Collaboration Term for an additional year, Sanofi has agreed to pay the Company an additional $75.0 million. The Amended Sanofi Agreement provides that the Company is eligible to receive aggregate potential payments of up to $1.9 billion upon the achievement of additional specified development, regulatory, manufacturing and commercialization milestones, which $1.9 billion is inclusive of the fee to exercise the option to extend the Collaboration Term. In particular, the Company is entitled to receive development, regulatory and sales milestone payments of up to $148.0 million for each Licensed Field, other than the SARS-CoV-2 Licensed Field, development, regulatory and sales milestone payments of up to $250.0 million in the SARS-CoV-2 Licensed Field, and one-time manufacturing milestone payments of up to $200.0 million. Under the terms of the Second Sanofi Amendment, Sanofi has also agreed to pay the Company royalties on net sales of mRNA vaccines in the SARS-CoV-2 Licensed Field in accordance with the terms of and at the same high single digits to low teens percentages set forth in the Original Sanofi Agreement, except where such vaccines are provided as a donation or transferred to a third party without any profit margin, in which case the Company will be paid royalties sufficient to cover its royalty obligations.

Securities Purchase Agreement

In connection with the execution of the Second Sanofi Amendment, the Investor and the Company also entered into the Securities Purchase Agreement on June 22, 2020 for the sale and issuance of 4,884,434 shares of common stock (the “Shares”) to the Investor at a price of $25.59 per share representing a 50 percent premium to the 20-day moving average share price prior to signing, for an aggregate purchase price of approximately $125.0 million. The closing of the transaction contemplated by the Securities Purchase Agreement was consummated on July 20, 2020 (the “SPA Closing Date”).

Pursuant to the terms of the Securities Purchase Agreement, the Investor agreed not to, without the prior written approval of the Company and subject to specified conditions, directly or indirectly acquire shares of the Company’s outstanding common stock, make a tender, exchange, or other offer to acquire shares of the Company’s outstanding common stock, solicit proxies or consents with respect to any matter, or undertake other specified actions related to the potential acquisition of additional equity interests in the Company (the “Standstill Restrictions”). Further, the Investor agreed not to, and to cause its affiliates not to, sell or transfer the Shares without the prior written approval of the Company subject to specified conditions (the “Lock-Up Restrictions”). The Standstill Restrictions terminate 12 months after the SPA Closing Date. The Lock-Up Restrictions terminate 18 months from the SPA Closing Date.

Registration Rights Agreement

Upon the closing of the Securities Purchase Agreement on July 20, 2020, the Investor and the Company entered into a registration rights agreement (the “Registration Rights Agreement”) providing the Investor with certain registration rights with respect to the Shares.

Pursuant to the Registration Rights Agreement, the Company agreed to provide the Investor with certain registration rights (the “Registration Rights”) such that, promptly, but no later than August 19, 2020, the Company agreed to prepare and file with the SEC a registration statement covering the resale of the Shares (the “Sanofi Registration Statement”). The Company has agreed to use commercially reasonable efforts to keep such Sanofi Registration Statement effective until the date on which all Shares (i) are sold pursuant to a Registration Statement or Rule 144 under the Securities Act or (ii) may be sold without restriction pursuant to Rule 144 under the Securities Act. The Company will be responsible for specified fees and expenses incurred in connection with the registration of the Investor’s Shares for resale. The Registration Rights Agreement contained customary indemnification rights in connection with the Sanofi Registration Statement.

23

Item 2. 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 unaudited condensed financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2019, or the 2019 Annual Report, that was filed with the Securities and Exchange Commission, or SEC, on March 12, 2020. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on current expectations, estimates, forecasts and projections, and the beliefs and assumptions of our management, and include, without limitation, statements with respect to our expectations regarding our research, development and commercialization plans and prospects, results of operations, selling, general and administrative expenses, research and development expenses, the sufficiency of our cash, cash equivalents and short-term investments for future operations and business activity disruption due to the COVID-19 pandemic. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. You are cautioned that these forward-looking statements are predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by our forward-looking statements are those discussed under the heading “Risk Factors” in Part II, Item 1A. and elsewhere in this report, and in the 2019 Annual Report. Statements made herein are as of the date of the filing of this Quarterly Report on Form 10-Q with the SEC and should not be relied upon as of any subsequent date. We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

Overview

We are a clinical-stage messenger RNA, or mRNA, therapeutics company developing a new class of potentially transformative medicines to treat diseases caused by protein or gene dysfunction. Using our proprietary mRNA therapeutic platform, or MRT platform, we create mRNA that encodes functional proteins. Our mRNA is designed to be delivered to the target cell where the cell’s own machinery recognizes it and translates it, restoring or augmenting protein function to treat or prevent disease. We believe that the mRNA design, delivery and manufacturing capabilities of our MRT platform provide us with the most advanced platform for developing product candidates that deliver mRNA encoding functional proteins for therapeutic uses. We believe that our MRT platform is broadly applicable across multiple diseases in which the production of a desirable protein can have a therapeutic effect, with the potential to transform life-threatening illnesses into manageable chronic conditions. We are primarily focused on applying our MRT platform to treat pulmonary diseases caused by insufficient protein production or where production of proteins can modify disease. We are also pursuing the applicability of our MRT platform for the development of mRNA vaccines for infectious diseases under a collaboration with Sanofi Pasteur Inc., or Sanofi, the vaccines global business unit of Sanofi S.A. We believe our technology is applicable to a broad range of diseases, including diseases that affect the liver. Additionally, our MRT platform may be applied to produce various classes of treatments, such as therapeutic antibodies for infectious diseases and other diseases.

We are developing MRT5005 for the treatment of cystic fibrosis, or CF. We believe MRT5005 is the first clinical-stage mRNA product candidate designed to deliver mRNA encoding fully functional cystic fibrosis transmembrane conductance regulator, or CFTR, protein to the lung. We have designed MRT5005 to be inhaled via a handheld nebulizer and to be administered in a once-weekly dose. Once the inhaled MRT5005 has entered the epithelial cells lining the patient’s lungs, our therapeutic mRNA uses the cells’ own machinery for translation and expression of fully functional CFTR protein, thereby restoring this essential ion channel, which we believe will address the pathology of CF directly. Currently approved CFTR modulating therapies are limited to patients with specific genetic mutations; therefore, there remains a significant unmet medical need for patients with CF who have genetic mutations non-amenable to currently approved CFTR modulating therapies. Additionally, patients treated with these current therapies still suffer from a long-term decline in lung function and exacerbations that require hospitalization. MRT5005 is being developed to treat the underlying cause of CF, regardless of the specific genetic mutation, including in patients with limited or no CFTR protein. The U.S. Food and Drug Administration, or FDA, has granted orphan drug designation, fast track designation and rare pediatric disease designation for MRT5005 for the treatment of CF.

We are conducting a Phase 1/2 clinical trial to evaluate the safety and tolerability of MRT5005. Percent predicted forced expiratory volume in one second, or ppFEV1, which is a well-defined and accepted endpoint measuring lung function, is also being measured at pre-defined timepoints throughout the trial. In April 2019, we completed dosing of patients in the single-ascending dose, or SAD, portion of the Phase 1/2 clinical trial and in July 2019, we reported interim data from the SAD portion of the clinical trial through one-month follow up post dosing. MRT5005 was generally well-tolerated at low and mid-dose levels with no serious adverse

24

events reported at any dose level. Marked increases in ppFEV1 were observed after a single dose of MRT5005, primarily at the mid-dose level. Based on the analysis of the interim results, we have amended the clinical trial protocol to include one additional SAD dose group and two additional dose groups in the ongoing multiple-ascending dose, or MAD, portion of this trial. We began dosing patients in the MAD portion of this trial in early 2019. In April 2020, we announced that enrollment and dosing have been paused in the ongoing Phase 1/2 clinical trial in patients with CF as a consequence of the response to the coronavirus disease, or COVID-19, pandemic. We and the clinical trial sites are assessing the potential for patients to safely return to the clinic for study enrollment and dosing. At this time we are unable to predict the timing for reporting data.

We are leveraging our lung delivery platform and focusing our preclinical research efforts on identifying lead product candidates for a next-generation CF program, as well as beyond CF in additional pulmonary diseases with unmet medical need. Building upon the MRT5005 program’s success to date, we are exploring innovation in the MRT platform including novel lipid nanoparticles, protein engineering approaches and manufacturing process enhancements to identify next-generation CF candidates that can support expansion of our pipeline opportunities. Beyond CF, we have discovery efforts underway to identify lead product candidates in additional pulmonary diseases, including primary ciliary dyskinesia, or PCD, idiopathic pulmonary fibrosis, or IPF, and pulmonary arterial hypertension, or PAH.

We have also begun to explore ways to leverage our delivery platform and expertise to apply different modalities to diseases where the knock-down or degradation of a protein would lead to therapeutic benefit, including small interfering RNA, or siRNA, or biological protein degradation. For example, in IPF, we are conducting preclinical studies to evaluate the delivery of siRNA and the resulting knock-down effect of a specific target of interest.

Additionally, we intend to leverage the broad applicability of our platform through a collaboration with Sanofi to develop infectious disease vaccines using our mRNA technology. Under the collaboration, we will jointly conduct research and development activities to advance vaccines targeting up to seven infectious disease pathogens. As part of the ongoing vaccine development program, comprehensive in vivo studies have been conducted across several infectious disease targets. Multiple development candidates were evaluated against distinct pathogens, all of which were well tolerated across all species tested. Multiple antigens were tested with all demonstrating robust neutralization titers. Two of the target pathogens under development are a novel strain of coronavirus named SARS-CoV-2 (severe acute respiratory syndrome 2), which causes COVID-19, and influenza. Multiple COVID-19 vaccine candidates are being evaluated in vivo for immunogenicity and neutralizing antibody activity to support lead candidate selection with the goal to initiate a first-in-human clinical trial in the fourth quarter of 2020. Assuming an accelerated development pathway due to the COVID-19 pandemic and successful completion of clinical studies demonstrating safety and efficacy, earliest approval of a vaccine from this program could occur in the second half of 2021. For information on risks related to our successful development of a vaccine against COVID-19, please see Part II, Item 1A – “Risk Factors – Risks Related to COVID-19,” included elsewhere in this Quarterly Report on Form 10-Q. Additionally, we are conducting preclinical studies with a lead candidate for influenza from our vaccine programs to support an anticipated investigational new drug, or IND, filing with clinical trial initiation anticipated mid-year 2021. Preclinical studies are ongoing for targets against additional viral and bacterial pathogens.

The successful development of our product candidates will require, among other things, our mRNA manufacturing capabilities. To date, we have established 100-gram single-batch production with our clinical-stage mRNA therapeutics platform. Build-out is underway of dedicated manufacturing space through a contract manufacturing partner, which has the potential to accommodate multiple 250-gram batches per month upon continued investments and third-party supplier arrangements. As it relates to development of a COVID-19 vaccine, depending on the final human COVID-19 vaccine dose, we estimate that we could have manufacturing capacity to produce 90-360 million doses annually by the first half of 2021. We plan to further expand our mRNA manufacturing capabilities to increase production capacity, and will need to work with raw material and other third-party suppliers to achieve this goal.

Since our inception in 2011, we have devoted substantially all of our focus and financial resources to organizing and staffing our company, business planning, raising capital, acquiring or discovering product candidates and securing related intellectual property rights and conducting discovery, research and development activities for our programs. We do not have any products approved for sale and have not generated any revenue from product sales. Through June 30, 2020, we have funded our operations primarily through sales of equity securities and research and collaboration agreements and we have received proceeds of approximately $629.1 million from such transactions.

In July 2019, we entered into an Open Market Sale AgreementSM, or Sales Agreement, with Jefferies LLC, or Jefferies, under which we may issue and sell shares of our common stock, from time to time, having an aggregate offering price of up to $50.0 million. On March 13, 2020, we amended the Sales Agreement to increase the aggregate dollar amount of shares of common stock that may be sold pursuant to the Sales Agreement from $50.0 million to $100.0 million, which became effective when our universal shelf registration statement on Form S-3 (File No. 333-237159), or the 2020 Shelf, was declared effective. As of June 30, 2020, we have issued and sold an aggregate of 2,863,163 shares of our common stock pursuant to the Sales Agreement, resulting in gross proceeds of

25

$37.9 million, before deducting commissions of $1.1 million and other offering expenses of $0.2 million. In the future, $62.1 million of shares of common stock remain available to be sold pursuant to the Sales Agreement, which sales, if any, would be made under the 2020 Shelf.

On June 30, 2020, we issued and sold 5,681,819 shares of our common stock through a public offering under a Registration Statement on Form S-ASR, which became automatically effective on June 24, 2020, at a price per share of $22.00, resulting in gross proceeds of $125.0 million, before deducting underwriting discounts and commissions of $7.5 million and other offering expenses of $0.5 million.

Since our inception, we have incurred significant operating losses. Our ability to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our current or future product candidates. Our net losses were $36.3 million and $27.8 million for the three months ended June 30, 2020 and 2019, respectively, and $50.6 million and $61.0 million for the six months ended June 30, 2020 and 2019, respectively. As of June 30, 2020, we had an accumulated deficit of $410.1 million. We expect to continue to incur significant expenses for at least the next several years as we advance our product candidates from discovery through preclinical development and clinical trials and seek regulatory approval of our product candidates. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. We may also incur expenses in connection with the in-licensing or acquisition of additional product candidates.

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financings or other capital sources, including collaborations, strategic partnerships or marketing, distribution or licensing arrangements with third parties or grants from organizations and foundations. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more of our product candidates or delay our pursuit of potential in-licenses or acquisitions.

Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

As of June 30, 2020, we had cash, cash equivalents and short-term investments of $292.2 million. We believe that our existing cash, cash equivalents and short-term investments, together with the upfront payment of $300.0 million from Sanofi under an amendment to our collaboration and license agreement, as further described below, and the aggregate purchase price of approximately $125.0 million from Sanofi, a French corporation, an affiliate of Sanofi, or the Investor, under a securities purchase agreement, as further described below, both received as of August 6, 2020, will enable us to fund our operating expenses and capital expenditure requirements for at least the next 36 months.

Sanofi Pasteur Collaboration and Licensing Agreement

In 2018, we entered into a collaboration and license agreement with Sanofi, or the Original Sanofi Agreement, to develop mRNA vaccines for up to five infectious disease pathogens, or the Licensed Fields. On March 26, 2020, we and Sanofi amended the Original Sanofi Agreement, or the First Sanofi Amendment, to include vaccines against SARS-CoV-2 as an additional Licensed Field, increasing the number of infectious disease pathogens to up to six. On June 22, 2020, we and Sanofi agreed to further amend the Original Sanofi Agreement to expand the scope of the collaboration and licenses granted to Sanofi, or the Second Sanofi Amendment, which closed on July 20, 2020, the effective date. The Original Sanofi Agreement, as amended by the First Sanofi Amendment and the Second Sanofi Amendment, is referred to as the Amended Sanofi Agreement.

Pursuant to the Amended Sanofi Agreement, we and Sanofi have agreed to jointly conduct research and development activities to advance mRNA vaccines targeting up to seven infectious disease pathogens. The term of the collaboration expires in June 2022, with an option for Sanofi to extend for one additional year. If Sanofi elects to so extend, the collaboration may be further expanded to jointly conduct research and development activities to advance mRNA vaccines for up to an additional three infectious disease pathogens, bringing the total to ten pathogens.

Under the terms of the Amended Sanofi Agreement, we have granted to Sanofi exclusive, worldwide licenses under applicable patents, patent applications, know-how and materials, including those arising under the collaboration, to develop, commercialize and manufacture mRNA vaccines to prevent, treat or cure diseases, disorders or conditions in humans caused by any infectious disease pathogens, with certain specified exceptions.

26

Pursuant to the Second Sanofi Amendment, Sanofi agreed to pay us an additional upfront payment of $300.0 million, which was received in August 2020. Additionally, in connection with the execution of the Second Sanofi Amendment, we and the Investor entered into a securities purchase agreement, or the Securities Purchase Agreement, for the sale and issuance of 4,884,434 shares of our common stock at a price of $25.59 per share representing a 50 percent premium to the 20-day moving average share price prior to signing, for an aggregate purchase price of approximately $125.0 million, which was received in July 2020. The closing of the transaction contemplated by the Securities Purchase Agreement was consummated on July 20, 2020.

Business Impact of the COVID-19 Pandemic

The outbreak of SARS-CoV-2 has presented a substantial public health and economic challenge around the world and is affecting our employees, patients, communities and business operations, as well as the U.S. economy and financial markets. While we have progressed certain of our preclinical programs, specifically in therapeutics for pulmonary diseases and in vaccine development under our collaboration with Sanofi, as further discussed above, enrollment and dosing has been paused in our Phase 1/2 clinical trial in patients with CF as a consequence of the response to the COVID-19 pandemic. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning COVID-19, the actions taken in an effort to contain it or to potentially treat or vaccinate against COVID-19 and the economic impact on local, regional, national and international markets. Management is actively monitoring this situation and the possible effects on our financial condition, liquidity, operations, suppliers, industry and workforce. For additional information on risks posed by the COVID-19 pandemic, please see Part II, Item 1A – “Risk Factors – Risks Related to COVID-19,” included elsewhere in this Quarterly Report on Form 10-Q.

Components of Our Results of Operations

Revenue from Product Sales

To date, we have not generated any revenue from product sales, and we do not expect to generate any revenue from the sale of products in the near future. If our development efforts for our product candidates are successful and result in regulatory approval, we may generate revenue in the future from product sales.

Collaboration Revenue

In 2018, we entered into the Original Sanofi Agreement to develop mRNA vaccines and an mRNA vaccine platform for up to five infectious disease pathogens.

Under the terms of the Original Sanofi Agreement, we have granted to Sanofi exclusive, worldwide licenses under applicable patents, patent applications, know-how and materials, including those arising under the collaboration, to develop, commercialize and manufacture mRNA vaccines to prevent, treat or cure diseases, disorders or conditions in humans caused by any of three Licensed Fields. In addition, pursuant to the terms of the Original Sanofi Agreement and subject to certain limitations, Sanofi has the options to add up to two additional infectious disease pathogens within the granted licenses to the License Fields.

27

Under revenue recognition guidance, we account for: (i) the license we conveyed to Sanofi with respect to the Licensed Fields, (ii) the licensed know-how to be conveyed to Sanofi with respect to the Licensed Fields, (iii) our obligations to perform research and development on the Licensed Fields, (iv) our obligation to transfer licensed materials to Sanofi, (v) our obligation to manufacture and supply certain non-clinical and clinical mRNA vaccines and materials containing mRNA until we transfer such manufacturing capabilities to Sanofi and (vi) the technology and process transfer as a single performance obligation. We recognize revenue using the cost-to-cost input method, which we believe best depicts the transfer of control to the customer. Under the cost-to-cost input method, the extent of progress towards completion is measured based on the ratio of actual costs incurred to the total estimated costs expected upon satisfying the identified performance obligation. Under this method, revenue is recorded as a percentage of the estimated transaction price based on the extent of progress towards completion.

Operating Expenses

Research and Development Expenses

Research and development expenses consist primarily of costs incurred in connection with the discovery and development of our product candidates. We expense research and development costs as incurred. These expenses include:

• employee-related expenses, including salaries, related benefits and stock-based compensation expense for employees engaged in research and development functions;

• expenses incurred in connection with the preclinical and clinical development of our product candidates, including under agreements with third parties, such as consultants and contract research organizations, or CROs;

• the cost of manufacturing drug products for use in our preclinical studies and clinical trials, including under agreements with third parties, such as consultants and contract manufacturing organizations, or CMOs;

• laboratory supplies;

• facilities, depreciation and other expenses, which include direct or allocated expenses for rent and maintenance of facilities and insurance;

• costs to fulfill our obligations under our collaboration with Sanofi;

• costs related to compliance with regulatory requirements; and

• payments made under third-party licensing agreements.

We recognize external development costs based on an evaluation of the progress to completion of specific tasks using information provided to us by our service providers. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. Such amounts are recognized as an expense when the services have been performed or the goods have been delivered, or when it is no longer expected that the goods will be delivered or the services rendered. Upfront payments, milestone payments (other than those deemed contingent consideration in a business combination) and annual maintenance fees under license agreements are expensed in the period in which they are incurred.

Our direct research and development expenses are tracked on a program-by-program basis and consist primarily of external costs, such as fees paid to outside consultants, CROs, CMOs and central laboratories in connection with our preclinical development, process development, manufacturing and clinical development activities. Our direct research and development expenses by program also include costs of laboratory supplies incurred for each program as well as fees incurred under license agreements. We do not allocate employee costs or facility expenses, including depreciation or other indirect costs, to specific programs because these costs are deployed across multiple programs and, as such, are not separately classified. We use internal resources primarily to conduct our research and discovery and to manage our preclinical development, process development, manufacturing and clinical development activities.

28

The table below summarizes our direct research and development expenses incurred by program:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(in thousands)
Vaccine program	$	9,387	$	288	$	11,976	$	545
MRT5005 program		3,350		5,263		9,444		11,884
Discovery program		2,033		1,500		5,807		3,543
MRT5201 program		—		2,217		—		4,087
Oligonucleotide program		—		62		—		95
Unallocated research and development expenses		14,232		7,295		23,215		13,894
Total research and development expenses	$	29,002	$	16,625	$	50,442	$	34,048

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages, primarily due to the increased size and duration of later-stage clinical trials. As a result, we expect that our research and development expenses will increase substantially over the next several years as we conduct our clinical trials of MRT5005 for the treatment of patients with CF; expand our manufacturing capabilities; conduct research and development activities to advance mRNA vaccines and develop an mRNA vaccine platform under the Amended Sanofi Agreement; prepare regulatory filings for our product candidates; continue to discover and develop additional product candidates; and potentially advance product candidates from our discovery program into later stages of clinical development. We expect to continue to devote a substantial portion of our resources to our discovery program for the foreseeable future.

The successful development and commercialization of our product candidates is highly uncertain. At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the preclinical and clinical development of any of our product candidates. This uncertainty is due to the numerous risks and uncertainties associated with product development and commercialization, including the uncertainty of:

• the timing and progress of preclinical and clinical development activities, including delays resulting from the COVID-19 pandemic;

• the number and scope of preclinical and clinical programs we decide to pursue;

• our ability to maintain our current research and development programs and to establish new ones;

• establishing an appropriate safety profile with IND enabling studies;

• successful patient enrollment in, and the initiation and completion of, clinical trials;

• the successful completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority;

• the receipt of regulatory approvals from applicable regulatory authorities;

• the timing, receipt and terms of any marketing approvals from applicable regulatory authorities;

• the success of our collaboration with Sanofi;

• our ability to establish new licensing or collaboration arrangements;

• the performance of our future collaborators, if any;

• establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers;

• development and timely delivery of commercial-grade drug formulations that can be used in our clinical trials and for commercial launch;

• obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights;

• launching commercial sales of our product candidates, if approved, whether alone or in collaboration with others; and

29

• maintaining a continued acceptable safety profile of the product candidates following approval.

Any changes in the outcome of any of these variables with respect to the development of our product candidates in preclinical and clinical development could mean a significant change in the costs and timing associated with the development of these product candidates. For example, in September 2019, we announced our decision to discontinue the development of MRT5201. In addition, if the FDA or another regulatory authority were to delay our planned start of clinical trials or require us to conduct clinical trials or other testing beyond those that we currently expect, or if we experience significant delays in enrollment in any of our planned clinical trials, such as the pause in enrollment in our ongoing Phase 1/2 clinical trial in patients with CF as a consequence of the response to the COVID-19 pandemic that we announced in April 2020, we could be required to expend significant additional financial resources and time to complete clinical development of that product candidate. We may never obtain regulatory approval for any of our product candidates. Drug commercialization will take several years and millions of dollars in development costs.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries, related benefits and stock-based compensation expense for personnel in executive, finance and administrative functions. General and administrative expenses also include facilities, depreciation and other expenses, which include direct or allocated expenses for rent and maintenance of facilities and insurance, as well as professional fees for legal, patent, consulting, investor and public relations, accounting and audit services.

We anticipate that our general and administrative expenses will increase over the next several years as we anticipate increased accounting, audit, legal, regulatory, compliance, director and officer insurance and investor and public relations costs associated with being a public company.

Change in Fair Value of Contingent Consideration

In connection with our acquisition of the messenger RNA therapeutic platform, or MRT Program, from Shire Human Genetic Therapies, Inc., or Shire, a subsidiary of Takeda Pharmaceutical Company Ltd., we recognized contingent consideration liabilities for future potential milestone and earnout payment obligations, and prior to the IPO, anti-dilution rights with respect to common stock issued to Shire. The contingent consideration was initially recorded at fair value on the acquisition date and is subsequently remeasured to fair value at each reporting date. Any changes in the fair value of the contingent consideration liabilities are recognized as operating income or expenses.

Interest Income

Interest income consists of income recognized in connection with our investments in money market funds and U.S. government agency bonds.

Income Taxes

We recognized an income tax benefit of $0 and $0.5 million during the six months ended June 30, 2020 and 2019, respectively. There was no income tax benefit recognized during the three months ended June 30, 2020 and 2019. The income tax benefits recognized during the six months ended June 30, 2019 resulted from a reduction in the deferred tax liabilities recorded as part of our acquisition of the MRT Program as well as deferred tax assets recorded for net operating losses generated that have an unlimited carryforward period. Net operating losses generated in 2018 and years thereafter can be carried forward indefinitely.

As of December 31, 2019, we had U.S. federal net operating loss carryforwards of $229.3 million, of which $122.1 million will, if not utilized, begin to expire in 2031. As of December 31, 2019, we had U.S. state net operating loss carryforwards of $210.6 million, which will, if not utilized, begin to expire in 2031. As of December 31, 2019, we also had U.S. federal and state research and development tax credit carryforwards of $6.5 million and $2.7 million, respectively, which will, if not utilized, begin to expire in 2032 and 2028, respectively, and orphan drug tax credit carryforwards of $13.0 million, which begin to expire in 2037. We also have state investment tax credit carryforwards of $0.3 million, which will, if not utilized, begin to expire in 2020. As of December 31, 2019, we recorded a full valuation allowance against our deferred tax assets, except for the deferred tax asset associated with our alternative minimum tax credit carryforwards, which will be fully refundable.

30

Results of Operations

Comparison of the Three Months Ended June 30, 2020 and 2019

The following table summarizes our results of operations for the three months ended June 30, 2020 and 2019:

	Three Months Ended June 30,
	2020			2019			Change
	(in thousands)
Collaboration revenue	$	16,319		$	1,174		$	15,145
Operating expenses:
Research and development		29,002			16,625			12,377
General and administrative		8,601			7,850			751
Change in fair value of contingent consideration		15,347			4,889			10,458
Total operating expenses		52,950			29,364			23,586
Loss from operations		(36,631	)		(28,190	)		(8,441	)
Interest income		343			358			(15	)
Loss before benefit from income taxes		(36,288	)		(27,832	)		(8,456	)
Benefit from income taxes		—			—			—
Net loss	$	(36,288	)	$	(27,832	)	$	(8,456	)

Collaboration Revenue

Collaboration revenue was $16.3 million and $1.2 million for the three months ended June 30, 2020 and 2019, respectively, which was derived from the Sanofi collaboration. The increase of $15.1 million was related to increased activities for the vaccine program in the three months ended June 30, 2020 compared to the same period in 2019.

Research and Development Expenses

	Three Months Ended June 30,
	2020		2019		Change
	(in thousands)
Direct external research and development expenses by program:
Vaccine program	$	9,387	$	288	$	9,099
MRT5005 program		3,350		5,263		(1,913	)
Discovery program		2,033		1,500		533
MRT5201 program		—		2,217		(2,217	)
Oligonucleotide program		—		62		(62	)
Unallocated research and development expenses:
Personnel related (including stock-based compensation)		8,791		4,701		4,090
Other		5,441		2,594		2,847
Total research and development expenses	$	29,002	$	16,625	$	12,377

Research and development expenses were $29.0 million for the three months ended June 30, 2020, compared to $16.6 million for the three months ended June 30, 2019. The increase of $12.4 million was primarily due to continued development of our vaccine and discovery programs as well as an increase in personnel-related costs, partially offset by a decrease in our MRT5201 and MRT5005 programs.

Direct external expenses of our vaccine program increased by $9.1 million during the three months ended June 30, 2020 compared to the three months ended June 30, 2019 primarily due to increased costs related to the increased activities of the vaccine program.

Direct external expenses of our MRT5005 program decreased by $1.9 million during the three months ended June 30, 2020 compared to the three months ended June 30, 2019 primarily due to decreased manufacturing costs and clinical trial costs. Expenses incurred in the three months ended June 30, 2019 related to manufacturing costs in preparation of our Phase 1/2 clinical trial of MRT5005 for the treatment of patients with CF, for which there were no comparable manufacturing expenses in the same period in 2020. The decrease in clinical trial costs was due to a pause in enrollment and dosing in our ongoing Phase 1/2 clinical trial in patients with CF, as a consequence of the response to the COVID-19 pandemic.

31

Direct external expenses of our discovery program increased by $0.5 million during the three months ended June 30, 2020 compared to the three months ended June 30, 2019 primarily due to increased costs related to our ongoing exploratory research and discovery efforts to identify next-generation CF candidates and identify lead product candidates in additional pulmonary diseases, such as PCD, IPF and PAH.

Direct external expenses of our MRT5201 program decreased by $2.2 million in the three months ended June 30, 2020 compared to the three months ended June 30, 2019 due to the decision in 2019 to discontinue development of this program.

Unallocated research and development expenses increased by $6.9 million during the three months ended June 30, 2020 compared to the three months ended June 30, 2019. The increase of $4.1 million in personnel-related costs was primarily related to an increase in stock-based compensation due to a stock option modification in the three months ended June 30, 2020 as well as an increase in headcount in the three months ended June 30, 2020 compared to the same period in 2019. The increase of $2.8 million in other unallocated research and development expenses was primarily due to an increase of $3.3 million in amortization expense related to the definite-lived MRT intangible asset, partially offset by a decrease of $0.4 million in professional fees.

General and Administrative Expenses

General and administrative expenses were $8.6 million for the three months ended June 30, 2020, compared to $7.9 million for the three months ended June 30, 2019. The increase of $0.8 million was primarily due to an increase in legal fees.

Change in Fair Value of Contingent Consideration

During the three months ended June 30, 2020 and 2019, we recognized operating expenses of $15.3 million and $4.9 million, respectively, for changes in the fair value of the contingent consideration liabilities we recorded in connection with our acquisition of the MRT Program in December 2016. The contingent consideration liabilities relate to future potential milestone and earnout payment obligations and, prior to the IPO, anti-dilution rights with respect to common stock issued to Shire. The expense recognized during the three months ended June 30, 2020 was attributed primarily to an increase in the fair value of the contingent consideration liability for future earnout payments that could become due. This increase was primarily due to the time value of money due to the passage of time and a decrease in the discount rate.

Comparison of the Six Months Ended June 30, 2020 and 2019

The following table summarizes our results of operations for the six months ended June 30, 2020 and 2019:

	Six Months Ended June 30,
	2020			2019			Change
	(in thousands)
Collaboration revenue	$	20,974		$	2,648		$	18,326
Operating expenses:
Research and development		50,442			34,048			16,394
General and administrative		16,060			14,403			1,657
Change in fair value of contingent consideration		5,895			16,591			(10,696	)
Total operating expenses		72,397			65,042			7,355
Loss from operations		(51,423	)		(62,394	)		10,971
Interest income		853			878			(25	)
Loss before benefit from income taxes		(50,570	)		(61,516	)		10,946
Benefit from income taxes		—			486			(486	)
Net loss	$	(50,570	)	$	(61,030	)	$	10,460

Collaboration Revenue

Collaboration revenue was $21.0 million and $2.6 million for the six months ended June 30, 2020 and 2019, respectively, which was derived from the Sanofi collaboration. The increase of $18.3 million was related to increased activities for the vaccine program in the six months ended June 30, 2020 compared to the same period in 2019.

32

Research and Development Expenses

	Six Months Ended June 30,
	2020		2019		Change
	(in thousands)
Direct external research and development expenses by program:
Vaccine program	$	11,976	$	545	$	11,431
MRT5005 program		9,444		11,884		(2,440	)
Discovery program		5,807		3,543		2,264
MRT5201 program		—		4,087		(4,087	)
Oligonucleotide program		—		95		(95	)
Unallocated research and development expenses:
Personnel related (including stock-based compensation)		14,777		8,986		5,791
Other		8,438		4,908		3,530
Total research and development expenses	$	50,442	$	34,048	$	16,394

Research and development expenses were $50.4 million for the six months ended June 30, 2020, compared to $34.0 million for the six months ended June 30, 2019. The increase of $16.4 million was primarily due to continued development of our vaccine and discovery programs as well as an increase in personnel-related costs, partially offset by a decrease in our MRT5201 and MRT5005 programs.

Direct external expenses of our vaccine program increased by $11.4 million during the six months ended June 30, 2020 compared to the six months ended June 30, 2019 primarily due to increased costs related to the increased activities of the vaccine program.

Direct external expenses of our MRT5005 program decreased by $2.4 million during the six months ended June 30, 2020 compared to the six months ended June 30, 2019 primarily due to decreased manufacturing costs and clinical trial costs. Expenses incurred in the six months ended June 30, 2019 related to manufacturing costs in preparation of our Phase 1/2 clinical trial of MRT5005 for the treatment of patients with CF, for which there were no comparable manufacturing expenses in the same period in 2020. The decrease in clinical trial costs is due to a pause in enrollment and dosing in our ongoing Phase 1/2 clinical trial in patients with CF, as a consequence of the response to the COVID-19 pandemic.

Direct external expenses of our discovery program increased by $2.3 million during the six months ended June 30, 2020 compared to the six months ended June 30, 2019 primarily due to increased costs related to our ongoing exploratory research and discovery efforts to identify next-generation CF candidates and identify lead product candidates in additional pulmonary diseases, such as PCD, IPF and PAH.

Direct external expenses of our MRT5201 program decreased by $4.1 million in the six months ended June 30, 2020 compared to the six months ended June 30, 2019 due to the decision in 2019 to discontinue development of this program.

Unallocated research and development expenses increased by $9.3 million during the six months ended June 30, 2020 compared to the six months ended June 30, 2019. The increase of $5.8 million in personnel-related costs was primarily related to an increase in stock-based compensation due to a stock option modification in the six months ended June 30, 2020 as well as an increase in headcount in the six months ended June 30, 2020 compared to the same period in 2019. The increase of $3.5 million in other unallocated research and development expenses was primarily due to an increase in amortization expense related to the definite-lived MRT intangible asset.

General and Administrative Expenses

General and administrative expenses were $16.1 million for the six months ended June 30, 2020, compared to $14.4 million for the six months ended June 30, 2019. The increase of $1.7 million was due to an increase of $0.8 million in legal fees and an increase of $0.6 million in personnel-related costs primarily due to an increase in stock-based compensation expense.

Change in Fair Value of Contingent Consideration

During the six months ended June 30, 2020 and 2019, we recognized operating expenses of $5.9 million and $16.6 million, respectively, for changes in the fair value of the contingent consideration liabilities we recorded in connection with our acquisition of the MRT Program in December 2016. The contingent consideration liabilities relate to future potential milestone and earnout payment obligations and, prior to the IPO, anti-dilution rights with respect to common stock issued to Shire. The expense recognized during the six months ended June 30, 2020 was attributed primarily to an increase in the fair value of the contingent consideration liability for future earnout payments that could become due. This increase was primarily due to the time value of money due to the passage of time.

33

Benefit from Income Taxes

During the six months ended June 30, 2020 and 2019, we recognized an income tax benefit of $0 and $0.5 million, respectively. The income tax benefit recognized during the six months ended June 30, 2019 resulted from a reduction in the deferred tax liabilities recorded as part of our acquisition of the MRT Program as well as deferred tax assets recorded for net operating losses generated that have an unlimited carryforward period. Net operating losses generated in 2018 and years thereafter can be carried forward indefinitely.

Liquidity and Capital Resources

Since our inception through June 30, 2020, we have not generated any revenue from product sales, have generated only limited revenue from the Original Sanofi Agreement and have incurred significant operating losses and negative cash flows from our operations. We have not yet commercialized any of our product candidates, and we do not expect to generate revenue from sales of any product candidates for several years, if at all. See “—Funding Requirements” and Note 1 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for a further discussion of our liquidity.

Through June 30, 2020, we have funded our operations primarily through sales of equity securities and research and collaboration agreements and we have received proceeds of approximately $629.1 million from such transactions.

In July 2019, we filed a universal shelf registration statement on Form S-3 with the SEC, or the 2019 Shelf, to register for sale from time to time up to $250.0 million of our common stock, preferred stock, debt securities, warrants and/or units in one or more offerings, which became effective on July 19, 2019 (File No. 333-232543).

In July 2019, we entered into an Open Market Sale AgreementSM, or Sales Agreement, with Jefferies, under which we may issue and sell shares of our common stock, from time to time, having an aggregate offering price of up to $50.0 million.

On March 13, 2020, we filed a universal shelf registration statement on Form S-3 with the SEC, or the 2020 Shelf, to register for sale from time to time up to $350.0 million of our common stock, preferred stock, debt securities, warrants and/or units in one of more offerings (File No. 333-237159). This registration statement was declared effective on May 4, 2020. Upon the effectiveness of the 2020 Shelf, we deregistered the 2019 Shelf and no more sales may be made pursuant to the 2019 Shelf. On March 13, 2020, we entered into Amendment No. 1 to the Open Market Sale AgreementSM with Jefferies, which increased the aggregate dollar amount of shares of common stock that we may issue and sell pursuant to the Sales Agreement from $50.0 million to $100.0 million, which became effective when the 2020 Shelf was declared effective. 

Sales of common stock through Jefferies may be made by any method that is deemed an “at the market” offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended. Jefferies has agreed to use its commercially reasonable efforts consistent with its normal trading and sales practices to sell shares of our common stock based upon our instructions. We are not obligated to make any sales of our common stock under the Sales Agreement. As of June 30, 2020, we have issued and sold an aggregate of 2,862,163 shares of our common stock, resulting in gross proceeds of $37.9 million, before deducting commissions of $1.1 million and other offering expenses of $0.2 million. In the future, $62.1 million of shares of common stock remain available to be sold pursuant to the Sales Agreement, which sales, if any, would be made under the 2020 Shelf.

On June 24, 2020, we filed a registration statement on Form S-3ASR, which became automatically effective upon filing with the SEC (File No. 333-239405), referred to as the June 2020 Registration Statement. The June 2020 Registration Statement registered for sale from time to time common stock, preferred stock, debt securities, warrants and/or units in one or more offerings. On June 30, 2020, we issued and sold 5,681,819 shares of common stock and a stockholder sold 6,824,992 shares of common stock through a public offering pursuant to the June 2020 Registration Statement. The price to the public was $22.00 per share, resulting in gross proceeds to us of $125.0 million, before deducting underwriting discounts and commissions of $7.5 million and other offering expenses of $0.5 million. We did not receive any proceeds from the sales of shares of common stock by the stockholder.

34

Cash Flows

The following table summarizes our sources and uses of cash for each of the periods presented:

	Six Months Ended June 30,
	2020			2019
	(in thousands)
Net cash used in operating activities	$	(51,489	)	$	(41,445	)
Net cash provided by investing activities		79,422			15,525
Net cash provided by financing activities		159,680			45,550
Net increase in cash, cash equivalents and restricted cash	$	187,613		$	19,630

Operating Activities

During the six months ended June 30, 2020, operating activities used $51.5 million of cash, resulting from our net loss of $50.6 million and net cash used in changes in our operating assets and liabilities of $21.6 million, partially offset by net non-cash charges of $20.7 million. Net cash used in changes in our operating assets and liabilities consisted of a $10.5 million increase in collaboration receivables, a $6.4 million decrease in deferred revenue, a $5.9 million increase in prepaid expenses and other assets and a $2.8 million decrease in accounts payable, partially offset by a $4.0 million increase in accrued expenses. Net non-cash charges for the six months ended June 30, 2020 primarily consisted of a $9.2 million charge to stock-based compensation expense, a $5.9 million increase in the change in the fair value of contingent consideration which was primarily due to the time value of money due to the passage of time and a $5.6 million charge for depreciation and amortization expense.

During the six months ended June 30, 2019, operating activities used $41.4 million of cash, resulting from our net loss of $61.0 million and net cash used in changes in our operating assets and liabilities of $4.0 million, partially offset by net non-cash charges of $23.6 million. Net cash used in changes in our operating assets and liabilities consisted of a $1.9 million decrease in accounts payable and a $1.8 million increase in prepaid expenses and other assets. Net non-cash charges for the six months ended June 30, 2019 primarily consisted of a $16.6 million increase in the change in the fair value of contingent consideration which was primarily due to the continued progress of MRT5005 and MRT5201, the time value of money due to the passage of time and a decrease in the discount rate.

Investing Activities

During the six months ended June 30, 2020, net cash provided by investing activities was $79.4 million, consisting of $111.3 million of sales and maturities of short-term investments, partially offset by $27.4 million of purchases of short-term investments and $4.4 million of purchases of property and equipment.

During the six months ended June 30, 2019, investing activities provided $15.5 million of cash, consisting of $55.8 million of sales and maturities of short-term investments, partially offset by $38.4 million of purchases of short-term investments and $1.8 million of purchases of property and equipment.

Financing Activities

During the six months ended June 30, 2020, net cash provided by financing activities was $159.7 million, consisting of net cash proceeds of $153.8 million from public offerings of our common stock and $5.8 million in proceeds from option exercises.

During the six months ended June 30, 2019, net cash provided by financing activities was $45.6 million, consisting of net cash proceeds of $44.1 million from a private placement of our common stock and $1.4 million in proceeds from option exercises.

Funding Requirements

We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the research and development of, continue ongoing and initiate new clinical trials of and seek marketing approval for our product candidates. In addition, we expect to incur additional costs associated with operating as a public company. Our expenses will also increase if, and as, we:

• continue the clinical development of MRT5005;

35

• continue the development of mRNA vaccine candidates against infectious diseases;

• leverage our programs to advance our other product candidates into preclinical and clinical development;

• seek regulatory approvals for any product candidates that successfully complete clinical trials;

• seek to discover and develop additional product candidates;

• establish a sales, marketing, medical affairs and distribution infrastructure to commercialize any product candidates for which we may obtain marketing approval and intend to commercialize on our own or jointly;

• hire additional clinical, quality control and scientific personnel;

• expand our manufacturing, operational, financial and management systems;

• increase personnel, including personnel to support our clinical development, manufacturing and commercialization efforts and our operations as a public company;

• maintain, expand and protect our intellectual property portfolio;

• acquire or in-license other product candidates and technologies; and

• incur additional legal, accounting and other expenses in operating as a public company.

We believe that our existing cash, cash equivalents and short-term investments of $292.2 million as of June 30, 2020, together with the upfront payment of $300.0 million from Sanofi under the Amended Sanofi Agreement and the aggregate purchase price of approximately $125.0 million from the Investor under the Securities Purchase Agreement, both received as of August 6, 2020, will enable us to fund our operating expenses and capital expenditure requirements for at least the next 36 months. 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.

We will need to raise additional capital or incur indebtedness to continue to fund our operations in the future. Our ability to raise additional funds will depend on financial, economic and market conditions, many of which are outside of our control, and we may be unable to raise financing when needed, or on terms 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 or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves, which could adversely affect our business prospects, and we may be unable to continue our operations. Because of numerous risks and uncertainties associated with research, development and commercialization of product candidates, we are unable to estimate the exact amount of our working capital requirements. Factors that may affect our planned future capital requirements and accelerate our need for additional working capital include the following:

• the impacts of the COVID-19 pandemic and our response to it;

• the scope, progress, results and costs of researching and developing our product candidates, and conducting preclinical studies and clinical trials;

• the costs, timing and outcome of regulatory review of our product candidates;

• the costs of future activities, including product sales, medical affairs, marketing, manufacturing and distribution, for any of our product candidates for which we receive marketing approval;

• the costs of manufacturing commercial-grade products and sufficient inventory to support commercial launch;

• the ability to receive additional non-dilutive funding, including grants from organizations and foundations;

• the revenue, if any, received from commercial sale of our products, should any of our product candidates receive marketing approval;

36

• the cost and timing of hiring new employees to support our continued growth;

• the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;

• the ability to establish and maintain collaborations on favorable terms, if at all;

• the extent to which we acquire or in-license other product candidates and technologies; and

• the timing, receipt and amount of sales of, or milestone payments related to or royalties on, our current or future product candidates, if any.

A change in the outcome of any of these or other variables with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate. 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 substantial product revenue, we expect to finance our cash needs through a combination of public or private equity offerings, debt financings, collaborations, strategic partnerships or marketing, distribution or licensing arrangements with third parties and grants from organizations and foundations. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our common stockholders may be materially diluted, and the terms of such securities could include liquidation or other preferences that could adversely affect the rights of our 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 partnerships or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.

Contractual Obligations and Commitments

During the six months ended June 30, 2020, there were no material changes to our contractual obligations and commitments as of December 31, 2019 described under Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2019 Annual Report with the exception of the commitments as described below.

On March 26, 2020, we and Sanofi entered into the First Sanofi Amendment to include vaccines against SARS-CoV-2 as an additional Licensed Field, increasing the number of infectious disease pathogens to up to six. Pursuant to the First Sanofi Amendment, we and Sanofi agreed that no upfront fee is payable by Sanofi to us with respect to the addition of SARS-CoV-2 as a Licensed Field. We and Sanofi also agreed that certain provisions of the Original Sanofi Agreement, including provisions related to milestone payments, royalties and royalty reductions, shall not apply to vaccine products for the prevention, treatment or cure of SARS-CoV-2 that are purchased by a governmental authority while SARS-CoV-2 is a declared pandemic. We and Sanofi agreed to negotiate in good faith the royalty terms applicable to such products, which terms shall reflect the economic conditions applicable to commercializing such products and shall not exceed the royalty terms for the existing Licensed Fields. On June 22, 2020, we and Sanofi entered into the Second Sanofi Amendment, which further amends the Original Sanofi Agreement to expand the scope of the collaboration and licenses granted to Sanofi, which became effective on July 20, 2020.

In connection with the execution of the Second Sanofi Amendment, we and Sanofi also entered into the Supply Agreement with an effective date of December 20, 2019, governing the terms of the supply of products by us to Sanofi. Pursuant to the Supply Agreement, we have agreed to use commercially reasonable efforts to manufacture and supply Sanofi with non-clinical and clinical supply of products and other research materials in certain Licensed Fields, as set forth in the Second Sanofi Amendment.

Under our license agreement with MIT, we are obligated to make milestone payments to MIT aggregating up to $1.375 million upon the achievement of specified clinical and regulatory milestones with respect to each licensed product and $1.250 million upon our first commercial sale of each licensed product, and to pay royalties of a low single-digit percentage to MIT based on our, and any of our affiliates’ and sublicensees’, net sales of licensed products. As a result of the Amended Sanofi Agreement, we will be required to pay MIT a portion of the $300.0 million upfront payment and a portion of the 50 percent premium payment in consideration for the common stock purchased under the Securities Purchase Agreement as well as future option and milestone payments that we may

37

receive pursuant to the Second Sanofi Amendment. The amounts that we may owe to MIT will depend upon the relative value of the patents we licensed from MIT and sublicensed to Sanofi as compared to the other rights that we licensed to Sanofi. The determination of the relative value of such rights is subject to a process described in our license agreement with MIT.

Critical Accounting Policies and Significant Judgments and Estimates

Our condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of our condensed consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities in our finance statements. We believe that several accounting policies are important to understanding our historical and future performance. We refer to these policies as critical because these specific areas generally require us to make judgments and estimates about matters that are uncertain at the time we make the estimate, and different estimates—which also would have been reasonable—could have been used. On an ongoing basis, we evaluate our estimates and judgments, including those described in greater detail below. We base our estimates on historical experience, known trends and events and various other factors that we believe are 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. Our actual results may differ from these estimates under different assumptions or conditions.

There have been no material changes to our critical accounting policies from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2019 Annual Report.

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 irrevocably elected to “opt out” of this provision and, as a result, we will comply with new or revised accounting standards when they are required to be adopted by public companies that are not emerging growth companies.

On June 30, 2020, the market value of our stock held by non-affiliates was greater than $700 million. As a result, we will cease being an emerging growth company and a smaller reporting company effective December 31, 2020 and will no longer be able to take advantage of the various reporting and other exemptions available to emerging growth companies as of such date. As of the date we file our first Quarterly Report on Form 10-Q following December 31, 2020, we will no longer be able to take advantage of the various reporting and other exemptions available to smaller reporting companies.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company, as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, for this reporting period and are not required to provide the information required under this item.

38

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, who serve as our principal executive officer and principal financial and accounting officer, respectively, has evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2020. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2020.

Changes in Internal Control over Financial Reporting

There have been no changes in internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended June 30, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

39

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

We are not currently subject to any material legal proceedings.

Item 1A. Risk Factors.

Investing in our common stock involves a high degree of risk. Before investing in our common stock, you should consider carefully the risks described below, together with the other information contained in this Quarterly Report on Form 10-Q, including our financial statements and the related notes and in our other filings with the Securities and Exchange Commission, or SEC. If any of the following risks occur, our business, financial condition, results of operations and prospects could be materially and adversely affected. In these circumstances, the market price of our common stock could decline, and you may lose all or part of your investment.

Risks Related to the COVID-19 Pandemic

The COVID-19 pandemic has adversely disrupted, and is expected to continue to adversely disrupt, our operations, including our ability to complete our ongoing clinical trials, and may have other adverse effects on our business and operations. In addition, this pandemic has caused substantial disruption in the financial markets and may adversely impact economies worldwide, both of which could result in adverse effects on our business, operations and ability to raise capital.

In December 2019, SARS-CoV-2, a novel strain of a virus that causes COVID-19, surfaced in Wuhan, China and has since spread world-wide. The World Health Organization has declared the outbreak of COVID-19 a global pandemic. The COVID-19 pandemic is evolving, and to date has led to the implementation of various responses, including government-imposed quarantines, travel restrictions and other public health safety measures. The pandemic and government measures taken in response have also had a significant impact, both direct and indirect, on business and commerce, as worker shortages have occurred; supply chains have been disrupted; facilities and production have been suspended; and demand for certain goods and services, such as medical services and supplies, has spiked, while demand for other goods and services, such as travel, has fallen. The extent to which the ongoing COVID-19 pandemic impacts our operations or those of the third parties on which we rely will depend on many factors, which are highly uncertain and cannot be predicted with confidence, including the duration of the pandemic, additional or modified government actions, new information that may emerge concerning the severity and impact of COVID-19, and the actions to contain COVID-19 or address its impact in the short and long term.

In April 2020, we announced that enrollment and dosing have been paused in our ongoing Phase 1/2 clinical trial of MRT5005 in patients with CF as a consequence of the response to the COVID-19 pandemic. We and the clinical trial sites are assessing the potential of patients to safely return to the clinic for study enrollment and dosing. At this time we are unable to predict the timing for reporting data. Further, in response to the COVID-19 pandemic and in accordance with direction from state and local governmental authorities, we have restricted access to our facility to those individuals who perform critical research, translational medicine and laboratory support activities that must be completed on site, limited the number of such people that can be present at our facility at any one time and required that most of our employees work remotely. In the event that governmental authorities were to keep these restrictions in place for an extended period or impose further restrictions, our employees conducting research and development activities may not be able to access our laboratory space, and our core research activities may be significantly limited or curtailed, possibly for an extended period of time. The COVID-19 pandemic may further delay or otherwise adversely affect our clinical development activities as a result of many factors, including:

• diversion of healthcare resources away from the conduct of our clinical trials in order to focus on pandemic concerns, including the availability of necessary materials, the attention of physicians serving as our clinical trial investigators, access to hospitals serving as our clinical trial sites, and availability of hospital staff supporting the conduct of our clinical trials;

• potential interruptions in global shipping affecting the transport of clinical trial materials, such as investigational drug product, patient samples, and other supplies used in our clinical trials;

• the impact of further limitations on travel that could interrupt key clinical trial activities, such as clinical trial site initiations and monitoring activities, travel by our employees, contractors or patients to clinical trial sites, or the ability of employees at any of our contract manufacturers or contract research organizations to report to work, any of which could delay or adversely impact the conduct or progress of our clinical trials for MRT5005 and other research and manufacturing activities, and limit the amount of clinical data we will be able to report;

40

• any future interruption of, or delays in receiving, supplies of clinical trial material from our contract manufacturing organizations due to staffing shortages, production slowdowns or stoppages, or disruptions in delivery systems;

• availability of future capacity at our contract manufacturers to produce sufficient drug substance and drug product to meet forecasted clinical trial demand if any of these manufacturers elect or are required to divert attention or resources to the manufacture of other pharmaceutical products;

• delays in ongoing laboratory experiments and operations if we are required to further reduce the number of employees in our laboratories, or if the contract research organizations, or CROs, we have retained to supplement our internal research efforts are unable to perform as anticipated, whether due to capacity constraints, staffing shortages, or otherwise; and

• business disruptions caused by potential workplace closures and an increased reliance on employees working from home, challenges in recruiting employees required to execute on our research and development plans, cybersecurity and data accessibility issues, and communication or transit disruptions, any of which could adversely impact our business operations and delay necessary interactions among our employees and between our company and the third parties upon which we rely.

Any negative impact that the COVID-19 pandemic has on recruiting or retaining patients in our clinical trials for MRT5005, the ability of our suppliers to provide materials for our product candidates, or the regulatory review process could cause additional delays with respect to product development activities, which could materially and adversely affect our ability to obtain regulatory approval for and to commercialize our product candidates, increase our operating expenses, affect our ability to raise additional capital, and have a material adverse effect on our financial results.

The response to the COVID-19 pandemic may redirect resources with respect to regulatory and intellectual property matters in a way that would adversely impact our ability to progress regulatory approvals and protect our intellectual property. In addition, we may face impediments to regulatory meetings and approvals due to measures intended to limit in-person interactions.

The COVID-19 pandemic continues to rapidly evolve and its ultimate scope, duration and effects are unknown. The extent of the impact of the disruptions to our business, preclinical studies and clinical trials as a result of the COVID-19 pandemic will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions and actions to contain the outbreak or treat its impact, such as social distancing and quarantines or lock-downs in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.

The pandemic has already caused significant disruptions in the financial markets, and may continue to cause such disruptions, which could adversely impact any future plans to raise capital and may also impact the volatility of our stock price and trading in our stock. Moreover, it is possible the pandemic will significantly impact economies worldwide, which could result in adverse effects on our business and operations. We cannot be certain what the overall impact of the COVID-19 pandemic will be on our business and it has the potential to adversely affect our business, financial condition, results of operations, and prospects.

We and Sanofi may not be successful in our joint efforts to successfully develop in an expedited timeframe an mRNA vaccine against SARS-CoV-2, the virus responsible for COVID-19.

In 2018, we entered into a collaboration with Sanofi Pasteur Inc., or Sanofi, the vaccines global business unit of Sanofi S.A., to develop infectious disease vaccines using our mRNA technology. In March 2020, we and Sanofi amended this collaboration to include mRNA vaccines against SARS-CoV-2, the virus responsible for COVID-19, as an additional infectious disease pathogen and in July 2020, we and Sanofi further expanded our collaboration to develop mRNA vaccines for additional infectious diseases. Pursuant to the amended collaboration, we are leveraging our mRNA platform and Sanofi’s vaccine expertise to develop mRNA vaccines for infectious diseases, which includes a goal of discovering, developing and advancing rapidly into the clinic a SARS-CoV-2 vaccine candidate.

Although to date we have evaluated multiple COVID-19 vaccine candidates in vivo for immunogenicity and neutralizing antibody activity to support lead candidate selection, and we believe that we have the potential to advance a vaccine into the clinic by the fourth quarter of 2020, our development of a SARS-CoV-2 vaccine candidate is still in its early stages, and we may be unable to produce a vaccine candidate that is safe and successfully prevents COVID-19 in a timely manner, if at all. In order to obtain regulatory approval to market a new biological product such as a SARS-CoV-2 vaccine, we must demonstrate proof of safety, purity and potency in humans. To satisfy these requirements, we will have to conduct one or more adequate and well-controlled clinical trials. Before we can commence clinical trials for a SARS-CoV-2 vaccine candidate, we must complete extensive preclinical testing and studies that support applicable regulatory approval to begin clinical trials. We cannot be certain of the timely completion or outcome of our

41

preclinical testing and studies, and we cannot predict if any applicable regulatory bodies will accept our proposed clinical program or if the outcome of our preclinical testing and studies will ultimately support the further development of a SARS-CoV-2 vaccine candidate. As a result, we cannot be sure that we will be able to advance a SARS-CoV-2 vaccine candidate into clinical trials on the timeline we expect, if at all, and we cannot be sure that applicable regulatory authorities will allow clinical trials to begin. Moreover, even if we do initiate clinical trials for a SARS-CoV-2 vaccine candidate, our development efforts may not be successful, and clinical trials that we conduct may not demonstrate sufficient safety, purity and potency necessary to obtain the requisite regulatory approvals for any SARS-CoV-2 vaccine.

The timing and success of any clinical trials will also depend on our ability enroll subjects in the clinical trials. Several other companies are pursuing the development of a vaccine for COVID-19, and subject enrollment may be affected by availability of a competing commercially available vaccine and other clinical trials of competing vaccine candidates. Subject enrollment may also be affected by other factors, including variations in the incidence of COVID-19 at the time of the trial and the perceived risks and benefits of the clinical trial among potential subjects. Our inability to enroll a sufficient number of subjects for clinical trials would result in significant delays and could require us to abandon one or more clinical trials altogether. Even if we obtain positive results from preclinical studies or initial clinical trials, we may not achieve the same success in demonstrating safety and potency in later trials.

Further, while the U.S. Food and Drug Administration, or FDA, and other regulatory authorities have authority to expedite review and approval of various products, including vaccines, it is unclear how the FDA or such other authorities will exercise these powers with respect to our vaccine candidate, if at all. For example, the FDA possesses authority to issue Emergency Use Authorizations, or EUAs, allowing for the manufacture, research and distribution of drugs, biologics and medical devices that have not been approved or licensed by the agency under the standard requirements that typically govern the development of new medical products. The extent to which the FDA relies on the EUA process, or other expedited regulatory mechanisms for the study and review of vaccine candidates, remains unclear and will be subject to a number of different factors. As a result, even if our vaccine candidate shows promising results in preclinical and clinical studies, its approval under an EUA or expedited licensing processes is not assured and the need for authorization from the FDA may result in delays.

If the COVID-19 pandemic is effectively contained or the risk of SARS-CoV-2 infection is diminished or eliminated before we can successfully develop and manufacture an mRNA vaccine against SARS-CoV-2, Sanofi could de-prioritize its support for the joint development of such a vaccine. We are also committing financial resources and personnel to the development of an mRNA vaccine against SARS-CoV-2, which may cause delays in or otherwise negatively impact our other development programs, despite uncertainties surrounding the longevity and extent of coronavirus as a global health concern. Our business could be negatively impacted by our allocation of significant resources to a global health threat that is unpredictable and could rapidly dissipate or against which our vaccine, if developed, may not be partially or fully effective. In addition, there are numerous efforts currently underway by other parties and collaborations to develop a vaccine for COVID-19, and another party may be successful in producing a safe or efficacious vaccine or other treatment for the disease before we can complete clinical development, and, in that case, SARS-CoV-2 would be effectively contained before we are able to receive authorization for vaccine candidate.

Our failure to successfully develop, manufacture and commercialize a SARS-CoV-2 vaccine could have an adverse effect on our business, prospects, financial condition and results of operations and cause us reputational harm, any of which could cause our stock price to decline.

The manufacture, scale, validation and production of a potential SARS-CoV-2 vaccine is complex and uncertain. We may encounter difficulties, and our ability to develop and provide a vaccine, if approved, could be delayed, interrupted or halted.

To date, we have produced multiple mRNA constructs and have established 100 gram single-batch production with our clinical-stage mRNA therapeutics platform. Build-out is underway of dedicated manufacturing space through a contract manufacturing partner, which has the potential to accommodate multiple 250-gram batches per month upon continued investments and third-party supplier arrangements. As it relates to development of a SARS-CoV-2 vaccine, depending on the final human SARS-CoV-2 vaccine dose, we estimate that we could have manufacturing capacity to produce 90-360 million doses annually by the first half of 2021. However, the manufacture of mRNA-based therapeutics is complex and requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls. We may face difficulties in production of one or more SARS-CoV-2 vaccine candidates, including scaling up and validating production, potential shortages of raw materials, a failure by our contract manufacturer to comply with guidelines, specifications and regulations necessary for the manufacture of any vaccine candidate we seek to manufacture, and other disruptions relating to the manufacture of any potential SARS-CoV-2 vaccine candidates.

42

We will also require substantial capital to commence and continue production of any SARS-CoV-2 vaccine candidate, which capital may not be available in the time frame or amount needed. Any delay or interruption in the supply of clinical trial supplies could delay the completion of planned clinical trials of a vaccine candidate, increase the cost associated with the related clinical trial program and, depending upon the period of delay, require us to commence new clinical trials at additional expense or terminate clinical trials completely. Any adverse developments affecting clinical or commercial manufacturing of a SARS-CoV-2 vaccine candidate or approved vaccine may result in shipment delays, inventory shortages, lot failures, product withdrawals or recalls or other interruptions in supply.

Risks Related to our Financial Position and Need for Additional Capital

We have incurred significant losses since inception. We expect to incur losses for at least the next several years and may never achieve or maintain profitability.

Since inception, we have incurred significant losses. Our net losses were $50.6 million and $113.3 million for the six months ended June 30, 2020 and for the year ended December 31, 2019, respectively. As of June 30, 2020, we had an accumulated deficit of $410.1 million. We have funded our operations to date primarily through sales of equity securities and research and collaboration agreements. We expect that it could be several years, if ever, before we have a commercialized product candidate. We expect to continue to incur significant expenses and 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:

• continue the clinical development of MRT5005;

• continue the development of mRNA vaccine candidates against infectious diseases;

• leverage our programs to advance our other product candidates into preclinical and clinical development;

• seek regulatory approvals for any product candidates that successfully complete clinical trials;

• seek to discover and develop additional product candidates;

• establish a sales force, marketing, medical affairs and distribution infrastructure to commercialize any product candidates for which we may obtain marketing approval and intend to commercialize on our own or jointly;

• hire additional clinical, quality control and scientific personnel;

• expand our manufacturing, operational, financial and management systems;

• increase personnel, including personnel to support our clinical development, manufacturing and commercialization efforts and our operations as a public company;

• maintain, expand and protect our intellectual property portfolio;

• acquire or in-license other product candidates and technologies; and

• incur additional legal, accounting and other expenses in operating as a public company.

To become and remain profitable, we, or our collaborators, must develop and eventually commercialize product candidates with significant market potential. This will require us to succeed in a range of challenging activities, including completing preclinical studies and clinical trials of our product candidates, obtaining marketing approval for these product candidates, manufacturing, marketing and selling those products for which we may obtain marketing approval and satisfying any post-marketing requirements. We may never succeed in any or all of these activities and, even if we do, we may never generate sufficient revenue to achieve profitability. If we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, maintain our research and development efforts, expand our business or continue our operations. A decline in the value of our company also could cause you to lose all or part of your investment.

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

We have never generated revenue from product sales. Our ability to generate revenue from product sales and achieve profitability depends on our ability, alone or with our collaborative partners, to successfully develop and obtain the regulatory

43

approvals necessary to commercialize our product candidates. We do not have any products approved for sale and do not anticipate generating revenue from product sales for the next several years, if ever. Our ability to generate future revenue from product sales depends heavily on our, or our collaborators’, success in:

• completing preclinical and clinical development of our product candidates and identifying and developing new product candidates;

• seeking and obtaining marketing approvals for any of our product candidates;

• launching and commercializing product candidates for which we obtain marketing approval by establishing a sales force, marketing, medical affairs and distribution infrastructure or, alternatively, collaborating with a commercialization partner;

• achieving formulary status in hospitals and adequate coverage and reimbursement by government and third-party payors for our product candidates;

• establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate, in both amount and quality, products and services to support clinical development and the market demand for our product candidates, if approved;

• obtaining market acceptance of our product candidates as viable treatment options;

• addressing any competing technological and market developments;

• negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter and performing our obligations in such collaborations;

• maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how;

• defending against third-party interference or infringement claims, if any; and

• attracting, hiring and retaining qualified personnel.

Even if one or more of the product candidates that we develop is approved for commercial sale, we anticipate incurring significant costs in commercializing any approved product candidate. Our expenses could increase beyond expectations if we are required by the FDA, the European Medicines Agency, or EMA, or other regulatory agencies to perform clinical trials or studies in addition to those that we currently anticipate. Even if we are able to generate revenue from the sale of any approved products, we may not become profitable and may need to obtain additional funding to continue operations.

Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

Our operations to date have been limited to organizing and staffing our company, business planning, raising capital, acquiring or discovering product candidates and securing related intellectual property rights, conducting discovery, research and development activities for our programs, undertaking preclinical studies, entering into licensing agreements and planning for potential commercialization. While we are conducting a Phase 1/2 clinical trial of MRT5005, we have not yet completed a clinical trial of any of our product candidates. We have not yet demonstrated the ability to obtain marketing approvals, manufacture a commercial-scale product or conduct sales and marketing activities necessary for successful commercialization. Consequently, any evaluation of our business to date or predictions about our future success or viability may not be as accurate as they could be if we had a longer operating history.

If we obtain marketing approval for any of our product candidates, we will need to transition from a company with a research and development focus to a company capable of supporting commercial activities. We may encounter unforeseen expenses, difficulties, complications and delays and may not be successful in such a transition.

44

We will need to raise additional funding, which may not be available on acceptable terms, or at all. Failure to obtain capital when needed may force us to delay, reduce or eliminate certain of our product development efforts or other operations.

We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the research and development of, continue ongoing and initiate clinical trials of and seek marketing approval for our product candidates. These expenditures will include costs associated with our asset purchase agreement, as amended, with Shire Human Genetic Therapies, Inc., or Shire, a subsidiary of Takeda Pharmaceutical Company Ltd., referred to as the Shire Agreement. Under the terms of the Shire Agreement, we are obligated to make significant cash payments upon the achievement of specified commercial milestones, as well as earnout payments in connection with sales of products based on the compounds that we acquired from Shire.

We will require additional capital to advance MRT5005 and any other product candidates we develop through necessary clinical trials and clinical development. In addition, if we obtain marketing approval for any of our product candidates that we plan to commercialize ourselves, we expect to incur significant expenses related to product sales, medical affairs, marketing, manufacturing and distribution. Furthermore, we expect to continue to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain additional funding in connection with our continuing operations. We may raise this additional funding through the sale of equity, debt financings or other capital sources, including potential collaborations with other companies or other strategic transactions and funding under government or other contracts. In addition, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans.

We believe that our existing cash, cash equivalents and short-term investments of $292.2 million as of June 30, 2020, together with the upfront payment of $300.0 million from Sanofi under the Second Sanofi Amendment and the aggregate purchase price of approximately $125.0 million from the Investor under the Securities Purchase Agreement, both received as of August 6, 2020, will enable us to fund our operating expenses and capital expenditure requirements for at least the next 36 months. If we are unable to obtain funding, we may be required to delay, reduce or eliminate our product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves, which could adversely affect our business prospects, and we may be unable to continue operations. To finance our operations beyond that point, we will need to raise additional capital, which cannot be assured.

Our estimates regarding our ability to fund our operating expenses and capital expenditure requirements with our existing cash, cash equivalents and short-term investments are based on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. Our future funding requirements will depend on, and could increase significantly as a result of, many factors, including:

• the impacts of the COVID-19 pandemic and our response to it;

• the scope, progress, results and costs of researching and developing our product candidates, and conducting preclinical studies and clinical trials;

• the success of our collaboration with Sanofi;

• the costs, timing and outcome of regulatory review of our product candidates;

• the costs of future activities, including product sales, medical affairs, marketing, manufacturing and distribution, for any of our product candidates for which we receive marketing approval;

• the costs of manufacturing commercial-grade products and sufficient inventory to support commercial launch;

• the ability to receive additional non-dilutive funding, including grants from organizations and foundations;

• the revenue, if any, received from commercial sale of our products, should any of our product candidates receive marketing approval;

• the cost and timing of hiring new employees to support our continued growth;

• costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;

• our ability to establish and maintain collaborations on favorable terms, if at all;

45

• the extent to which we acquire or in-license other product candidates and technologies; and

• the timing, receipt and amount of sales of, or milestone payments related to or royalties on, our current or future product candidates, if any.

Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive and uncertain process that typically takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our product revenue, if any, and any commercial milestones or royalty payments under any collaboration agreements that we enter into, including our collaboration with Sanofi, will be derived from or based on sales of products that may not be commercially available for many years, if at all. Accordingly, we will continue to rely on additional financing to achieve our business objectives.

Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates. We cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. Our issuance of additional securities, whether equity or debt, or the possibility of such issuance, may cause the market price of our common stock to decline, and our stockholders may not agree with our financing plans or the terms of such financings.

Our failure to raise capital as and when needed would negatively impact our financial condition and our ability to pursue our business strategy, and we could be forced to delay, reduce or eliminate certain of our research and development programs or any future commercialization efforts.

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

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through the combination of public or private equity offerings, debt financings, grants, collaborations, strategic partnerships or marketing, distribution or licensing arrangements with third parties. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest may be materially diluted, and the terms of such securities could include liquidation or other preferences that adversely affect your rights as a common stockholder. 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 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 partnerships or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds when needed, we will be required to delay, reduce or eliminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

We may be required to make payments in connection with our acquisition of the MRT Program from Shire.

In December 2016, we acquired the messenger RNA, or mRNA, therapeutic platform, or MRT Program, pursuant to the Shire Agreement. Under the Shire Agreement, we are obligated to make milestone payments to Shire of up to $60.0 million in the aggregate upon the occurrence of specified commercial milestones, including upon the first commercial sale of a product that includes or is composed of MRT compounds acquired from Shire, or MRT Product, for the treatment of cystic fibrosis, or CF, and upon the achievement of a specified level of annual net sales with respect to MRT Products. We are also obligated to make additional milestone payments of $10.0 million for each non-CF MRT Product upon the first commercial sale of a non-CF MRT Product; provided that such milestone payments will only be due once for any two non-CF MRT Products that contain the same MRT compounds, or once for non-CF MRT Products that are mRNA vaccines in certain Licensed Fields under the Amended Sanofi Agreement. Under the Shire Agreement, we are also obligated to pay a fixed, quarterly earnout payment of a mid-single-digit percentage of net sales of each MRT Product. The earnout period will begin on the date of the first commercial sale of MRT Products and will end, on a product-by-product and country-by-country basis, on the later of (1) the expiration of the last valid claim of the assigned patents covering the manufacture, use or composition of such product in such country of the applicable MRT Product and (2) 10 years after the first commercial sale of the MRT Product in such country. If these payments become due under the terms of the Shire Agreement, we may not have sufficient funds available to meet our obligations and our development efforts may be materially harmed. If a combination MRT Product that is a vaccine is sold, in certain circumstances, we would be obligated to pay Shire a royalty on a minimum portion of net sales.

46

We might not be able to utilize a significant portion of our net operating loss carryforwards and research and development tax credit carryforwards.

As of December 31, 2019, we had federal net operating loss carryforwards of $229.3 million, of which $122.1 million will, if not utilized, begin to expire in 2031. As of December 31, 2019, we had state net operating loss carryforwards of $210.6 million, which will, if not utilized, begin to expire in 2031. Our federal and state research and development tax credit carryforwards of $6.5 million and $2.7 million, respectively, will, if not utilized, begin to expire in 2032 and 2028, respectively, and orphan drug tax credit carryforwards of $13.0 million will, if not utilized, begin to expire in 2037. We also have state investment tax credit carryforwards of $0.3 million, which will, if not utilized, begin to expire in 2020. These net operating loss and tax credit carryforwards could expire unused and be unavailable to offset our future income tax liabilities.

In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in its equity ownership by certain stockholders over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income may be limited. We have not determined if we have experienced Sections 382 and 383 ownership changes in the past and if a portion of our net operating loss and tax credit carryforwards are subject to an annual limitation under Section 382. In addition, we may experience ownership changes in the future as a result of subsequent changes in our stock ownership, some of which may be outside of our control. If an ownership change has occurred or occurs in the future and our ability to use our historical net operating loss and tax credit carryforwards is materially limited, it would harm our future operating results by effectively increasing our future tax obligations.

There is also a risk that due to regulatory changes, such as suspensions on the use of net operating losses, or other unforeseen reasons, our existing net operating losses could expire or otherwise become unavailable to offset future income tax liabilities. As described below in “Changes in tax laws or in their implementation or interpretation may adversely affect our business and financial condition,” the Tax Cuts and Jobs Act, or the Tax Act, as amended by the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, includes changes to U.S. federal tax rates and the rules governing net operating loss carryforwards that may significantly impact our ability to utilize our net operating losses to offset taxable income in the future. In addition, state net operating losses generated in one state cannot be used to offset income generated in another state. For these reasons, even if we attain profitability, we may be unable to use a material portion of our net operating losses and other tax attributes.

Changes in tax laws or in their implementation or interpretation may adversely affect our business and financial condition.

Recent changes in tax law may adversely affect our business or financial condition. On December 22, 2017, the U.S. government enacted the Tax Act, which significantly reformed the Code. The Tax Act, among other things, contained significant changes to corporate taxation, including a reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, the limitation of the tax deduction for net interest expense to 30% of adjusted taxable income (except for certain small businesses), the limitation of the deduction for net operating losses arising in taxable years beginning after December 31, 2017 to 80% of current year taxable income and elimination of net operating loss carrybacks for losses arising in taxable years ending after December 31, 2017 (though any such net operating losses may be carried forward indefinitely), the allowance of immediate deductions for certain new investments instead of deductions for depreciation expense over time, and the modification or repeal of many business deductions and credits.

As part of Congress’s response to the COVID-19 pandemic, the Families First Coronavirus Response Act, or FFCR Act, was enacted on March 18, 2020, and the CARES Act was enacted on March 27, 2020. Both contain numerous tax provisions. In particular, the CARES Act retroactively and temporarily (for taxable years beginning before January 1, 2021) suspends application of the 80%-of-income limitation on the use of net operating losses, which was enacted as part of the Tax Act. It also provides that net operating losses arising in any taxable year beginning after December 31, 2017, and before January 1, 2021 are generally eligible to be carried back up to five years. The CARES Act also temporarily (for taxable years beginning in 2019 or 2020) relaxes the limitation of the tax deductibility for net interest expense by increasing the limitation from 30 to 50% of adjusted taxable income.

Regulatory guidance under the Tax Act, the FFCR Act and the CARES Act is and continues to be forthcoming, and such guidance could ultimately increase or lessen impact of these laws on our business and financial condition. It is also possible that Congress will enact additional legislation in connection with the COVID-19 pandemic, some of which could have an impact on our company. In addition, it is uncertain if and to what extent various states will conform to the Tax Act, the FFCR Act or the CARES Act.

47

Risks Related to the Development of Our Product Candidates

Our approach to the discovery and development of product candidates based on mRNA is unproven, and we do not know whether we will be able to successfully develop any products.

We focus on delivering mRNA encoding functional versions of proteins into cells without altering the underlying DNA. Our future success depends on the successful development of this novel therapeutic approach. Relatively few mRNA-based therapeutic product candidates have been tested in animals or humans, and the data underlying the feasibility of developing mRNA-based therapeutic products is both preliminary and limited. To date, no product that utilizes mRNA as a therapeutic has been approved in the United States or Europe. We have not yet succeeded and may not succeed in demonstrating the efficacy and safety of any of our product candidates in clinical trials or in obtaining marketing approval thereafter. We have not yet completed a clinical trial of any product candidate and we have not yet assessed safety of any product candidate in humans. As such, there may be adverse effects from treatment with any of our current or future product candidates that we cannot predict at this time.

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 MRT platform, or any similar or competitive mRNA platforms, will result in the development and regulatory approval of any products. There can be no assurance that any development problems we experience in the future related to our MRT platform or any of our research programs will not cause significant delays or unanticipated costs, or that such development problems can be solved. 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. For example, in September 2019 we discontinued the development of MRT5201, a liver targeted treatment for ornithine transcarbamylase, or OTC, deficiency, and terminated our Phase 1/2 clinical trial for MRT5201 in patients with OTC deficiency.

We have never obtained marketing approval for a product candidate, and we may be unable to obtain, or may be delayed in obtaining, marketing approval for any of our product candidates.

We are a clinical-stage company and have not received approval from the FDA, EMA or other regulatory authority to market any product candidate. The regulatory review process may be more expensive or take longer than we expect, and we may be required to conduct additional studies and/or trials beyond those we anticipate. If it takes us longer to develop and/or obtain regulatory approval for our product candidates than we expect, such delays could materially and adversely affect our business, financial condition, results of operations and prospects.

If we are unable to complete satisfactorily the clinical development of, obtain marketing approval for or successfully commercialize MRT5005, either alone or with a future collaborator, or if we experience significant delays in doing so, our business would be substantially harmed.

We do not currently have products approved for sale and are investing a significant portion of our efforts and financial resources in the development of MRT5005. In April 2020, we announced that enrollment and dosing have been paused in our ongoing Phase 1/2 clinical trial in patients with CF as a consequence of the response to the COVID-19 pandemic. We and the clinical trial sites are assessing the potential for patients to safely return to the clinic for study enrollment and dosing. At this time we are unable to predict the timing for reporting data. We expect that the COVID-19 pandemic will continue to impact our clinical trials as described above in “Risks Related to the COVID-19 Pandemic.” Our prospects are substantially dependent on our ability, or that of any future collaborator, to develop and obtain marketing approval for, and successfully commercialize, MRT5005.

The success of MRT5005 will depend on several factors, including the following:

• successful resumption of patient enrollment in and completion of clinical trials;

• a safety, tolerability and efficacy profile that is satisfactory to the FDA, EMA or other regulatory authorities for marketing approval;

• timely receipt of marketing approvals from applicable regulatory authorities;

• the extent of any required post-marketing approval commitments to applicable regulatory authorities;

• establishment and maintenance of arrangements with third-party manufacturers for both clinical and any future commercial manufacturing;

48

• adequate ongoing availability of raw materials and drug product for clinical development and any commercial sales;

• obtaining and maintaining patent, trade secret protection and regulatory exclusivity, both in the United States and internationally;

• protection of our rights in our intellectual property portfolio;

• successful launch of commercial sales following any marketing approval;

• a continued acceptable safety profile following any marketing approval;

• commercial acceptance by hospitals, the patient community, the medical community and third-party payors;

• the availability of coverage and adequate reimbursement from third-party payors;

• the performance of our future collaborators, if any; and

• our ability to compete with other therapies.

Many of these factors are beyond our control, including clinical development, the regulatory review process, potential threats to our intellectual property rights and the manufacturing, marketing and sales efforts of any future collaborator. If we are unable to develop, receive marketing approval for and successfully commercialize MRT5005, on our own or with any future collaborator, or experience delays as a result of any of these factors or otherwise, our business would be substantially harmed.

Clinical drug development is a lengthy and expensive process with uncertain timelines and uncertain outcomes. If the initiation or completion of clinical trials of our product candidates, particularly MRT5005, is prolonged or delayed, we or any future collaborators may be unable to obtain required regulatory approvals, and therefore will be unable to commercialize our product candidates on a timely basis or at all, which will adversely affect our business.

Before obtaining marketing approval for our product candidates, we must complete preclinical development and then conduct extensive clinical trials to demonstrate the safety and efficacy of the product candidates. Clinical testing is expensive, time-consuming, difficult to design and implement and uncertain as to outcome. We cannot guarantee that our clinical trials, such as the planned Phase 1 trial for a COVID-19 vaccine candidate and our Phase 1/2 clinical trial of MRT5005 in patients with CF, will be conducted as planned, completed on schedule, if at all, or yield positive results. For example, in April 2020, we announced that enrollment and dosing have been paused in our ongoing Phase 1/2 clinical trial in patients with CF as a consequence of the response to the COVID-19 pandemic. We and the clinical trial sites are assessing the potential for patients to safely return to the clinic for study enrollment and dosing. At this time we are unable to predict the timing for reporting data. We expect that the COVID-19 pandemic will continue to impact our clinical trials as described above in “Risks Related to the COVID-19 Pandemic.”

A clinical trial failure can occur at any stage of testing. Events that may prevent successful or timely completion of clinical development include:

• delays in reaching a consensus with regulatory authorities or collaborators on trial design;

• delays in reaching agreement on acceptable terms with CROs and clinical trial sites;

• delays in opening clinical trial sites or obtaining required institutional review board or independent ethics committee approval at each clinical trial site;

• delays in recruiting suitable subjects or a sufficient number of subjects to participate in our clinical trials;

• imposition of a clinical hold by regulatory authorities, including upon submission of an IND, or as a result of a serious adverse event or after an inspection of our clinical trial operations or trial sites;

• failure by us, any CROs we engage, clinical investigators or any other third parties to adhere to clinical trial requirements;

• failure to perform the clinical trial in accordance with good clinical practices, or GCP, or applicable regulatory requirements in the European Union, the United States, or other countries;

49

• delays in the testing, validation, manufacturing and delivery of our product candidates to the clinical sites, including delays by third parties with whom we have contracted to perform certain of those functions;

• delays or failures in demonstrating the comparability of product manufactured at one facility or with one process to product manufactured at another facility or with another process, including clinical trials to demonstrate such comparability;

• delays in having patients complete participation in a trial or return for post-treatment follow-up;

• clinical trial sites or subjects dropping out of a trial;

• selection of clinical endpoints that require prolonged periods of clinical observation or analysis of the resulting data;

• occurrence of serious adverse events associated with the product candidate that are viewed to outweigh its potential benefits;

• occurrence of serious adverse events in trials of the same class of agents conducted by other sponsors; and

• changes in regulatory requirements and guidance that require amending or submitting new clinical protocols.

Any inability to successfully complete preclinical and clinical development could result in additional costs to us or impair our ability to generate revenue from product sales, regulatory and commercialization milestones and royalties. In addition, if we make manufacturing or formulation changes to our product candidates, we may need to conduct additional trials to bridge our modified product candidates to earlier versions. Clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do, which could impair our ability to successfully commercialize our product candidates and may harm our business, financial condition, results of operations and prospects.

We have experienced delays in enrollment and dosing in our ongoing Phase 1/2 clinical trial in patients with CF as a consequence of the response to the COVID-19 pandemic. We could also encounter delays if a clinical trial is suspended or terminated by us, by the institutional review boards of the institutions in which such trials are conducted or their ethics committees, by the Data Review Committee or Data Safety Monitoring Board for such trial or by the FDA or other foreign regulatory authorities. Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other foreign regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, including those relating to the class of products to which our product candidates belong.

Any of these occurrences may harm our business, financial condition and prospects significantly. In addition, many of the factors that cause or lead to a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates or early termination of the development of our product candidates.

Preclinical drug development is uncertain. Some or all of our preclinical programs may experience delays or may never advance to clinical trials, which would adversely affect our ability to obtain regulatory approvals or commercialize these product candidates on a timely basis or at all, which would have an adverse effect on our business.

In order to obtain FDA approval to market a new biological product, we must demonstrate proof of safety, purity and potency or efficacy in humans. To satisfy these requirements, we will have to conduct adequate and well-controlled clinical trials. Before we can commence clinical trials for a product candidate, we must complete extensive preclinical testing and studies that support an IND in the United States. We cannot be certain of the timely completion or outcome of our preclinical testing and studies, and we cannot predict if the FDA will accept our proposed clinical programs or if the outcome of our preclinical testing and studies will ultimately support the further development of these product candidates. As a result, we cannot be sure that we will be able to submit INDs or similar applications for any preclinical programs on the timelines we expect, if at all, and we cannot be sure that submission of INDs or similar applications will result in the FDA or other regulatory authorities allowing clinical trials to begin. For example, after we submitted an IND for MRT5005 to initiate our Phase 1/2 clinical trial in patients with CF, the FDA placed a clinical hold on the IND, requiring us to submit, prior to initiating the trial, additional chemistry, manufacturing and controls information relating to materials and processes used during the manufacture of the product candidate. The FDA lifted the clinical hold for our Phase 1/2 clinical trial of MRT5005 in April 2018.

50

Conducting preclinical testing is a lengthy, time-consuming and expensive process. The length of time may vary substantially according to the type, complexity, novelty and intended use of the product candidate, and often can be several years or more per product candidate. Delays associated with product candidates for which we are conducting preclinical testing and studies ourselves may cause us to incur additional operating expenses. Moreover, we may be affected by delays associated with the preclinical testing and studies of certain product candidates conducted by our potential partners over which we have no control. The commencement and rate of completion of preclinical studies and clinical trials for a product candidate may be delayed by many factors, including, for example:

• inability to generate sufficient preclinical or other in vivo or in vitro data to support the initiation of clinical trials; and

• delays in reaching a consensus with regulatory agencies on study design.

Moreover, even if we do initiate clinical trials for other product candidates, our development efforts may not be successful, and clinical trials that we conduct or that third parties conduct on our behalf may not demonstrate sufficient safety, purity and potency or efficacy necessary to obtain the requisite regulatory approvals for any of our product candidates or product candidates employing our technology. Even if we obtain positive results from preclinical studies or initial clinical trials, we may not achieve the same success in future trials.

Success in preclinical studies or early clinical trials may not be indicative of results obtained in later trials.

Results from preclinical studies are not necessarily predictive of clinical trial results, results from early clinical trials are not necessarily predictive of later clinical trial results and interim results of a clinical trial are not necessarily indicative of final results. Our product candidates may fail to show the desired safety and efficacy in clinical development despite positive results in preclinical studies or successful advancement through initial clinical trials.

There can be no assurance that the success we achieved in preclinical studies of MRT5005 or may achieve in preclinical studies of other product candidates will result in success in clinical trials of these product candidates. In addition, we cannot assure you that we will be able to achieve the same or similar success in our preclinical studies and clinical trials of our other product candidates.

For example, our preclinical studies in animal models have been conducted using human mRNA, which differs from animal mRNA, making it difficult for us to use animal models to assess whether our product candidates are safe or effective in humans. Preclinical studies conducted in rats and non-human primates are not always indicative of clinical trial outcomes in humans.

We have not completed any clinical trials evaluating any of our product candidates or proposed delivery modes, including the use of lipid-based nanoparticles, or LNPs, that are customized for delivery to specific tissues.

There is a high failure rate for drugs and biologic products proceeding through preclinical studies and clinical trials. Any product candidates we develop may fail to show the desired safety and efficacy in later stages of clinical development despite having successfully advanced through initial clinical trials. Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials even after achieving promising results in preclinical studies and earlier-stage clinical trials. Data obtained from preclinical and clinical activities are subject to varying interpretations, which may delay, limit or prevent regulatory approval. In addition, we may experience regulatory delays or rejections as a result of many factors, including changes in regulatory policy during the period of our product candidate development. Any such delays could materially and adversely affect our business, financial condition, results of operations and prospects.

We have experienced and may in the future experience difficulty enrolling and dosing patients in our clinical trials, which could delay or prevent us from proceeding with clinical trials of our product candidates.

Identifying, qualifying and enrolling patients to participate in clinical trials of our product candidates is critical to our success, and we may not be able to identify, recruit, enroll and dose a sufficient number of patients, or those with required or desired characteristics, to complete our clinical trials in a timely manner. The timing of our clinical trials depends on our ability to recruit patients to participate as well as to subsequently dose these patients and complete required follow-up periods. We depend on Sanofi to design and conduct clinical trials for our vaccine candidates. As a result, we may not control the manner or time schedule in which these clinical trials are conducted, which may negatively impact our business operations. In addition, we anticipate competition recruiting patients for any potential future clinical trials to test a COVID-19 vaccine as many other companies are conducting or plan to conduct similar trials. In contrast, because our clinical trial of MRT5005 is focused on indications with relatively small patient populations, our ability to enroll eligible patients may be limited or may result in slower enrollment than we anticipate. Many CF clinical trial sites place importance on the review, ranking and sanctioning of CF patient advocacy groups. If CF patient advocacy groups do not timely sanction or highly rate our clinical trials, or prioritize trials of other sponsors over our trials, we may not be able to enroll sufficient patients to conduct our trials at their member sites, or it may take longer to conduct these trials.

51

In April 2020, we announced that enrollment and dosing have been paused in our ongoing Phase 1/2 clinical trial in patients with CF as a consequence of the response to the COVID-19 pandemic. Even when enrollment and dosing of patients in this trial resume, we may encounter slower than expected enrollment or dosing delays due to the CF patient population, or CF advocacy groups may provide additional guidance for the safety of the CF population, which may delay the trial. We and the clinical trial sites are assessing the potential for patients to safely return to the clinic for study enrollment and dosing. At this time we are unable to predict the timing for reporting data. We expect that the COVID-19 pandemic will continue to impact our clinical trial of MRT5005 as described above in “Risks Related to the COVID-19 Pandemic.” In addition, we may experience enrollment delays related to increased or unforeseen regulatory, legal and logistical requirements at certain clinical trial sites. These delays could be caused by regulatory reviews by regulatory authorities and contractual discussions with individual clinical trial sites. Any delays in enrolling and/or dosing patients in our planned clinical trials could result in increased costs, delays in advancing our product candidates, delays in testing the effectiveness of our product candidates or termination of the clinical trials altogether.

Patient enrollment may be affected if our competitors have ongoing clinical trials for product candidates for the same indications as our product candidates, and patients who would otherwise be eligible for our clinical trials instead enroll in our competitors’ clinical trials. Patient enrollment may also be affected by other factors, including:

• coordination between us, CROs and any future collaborators in our efforts to enroll and administer the clinical trial;

• size of the patient population and process for identifying patients;

• design of the trial protocol;

• eligibility and exclusion criteria;

• perceived risks and benefits of the product candidate under study;

• availability of competing commercially available therapies and other competing product candidates’ clinical trials;

• time of year in which the trial is initiated or conducted;

• variations in the seasonal incidence of the target indication;

• severity of the disease under investigation;

• ability to obtain and maintain subject consent;

• ability to enroll and treat patients in a timely manner;

• risk that enrolled subjects will drop out before completion of the trial;

• proximity and availability of clinical trial sites for prospective patients;

• patient referral practices of physicians; and

• ability to monitor subjects adequately during and after treatment.

Our inability to enroll a sufficient number of patients for clinical trials would result in significant delays and could require us to abandon one or more clinical trials altogether. Enrollment delays in these clinical trials may result in increased development costs for our product candidates, which could cause the value of our company to decline and limit our ability to obtain additional financing.

52

We may not be successful in our efforts to identify or discover additional product candidates and may fail to capitalize on programs or product candidates for which there is a greater likelihood of commercial success.

Our success depends upon our ability to identify, develop and commercialize product candidates based on our MRT platform. If we do not successfully develop and eventually commercialize products, we will not be able to generate product revenue, resulting in significant harm to our financial position and adverse effects to our share price. Research programs to identify new product candidates require substantial technical, financial and human resources. Although our product candidates are currently in preclinical or clinical development, we may fail to identify other potential product candidates for clinical development.

Additionally, because we have limited financial and managerial resources, we may forego or delay pursuit of opportunities for certain programs or product candidates or for indications that later prove to have greater commercial potential. For example, we currently intend to focus our capital resources primarily on the clinical development of MRT5005 and the development of vaccines. However, the development of MRT5005 may ultimately prove to be unsuccessful or less successful than another product candidate in our pipeline that we might have chosen to pursue on a more aggressive basis with our capital resources. Our estimates regarding the potential market for our product candidates could be inaccurate, and our spending on current and future research and development programs may not yield any commercially viable products. If we do not accurately evaluate the commercial potential for a particular product candidate, we may relinquish valuable rights to that product candidate through strategic collaboration, licensing or other arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights. Alternatively, we may allocate internal resources to a product candidate in a therapeutic area in which it would have been more advantageous to enter into a collaborative arrangement.

If any of these events occur, we may be forced to abandon or delay our development efforts with respect to a particular product candidate, or we may fail to develop a potentially successful product candidate, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

We may fail to demonstrate safety and efficacy of our product candidates to the satisfaction of applicable regulatory authorities.

If the results of any of our clinical trials are inconclusive or if there are safety concerns or serious adverse events associated with our product candidates, we may:

• be delayed in obtaining marketing approval for our product candidates, if at all;

• obtain approval for indications or patient populations that are not as broad as intended or desired;

• obtain approval with labeling that includes significant use or distribution restrictions or safety warnings;

• be subject to changes in the way the product is administered;

• be required to perform additional clinical trials to support approval or be subject to additional post-marketing testing requirements;

• have regulatory authorities withdraw, or suspend, their approval of the product or impose restrictions on its distribution in the form of a modified risk evaluation and mitigation strategy, or REMS;

• be subject to the addition of labeling statements, such as contraindications or warnings, including a black box warning;

• be sued; or

• experience damage to our reputation.

53

If serious adverse or undesirable side effects are identified during the development of our product candidates or proposed delivery modes, we may abandon or limit our development of such product candidates.

If our product candidates or proposed delivery modes are associated with undesirable side effects or have unexpected characteristics, we may need to abandon their development or limit development to certain uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. Many compounds that initially showed promise in clinical or earlier stage testing have later been found to cause side effects or raise other safety issues that delayed or prevented further development of the compound. Further, given the relatively small patient populations for which we are developing our MRT5005, we expect to have to evaluate long-term exposure to establish the safety and tolerability of this product candidate in a chronic dose setting. The adverse effects from long-term exposure, as well as exposure in general, to our product candidates are unknown because they are a new class of therapeutics that have not previously been evaluated in a clinical trial. The risk of adverse or undesirable side effects therefore remains a significant concern, and we cannot assure you that these or other risks will not occur in any of our current or future clinical trials of MRT5005 or other product candidates that we may develop.

If we elect or are forced to suspend or terminate any clinical trial of our product candidates, the commercial prospects of such product candidate will be harmed, and our ability to generate product revenue from such product candidate will be delayed or eliminated. Any of these occurrences could materially harm our business, financial condition, results of operations and prospects.

Because we are developing product candidates for the treatment of diseases in which there is little clinical experience using new technologies, there is increased risk that the FDA, the EMA or other regulatory authorities may not consider the endpoints of our clinical trials to provide clinically meaningful results and that these results may be difficult to analyze.

During the regulatory review process, we will need to identify success criteria and endpoints such that the FDA, the EMA or other regulatory authorities will be able to determine the clinical efficacy and safety profile of any product candidates we may develop. Because our initial focus is to identify and develop product candidates to treat diseases in which there is little clinical experience using new technologies, there is heightened risk that the FDA, the EMA or other regulatory authorities may not consider the clinical trial endpoints that we propose to provide clinically meaningful results. In addition, the resulting clinical data and results may be difficult to analyze. Even if the FDA determines that our success criteria is sufficiently validated and clinically meaningful, we may not achieve the pre-specified endpoints to a degree of statistical significance.

This may be a particularly significant risk for many of the genetically defined diseases for which we plan to develop product candidates because many of these diseases have small patient populations, and designing and executing a rigorous clinical trial with appropriate statistical power is more difficult than with diseases that have larger patient populations. Further, even if we do achieve the pre-specified criteria, the results may be unpredictable or inconsistent with the results of the non-primary endpoints or other relevant data. The FDA also weighs the benefits of a product against its risks, and the FDA may view the efficacy results in the context of safety as not being supportive of regulatory approval. The EMA and other regulatory authorities may make similar comments with respect to these endpoints and data. Any product candidate we may develop will be based on a novel technology that makes it difficult to predict the time and cost of development and of subsequently obtaining regulatory approval.

We may conduct clinical trials at sites outside the United States. The FDA may not accept data from trials conducted in such locations, and the conduct of trials outside the United States could subject us to additional delays and expense.

We may conduct one or more of our clinical trials with one or more trial sites that are located outside the United States. Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of these data is subject to certain conditions imposed by the FDA. For example, the clinical trial must be well designed and conducted and performed by qualified investigators in accordance with GCP. The FDA must be able to validate the data from the trial through an onsite inspection, if necessary. The trial population must also have a similar profile to the U.S. population, and the data must be applicable to the U.S. population and U.S. medical practice in ways that the FDA deems clinically meaningful, except to the extent the disease being studied does not typically occur in the United States. In addition, while these clinical trials are subject to the applicable local laws, whether the FDA accepts the data will depend upon its determination that the trials also complied with all applicable U.S. laws and regulations. There can be no assurance that the FDA will accept data from trials conducted outside of the United States. If the FDA does not accept the data from any trial that we conduct outside the United States, it would likely result in the need for additional trials, which would be costly and time-consuming and delay or permanently halt our development of MRT5005 or any future product candidates.

In addition, conducting clinical trials outside the United States could have a significant adverse impact on us. Risks inherent in conducting international clinical trials include:

• clinical practice patterns and standards of care that vary widely among countries;

54

• non-U.S. regulatory authority requirements that could restrict or limit our ability to conduct our clinical trials;

• administrative burdens of conducting clinical trials under multiple non-U.S. regulatory authority schema;

• foreign exchange fluctuations; and

• diminished protection of intellectual property in some countries.

The manufacture of mRNA-based therapeutics is complex and manufacturers often encounter difficulties in production. If we or any of our third-party manufacturers encounter difficulties, our ability to provide product candidates for clinical trials or products, if approved, to patients could be delayed or halted.

The manufacture of mRNA-based therapeutics is complex and requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls. We and our third-party manufacturers must comply with current Good Manufacturing Practices, or cGMP, regulations and guidelines for the manufacturing of our product candidates used in preclinical studies and clinical trials and, if approved, marketed products. Manufacturers of biotechnology products often encounter difficulties in production, particularly in scaling up and validating initial production. Furthermore, if microbial, viral or other contaminations are discovered in our product candidates or in the manufacturing facilities where our product candidates are made, such manufacturing facilities may be closed for an extended period of time to investigate and remedy the contamination. Shortages of raw materials may also extend the period of time required to develop our product candidates.

We cannot assure you that any disruptions or other issues relating to the manufacture of any of our product candidates will not occur in the future. Any delay or interruption in the supply of clinical trial supplies could delay the completion of planned clinical trials, increase the costs associated with maintaining clinical trial programs and, depending upon the period of delay, require us to commence new clinical trials at additional expense or terminate clinical trials completely. Any adverse developments affecting clinical or commercial manufacturing of our product candidates or products may result in shipment delays, inventory shortages, lot failures, product withdrawals or recalls or other interruptions in the supply of our product candidates or products. We may also have to take inventory write-offs and incur other charges and expenses for product candidates or products that fail to meet specifications, undertake costly remediation efforts or seek more costly manufacturing alternatives. Accordingly, failures or difficulties faced at any level of our supply chain could delay or impede the development and commercialization of any of our product candidates or products and could have an adverse effect on our business, prospects, financial condition and results of operations.

If the market opportunities for our product candidates are smaller than we believe they are, even assuming approval of a product candidate, our business may suffer.

Our product candidates are based on novel therapeutic approaches. As such, physicians, hospitals, third-party payors and patients may not accept our product candidates as treatment options, even if approved. While we believe there are commercial opportunities for our product candidates, we cannot be sure that is the case, particularly given the novelty of mRNA-based therapeutics.

Our projections of both the number of people affected by disease within our target indications, as well as the subset of these people who could benefit from treatment with our product candidates, are based on our beliefs and estimates. These estimates have been derived from a variety of sources, including scientific literature, patient foundations and market research, and may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of these diseases. The number of patients may turn out to be lower than expected. Likewise, the potentially addressable patient population for each of our product candidates may be limited or may not be amenable to treatment with our product candidates, and new patients may become increasingly difficult to identify or reach, which would adversely affect our results of operations and our business.

We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.

The biotechnology and pharmaceutical industries are highly competitive, characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products. We face and will continue to face competition from third parties that use mRNA, gene editing or gene therapy development platforms and from companies focused on more traditional therapeutic modalities, such as small molecules. The competition is likely to come from multiple sources, including large and specialty pharmaceutical and biotechnology companies, academic research institutions, government agencies and public and private research institutions.

55

Our competitors also include companies that are or will be developing other mRNA technology methods as well as small molecules, biologics and nucleic acid-based therapies for the same indications that we are targeting with our mRNA-based therapeutics.

Many of our potential competitors, alone or with their strategic partners, have substantially greater financial, technical and other resources, such as larger research and development, clinical, marketing and manufacturing organizations. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even greater concentration of resources among a smaller number of competitors. Our commercial opportunity could be reduced or eliminated if competitors develop and commercialize products that are 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 faster or earlier than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. Additionally, new data from clinical-stage products continue to emerge. Technologies developed by our competitors may render our product candidates uneconomical or obsolete, and we may not be successful in marketing our product candidates against competitors’ products. In addition, the availability of our competitors’ products could limit the demand and the prices we are able to charge for any products that we may develop and commercialize.

If approved for the treatment of CF, MRT5005 would compete with Kalydeco, Orkambi, Symdeko and Trikafta, each of which is marketed by Vertex Pharmaceuticals Incorporated, or Vertex. Vertex also has several CFTR modulator compounds in clinical development, each of which is currently in a Phase 2 clinical trial.

Our other potential competitors for CF include large pharmaceutical and biotechnology companies, specialty pharmaceutical and generic drug companies, academic institutions, government agencies and research institutions. Examples include AbbVie Inc., Corbus Pharmaceuticals, Inc., Eloxx Pharmaceuticals Ltd, and Proteostasis Therapeutics, Inc.

Other companies developing products that modulate or affect CFTR function for the treatment of CF also include: Arcturus Therapeutics Holdings Inc., CRISPR Therapeutics AG and Moderna, Inc.

Large and established companies, such as Merck & Co., Inc., GlaxoSmithKline plc, Sanofi, Pfizer, Inc., Johnson & Johnson and AstraZeneca plc, among others, compete in the vaccine market. Although there is no approved vaccine against COVID-19 on the market, competition to find a vaccine for COVID-19 is intense, and moving rapidly. We are aware of several companies, such as Moderna, Inc., Novavax, Inc., BioNTech SE, and Pfizer, Inc., as well as others, that have already commenced clinical trials of a vaccine against COVID-19, and there will likely be significant and consistent competition as these active programs mature.

Risks Related to Dependence on Third Parties

We have an existing collaboration with Sanofi and we are highly dependent on the efforts of Sanofi to advance our vaccine development program, including the vaccine against SARS-CoV-2. If our collaboration with Sanofi is not successful, our business could be adversely affected.

We currently have a collaboration and license agreement with Sanofi to develop mRNA vaccines for infectious disease pathogens, including SARS-CoV-2. Sanofi may not be successful in its efforts to develop or commercialize our vaccine candidates, which could adversely affect our business. In addition, Sanofi could decide not to pursue or prioritize our vaccine candidates, or disputes may arise over certain obligations, which could have an adverse effect on our ability to develop and commercialize any affected product candidate.

We have limited control over the amount and timing of resources that Sanofi dedicates to the development or commercialization of our vaccine candidates. Our ability to generate revenue from our arrangement with Sanofi will depend on Sanofi’s ability to successfully perform the functions assigned to Sanofi.

Our collaboration with Sanofi may pose several risks, including the following:

• Sanofi has significant discretion in determining the efforts and resources that it will apply to these our collaboration;

• Sanofi may not perform its obligations as expected;

• The clinical trials conducted as part of our collaboration with Sanofi may not be successful;

56

• Sanofi may not pursue development and/or commercialization of any vaccine candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in Sanofi’s strategic focus or available funding or external factors, such as an acquisition, that divert resources or create competing priorities;

• Sanofi has final decision-making authority for conducting clinical trials, and this may result in Sanofi delaying clinical trials, providing insufficient funding for clinical trials, stopping a clinical trial or abandoning a vaccine candidate, repeating or conducting new clinical trials or requiring a new formulation of a vaccine candidate for clinical testing;

• We may not have access to, or may be restricted from disclosing, certain information regarding vaccine candidates being developed or commercialized under our collaboration with Sanofi and, consequently, may have limited ability to inform our stockholders about the status of such vaccine candidates;

• Sanofi has an existing collaboration with GlaxoSmithKline plc to develop a SARS-CoV-2 vaccine candidate that could compete with the SARS-CoV-2 vaccine candidate that we develop with Sanofi, and Sanofi could further independently develop, or develop with third parties, products that compete directly or indirectly with any of our vaccine candidates if Sanofi believes that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours;

• Sanofi may view vaccine candidates developed in collaboration with us as competitive with their own product candidates or products, which may cause Sanofi to cease to devote resources to the commercialization of our vaccine candidates;

• Sanofi may not commit sufficient resources to the marketing and distribution of any such of our vaccine candidates that achieve regulatory approval;

• Disagreements with Sanofi, including disagreements over proprietary rights, contract interpretation or the preferred course of development of any of our vaccine candidates, may cause delays or termination of the research, development, manufacture or commercialization of such vaccine candidates, may lead to additional responsibilities for us with respect to such vaccine candidates or may result in litigation or arbitration, any of which would be time-consuming and expensive. Moreover, in certain circumstances, there could be a misalignment between our contractual obligations to Sanofi and any upstream contractual obligations we may owe to our licensors or other third parties;

• Sanofi may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation. For example, Sanofi has the first right to enforce or defend certain of our intellectual property rights under our collaboration with respect to products in Licensed Fields, and although we may have the right to assume the enforcement and defense of such intellectual property rights if Sanofi does not, our ability to do so may be compromised by Sanofi’s actions;

• Disputes may arise with respect to the ownership of intellectual property developed pursuant to our collaboration with Sanofi;

• Sanofi may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; and

• Sanofi may terminate our collaboration for convenience after a specified notice period and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable vaccine candidates.

57

If our collaboration with Sanofi does not result in the successful development and commercialization of vaccines, or if Sanofi terminates its agreement with us, we may not receive any future research funding or milestone or royalty payments under the collaboration. If we do not receive the funding we expect under our agreement with Sanofi, our development of vaccine candidates could be delayed and we may need additional resources to develop our vaccine candidates.

In addition, if Sanofi terminates its agreement with us, we may find it more difficult to attract new collaborators and our reputation among the business and financial communities could be adversely affected. All of the risks relating to product development, regulatory approval and commercialization described in this Quarterly Report on Form 10-Q also apply to Sanofi’s activities.

We may enter into additional collaborations with third parties, and if we are not able to establish collaborations on commercially reasonable terms, we may have to alter our development and commercialization plans.

As part of our strategy, we intend to seek to enter into collaborations with third parties for one or more of our programs or product candidates. Our likely collaborators for any other collaboration arrangements include large and mid-size pharmaceutical companies and biotechnology companies.

We face significant competition in attracting appropriate collaborators to advance the development of any product candidates for which we may seek a collaboration. Whether we reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of a number of factors. Those factors may include the design or results of clinical trials, the likelihood of approval by the FDA, EMA or other regulatory authorities, the potential market for the subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to patients, the potential of competing products, the existence of uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge, the terms of any existing collaboration agreements, and industry and market conditions generally. The collaborator may also have the opportunity to collaborate on other product candidates or technologies for similar indications and will have to evaluate whether such a collaboration could be more attractive than one with us.

Collaborations are complex and time-consuming to negotiate, document and execute. In addition, consolidation among large pharmaceutical companies has reduced the number of potential future collaborators. Even if we are able to successfully enter into collaborations with third parties for one or more of our programs or product candidates, such collaborations may be subject to risks similar to those described above under the risk factor captioned “We have an existing collaboration with Sanofi and we are highly dependent on the efforts of Sanofi to advance our vaccine development program, including the vaccine against SARS-CoV-2. If our collaboration with Sanofi is not successful, our business could be adversely affected.”

We may not be able to negotiate collaborations on a timely basis, on acceptable terms or at all. If we are unable to do so, we may have to curtail the development of the product candidate for which we are seeking to collaborate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense. If we elect to fund development or commercialization activities on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms or at all. If we do not have sufficient funds, we may not be able to further develop our product candidates or bring them to market and generate product revenue, which could have an adverse effect on our business, prospects, financial condition and results of operations.

Under the Shire Agreement, prior to the first dosing of a patient with a CFTR MRT Product in a Phase 3 clinical trial, Shire has a 90-day right of first negotiation before we may grant rights or sell assets relating to our CFTR MRT Products to a third party. Shire may exercise the right of first negotiation for a period of 30 days following Shire’s receipt of written notice from us notifying Shire of the offer from a third party to acquire, license or commercialize grant rights or sell assets relating to our CF program.

We expect to rely on third parties to conduct our clinical trials and some aspects of our research and preclinical studies, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, research or testing.

We currently rely and expect to continue to rely on third parties, such as CROs, clinical data management organizations, medical institutions and clinical investigators, to conduct our clinical trials. In addition, we currently rely and expect to continue to rely on third parties to conduct some aspects of our research and preclinical studies. Any of these third parties may terminate their engagements with us, some in the event of an uncured material breach and some at any time for convenience. In addition, as a consequence of the ongoing COVID-19 pandemic, some of these parties may be unable to perform their engagements satisfactorily or

58

at all. If any of our relationships with these third parties terminate, we may not be able to enter into alternative arrangements on commercially reasonable terms, if at all. Switching or including additional third parties involves increased cost and requires management’s time and focus. In addition, there is a natural transition period when a new third party commences work. As a result, delays may occur in our product development activities. Although we seek to carefully manage our relationships with our third parties, we could encounter similar challenges or delays in the future and these challenges or delays could have a material adverse impact on our business, financial condition and prospects. We expect that the COVID-19 pandemic will continue to impact our clinical trials as described above in “Risks Related to the COVID-19 Pandemic.”

Our reliance on third parties for research and development activities will reduce our control over these activities but will not relieve us of our responsibilities. For example, we remain responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol, legal and regulatory requirements and scientific standards. We and these third parties are required to comply with GCP, which are regulations and guidelines enforced by the FDA, the Competent Authorities of the Member States of the European Economic Area and comparable regulatory authorities, for all of our products in clinical development. Regulatory authorities enforce these GCPs through periodic inspections of trial sponsors, principal investigators and trial sites. If we or any of these third parties fail to comply with applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA, the EMA or comparable regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. We cannot assure you that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials comply with GCP regulations. In addition, our clinical trials must be conducted with products produced under cGMP regulations. Our failure to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process. We also are required to register ongoing clinical trials and post the results of completed clinical trials on a U.S. government-sponsored database, clinicaltrials.gov, within certain timeframes. Similar requirements are applicable outside the United States. Failure to comply can result in fines, adverse publicity and civil and criminal sanctions.

Furthermore, third parties on whom we rely may also have relationships with other entities, some of which may be our competitors. In addition, these third parties are not our employees, and except for remedies available to us under our agreements with such third parties, we cannot control whether or not they devote sufficient time and resources to our ongoing clinical, non-clinical and preclinical programs. If these third parties do not successfully satisfy their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our preclinical studies or clinical trials may be extended, delayed or terminated, and we may not be able to obtain, or may be delayed in obtaining, marketing approvals for our product candidates and will not be able to, or may be delayed in our efforts to, successfully commercialize our products. As a result, our results of operations and the commercial prospects for our products would be harmed, our costs could increase and our ability to generate revenue could be impaired.

Our reliance on third parties to manufacture our product candidates and any future products increases the risk that we will not have sufficient quantities of our product candidates or products or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.

We do not own or operate manufacturing facilities for the production of clinical or commercial supplies of the product candidates that we are developing or evaluating in our research program. We have limited personnel with experience in drug manufacturing and lack the resources and capabilities to manufacture any of our product candidates on a clinical or commercial scale. We currently rely on third parties for supply of our product candidates, and we outsource to third parties all manufacturing of our product candidates in preparation for our clinical trials.

In order to conduct clinical trials of our product candidates, we will need to have them manufactured in potentially large quantities. Our third-party manufacturers may be unable to meet this increased demand in a timely or cost-effective manner, or at all. In addition, as a consequence of the COVID-19 pandemic, our third-party manufacturers may experience delays or other interruptions with their manufacturing capabilities and may be unable to perform satisfactorily, or at all. In addition, quality issues may arise during scale-up activities and at any other time. For example, ongoing data on the stability of our products may shorten the expiry of our products and lead to clinical trial material supply shortages, and potentially clinical trial delays. If these third-party manufacturers are unable to successfully scale up the manufacture of our product candidates in sufficient quality and quantity, the development, testing and clinical trials of that product candidate may be delayed or infeasible, and regulatory approval or commercial launch of that product candidate may be delayed or not obtained, which could significantly harm our business.

59

Our use of third-party manufacturers increases the risk of delays in production or insufficient supplies of our product candidates as we transfer our manufacturing technology to these manufacturers and as they gain experience manufacturing our product candidates. For example, we recently entered into a leasing arrangement with a third-party manufacturer, Albany Molecular Research, Inc., or AMRI, for the manufacture of certain portions of our product candidates. Although we are closely involved with the design and construction of the cleanroom suites, we may still experience delays in construction of the cleanroom suites and the development services provided by AMRI. We have not yet experienced construction delays as a consequence of the ongoing COVID-19 pandemic, but we may encounter such delays in the future. Such delays could materially adversely affect our business.

Even after a third-party manufacturer has gained significant experience in manufacturing our product candidates or even if we believe we have succeeded in optimizing the manufacturing process, there can be no assurance that such manufacturer will produce sufficient quantities of our product candidates in a timely manner or continuously over time, or at all.

We do not currently have any agreements with third-party manufacturers for the long-term commercial supply of any of our product candidates. In the future, we may be unable to enter into such agreements with third-party manufacturers for commercial supplies of our product candidates, or may be unable to do so on acceptable terms. Even if we are able to establish and maintain arrangements with third-party manufacturers, reliance on third-party manufacturers entails risks, including:

• reliance on the third party for regulatory compliance and quality assurance;

• the possible breach of the manufacturing agreement by the third party;

• the possible misappropriation of our proprietary information, including our trade secrets and know-how; and

• the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us.

Third-party manufacturers may not be able to comply with cGMP requirements or similar regulatory requirements outside the United States. Our failure, or the failure of our third-party manufacturers, to comply with applicable requirements could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates or products, operating restrictions and/or criminal prosecutions, any of which could significantly and adversely affect supplies of our product candidates.

Our product candidates and any products that we may develop may compete with other product candidates and products for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP requirements, particularly for the development of mRNA-based therapeutics, and that might be capable of manufacturing for us.

If the third parties that we engage to supply any materials or manufacture product for our preclinical tests and clinical trials should cease to do so for any reason, we likely would experience delays in advancing these tests and trials while we identify and qualify replacement suppliers or manufacturers, and we may be unable to obtain replacement supplies on terms that are favorable to us. For example, we rely on one third-party supplier of the handheld nebulizer that patients in our clinical trials use to administer MRT5005. The failure of our supplier to provide sufficient quantities, acceptable quality and timely delivery of the nebulizer at an acceptable price, or an interruption in the delivery of goods from such supplier, could delay or otherwise adversely affect our clinical trials of MRT5005, and harm our business and prospects. The use of an alternative manufacturer of the nebulizer could involve significant delays and other costs and regulatory challenges, and may not be available to us on reasonable terms, if at all. In addition, if we are not able to obtain adequate supplies of our product candidates or the substances used to manufacture them, it will be more difficult for us to develop our product candidates and compete effectively.

Our current and anticipated future dependence upon others for the manufacture of our product candidates may adversely affect our future profit margins and our ability to develop product candidates and commercialize any products that receive marketing approval on a timely and competitive basis.

60

Risks Related to the Commercialization of our Product Candidates

If we are unable to establish sales, medical affairs and marketing capabilities or enter into agreements with third parties to market and sell our product candidates, we may be unable to generate any product revenue.

We do not currently have a sales and marketing organization and have never commercialized a product. To successfully commercialize any products that may result from our development programs, we will need to develop these capabilities, either on our own or with others. The establishment and development of our own commercial and medical science liaison teams or the engagement of a contract sales force will be expensive and time-consuming and could delay any product launch. Moreover, we cannot be certain that we will be able to successfully develop this capability. We have entered into a collaboration with Sanofi and may also seek to enter into future collaborations with other entities to utilize their established marketing and distribution capabilities, but we may be unable to enter into such agreements on favorable terms, if at all. If our collaborators do not commit sufficient resources to commercialize our products, or we are unable to develop the necessary capabilities on our own, we will be unable to generate sufficient product revenue to sustain our business. We compete with many well-funded and profitable pharmaceutical and biotechnology companies that currently have extensive and experienced medical affairs, marketing and sales operations to recruit, hire, train and retain marketing and sales personnel. We also face competition in our search for third parties to assist us with the sales and marketing efforts of our product candidates. Without an internal team or the support of a third party to perform marketing, sales and medical affairs functions, we may be unable to compete successfully against these more established companies.

Our efforts to educate the medical community and third-party payors about the benefits of our product candidates may require significant resources and may never be successful. If any of our product candidates are approved but fail to achieve market acceptance among physicians, patients, hospitals or third-party payors, we will not be able to generate significant revenue from such product, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

The hospital formulary approval and insurance coverage and reimbursement status of newly approved products, including vaccines, is uncertain. Failure to obtain or maintain adequate hospital formulary approval and/or insurance coverage and reimbursement for our products, if approved, could limit our ability to market those products and decrease our ability to generate product revenue.

We expect that hospital formulary approval and insurance coverage and reimbursement by government and other third-party payors of our products, including vaccines, if approved, will be essential for most patients to be able to access these treatments. Accordingly, sales of our product candidates, if approved, will depend substantially on the extent to which the costs of our product candidates will be paid by hospitals or will be reimbursed by government authorities, private health coverage insurers and other third-party payors. Hospital formulary approval and insurance coverage and reimbursement by other third-party payors may depend upon several factors, including the third-party payor’s determination that use of a product is:

• a covered benefit under the applicable health plan;

• safe, effective and medically necessary;

• appropriate for the specific patient population;

• cost-effective; and

• neither experimental nor investigational.

Obtaining hospital formulary approval and insurance coverage and reimbursement for a product from third-party payors is a time-consuming and costly process that will require us to provide to the hospitals and payors supporting scientific, clinical and cost-effectiveness data. We may not be able to provide data sufficient to gain acceptance with respect to hospital formulary approval and insurance coverage and reimbursement. If hospital formulary approval, insurance coverage and reimbursement are not available, or are available only at limited levels, we may not be able to successfully commercialize our product candidates.

There is significant uncertainty related to hospital formulary approval and insurance coverage and reimbursement of newly approved products. In the United States, third-party payors, including government payors such as the Medicare and Medicaid programs, play an important role in determining the extent to which new drugs and biologics will be covered and reimbursed. It is difficult to predict what third-party payors will decide with respect to the insurance coverage and reimbursement for our product candidates.

61

Outside the United States, international operations generally are subject to extensive government price controls and other market regulations, and increasing emphasis on cost-containment initiatives in the European Union, Canada and other countries may put pricing pressure on us. In many countries, the prices of medical products are subject to varying price control mechanisms as part of national health systems. In general, the prices of medicines and vaccines under such systems are substantially lower than in the United States. Other countries may use different methods to keep the cost of medical products artificially low. Foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for our product candidates. Accordingly, in markets outside the United States, the reimbursement for our products may be reduced compared with the United States and may be insufficient to generate commercially reasonable product revenue.

Moreover, hospitals and government and other third-party payors in the United States and abroad have increasingly taken measures to cap or reduce health care costs. For example, governmental and other third-party payors may attempt to limit both coverage and the level of reimbursement for new products approved and, as a result, they may not cover or provide adequate payment for our product candidates. We expect to experience pricing pressures in connection with the sale of any of our product candidates due to the trend toward reducing hospital costs, managed health care, the increasing influence of health maintenance organizations and additional legislative changes.

The commercial success of any of our product candidates will depend upon its degree of market acceptance by physicians, patients, hospitals, third-party payors and others in the medical community.

Even with the requisite approvals from the FDA in the United States, EMA in the European Union and other regulatory authorities internationally, the commercial success of our product candidates, if approved, will significantly depend on the acceptance of physicians, hospitals and health care payors of our product candidates as medically necessary, cost-effective and safe. Any product that we commercialize may not gain acceptance by physicians, hospitals, health care payors and others in the medical community. If these commercialized products do not achieve an adequate level of acceptance, we may not generate significant product revenue and may not become profitable. The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on several factors, including:

• the efficacy and safety of such product candidates as demonstrated in clinical trials;

• the potential and perceived advantages of our product candidates over other treatments;

• the cost-effectiveness of treatment relative to alternative treatments;

• the clinical indications for which the product candidate is approved by the FDA, the EMA or other regulatory body;

• the willingness of physicians to prescribe new therapies over the existing standard of care and future new therapies;

• the willingness of the target patient population to try new therapies;

• the prevalence and severity of any side effects;

• product labeling or product insert requirements of the FDA, EMA or other regulatory authorities, including any limitations or warnings contained in a product’s approved labeling, including any black box warning;

• relative convenience and ease of administration;

• our ability to educate the medical community and third-party payors about the benefit of our product candidates;

• the strength of marketing and distribution support;

• the timing of market introduction of competitive products;

• any restrictions on the use of our products together with other medications;

• publicity concerning our products or competing products and treatments; and

• sufficient third-party payor insurance coverage and adequate reimbursement.

62

Even if a potential product displays a favorable efficacy and safety profile in preclinical studies and clinical trials, market acceptance of the product will not be fully known until after we begin to commercialize the product.

If we obtain approval to commercialize our product candidates outside of the United States, a variety of risks associated with international operations could materially adversely affect our business.

We expect that we will be subject to additional risks in commercializing our product candidates outside the United States, including:

• different regulatory requirements for approval of drugs and biologics in foreign countries;

• reduced protection for intellectual property rights;

• unexpected changes in tariffs, trade barriers and regulatory requirements;

• economic weakness, including inflation, or political instability in foreign economies and markets;

• different pricing and reimbursement regimes;

• compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;

• foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country;

• workforce uncertainty in countries where labor unrest is more common than in the United States;

• production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and

• business interruptions resulting from geopolitical actions, including war and terrorism or natural disasters, including earthquakes, typhoons, floods and fires.

Risks Related to Our Business Operations

Unfavorable U.S. or global economic conditions could adversely affect our business, financial condition or results of operations.

Our results of operations could be adversely affected by general conditions in the U.S. and global economy and financial markets. A severe or prolonged economic downturn could result in a variety of risks to our business, including, weakened demand for our products, if any, and could adversely impact our ability to raise additional capital when needed on acceptable terms, if at all. A weak or declining economy could also strain our suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for any current or future approved products. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business. We expect that the COVID-19 pandemic will continue to disrupt the financial markets and may adversely impact economies worldwide as described above in “Risks Related to the COVID-19 Pandemic.”

Our future success depends on our ability to retain key employees, consultants and advisors and to attract, retain and motivate qualified personnel.

We are highly dependent on members of our executive team. The loss of the services of any of them may adversely impact the achievement of our objectives. Any of our executive officers could leave our employment at any time, as all of our employees are “at-will” employees.

63

Recruiting and retaining qualified employees, consultants and advisors for our business, including scientific and technical personnel, is also critical to our success. Competition for skilled personnel is intense and the turnover rate can be high. We may not be able to attract and retain personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies and academic institutions for skilled individuals. In addition, failure to succeed in preclinical studies, clinical trials or applications for marketing approval may make it more challenging to recruit and retain qualified personnel. The inability to recruit, or loss of services of certain executives, key employees, consultants or advisors, may impede the progress of our research, development and commercialization objectives and have a material adverse effect on our business, financial condition, results of operations and prospects.

If we are unable to manage expected growth in the scale and complexity of our operations, our performance may suffer.

If we are successful in executing our business strategy, we will need to expand our managerial, operational, financial and other systems and resources to manage our operations, continue our research and development activities and, in the longer term, build a commercial infrastructure to support commercialization of any of our product candidates that are approved for sale. Future growth would impose significant added responsibilities on members of management. It is likely that our management, finance, development personnel, systems and facilities currently in place may not be adequate to support this future growth. Our need to effectively manage our operations, growth and product candidates requires that we continue to develop more robust business processes and improve our systems and procedures in each of these areas and to attract and retain sufficient numbers of talented employees. We may be unable to successfully implement these tasks on a larger scale and, accordingly, may not achieve our research, development and growth goals.

Product liability lawsuits against us could cause us to incur substantial liabilities and could limit commercialization of any product candidates that we may develop.

We face an inherent risk of product liability exposure related to the testing of our product candidates in clinical trials and may face an even greater risk if we commercialize any products that we may develop. If we cannot successfully defend ourselves against claims that our product candidates caused injuries, we could incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:

• decreased demand for any product candidates that we may develop;

• loss of revenue;

• substantial monetary awards to trial participants or patients;

• significant time and costs to defend the related litigation;

• withdrawal of clinical trial participants;

• the inability to commercialize any product candidates that we may develop; and

• injury to our reputation and significant negative media attention.

Our insurance coverage may not be adequate to cover all liabilities that we may incur. We anticipate that we will need to increase our insurance coverage each time we commence a clinical trial and if we successfully commercialize any product candidate. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise.

64

Our internal computer systems, or those of any collaborators, contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product development programs.

Our internal computer systems and those of any collaborators, contractors or consultants are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. While we have not experienced any such material system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs and our business operations, whether due to a loss of our trade secrets or other proprietary information or other similar disruptions. For example, the loss of clinical trial data from completed or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability, our competitive position could be harmed and the further development and commercialization of our product candidates could be delayed. In addition, we may not have adequate insurance coverage to provide compensation for any losses associated with such events.

We could be subject to risks caused by misappropriation, misuse, leakage, falsification or intentional or accidental release or loss of information maintained in the information systems and networks of our company, including personal information of our employees. In addition, outside parties may attempt to penetrate our systems or those of our vendors or fraudulently induce our employees or employees of our vendors to disclose sensitive information to gain access to our data. Like other companies, we may experience threats to our data and systems, including malicious codes and viruses, and other cyber-attacks. The number and complexity of these threats continue to increase over time. If a material breach of our security or that of our vendors occurs, the market perception of the effectiveness of our security measures could be harmed, we could lose business and our reputation and credibility could be damaged. We could be required to expend significant amounts of money and other resources to repair or replace information systems or networks. Although we develop and maintain systems and controls designed to prevent these events from occurring, and we have a process to identify and mitigate threats, the development and maintenance of these systems, controls and processes is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated. Moreover, despite our efforts, the possibility of these events occurring cannot be eliminated entirely.

Our employees, principal investigators, consultants and commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading laws.

We are exposed to the risk of fraud or other misconduct by our employees, principal investigators, consultants and commercial partners. Misconduct by these parties could include failures to:

• comply with FDA regulations or the regulations applicable in the European Union and other jurisdictions;

• provide accurate information to the FDA, the EMA and other regulatory authorities;

• comply with health care fraud and abuse laws and regulations in the United States and abroad;

• comply with the U.S. Foreign Corrupt Practices Act, or FCPA, or other anti-corruption laws and regulations;

• comply with U.S. federal securities laws relating to trading in our common stock;

• report financial information or data accurately; or

• disclose unauthorized activities to us.

In particular, sales, marketing and business arrangements in the health care industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations regulate a wide range of pricing, discounting, marketing and promotional practices, as well as sales and customer incentive programs and other business arrangements. Other forms of misconduct could involve the improper use of information obtained in the course of clinical trials or interactions with the FDA, EMA or other regulatory authorities, which could result in regulatory sanctions and cause serious harm to our reputation. We have adopted a code of conduct and expect to implement other internal controls applicable to all of our employees, consultants and contractors, but it is not always possible to identify and deter third-party misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from government investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights, we may be subject to civil, criminal and/or administrative penalties, damages, fines, disgorgement, individual imprisonment, exclusion

65

from participation in government health care programs, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws and the curtailment or restructuring of our operations, any of which could have a significant impact on our business, financial condition, results of operations and prospects.

Risks Related to Our Intellectual Property

If we are unable to obtain and maintain patent protection for our products and technology, or if the scope of the patent protection obtained is not sufficiently broad or robust, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to successfully commercialize our products and technology may be adversely affected.

Our success depends, in large part, on our ability to obtain and maintain patent protection in the United States and other countries with respect to our product candidates and technology. We and our licensors have sought, and intend to seek, to protect our proprietary position by filing patent applications in the United States and abroad related to our product candidates and technology that are important to our business.

The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and has, in recent years, been the subject of much litigation. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Our pending and future patent applications may not result in patents that protect our technology or product candidates or that effectively prevent others from commercializing competitive technologies and product candidates being issued. Since patent applications in the United States and most other countries are confidential for a period of time after filing, and some remain so until issued, we cannot be certain that we or our licensors were the first to file a patent application relating to any particular aspect of a product candidate. Furthermore, if third parties have filed such patent applications on inventions claimed in our patent or patent application on or before March 15, 2013, an interference proceeding in the United States can be initiated by such third party to determine who was the first to invent any of the subject matter covered by the patent claims of our applications. If third parties have filed such applications after March 15, 2013, a derivation proceeding in the United States can be initiated by such third parties to determine whether our invention was derived from theirs.

The patent prosecution process is expensive, time-consuming and complex, and we may not be able to file, prosecute, maintain, enforce or license all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection.

Periodic maintenance fees, renewal fees, annuity fees and various other government fees on patents and/or applications will be due to be paid to the United States Patent and Trademark Office, or USPTO, and various government patent agencies outside of the United States over the lifetime of our licensed patents and/or applications and any patent rights we own or may own in the future. We rely, in part, on our outside counsel or our licensing partners to pay these fees due to the USPTO and to non-U.S. patent agencies. The USPTO and various non-U.S. government patent agencies require compliance with several procedural, documentary, fee payment and other similar provisions during the patent application process. We employ reputable law firms and other professionals to help us comply and we are also dependent on our licensors to take the necessary action to comply with these requirements with respect to our licensed intellectual property. In many cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules. There are situations, however, in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, potential competitors might be able to enter the market and this circumstance could have a material adverse effect on our business.

Filing, prosecuting and enforcing patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States could be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States. Consequently, we may not be able to prevent third parties from infringing our patents in all countries outside the United States, or from selling or importing products that infringe our patents in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our products and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Even if the patent applications we license or own do issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors or other third parties from competing with us or otherwise provide us with any competitive advantage. Our competitors or other third parties may be able to circumvent our patents by developing similar or alternative technologies or products in a non-infringing manner.

66

The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our patents may be challenged in the courts or patent offices in the United States and abroad. Such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated or held unenforceable, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and product candidates. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our intellectual property may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

Our product candidates may face competition from biosimilars approved through an abbreviated regulatory pathway.

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively the ACA, includes a subtitle called the Biologics Price Competition and Innovation Act of 2009, or BPCIA, which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-approved reference biological product. Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first approved by the FDA. In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first approved. During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full Biologics License Application, or BLA, for the competing 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 the other company’s product. The law is complex and is still being interpreted and implemented by the FDA. As a result, its ultimate impact, implementation, and meaning are subject to uncertainty.

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

Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates.

As is the case with other biotechnology and pharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biopharmaceutical industry involves both technological and legal complexity, and obtaining and enforcing biopharmaceutical patents is costly, time consuming and inherently uncertain. The U.S. Supreme Court has ruled on several patent cases in recent years, and these decisions have narrowed the scope of patent protection available in certain circumstances or weakened the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our and our licensors’ ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents once obtained. Depending on future decisions by the U.S. Congress, the federal courts and the USPTO, as well as similar bodies in foreign jurisdictions, the laws and regulations governing patents could change in unpredictable ways that may weaken our and our licensors’ ability to obtain new patents or to enforce existing patents and patents we and our licensors or any collaborators may obtain in the future.

Patent reform legislation enacted in the United States in 2011 could increase the uncertainties and costs surrounding the prosecution of our and our licensors’ patent applications and the enforcement or defense of our or our licensors’ issued patents. On September 16, 2011, the Leahy-Smith America Invents Act, or the Leahy-Smith Act, was signed into law. The Leahy-Smith Act includes a number of significant changes to U.S. patent law. These include provisions that affect the way patent applications are prosecuted, redefine prior art, may affect patent litigation and switch the U.S. patent system from a “first to invent” system to a “first inventor to file” system. The USPTO has developed new regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular the first inventor to file provisions, became effective on March 16, 2013. Accordingly, it is not clear what, if any, impact the Leahy-Smith Act will have on the operation of our business. However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our or our licensors’ patent applications and the enforcement or defense of our or our licensors’ issued patents, all of which could have a material adverse effect on our business and financial condition.

67

Our rights to develop and commercialize our product candidates are subject, in part, to the terms and conditions of licenses granted to us by others, and, if we fail to comply with our obligations under these arrangements, we could lose such intellectual property rights or owe damages to the licensor of such intellectual property.

We are a party to several intellectual property license agreements, including agreements with the Massachusetts Institute of Technology, or MIT, that are important to our business, and may need to obtain additional licenses from others to advance our research or allow commercialization of our product candidates. These and other licenses may not provide exclusive rights to use such intellectual property and technology in all relevant fields of use and in all territories in which we may wish to develop or commercialize our technology and product candidates in the future. It is possible that we may be unable to obtain additional licenses at a reasonable cost or on reasonable terms, if at all. As a result, we may not be able to prevent competitors from developing and commercializing competitive products in territories included in all of our licenses. In that event, we may be required to expend significant time and resources to redesign our product candidates or the methods for manufacturing them or to develop or license replacement technology, all of which may not be feasible on a technical or commercial basis. If we are unable to do so, we may be unable to develop or commercialize the affected product candidates, which could harm our business significantly.

Our existing license agreements impose, and we expect that future license agreements will impose, various diligence, development and commercialization timelines, milestone payments, royalties and other obligations on us. If we fail to comply with our obligations under these agreements, or we are subject to a bankruptcy, the licensor may have the right to terminate the license, in which event we would not be able to market products covered by the license.

For example, our license agreement with MIT imposes specified diligence, annual payment, milestone payment, royalty and other obligations on us. If we fail to comply with our obligations under the license agreement, MIT may have the right to terminate the license agreement, in which event we might not be able to market, and may be required to transfer to MIT our rights in, any product that is covered by the MIT agreement, including products that may be developed under our collaboration with Sanofi. Termination of the license agreement may also result in our having to negotiate a new or reinstated license with less favorable terms, which would have a material adverse impact on our business.

In our existing license agreements, and we expect in future agreements, patent prosecution of our licensed technology is in certain cases controlled solely by the licensor, and we are in certain cases required to reimburse the licensor for their costs of patent prosecution. If our licensors fail to obtain and maintain patent or other protection for the proprietary intellectual property we license from them, we could lose our rights to the intellectual property or our exclusivity with respect to those rights, and our competitors could market competing products covered by the intellectual property. Further, in each of our license agreements, we are responsible for bringing any actions against any third party for infringing the patents we have licensed. Certain of our license agreements also require us to meet development thresholds to maintain the license, including establishing a set timeline for developing and commercializing products and minimum yearly diligence obligations in developing and commercializing the product. Disputes may arise regarding intellectual property subject to a licensing agreement, including:

• the scope of rights granted under the license agreement and other interpretation-related issues;

• the extent to which our technology and processes infringe the intellectual property of the licensor that is not subject to the licensing agreement;

• the sublicensing of patent and other rights under any collaborative development relationships;

• our diligence obligations under the license agreement and what activities satisfy those diligence obligations;

• the inventorship or ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and

• the priority of invention of patented technology.

If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates.

In addition, the agreements under which we currently license intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

68

We may become involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time-consuming and unsuccessful.

Competitors may infringe our patents or the patents of our licensing partners, or we may be required to defend against claims of infringement. Countering infringement or unauthorized use claims or defending against claims of infringement can be expensive and time-consuming. Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities. We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources and more mature and developed intellectual property portfolios. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace.

In addition, many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property, particularly those relating to biotechnology products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we own, develop or license.

Issued patents covering our product candidates could be found invalid or unenforceable if challenged in court. We may not be able to protect our trade secrets in court.

If we or one of our licensing partners initiates legal proceedings against a third party to enforce a patent covering one of our product candidates, the defendant could counterclaim that the patent covering our product candidate is invalid or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, written description or non-enablement. In addition, patent validity challenges may, under certain circumstances, be based upon non-statutory obviousness-type double patenting, which, if successful, could result in a finding that the claims are invalid for obviousness-type double patenting or the loss of patent term, including a patent term adjustment granted by the USPTO, if a terminal disclaimer is filed to obviate a finding of obviousness-type double patenting. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld information material to patentability from the USPTO, or made a misleading statement, during prosecution. Third parties also may raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include re-examination, post grant review, inter partes review and equivalent proceedings in foreign jurisdictions. For example, as of August 3, 2020, six of our patents issued in Europe are under opposition, including two with claims of similar scope as U.S. Patent 10,143,758. Such proceedings could result in the revocation or cancellation of or amendment to our patents in such a way that they no longer cover our product candidates. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art of which the patent examiner and we or our licensing partners were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity or unenforceability, we could lose at least part, and perhaps all, of the patent protection on one or more of our product candidates. Such a loss of patent protection could have a material adverse impact on our business.

In addition to the protection afforded by patents, we rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable or that we elect not to patent, processes for which patents are difficult to enforce and any other elements of our product candidate discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents. However, trade secrets can be difficult to protect, and some courts inside and outside the United States are less willing or unwilling to protect trade secrets. We seek to protect our proprietary technology and processes, in part, by entering into confidentiality agreements with our employees, consultants, scientific advisors and contractors. We cannot

69

guarantee that we have entered into such agreements with each party that may have or have had access to our trade secrets or proprietary technology and processes. 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. While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors.

Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.

Our commercial success depends upon our ability and the ability of any collaborators to develop, manufacture, market and sell our product candidates and use our proprietary technologies without infringing the proprietary rights and intellectual property of third parties. We cannot provide any assurances that third-party patents do not exist which might be enforced against our current manufacturing methods, product candidates or future methods or products, resulting in either an injunction prohibiting our manufacture or sales, or, with respect to our sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties. The biotechnology and pharmaceutical industries are characterized by extensive and complex litigation regarding patents and other intellectual property rights. We may in the future become party to, or be threatened with, adversarial proceedings or litigation regarding intellectual property rights with respect to our product candidates and technology, including interference proceedings, post grant review and inter partes review before the USPTO. The risks of being involved in such litigation and proceedings may also increase as our product candidates approach commercialization and as we gain greater visibility as a public company. Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future, regardless of their merit. There is a risk that third parties may choose to engage in litigation with us to enforce or to otherwise assert their patent rights against us. Even if we believe such claims are without merit, a court of competent jurisdiction could hold that these third-party patents are valid, enforceable and infringed, which could materially and adversely affect our ability to commercialize any of our product candidates or technologies covered by the asserted third-party patents. In order to successfully challenge the validity of any such U.S. patent in federal court, we would need to overcome a presumption of validity. As this burden is a high one requiring us to present clear and convincing evidence as to the invalidity of any such U.S. patent claim, there is no assurance that a court of competent jurisdiction would invalidate the claims of any such U.S. patent.

If we are found to infringe a third party’s valid and enforceable intellectual property rights, we could be required to obtain a license from such third party to continue developing, manufacturing and marketing our product candidates and technology. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us, and it could require us to make substantial licensing and royalty payments. We could be forced, including by court order, to cease developing, manufacturing and commercializing the infringing technology or product candidates. In addition, we could be found liable for monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed a patent or other intellectual property right. A finding of infringement could prevent us from manufacturing and commercializing our product candidates or force us to cease some of our business operations, which could materially harm our business. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business, financial condition, results of operations and prospects.

Others may claim an ownership interest in our intellectual property and our product candidates, which could expose us to litigation and have a significant adverse effect on our prospects.

While we are presently unaware of any claims or material assertions by third parties with respect to our patents or other intellectual property, we cannot guarantee that a third party will not assert a claim or an interest in any of such patents or intellectual property. For example, a third party may claim an ownership interest in one or more of our, or our licensors’, patents or other proprietary or intellectual property rights. A third party could bring legal actions against us and seek monetary damages or enjoin clinical testing, manufacturing or marketing of the affected product candidate or product. If we become involved in any litigation, it could consume a substantial portion of our resources and cause a significant diversion of effort by our technical and management personnel. If any such action is successful, in addition to any potential liability for damages, we could be required to obtain a license to continue to manufacture or market the affected product candidate or product, in which case we could be required to pay substantial royalties or grant cross-licenses to patents. We cannot, however, assure you that any such license would be available on acceptable terms, if at all. Ultimately, we could be prevented from commercializing a product, or forced to cease some aspect of our business operations as a result of claims of patent infringement or violation of other intellectual property rights. Further, the outcome of intellectual property litigation is subject to uncertainties that cannot be adequately quantified in advance, including the demeanor and credibility of witnesses and the identity of any adverse party. This is especially true in intellectual property cases, which may turn on the testimony of experts as to technical facts upon which experts may reasonably disagree. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations or prospects.

70

If we are unable to protect the confidentiality of our proprietary information, the value of our technology and products could be adversely affected.

Trade secrets and know-how can be difficult to protect. To maintain the confidentiality of trade secrets and proprietary information, we enter into confidentiality agreements with our employees, consultants, collaborators and others upon the commencement of their relationships with us. These agreements require that all confidential information developed by the individual or made known to the individual by us during the course of the individual’s relationship with us be kept confidential and not disclosed to third parties. Our agreements with employees and our personnel policies also provide that any inventions conceived by the individual in the course of rendering services to us shall be our exclusive property. However, we may not obtain these agreements in all circumstances, and individuals with whom we have these agreements may not comply with their terms. Thus, despite such agreement, there can be no assurance that such inventions will not be assigned to third parties. In the event of unauthorized use or disclosure of our trade secrets or proprietary information, these agreements, even if obtained, may not provide meaningful protection, particularly for our trade secrets or other confidential information. To the extent that our employees, consultants or contractors use technology or know-how owned by third parties in their work for us, disputes may arise between us and those third parties as to the rights in related inventions. To the extent that an individual who is not obligated to assign rights in intellectual property to us is rightfully an inventor of intellectual property, we may need to obtain an assignment or a license to that intellectual property from that individual, or a third party or from that individual’s assignee. Such assignment or license may not be available on commercially reasonable terms or at all.

Adequate remedies may not exist in the event of unauthorized use or disclosure of our proprietary information. The disclosure of our trade secrets would impair our competitive position and may materially harm our business, financial condition and results of operations. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to maintain trade secret protection could adversely affect our competitive business position. In addition, others may independently discover or develop our trade secrets and proprietary information, and the existence of our own trade secrets affords no protection against such independent discovery. For example, a public presentation in the scientific or popular press on the properties of our product candidates could motivate a third party, despite any perceived difficulty, to assemble a team of scientists having backgrounds similar to those of our employees to attempt to independently reverse engineer or otherwise duplicate our antibody technologies to replicate our success.

We may be subject to claims asserting that our employees, consultants or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers or claims asserting ownership of what we regard as our own intellectual property.

Many of our employees, consultants or advisors are currently, or were previously, employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that our employees, consultants and advisors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that these individuals, or we, have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual’s current or former employer, or that patents and applications we have filed to protect inventions of these employees, even those related to one or more of our product candidates, are rightfully owned by their former or current employer. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.

In addition, while it is our policy to require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that we regard as our own. The assignment of intellectual property rights may not be self-executing or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property.

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

Any registered trademarks or trade names may be challenged, circumvented or declared generic or determined to be infringing on other marks. We may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition among potential partners or customers in our markets of interest. At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement claims brought by owners of other registered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names. Over the long term, if we are unable to

71

establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected. Our efforts to enforce or protect our proprietary rights related to trademarks, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could adversely impact our financial condition or results of operations.

Intellectual property rights do not necessarily address all potential threats.

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

• others may be able to make products that are similar to our product candidates but that are not covered by the claims of the patents that we own or license or may own in the future;

• we, or any partners or collaborators, might not have been the first to make the inventions covered by the issued patent or pending patent application that we license or may own in the future;

• we, or any partners or collaborators, might not have been the first to file patent applications covering certain of our or their inventions;

• others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our owned or licensed intellectual property rights;

• it is possible that our pending licensed patent applications or those that we may own in the future will not lead to issued patents;

• issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors;

• our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets;

• we may not develop additional proprietary technologies that are patentable;

• the patents of others may have an adverse effect on our business; and

• we may choose not to file a patent for certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.

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

Risks Related to Regulatory Approval and Other Legal Compliance Matters

The regulatory approval process of the FDA is lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed.

The time required to obtain approval by the FDA is unpredictable but typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities. In addition, approval policies, regulations or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions. We have not obtained regulatory approval for any product candidate and it is possible that none of our existing product candidates, or any product candidates we may seek to develop in the future, will ever obtain regulatory approval. Further, as set forth above in the risk factor captioned “We and Sanofi may not be successful in our joint efforts to successfully develop in an expedited timeframe an mRNA vaccine against SARS-CoV-2, the virus responsible for COVID-19,” substantial uncertainty and potential delay surrounds the use of emergency authorization processes to approve products, including vaccines, by the FDA and comparable regulatory authorities in other jurisdictions. The extent to which the FDA and other regulatory authorities rely on such emergency procedures is uncertain and subject to a number of different factors. As a result, even if the FDA and comparable regulatory authorities have indicated that they will rely on these emergency procedures to review our product candidates, including our vaccine candidates, approval of such products under these procedures may be substantially delayed and is not assured.

72

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

• the FDA may disagree with the design or implementation of our clinical trials;

• we may be unable to demonstrate to the satisfaction of the FDA that a product candidate is safe, pure and potent or effective for its proposed indication;

• results of clinical trials may not meet the level of statistical significance required by the FDA for approval;

• we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

• the FDA may disagree with our interpretation of data from preclinical studies or clinical trials;

• data collected from clinical trials of our product candidates may not be sufficient to support the submission of a BLA to the FDA or other submission or to obtain regulatory approval in the United States;

• the FDA may find deficiencies with or fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and

• the approval policies or regulations of the FDA may significantly change in a manner rendering our clinical data insufficient for approval.

This lengthy approval process as well as the unpredictability of future clinical trial results may result in our failing to obtain regulatory approval to market any of our product candidates, which would significantly harm our business, results of operations and prospects. We may also experience delays as a consequence of the COVID-19 pandemic. The FDA has substantial discretion in the approval process, and determining when or whether regulatory approval will be obtained for any of our product candidates. Even if we believe the data collected from clinical trials of our product candidates are promising, such data may not be sufficient to support approval by the FDA.

In addition, even if we were to obtain approval, regulatory authorities may approve any of our product candidates for fewer or more limited indications than we request, may not approve the price we intend to charge for our products, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate. Any of the foregoing scenarios could materially harm the commercial prospects for our product candidates.

Even if we complete the necessary preclinical studies and clinical trials, the marketing approval process is expensive, time-consuming and uncertain and may prevent us or any future collaborators from obtaining approvals for the commercialization of some or all of our product candidates. As a result, we cannot predict when or if, and in which territories, we, or any future collaborators, will obtain marketing approval to commercialize a product candidate.

The research, testing, manufacturing, labeling, approval, selling, marketing, promotion and distribution of drug products are subject to extensive regulation by the FDA, EMA and other regulatory authorities, and regulations may differ from country to country. We, and any future collaborators, are not permitted to market our product candidates in the United States or in other countries until we, or they, receive approval of a BLA from the FDA, approval of a marketing authorization application, or MAA, from the EMA, or marketing approval from other applicable regulatory authorities. Our product candidates are in various stages of development and are subject to the risks of failure inherent in drug development. We have not submitted an application for or received marketing approval for any of our product candidates in the United States, Europe or in any other jurisdiction. We have not yet been successful at conducting and managing the clinical trials necessary to obtain marketing approvals, including FDA approval of a BLA and EMA approval of an MAA.

The process of obtaining marketing approvals, both in the United States and abroad, is lengthy, expensive and uncertain. It may take many years, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the product candidates involved.

In addition, changes in marketing approval policies during the development period, changes in or the enactment or promulgation of additional statutes, regulations or guidance or changes in regulatory review for each submitted product application, may cause delays in the approval or rejection of an application. Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that our data are insufficient for approval and require additional preclinical, clinical or other studies. In addition, varying interpretations of the data obtained from preclinical studies and clinical trials could delay, limit or prevent marketing approval of a product candidate. Any marketing approval we, or any future collaborators, ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the approved product not commercially viable.

73

Any delay in obtaining or failure to obtain required approvals could materially adversely affect our ability or that of any future collaborators to generate revenue from the particular product candidate, which likely would result in significant harm to our financial position and adversely impact our stock price.

Failure to obtain marketing approval in foreign jurisdictions would prevent our product candidates from being marketed abroad and may limit our ability to generate revenue from product sales.

In order to market and sell our products in the European Union and many other jurisdictions, we, and any future collaborators, must obtain separate marketing approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and can involve additional testing. The time required to obtain approval may differ substantially from that required to obtain FDA approval. The marketing approval process outside the United States generally includes all of the risks associated with obtaining FDA approval. We, and any future collaborators, may not obtain approvals from regulatory authorities outside the United States on a timely basis, if at all. Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one regulatory authority outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA.

In many countries outside the United States, a product candidate must also be approved for reimbursement before it can be sold in that country. In some cases, the price that we intend to charge for our products, if approved, is also subject to approval. Obtaining non-U.S. regulatory approvals and compliance with non-U.S. regulatory requirements could result in significant delays, difficulties and costs for us and any future collaborators and could delay or prevent the introduction of our product candidates in certain countries. In addition, if we or any future collaborators fail to obtain the non-U.S. approvals required to market our product candidates outside the United States or if we or any future collaborators fail to comply with applicable non-U.S. regulatory requirements, our target market will be reduced and our ability to realize the full market potential of our product candidates will be harmed and our business, financial condition, results of operations and prospects may be adversely affected.

Additionally, on June 23, 2016, the electorate in the United Kingdom voted in favor of leaving the European Union, commonly referred to as Brexit. Following protracted negotiations, the United Kingdom left the EU on January 31, 2020. Under the withdrawal agreement, there is a transitional period until December 31, 2020 (extendable up to two years). Discussions between the United Kingdom and the EU have so far mainly focused on finalizing withdrawal issues and transition agreements but have been extremely difficult to date. To date, only an outline of a trade agreement has been reached. Much remains open but the Prime Minister has indicated that the United Kingdom will not seek to extend the transitional period beyond the end of 2020. If no trade agreement has been reached before the end of the transitional period, there may be significant market and economic disruption.

Since the regulatory framework for pharmaceutical products in the United Kingdom covering quality, safety, and efficacy of pharmaceutical products, clinical trials, marketing authorization, commercial sales, and distribution of pharmaceutical products is derived from EU directives and regulations, Brexit could materially impact the future regulatory regime that applies to products and the approval of product candidates in the United Kingdom. Any delay in obtaining, or an inability to obtain, any marketing approvals, as a result of Brexit or otherwise, may force us to restrict or delay efforts to seek regulatory approval in the United Kingdom and/or European Union for our product candidates, which could significantly and materially harm our business.

We, or any future collaborators, may not be able to obtain and maintain orphan drug exclusivity for our product candidates in the United States and Europe.

Regulatory authorities in some jurisdictions, including the United States and Europe, may designate drugs and biologics for relatively small patient populations as orphan drugs. Under the Orphan Drug Act, the FDA may designate a product as an orphan drug if it is a drug or biologic intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals annually in the United States. In November 2015, the FDA granted orphan drug designation to MRT5005 for the treatment of CF. We may seek orphan drug designations for MRT5005 for other indications or for other of our product candidates. There can be no assurances that we will be able to obtain such designations.

74

Even if we, or any future collaborators, obtain orphan drug designation for a product candidate as we have obtained for MRT5005 for the treatment of CF, we, or they, may not be able to obtain or maintain orphan drug exclusivity for that product candidate. Generally, if a product with an orphan drug designation subsequently receives the first marketing approval for the indication for which it has such designation, the product is entitled to a period of marketing exclusivity, which precludes the EMA or the FDA from approving another marketing application for the same product for that time period. The applicable period is seven years in the United States and 10 years in Europe. The European exclusivity period can be reduced to six years if a product no longer meets the criteria for orphan drug designation or if the product is sufficiently profitable so that market exclusivity is no longer justified. Orphan drug exclusivity may be lost if the FDA or EMA determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the product to meet the needs of patients with the rare disease or condition. Moreover, even after an orphan drug is approved, the FDA can subsequently approve a different product for the same condition if the FDA concludes that the later product is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care.

On August 3, 2017, Congress passed the FDA Reauthorization Act of 2017, or FDARA. FDARA, among other things, codified the FDA’s pre-existing regulatory interpretation, to require that a drug sponsor demonstrate the clinical superiority of an orphan drug that is otherwise the same as a previously approved drug for the same rare disease in order to receive orphan drug exclusivity. The new legislation reverses prior precedent holding that the Orphan Drug Act unambiguously requires that the FDA recognize the orphan exclusivity period regardless of a showing of clinical superiority. The FDA may further reevaluate the Orphan Drug Act and its regulations and policies. We do not know if, when, or how the FDA may change the orphan drug regulations and policies in the future, and it is uncertain how any changes might affect our business. Depending on what changes the FDA may make to its orphan drug regulations and policies, our business could be adversely impacted.

Although we have received fast track designation for MRT5005 for CF, such designation may not actually lead to a faster development or regulatory review or approval process. In addition, we may not receive such designation for other product candidates.

If a product is intended for the treatment of a serious or life-threatening condition and the product demonstrates the potential to address unmet needs for this condition, the treatment sponsor may apply for FDA fast track designation. We have received fast track designation for MRT5005 for CF. However, even though we received fast track designation, fast track designation does not ensure that we will receive marketing approval or that approval will be granted within any particular timeframe. We may not experience a faster development, regulatory review or approval process with fast track designation compared to conventional FDA procedures. Additionally, the FDA may withdraw fast track designation if it believes that the designation is no longer supported by data from our clinical development program. Fast track designation alone does not guarantee qualification for the FDA’s priority review procedures. In addition, if we seek fast track designation for other product candidates, we may not receive it from the FDA.

The FDA has granted a Rare Pediatric Disease Designation, or RPDD, for MRT5005 and we may seek the same designation for one or more of our other product candidates. However, a BLA for one or more of our product candidates may not meet the eligibility criteria for a priority review voucher upon approval nor does this designation mean that our product candidates, including MRT5005, will be subject to a faster development and regulatory review process.

With enactment of the Food and Drug Administration Safety and Innovation Act in 2012, Congress authorized the FDA to award priority review vouchers to sponsors of certain rare pediatric disease product applications that meet the criteria specified in the law. This provision is designed to encourage development of new drug and biological products for prevention and treatment of certain rare pediatric diseases. Specifically, under this program, a sponsor who receives an approval for a drug or biologic for a “rare pediatric disease” may qualify for a voucher that can be redeemed to receive a priority review of a subsequent marketing application for a different product. The sponsor of a rare pediatric disease drug product receiving a priority review voucher may transfer (including by sale) the voucher to another sponsor. The voucher may be further transferred any number of times before the voucher is used, as long as the sponsor making the transfer has not yet submitted the application.

For the purposes of this program, a “rare pediatric disease” is a (a) serious or life-threatening disease in which the serious or life-threatening manifestations primarily affect individuals aged from birth to 18 years, including age groups often called neonates, infants, children, and adolescents; and (b) rare disease or conditions within the meaning of the Orphan Drug Act. In March 2020, the FDA granted Rare Pediatric Designation for MRT5005 for the treatment of CF. The FDA may, however, determine that a BLA for this product candidate or our other product candidates do not meet the eligibility criteria for a priority review voucher upon approval. Moreover, even if one or more of our product candidates does satisfy those criteria, the product will need to be licensed before September 30, 2022, in order to be granted a rare disease priority review voucher.

75

A breakthrough therapy designation by the FDA for a product candidate may not lead to a faster development or regulatory review or approval process, and it would not increase the likelihood that the product candidate will receive marketing approval.

We may seek a breakthrough therapy designation for one or more product candidates. A breakthrough therapy is defined as a product candidate that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the product candidate may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For product candidates that have been designated as breakthrough therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. Product candidates designated as breakthrough therapies by the FDA are also eligible for priority review if supported by clinical data at the time of the submission of the BLA.

Designation as a breakthrough therapy is within the discretion of the FDA. Accordingly, even if we believe that one of our product candidates meets the criteria for designation as a breakthrough therapy, the FDA may disagree and instead determine not to make such designation. In any event, the receipt of a breakthrough therapy designation for a product candidate may not result in a faster development process, review or approval compared to product candidates considered for approval under conventional FDA procedures and it would not assure ultimate approval by the FDA. In addition, even if one or more of our product candidates qualify as breakthrough therapies, the FDA may later decide that the product candidate no longer meets the conditions for qualification or it may decide that the time period for FDA review or approval will not be shortened.

Even if we, or any future collaborators, obtain marketing approvals for our product candidates, the terms of approvals and ongoing regulation of our products may limit how we, or they, manufacture and market our products, which could materially impair our ability to generate revenue.

Once marketing approval has been granted, an approved product and its manufacturer and marketer are subject to ongoing review and extensive regulation. We, and any future collaborators, must therefore comply with requirements concerning advertising and promotion for any of our product candidates for which we or they obtain marketing approval. Promotional communications with respect to prescription drugs are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the product’s approved labeling. Thus, we, and any future collaborators, will not be able to promote any products we develop for indications or uses for which they are not approved.

In addition, manufacturers of approved products and those manufacturers’ facilities are required to comply with extensive FDA requirements, including ensuring that quality control and manufacturing procedures conform to cGMPs, which include requirements relating to quality control and quality assurance as well as the corresponding maintenance of records and documentation and reporting requirements. We, our third-party manufacturers, any future collaborators and their third-party manufacturers could be subject to periodic unannounced inspections by the FDA to monitor and ensure compliance with cGMPs.

Accordingly, assuming we, or any future collaborators, receive marketing approval for one or more of our product candidates, we, and any future collaborators, and our respective third-party manufacturers will continue to expend time, money and effort in all areas of regulatory compliance, including manufacturing, production, product surveillance and quality control.

If we, and any future collaborators, are not able to comply with post-approval regulatory requirements, we, and any future collaborators, could have the marketing approvals for our products withdrawn by regulatory authorities and our, or any future collaborators’, ability to market any future products could be limited, which could adversely affect our ability to achieve or sustain profitability. Further, the cost of compliance with post-approval regulations may have a negative effect on our operating results and financial condition.

Any of our product candidates for which we, or any future collaborators, obtain marketing approval in the future could be subject to post-marketing restrictions or withdrawal from the market and we, or any future collaborators, may be subject to substantial penalties if we, or they, fail to comply with regulatory requirements or if we, or they, experience unanticipated problems with our products following approval.

Any of our product candidates for which we, or any future collaborators, obtain marketing approval in the future, as well as the manufacturing processes, post-approval studies and measures, labeling, advertising and promotional activities for such product, among other things, will be subject to continual requirements of and review by the FDA, EMA and other regulatory authorities. These requirements include submissions of safety and other post-marketing information and reports, registration and listing requirements, requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, requirements regarding the distribution of samples to physicians and recordkeeping. Even if marketing approval of a product candidate is granted, the approval may be subject to limitations on the indicated uses for which the product may be marketed or to the conditions of approval, including the requirement to implement a REMS.

76

The FDA may also impose requirements for costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of a product. The FDA and other agencies, including the Department of Justice, closely regulate and monitor the post-approval marketing and promotion of products to ensure that they are manufactured, marketed and distributed only for the approved indications and in accordance with the provisions of the approved labeling. The FDA imposes stringent restrictions on manufacturers’ communications regarding off-label use and if we, or any future collaborators, do not market any of our product candidates for which we, or they, receive marketing approval for only their approved indications, we, or they, may be subject to warnings or enforcement action for off-label marketing. Violation of the Federal Food, Drug, and Cosmetic Act and other statutes, including the False Claims Act, relating to the promotion and advertising of prescription drugs may lead to investigations or allegations of violations of federal and state health care fraud and abuse laws and state consumer protection laws.

In addition, later discovery of previously unknown side effects or other problems with our products or their manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various results, including:

• restrictions on such products, manufacturers or manufacturing processes;

• restrictions on the labeling or marketing of a product;

• restrictions on product distribution or use;

• requirements to conduct post-marketing studies or clinical trials;

• warning letters or untitled letters;

• withdrawal of the products from the market;

• refusal to approve pending applications or supplements to approved applications that we submit;

• recall of products;

• restrictions on coverage by third-party payors;

• fines, restitution or disgorgement of profits or revenue;

• suspension or withdrawal of marketing approvals, including license revocation;

• refusal to permit the import or export of products;

• product seizure; and

• injunctions or the imposition of civil or criminal penalties.

Our relationships with health care providers, physicians and third-party payors will be subject to applicable anti-kickback, fraud and abuse and other health care laws and regulations, which could expose us to civil, criminal and administrative sanctions, contractual damages, reputational harm and diminished future profits and earnings.

Health care providers, physicians and third-party payors will play a primary role in the recommendation and prescription of any drugs for which we obtain marketing approval. Our future arrangements with third-party payors, health care providers and physicians may expose us to broadly applicable fraud and abuse and other health care laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute any drugs for which we obtain marketing approval. These include the following:

• Anti-Kickback Statute—the federal Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing any remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation or arranging of, any good, facility, item or service, for which payment may be made, in whole or in part, by a federal health care program, such as Medicare and Medicaid;

77

• False Claims Act—the federal civil and criminal false claims laws impose criminal and civil penalties, including, in some cases, through civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, false or fraudulent claims for payment by a federal health care program or knowingly making a false statement or record material to payment of a false claim or knowingly avoiding, decreasing or concealing an obligation to pay money to the federal government, with potential liability including mandatory treble damages and significant per-claim penalties;

• HIPAA—the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal statutes that prohibit, among other things, executing a scheme to defraud any health care benefit program or making false statements relating to health care matters, and apply regardless of the payor (e.g., public or private);

• HIPAA and HITECH—HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their implementing regulations, which impose obligations on HIPAA covered entities and their business associates, including mandatory contractual terms and required implementation of administrative, physical and technical safeguards to maintain the privacy and security of individually identifiable health information;

• Transparency Requirements—federal transparency laws, including the federal Physician Payments Sunshine Act, require applicable manufacturers of covered drugs to annually report payments and other transfers of value to physicians and teaching hospitals and ownership or investment interests held by physicians and their family members; and

• Analogous State and Foreign Laws—analogous state and foreign fraud and abuse laws and regulations, such as state anti-kickback and false claims laws, which may be broader than similar federal laws, can apply to claims involving health care items or services regardless of payor, and are enforced by many different federal and state agencies as well as through private actions.

Some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and require drug manufacturers to report information related to payments and other transfers of value to physicians and other health care providers or marketing expenditures. State and foreign laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not pre-empted by HIPAA, thus complicating compliance efforts.

Efforts to ensure that our business arrangements with third parties will comply with applicable health care laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other health care laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and/or administrative penalties, damages, fines, individual imprisonment, disgorgement, exclusion of drugs from government funded health care programs, such as Medicare and Medicaid, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws and the curtailment or restructuring of our operations. If any of the physicians or other health care providers or entities with whom we expect to do business is found to be not in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded health care programs.

The provision of benefits or advantages to physicians to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or use of medicinal products is also prohibited in the European Union. The provision of benefits or advantages to physicians is governed by the national anti-bribery laws of European Union Member States, such as the U.K. Bribery Act 2010, or the Bribery Act. Infringement of these laws could result in substantial fines and imprisonment.

Payments made to physicians in certain European Union Member States must be publicly disclosed. Moreover, agreements with physicians often must be the subject of prior notification and approval by the physician’s employer, his or her competent professional organization and/or the regulatory authorities of the individual European Union Member States. These requirements are provided in the national laws, industry codes or professional codes of conduct, applicable in the European Union Member States. Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment.

78

Compliance with global privacy and data security requirements could result in additional costs and liabilities to us or inhibit our ability to collect and process data globally, and the failure to comply with such requirements could subject us to significant fines and penalties, which may have a material adverse effect on our business, financial condition or results of operations.

The regulatory framework for the collection, use, safeguarding, sharing, transfer and other processing of information worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. Globally, virtually every jurisdiction in which we operate has established its own data security and privacy frameworks with which we must comply. For example, the collection, use, disclosure, transfer, or other processing of personal data regarding individuals in the European Union, including personal health data, is subject to the EU General Data Protection Regulation, or the GDPR, which took effect across all member states of the European Economic Area, or EEA, in May 2018. The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including requirements relating to processing health and other sensitive data, obtaining consent of the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third-party processors. The GDPR increases our obligations with respect to clinical trials conducted in the EEA by expanding the definition of personal data to include coded data and requiring changes to informed consent practices and more detailed notices for clinical trial subjects and investigators. In addition, the GDPR also imposes strict rules on the transfer of personal data to countries outside the European Union, including the United States, and, as a result, increases the scrutiny that clinical trial sites located in the EEA should apply to transfers of personal data from such sites to countries that are considered to lack an adequate level of data protection, such as the United States. The GDPR also permits data protection authorities to require destruction of improperly gathered or used personal information and or impose substantial fines for violations of the GDPR, which can be up to four percent of global revenues or 20 million Euros, whichever is greater and it also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR. In addition, the GDPR provides that European Union member states may make their own further laws and regulations limiting the processing of personal data, including genetic, biometric or health data.

Similar actions are either in place or under way in the United States. There are a broad variety of data protection laws that are applicable to our activities, and a wide range of enforcement agencies at both the state and federal levels that can review companies for privacy and data security concerns based on general consumer protection laws. The Federal Trade Commission and state Attorneys General all are aggressive in reviewing privacy and data security protections for consumers. New laws also are being considered at both the state and federal levels. For example, the California Consumer Privacy Act—which went into effect on January 1, 2020—is creating similar risks and obligations as those created by GDPR, though the Act does exempt certain information collected as part of a clinical trial subject to the Federal Policy for the Protection of Human Subjects (the Common Rule). Many other states are considering similar legislation. A broad range of legislative measures also have been introduced at the federal level. Accordingly, failure to comply with federal and state laws (both those currently in effect and future legislation) regarding privacy and security of personal information could expose us to fines and penalties under such laws. There also is the threat of consumer class actions related to these laws and the overall protection of personal data. Even if we are not determined to have violated these laws, government investigations into these issues typically require the expenditure of significant resources and generate negative publicity, which could harm our reputation and our business.

Given the breadth and depth of changes in data protection obligations, preparing for and complying with these requirements is rigorous and time intensive and requires significant resources and a review of our technologies, systems and practices, as well as those of any third-party collaborators, service providers, contractors or consultants that process or transfer personal data collected in the European Union. The GDPR and other changes in laws or regulations associated with the enhanced protection of certain types of sensitive data, such as healthcare data or other personal information from our clinical trials, could require us to change our business practices and put in place additional compliance mechanisms, may interrupt or delay our development, regulatory and commercialization activities and increase our cost of doing business, and could lead to government enforcement actions, private litigation and significant fines and penalties against us and could have a material adverse effect on our business, financial condition or results of operations.

79

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

In the United States and some foreign jurisdictions, there have been and continue to be a number of legislative and regulatory changes and proposed changes regarding the health care system that could, among other things, prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our ability, or the ability of any future collaborators, to profitably sell any products for which we, or they, obtain marketing approval. We expect that current laws, as well as other health care reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we, or any future collaborators, may receive for any approved products.

In March 2010, President Obama signed into law the ACA. Among the provisions of the ACA of importance to our business, including, without limitation, our ability to commercialize and the prices we may obtain for any of our product candidates, are the following:

• an annual, non-deductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic products;

• an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program;

• expansion of federal health care fraud and abuse laws, including the civil False Claims Act and the federal Anti-Kickback Statute, new government investigative powers and enhanced penalties for noncompliance;

• a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices;

• extension of manufacturers’ Medicaid rebate liability;

• expansion of eligibility criteria for Medicaid programs;

• expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;

• new requirements to report certain financial arrangements with physicians and teaching hospitals;

• a new requirement to annually report drug samples that manufacturers and distributors provide to physicians; and

• a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.

In addition, other legislative changes have been proposed and adopted since the ACA was enacted. These changes include the Budget Control Act of 2011, which, among other things, led to aggregate reductions to Medicare payments to providers of 2% per fiscal year starting in 2013 and that, due to subsequent legislative amendments to the statute, will stay in effect through 2029. The CARES Act suspended the 2% Medicare sequester from May 1, 2020 through December 31, 2020, and extended the sequester by one year, through 2030. The American Taxpayer Relief Act of 2012 reduced Medicare payments to several types of providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. These laws and any new health care reform measures may result in additional reductions in Medicare and other health care 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.

Since enactment of the ACA, there have been, and continue to be, 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 President Trump 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. Additionally, the 2020 federal spending package permanently eliminated, effective January 1, 2020, the ACA-mandated “Cadillac” tax on high-cost employer-sponsored health coverage and medical device tax and, effective January 1, 2021, also eliminates the health insurer tax. Further, the Bipartisan Budget Act of 2018, among other things, amended the ACA, effective January 1, 2019, to increase from 50 to 70 percent the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and to close the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole.” The Congress may consider other legislation to replace elements of the ACA during the next Congressional session.

80

We expect that these health care reforms, as well as other health care reform measures that may be adopted in the future, may result in additional reductions in Medicare, Medicaid and other health care funding, more rigorous coverage criteria, new payment methodologies and additional downward pressure on the price that we receive for any approved product and/or the level of reimbursement physicians receive for administering any approved product we might bring to market. Reductions in reimbursement levels may negatively impact the prices we receive or the frequency with which our products are prescribed or administered. Any reduction in reimbursement from Medicare, Medicaid or other government programs may result in a similar reduction in payments from private payors.

The Trump Administration has also taken executive actions to undermine or delay implementation of the ACA. Since January 2017, President Trump has signed two Executive Orders designed to delay the implementation of certain provisions of the ACA or otherwise circumvent some of the requirements for health insurance mandated by the ACA. One Executive Order directs federal agencies with authorities and responsibilities under the ACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices. The second Executive Order terminates the cost-sharing subsidies that reimburse insurers under the ACA. Several state Attorneys General filed suit to stop the Administration from terminating the subsidies, but their request for a restraining order was denied by a federal judge in California on October 25, 2017. In addition, CMS has recently proposed regulations that would give states greater flexibility in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the ACA for plans sold through such marketplaces. Further, on June 14, 2018, the U.S. Court of Appeals for the Federal Circuit ruled that the federal government was not required to pay more than $12 billion in ACA risk corridor payments to third-party payors who argued such payments were owed to them. On April 28, 2020, that decision was reversed by the U.S. Supreme Court.

In addition, on December 14, 2018, a U.S. District Court judge in the Northern District of Texas ruled that the individual mandate portion of the ACA is an essential and inseverable feature of the ACA, and therefore because the mandate was repealed as part of the Tax Cuts and Jobs Act, the remaining provisions of the ACA are invalid as well. The Trump administration and CMS have both stated that the ruling will have no immediate effect, and on December 30, 2018 the same judge issued an order staying the judgment pending appeal. The Trump Administration recently represented to the Court of Appeals considering this judgment that it does not oppose the lower court’s ruling. On July 10, 2019, the Court of Appeals for the Fifth Circuit heard oral argument in this case. On December 18, 2019, that court affirmed the lower court’s ruling that the individual mandate portion of the ACA is unconstitutional and it remanded the case to the district court for reconsideration of the severability question and additional analysis of the provisions of the ACA. On January 21, 2020, the U.S. Supreme Court declined to review this decision on an expedited basis. On March 3, 2020, the Court agreed to hear the case through its normal procedures. On June 25, 2020, the Trump Administration and a coalition of 18 states asked the court to strike down the entirety of the ACA. Litigation and legislation over the ACA are likely to continue, with unpredictable and uncertain results.

The cost of prescription pharmaceuticals has also been the subject of considerable discussion in the United States, and members of Congress and the Administration have stated that they will address such costs through new legislative and administrative measures. To date, there have been several recent U.S. Congressional inquiries and proposed and enacted 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, the Trump Administration’s budget proposals contain further drug price control measures that could be enacted during the budget process or in other future legislation, including, for example, measures to permit Medicare Part D plans to negotiate the price of certain drugs under Medicare Part B, to allow some states to negotiate drug prices under Medicaid, and to eliminate cost sharing for generic drugs for low-income patients. While any proposed measures will require authorization through additional legislation to become effective, Congress and the Trump Administration have each indicated that they will continue to seek new legislative and/or administrative measures to control drug costs. At the state level, legislatures are increasingly 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.

Specifically, there have been several recent U.S. Congressional inquiries and proposed federal and proposed and enacted state 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 they will continue to seek new legislative and/or administrative measures to control drug costs. For example, on May 11, 2018, the

81

Administration issued a plan to lower drug prices. Under this blueprint for action, the Administration indicated that the Department of Health and Human Services will: take steps to end the gaming of regulatory and patent processes by drug makers to unfairly protect monopolies; advance biosimilars and generics to boost price competition; evaluate the inclusion of prices in drug makers’ ads to enhance price competition; speed access to and lower the cost of new drugs by clarifying policies for sharing information between insurers and drug makers; avoid excessive pricing by relying more on value-based pricing by expanding outcome-based payments in Medicare and Medicaid; work to give Part D plan sponsors more negotiation power with drug makers; examine which Medicare Part B drugs could be negotiated for a lower price by Part D plans, and improving the design of the Part B Competitive Acquisition Program; update Medicare’s drug-pricing dashboard to increase transparency; prohibit Part D contracts that include “gag rules” that prevent pharmacists from informing patients when they could pay less out-of-pocket by not using insurance; and require that Part D plan members be provided with an annual statement of plan payments, out-of-pocket spending, and drug price increases. In addition, on December 23, 2019, the Trump Administration published a proposed rulemaking that, if finalized, would allow states or certain other non-federal government entities to submit importation program proposals to FDA for review and approval. Applicants would be required to demonstrate their importation plans pose no additional risk to public health and safety and will result in significant cost savings for consumers. At the same time, FDA issued draft guidance that would allow manufacturers to import their own FDA-approved drugs that are authorized for sale in other countries (multi-market approved products). Finally, the current presidential administration’s budget proposal for fiscal year 2021 includes a $135 billion allowance to support legislative proposals seeking to reduce drug prices, increase competition, lower out-of-pocket drug costs for patients, and increase patient access to lower-cost generic and biosimilar drugs.

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. We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.

Finally, legislative and regulatory proposals have also been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any, may be. In addition, increased scrutiny by the U.S. Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us and any future collaborators to more stringent product labeling and post-marketing testing and other requirements.

Governments outside of the United States tend to impose strict price controls, which may adversely affect our revenues from the sales of drugs and vaccines, if any.

In some countries, particularly the countries of the European Union, the pricing of prescription pharmaceuticals and vaccines is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a drug or vaccine. To obtain reimbursement or pricing approval in some countries, we, or our future collaborators, may be required to conduct a clinical trial that compares the cost-effectiveness of our drug or vaccine to other available therapies. If reimbursement of our drugs or vaccines is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be materially harmed.

We are subject to anti-corruption laws, as well as export control laws, customs laws, sanctions laws and other laws governing our operations. If we fail to comply with these laws, we could be subject to civil or criminal penalties, other remedial measures and legal expenses, which could adversely affect our business, results of operations and financial condition.

Our operations are subject to anti-corruption laws, including the FCPA, the Bribery Act, and other anti-corruption laws that apply in countries where we do business and may do business in the future. The FCPA, the Bribery Act, and these other laws generally prohibit us, our officers and our employees and intermediaries from bribing, being bribed or making other prohibited payments to government officials or other persons to obtain or retain business or gain some other business advantage. We may in the future operate in jurisdictions that pose a high risk of potential FCPA or Bribery Act violations, and we may participate in collaborations and relationships with third parties whose actions could potentially subject us to liability under the FCPA, the Bribery Act, or local anti-corruption laws. In addition, we cannot predict the nature, scope or effect of future regulatory requirements to which our international operations might be subject or the manner in which existing laws might be administered or interpreted.

82

We are also subject to other laws and regulations governing our international operations, including regulations administered by the governments of the United States, United Kingdom, and authorities in the European Union, including applicable export control regulations, economic sanctions on countries and persons, customs requirements and currency exchange regulations, which we collectively refer to as Trade Control Laws.

There is no assurance that we will be completely effective in ensuring our compliance with all applicable anti-corruption laws, including the FCPA, the Bribery Act, or other legal requirements, including Trade Control Laws. If we are not in compliance with the FCPA, the Bribery Act, and other anti-corruption laws or Trade Control Laws, we may be subject to criminal and civil penalties, disgorgement and other sanctions and remedial measures, and legal expenses, which could have an adverse impact on our business, financial condition, results of operations and liquidity. The SEC also may suspend or bar issuers from trading securities on U.S. exchanges for violations of the FCPA’s accounting provisions. Likewise, any investigation of any potential violations of the FCPA, the Bribery Act, other anti-corruption laws or Trade Control Laws by U.S., U.K. or other authorities could also have an adverse impact on our reputation, our business, results of operations and financial condition.

If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could significantly harm our business.

We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. From time to time and in the future, our operations may involve the use of hazardous and flammable materials, including chemicals and biological materials, and may also produce hazardous waste products. Although we contract with third parties for the disposal of these materials and waste products, we cannot completely eliminate the risk of contamination or injury resulting from these materials. In the event of contamination or injury resulting from the use or disposal of our hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations.

We maintain workers’ compensation insurance to cover costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials, but this insurance may not provide adequate coverage against potential liabilities. We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us. In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. Current or future environmental laws and regulations may impair our research, development or production efforts, which could adversely affect our business, financial condition, results of operations or prospects. In addition, failure to comply with these laws and regulations may result in substantial fines, penalties or other sanctions.

Inadequate funding for the FDA, the SEC and other government agencies could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes. Average review times at the agency have fluctuated in recent years as a result. In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. For example, over the last several years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical employees and stop critical activities. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

83

Risks Related to Ownership of Our Common Stock

Our executive officers, directors and principal stockholders maintain the ability to control all matters submitted to stockholders for approval.

We believe our executive officers, directors and stockholders which own more than 5% of our outstanding common stock, in the aggregate, beneficially own more than a majority of our capital stock. One of our directors is affiliated with a stockholder who beneficially owns more than 5% of our outstanding common stock. We also have one stockholder who holds approximately 25% of our outstanding common stock as of August 3, 2020. If these stockholders were to act together, they would be able to control all matters submitted to our stockholders for approval, as well as our management and business affairs. For example, these persons, if they act together, would control the election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets. This concentration of voting power could delay or prevent an acquisition of our company on terms that other stockholders may desire or result in management of our company that other stockholders disagree with.

A substantial number of shares of our common stock may be sold into the market in the near future, including pursuant to our Sales Agreement with Jefferies or our universal shelf registration statement, which could result in dilution to our stockholders and/or cause the market price of our common stock to drop significantly, even if our business is performing well.

Sales of a substantial number of shares of our common stock in the public market could occur at any time, subject to certain restrictions under U.S. securities laws. A significant number of our total outstanding shares are restricted from resale but may be sold into the market in the near future. Moreover, holders of a substantial number of shares of our common stock have rights, subject to certain conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.

In July 2020, we issued and sold 4,884,434 shares of common stock to the Investor in connection with the Second Sanofi Amendment. We are required to register these shares on a registration statement by August 19, 2020, covering the resale by the Investor of the common stock purchased in the private placement and, once effective, have agreed to keep the registration statement effective until the date the shares covered by the registration statement have been sold or can be sold without restriction pursuant to Rule 144 of the Securities Act of 1933, as amended, or the Securities Act. The Investor will not, and will cause its affiliates not to, sell or transfer the shares without our prior written approval, subject to specified conditions, for a period of 18 months after the closing. In May 2019, we completed a private placement of 5,582,940 shares of our common stock to several accredited institutional investors. We have filed a registration statement covering the resale by these investors of the shares of common stock purchased in the private placement, and have agreed to keep the registration statement effective until the date the shares covered by the registration statement have been sold or can be sold without restriction pursuant to Rule 144 of the Securities Act. Furthermore, we have registered an aggregate of 14,042,632 shares of our common stock on Form S-8 to be issued to our employees under certain employee benefit plans. Registered shares can be freely sold in the public market, subject only to volume limitations applicable to affiliates.

We currently have on file with the SEC a universal shelf registration statement which allows us to offer and sell an indeterminate amount of registered common stock, preferred stock, debt securities, warrants and/or units from time to time pursuant to one or more offerings at prices and terms to be determined at the time of sale. We are party to an Open Market Sale AgreementSM, or Sales Agreement, with Jefferies LLC, or Jefferies, pursuant to which, from time to time, we may offer and sell through Jefferies up to $100.0 million of common stock pursuant to one or more “at the market” offerings. Through June 30, 2020, pursuant to the Sales Agreement, we had issued and sold an aggregate of 2,863,163 shares of our common stock, for gross proceeds of $37.9 million, before deducting commissions of $1.1 million and other offering expenses of $0.2 million. In June 2020, we completed a public offering in which we issued and sold 5,681,819 shares of common stock and a stockholder sold 6,824,992 shares of common stock registered under our universal shelf registration statement. Sales of a substantial number of shares of our common stock, or the perception in the market that holders of a large number of shares intend to sell shares, could reduce the market price of our common stock.

Sales of substantial amounts of shares of our common stock or other securities by our stockholders, by Jefferies pursuant to the Sales Agreement, under our universal shelf registration statement or otherwise could also dilute our stockholders.

If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our stock, the price of our stock could decline.

The trading market for our common stock will rely, in part, on the research and reports that industry or financial analysts publish about us or our business. There can be no assurance that existing analysts will continue to cover us or that new analysts will begin to cover us. There is also no assurance that any covering analyst will provide favorable coverage. A lack of research coverage or adverse coverage may negatively impact the market price of our common stock. In addition, if one or more of the analysts covering our business downgrade their evaluations of our stock, the price of our stock could decline. If one or more of these analysts cease to cover our stock, we could lose visibility in the market for our stock, which in turn could cause our stock price to decline.

84

The price of our common stock is volatile and may fluctuate substantially, which could result in substantial losses for purchasers of our common stock.

Our stock price is volatile. The stock market in general, and the market for biopharmaceutical companies in particular, has experienced extreme volatility that has often been unrelated to the operating performance of particular companies. The market price for our common stock may be influenced by many factors, including:

• results of preclinical studies and clinical trials of our product candidates or those of our competitors;

• public announcements about the scientific community’s evolving understanding of the COVID-19 pandemic and the potential effectiveness of vaccines, treatments, public health measures and other approaches to addressing the disease;

• the success of competitive products or technologies;

• commencement or termination of collaborations;

• regulatory or legal developments in the United States and other countries;

• developments or disputes concerning patent applications, issued patents or other proprietary rights;

• the recruitment or departure of key personnel;

• the level of expenses related to any of our product candidates or clinical development programs;

• the results of our efforts to discover, develop, acquire or in-license additional product candidates;

• actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;

• variations in our financial results or those of companies that are perceived to be similar to us;

• changes in the structure of health care payment systems;

• market conditions in the pharmaceutical and biotechnology sectors;

• the entry into significant acquisitions, strategic partnerships or divestitures by us or our competitors;

• significant sales of our common stock, including sales by our directors, executive officers or 5% stockholders;

• general economic, industry and market conditions, such as the impact of the COVID-19 pandemic on our industry and market conditions; and

• the other factors described in this “Risk Factors” section.

If any of the foregoing matters were to occur, or if our operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially. In the past, following periods of volatility in the market price of a company’s securities, securities class-action litigation often has been instituted against that company. Such litigation, if instituted against us, could cause us to incur substantial costs to defend such claims and divert management’s attention and resources, which could seriously harm our business, financial condition, results of operations and prospects.

85

We will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives and requirements.

As a public company, and particularly after we are no longer an EGC, we will incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and rules subsequently implemented by the SEC and the Nasdaq Stock Market have imposed various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. In addition, as we will cease to be an EGC as of December 31, 2020, we will be required to comply with auditor attestation requirements, increase disclosure obligations and other reporting requirements which will likely increase our costs in the upcoming fiscal year. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance, which could make it more difficult for us to attract and retain qualified members of our board of directors.

If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, stockholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our common stock.

Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, is designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause us to fail to meet our reporting obligations. In addition, any testing by us, as and when required, conducted in connection with Section 404 of the Sarbanes-Oxley Act, or Section 404, or any subsequent testing by our independent registered public accounting firm, as and when required, may reveal deficiencies in our internal control over financial reporting that are deemed to be significant deficiencies or material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock.

Pursuant to Section 404, we are required to furnish a report by our management on our internal control over financial reporting, including an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. However, while we remain an EGC, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To achieve compliance with Section 404 within the prescribed period, we will be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, continue to engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our efforts, there is a risk that neither we nor our independent registered public accounting firm will be able to conclude within the prescribed timeframe that our internal control over financial reporting is effective as required by Section 404. This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

Provisions in our certificate of incorporation and bylaws and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.

Provisions in our certificate of incorporation and our bylaws may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. These provisions also could limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock. In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors. Among other things, these provisions:

• establish a classified board of directors such that not all members of the board are elected at one time;

• allow the authorized number of our directors to be changed only by resolution of our board of directors;

• limit the manner in which stockholders can remove directors from the board;

• establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our board of directors;

86

• require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent;

• limit who may call stockholder meetings;

• authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a stockholder rights plan, or so-called “poison pill,” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and

• require the approval of the holders of at least 75% of the votes that all our stockholders would be entitled to cast to amend or repeal certain provisions of our certificate of incorporation or bylaws.

Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.

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

Our certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a breach of fiduciary duty owed by our directors, officers, other employees or stockholders to us or our stockholders, any action asserting a claim against us arising pursuant to the Delaware General Corporation Law or as to which the Delaware General Corporation Law confers jurisdiction on the Court of Chancery of the State of Delaware, or any action asserting a claim arising pursuant to our certificate of incorporation or our bylaws or governed by the internal affairs doctrine. These choice of forum provisions will not apply to suits brought to enforce a duty or liability created by the Securities Act, the Exchange Act of 1934, as amended, or any other claim for which federal courts have exclusive jurisdiction. This provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, other employees or other stockholders, which may discourage such lawsuits against us and our directors, officers, other employees or other stockholders. Alternatively, if a court were to find this provision in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition.

Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain.

We have never declared or paid cash dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future, and investors seeking cash dividends should not purchase shares of our common stock.

87

Item 6. Exhibits.

Exhibit Number	Description
10.1*+	Second Amendment to the Collaboration and License Agreement, dated June 22, 2020, by and between Translate Bio MA, Inc. and Sanofi Pasteur Inc.
10.2*	Securities Purchase Agreement, dated June 22, 2020, by and between the Registrant and Sanofi, a French corporation.
10.3*	Registration Rights Agreement, dated July 20, 2020, by and between the Registrant and Sanofi, a French corporation.
10.4*+	Supply Agreement, dated June 22, 2020, by and between Translate Bio MA Inc. and Sanofi Pasteur Inc.
10.5*+	Third Amendment to Exclusive Patent License Agreement, dated June 12, 2020, between the Massachusetts Institute of Technology and Shire AG, dated as of November 1, 2013, as amended
31.1*	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	Inline XBRL Instance Document– the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101)

* Filed herewith.

** Furnished herewith.

+ Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.

88

SIGNATURES

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

	Translate Bio, Inc.
Date: August 6, 2020	By:	/s/ Ronald C. Renaud, Jr.
		Ronald C. Renaud, Jr.
		President and Chief Executive Officer
Date: August 6, 2020	By:	/s/ John R. Schroer
		John R. Schroer
		Chief Financial Officer and Treasurer

89

EX-10.1

Exhibit 10.1

Certain identified information has been marked in the exhibit because it is both (i) not material and

(ii) would likely cause competitive harm to the Company, if publicly disclosed.

Double asterisks denote omission.

SECOND AMENDMENT to the

COLLABORATION AND LICENSE AGREEMENT

This Second Amendment (the “Second Amendment”) to the Collaboration and License Agreement with an Execution Date of June 8^th, 2018, (the “Agreement”) as amended by the First Amendment dated March 24, 2020 (the “First Amendment”) is made by and between Translate Bio MA, Inc., with offices at 29 Hartwell Ave, Lexington, MA 02421, USA, a corporation registered under the laws of the State of Delaware (“Translate Bio” or “TB”) and Sanofi Pasteur Inc., a company incorporated under the laws of the state of Delaware, with offices at Discovery Drive, Swiftwater, PA 18370 USA (“Sanofi”). Capitalized terms used and not defined herein shall have the respective meanings ascribed to them in the Agreement or the First Amendment, as applicable.

WHEREAS: Sanofi and TB wish to expand the scope of their Collaboration and the scope of the licenses granted by TB to Sanofi subject to the terms of this Second Amendment.

NOW, THEREFORE, in consideration of the premises and the mutual promises set forth herein, and intending to be legally bound, the Parties agree as follows:

1. ARTICLE 1 DEFINITIONS of the Agreement, as amended by the First Amendment, is hereby amended as follows:

(a) Section 1.11 (Collaboration Budget) is hereby deleted and replaced in its entirety as follows:

““Collaboration Budget” means the budget prepared jointly by the Parties to reflect the costs of the Translate Bio Collaboration Activities set forth in the Collaboration Plan, which shall consist of (a) FTE Costs to be reimbursed by Sanofi in accordance with Section 7.1 (Collaboration Funding), (b) Out-Of-Pocket Costs, and (c) Manufacturing Costs of Translate Bio for the Translate Bio Collaboration Activities, which shall be funded by Sanofi in accordance with Section 7.1 (Collaboration Funding). Collaboration Budgets for each Licensed Field in which the Parties shall conduct the Collaboration, and for the Vaccine Platform Development, are attached hereto as Schedule 1.11 (Collaboration Budget).”

(b) Section 1.12 (Collaboration Plan) is hereby deleted and replaced in its entirety as follows:

““Collaboration Plan” means (a) with respect to Products in each Licensed Field, the plans for the execution of certain research, development, regulatory and manufacturing activities which the Parties have allocated between them with respect to such Products in such Licensed Field during the Collaboration Term as described in Parts 2 through 8 of Schedule 1.12, and also (b) with respect to activities directed to [**] for vaccines which activities are directed to Products in the Licensed Fields but not specific to Products in any particular Licensed Field and such other activities as described in Part 1 of Schedule 1.12 (“Vaccine Platform Development”), which plan provides for the execution of such activities which the Parties have allocated between them during the Collaboration Term. Collaboration Plans for each of the following Licensed Fields: Influenza, [**], SARS-CoV-2, [**] Licensed Fields and for the Vaccine Platform Development are attached hereto as Schedule 1.12 (Collaboration Plan). The Parties acknowledge that such Collaboration Plans may require minor adjustments based on agreement to the Collaboration Budgets for such Collaboration Plans. The Parties shall update the Collaboration Plans annually in accordance with Section 3.1.2.”

- 1 -

(c) Section 1.31 (FTE Rate) is hereby deleted and replaced in its entirety as follows:

““FTE Rate” means (a) for Collaboration Plans in respect of the Influenza, [**] Licensed Fields and the Vaccine Platform Development, for the period beginning on the Execution Date and ending December 31, 2020, a rate of [**] U.S. dollars ($[**]) per FTE, (b) for Collaboration Plans in respect of the Influenza, [**] Licensed Fields and the Vaccine Platform Development, for the period beginning on January 1, 2021 and ending when the Collaboration Term (or any extension thereof) is terminated or expires, a rate of [**] U.S. dollars ($[**]) per FTE, (c) for Collaboration Plans in respect of the [**] Licensed Fields, for the period beginning on the Second Closing and ending when the Collaboration Term (or any extension thereof) is terminated or expires, a rate of [**] U.S. dollars ($[**]) per FTE; (d) for the Collaboration Plan in respect of the SARS-CoV-2 Licensed Field, for the period beginning on the First Amendment Effective Date and ending December 31, 2020, a rate of [**] U.S. dollars ($[**]) per FTE, (e) for the Collaboration Plan in respect of the SARS-CoV-2 Licensed Field, for the period beginning on January 1, 2021 and ending when the Collaboration Term (or any extension thereof) is terminated or expires, a rate of [**] U.S. dollars ($[**]) per FTE, and (f) for any Collaboration Plan for any Licensed Field not listed in item (a) through (e) which Collaboration Activities do not commence unless and until, Sanofi (in its sole discretion) extends the Collaboration Term pursuant to Section 2.2.2, for the period beginning on July 1, 2022 and ending on June 30, 2023, a rate of [**] U.S. dollars ($[**]) per FTE, which rate specified in (a), (b) (c), (d) and (e) above is, in each case, inclusive of salaries, bonus, benefits and overhead; provided however that beginning on January 1, 2022, the above FTE rates in (b), (c), (e) and (f) above shall increase by the percentage increase in the Producer Price Index (PPI) for Pharmaceutical and Medicine Manufacturing (NAICS 325400) for the twelve (12) month period preceding each such January 1.”

(d) Section 1.49 (Licensed Field) is hereby deleted and replaced in its entirety as follows:

““Licensed Field” means [**].”

(e) Section 1.62 (MIT License) is hereby deleted and replaced in its entirety as follows:

““MIT License” shall mean the APPL License and the OF-02 License.”

(f) Sections 1.66 (Option), 1.67 (Option Exercise Fee), 1.68 (Optioned Field), 1.69 Option Notice and Section 1.70 (Option Term) are hereby deleted and each such Section shall be replaced with the word [Reserved].

(g) Section 1.71 (Out-Of-Pocket Costs) is hereby deleted and replaced in its entirety as follows:

““Out-Of-Pocket Costs” shall mean those costs and expenses, including applicable taxes, paid to Third Parties, such as Service Providers, but excluding Manufacturing Costs; provided however that beginning as of January 1, 2021, Translate Bio may charge a mark-up of [**] percent ([**]%) to such costs.”

(h) Section 1.80 (Pre-Existing Agreements) shall be deleted in its entirety and replaced as follows:

““Pre-Existing Agreements” mean the agreements executed by Translate Bio which are listed in Schedule 1.80 (Pre-Existing Agreements).”

- 2 -

(i) Section 1.99 (Success Criteria) shall be deleted in its entirety and replaced as follows:

“ “Success Criteria” means the technical criteria, mutually agreed to by the Parties and described in the Technology and Process Transfer Plan or the SARS-CoV-2 Technology and Process Transfer Plan, as applicable.”

(j) Section 1.108 (Third Party Obligations) shall be deleted in its entirety and replaced as follows:

““Third Party Obligations” means the royalty payments (including any earn out payments payable under the Shire Agreement) which Translate Bio or any of its Affiliates owes to any Third Party with respect to a Product in a Licensed Field, in any calendar quarter, arising from an obligation under any Pre-Existing Agreement and/or Future Agreement.”

(k) A new Section 1.120 (Acquired Patent) is hereby added to the Agreement as follows:

“Acquired Patent” has the meaning set forth in Section 17.23.”

(l) A new Section 1.121 (Additional Milestone) is hereby added to the Agreement as follows:

“Additional Milestone” has the meaning set forth in Section 7.4.6.”

(m) A new Section 1.122 (APPL License) is hereby added to the Agreement as follows:

““APPL License” shall mean that certain Exclusive Patent License Agreement relating to “Amino Acid, Peptide, Polypeptide-Lipids (APPL) Derivatives and Uses Thereof” made effective November 1, 2013 (regarding MIT Case No. [**]) made by and between the M.I.T. and Shire AG, as amended from time to time, which license was assigned by Shire AG to Translate Bio.”

(n) A new Section 1.123 (Collaboration Term Extension) is hereby added to the Agreement as follows:

““Collaboration Term Extension” has the meaning set forth in Section 2.2.2.”

(o) A new Section 1.124 ([**]) is hereby added to the Agreement as follows:

““[**]” means [**].”

(p) A new Section 1.125 (Major Markets) is hereby added to the Agreement as follows:

““Major Markets” means [**].”

(q) A new Section 1.126 (Negotiation Period) is hereby added to the Agreement as follows:

““Negotiation Period” has the meaning set forth in Section 17.23.”

- 3 -

(r) A new Section 1.127 (OF-02 License) is hereby added to the Agreement as follows:

““OF-02 License” shall mean that certain Exclusive Patent License Agreement relating to “Ionizable Lipid OF-02 and its use in mRNA Delivery” Agreement, made effective as of January 17, 2019 (regarding MIT Case No. [**]) made by and between M.I.T. and Translate Bio, as amended from time to time.”

(s) A new Section 1.128 (SARS-CoV-2 Quality Agreement) is hereby added to the Agreement as follows:

““SARS-CoV-2 Quality Agreement” has the meaning set forth in Section 4.4.3.”

(t) A new Section 1.129 (SARS-CoV-2 Sales Milestones) is hereby added to the Agreement as follows:

““SARS-CoV-2 Sales Milestones” has the meaning set forth in Section 7.4.4(b).”

(u) A new Section 1.130 (SARS-CoV-2 Supply Agreement) is hereby added to the Agreement as follows:

““SARS-CoV-2 Supply Agreement” has the meaning set forth in Section 4.4.3.”

(v) A new Section 1.131 (SARS-CoV-2 Technology and Process Transfer Plan) is hereby added to the Agreement as follows:

““SARS-CoV-2 Technology and Process Transfer Plan” has the meaning set forth in Section 4.10.1.”

(w) A new Section 1.132 (SARS-CoV-2 Technology and Process Transfer Memorandum) is hereby added to the Agreement as follows:

““SARS-CoV-2 Technology and Process Transfer Memorandum” has the meaning set forth in Section 4.10.4.”

(x) A new Section 1.133 (SARS-CoV-2 Technology and Process Transfer Commencement Fee) is hereby added to the Agreement as follows:

““SARS-CoV-2 Technology and Process Transfer Commencement Fee” has the meaning ascribed to it in Section 7.3.2.”

(y) A new Section 1.134 (Solicit) is hereby added to the Agreement as follows:

““Solicit” has the meaning ascribed to it in Section 17.24.”

2. Section 2.2 (Collaboration Term) of the Agreement, as amended by the First Amendment, is hereby deleted and replaced in its entirety as follows:

“2.2.1 The Collaboration will begin on the Closing Date and the Collaboration will expire on June 30, 2022 unless extended at Sanofi’s sole discretion in accordance with Section 2.2.2 or otherwise mutually agreed by the Parties in writing (the “Collaboration Term”). Sanofi shall have the right, on written notice to Translate Bio to terminate (a) the Collaboration with respect to all Collaboration Plans, if at any time Translate Bio is unable to perform its obligations under such Collaboration Plans for any

- 4 -

Licensed Field or the Vaccine Platform Development due to lack of appropriate personnel or facilities or a Change of Control, and (b) the Collaboration with respect to any specific Collaboration Plan, if at any time Translate Bio is unable to perform its obligations under such Collaboration Plan for any Licensed Field, or the Vaccine Platform Development, due to lack of appropriate personnel or facilities or a Change of Control; provided, however, in each case (a) or (b) that such termination shall be effective as of the date specified by Sanofi in such notice which date is at least [**] after such notice is received by Translate Bio. In the event that Sanofi provides such a notice to Translate Bio with respect to (a) all of the Collaboration Plans, the Collaboration Term shall end as of the effective date of such notice and Sanofi shall continue to pay for the FTE Costs, in accordance with the applicable Collaboration Budget, and any non-cancellable Out-of-Pocket Costs, for a period of [**] after such notice is received by Translate Bio, and (b) one or more, but not all of the Collaboration Plans, the Collaboration Term shall end only with respect to such terminated Collaboration Plan(s) as of the effective date of such notice and (1) the Parties shall reallocate FTEs from terminated Collaboration Plan(s) to non-terminated Collaboration Plan(s) maintaining the aggregate Collaboration Budget for all Collaboration Plans (whether such Collaboration Plans were terminated or not) until the end of the period covered by Collaboration Budgets; and (2) Sanofi shall continue to pay for the FTE Costs, in accordance with the applicable Collaboration Budget, and any non-cancellable Out-of-Pocket Costs, for a period of [**] after such notice is received by Translate Bio.

2.2.2 Sanofi may elect, in its sole discretion, to extend the Collaboration Term for one additional year, until June 30, 2023 (“Collaboration Term Extension”), by notifying Translate Bio of such election no later than December 31, 2021, which extended term may include additional Collaboration Plans for up to three (3) Pathogens not already the subject of Collaboration Plans, and the Collaboration Term Extension shall become effective upon payment of the Collaboration Term Extension Fee.”

3. Section 2.4.4 of the Agreement, as amended by the First Amendment, is hereby deleted and replaced in its entirety as follows:

“Subject to Section 2.4.5, Sanofi shall have final decision-making authority, and the tie-breaking vote at the JSC, following the escalation in accordance with Sections 2.4.2 and 2.4.3 during the Collaboration Term, with respect to [**]; provided however that Sanofi shall not have the right [**] under this Agreement, including regarding [**], each of which shall be decided on mutual consent of the Parties, such consent not to be unreasonably withheld by either Party.”

4. Section 2.7 (Reporting) of the Agreement, as amended by the First Amendment, is hereby deleted and replaced in its entirety as follows:

“2.7 Reporting. During the Collaboration Term (and any extension thereof), each Party will keep the applicable committee or team informed of progress and results of activities for which it is responsible or that it is permitted to conduct hereunder through its members on such committee or team at each regularly scheduled meeting thereof and as otherwise provided herein. Each Party shall disclose to the other Party, in a timely manner, the Collaboration Know-How in such Party’s power, possession or control, including as required to enable such other Party to perform its activities under any Collaboration Plan and to determine ownership of such Collaboration Know-How in accordance with this Agreement; provided however that Sanofi shall have no obligation to [**].

- 5 -

5. Section 3.2 (Collaboration Costs) of the Agreement, as amended by the First Amendment, is hereby deleted and replaced in its entirety as follows:

“3.2.1 Collaboration Budget. As of the Second Amendment Execution Date, the Parties have agreed to Collaboration Budgets for each of Influenza, [**] and SARS-CoV-2 Licensed Fields and for Vaccine Platform Development, each of which are included in Schedule 1.11 (Collaboration Budgets). Within [**] of the Second Closing, the Parties shall (a) update the Collaboration Budget for the SARS-CoV-2 Licensed Field and Vaccine Platform Development, and (b) shall agree to initial Collaboration Budgets for each of the [**] Licensed Fields, which updated or initial Collaboration Budgets (as the case may be), when agreed by the Parties, shall form part of Schedule 1.11 (Collaboration Budgets) and shall be incorporated by reference herein. In the event that Sanofi elects in its sole discretion to extend the Collaboration Term pursuant to Section 2.2.2, the Parties may agree to additional Collaboration Budgets for up to three (3) additional Pathogens. The Parties shall update the Collaboration Budgets at least annually in accordance with Section 3.1.2.

3.2.2 Collaboration Costs. The estimated costs for Translate Bio’s Collaboration Activities will be as set forth in the applicable Collaboration Budget; provided, however, that Sanofi shall be responsible for paying FTE Costs, Out-of-Pocket Costs and Manufacturing Costs up to [**] percent ([**]%) of such estimated costs set forth in the applicable Collaboration Budget with respect to the Translate Bio Collaboration Activities. Any variation in excess of [**] percent ([**]%) of the Collaboration Budget will require Sanofi’s express prior written consent. Notwithstanding the first sentence of this Section 3.2, in no event shall Sanofi pay to Translate Bio an amount that is less than the amount of the FTE Costs set forth in the aggregate of all Collaboration Budgets for all Collaboration Plans, unless Sanofi terminates all Collaboration Plans.”

6. Section 4.1.1 of the Agreement, as amended by the First Amendment, is hereby deleted and replaced in its entirety as follows:

“Unless otherwise agreed by the Parties in writing, Translate Bio shall be responsible for manufacturing and supplying non-clinical Products, related Materials (other than Licensed Materials provided under Section 3.9 or made by Sanofi as described in Section 3.9 or Section 6.4.2) and investigational Products, in each case, as required by and pursuant to the Collaboration Plan and Supply Agreement (as applicable):

(a) for each of the Influenza, [**] Licensed Fields, until the earlier of (1) the end of the first Phase 2 clinical trial for the first Product to Start a Phase 2 clinical trial on a Licensed Field-by-Licensed Field basis, or (2) [**] following execution of the Technology and Process Transfer Memorandum or Deemed Completion, as applicable, has occurred for each initial Licensed Field on a Licensed Field by Licensed Field basis; provided however that if [**] is combined with [**] into a Multi-Component Product, Translate Bio’s obligations in this paragraph (a) would include such Multi-Component Product but Translate Bio shall not have any obligation in respect of such a Multi-Component Product for any new order for Materials or Products after June 30, 2024; and

(b) for the SARS-CoV-2 Licensed Field, for non-clinical use and for all clinical trials required in such Licensed Field for orders placed no later than, the later of (i) the first Market Approval or (ii) June 30, 2025;

(c) for each of [**] Licensed Fields to the end of the first Phase I clinical trial for the first Product in such Licensed Field to Start a Phase I clinical trial; provided that Sanofi would not place any new orders for Materials or Products in the of [**] Licensed Fields after June 30, 2023.

- 6 -

(d) if the Collaboration Term is extended by Sanofi in its sole discretion in accordance with Section 2.2.2, for each of three (3) additional Licensed Fields (that is, such other Pathogens as Sanofi may select in its discretion), to the end of the first Phase I clinical trial for the first Product in such Licensed Field to Start Phase I; provided that Sanofi would not place any new orders for Materials or Products in such three (3) additional Licensed Fields after June 30, 2024.

Notwithstanding Section 4.7.8 (Deemed Completion), Translate Bio shall be responsible for manufacturing and supplying non-clinical Products, related Materials (other than Licensed Materials provided under Section 3.9 or made by Sanofi as described in Section 3.9 or Section 6.4.2) and investigational Products, in each case, as required by and pursuant to the Collaboration Plan and Supply Agreement (as applicable) for each of the [**] Licensed Fields referred to in paragraph (c) above during the period set forth in paragraph (c) and also, if Sanofi elects to exercise its Collaboration Term Extension, an additional three (3) Licensed Fields referred to in paragraph (d) above during the period set forth in paragraph (d) above, even if Sanofi is also manufacturing Products in such Licensed Fields.

The Parties will monitor Sanofi’s demand for investigational Products so that Translate Bio will be able to meet Sanofi’s requirements without interference with Translate Bio’s other programs, including advanced planning, reservation of suites and employee allocations.”

7. Section 4.4 (Supply and Quality Agreements) of the Agreement, as amended by the First Amendment, is hereby amended by adding a new subsection 4.4.3 (SARS-CoV-2 Commercial Supply Agreement) as follows:

“SARS-CoV-2 Commercial Supply Agreement. The Parties shall negotiate in good faith and execute a supply agreement (the “SARS-CoV-2 Commercial Supply Agreement”) and a related quality agreement (the “SARS-CoV-2 Quality Agreement”), each such agreement shall be consistent with industry standards, governing the terms of the supply of Phase III and commercial supply of Products in the SARS-CoV-2 Licensed Field by Translate Bio by no later than December 31, 2020. The terms of the SARS-CoV-2 Commercial Supply Agreement shall include a [**] percent mark-up to be added to Translate Bio’s Manufacturing Costs. Concurrent with the execution of the SARS-CoV-2 Supply Agreement, the Parties shall execute a separate Pharmacovigilance Agreement or amend any existing Pharmacovigilance Agreement as necessary with respect to the SARS-CoV-2 Licensed Field.”

8. Schedule 4.4 of the Agreement, as amended by the First Amendment, is hereby deleted.

9. Section 4.4.1 (Supply & Quality Materials) of the Agreement, as amended by the First Amendment, is hereby deleted and replaced in its entirety as follows:

“Supply & Quality Matters. Concurrent with the execution of the Second Amendment, the Parties will enter into a supply agreement (the “Supply Agreement”) and have entered into related quality agreements (the “Quality Agreements”) governing the terms of the supply of Products by Translate Bio.”

10. Section 4.7.1 of the Agreement, as amended by the First Amendment, is hereby deleted and replaced in its entirety as follows:

“4.7.1 Technology and Process Transfer Plan. As of the Second Amendment Execution Date, Translate Bio and Sanofi have established a plan for the transfer of Licensed Technology required for the development and manufacturing of Products in the Influenza virus, [**] Licensed Fields. Translate Bio shall use Commercially Reasonable Efforts to deliver to Sanofi the tangible items of the Licensed

- 7 -

Technology listed within Technology and Process Transfer Plan within the timeframes prescribed therein. The Technology and Process Transfer Plan, as amended by the mutual agreement by the Parties from time to time, is attached hereto as Schedule 4.7.1 (the “Technology and Process Transfer Plan”).”

11. Section 4.7.5 (Qualified Personnel) of the Agreement, as amended by the First Amendment, is hereby amended deleting that provision and replacing it as follows:

“Qualified Personnel. Each Party will make their respective suitably qualified and experienced employees available (whether, as reasonably necessary, by telephone, e-mail, in person or such other method as the Parties may find mutually convenient) to execute the Technology and Process Transfer in accordance with Technology and Process Transfer Plan. Translate Bio’s personnel that are transferring Licensed Technology under the Technology and Process Transfer Plan shall have actual knowledge of the Licensed Technology and Licensed Improvements, if any, they are transferring. The Technology and Process Transfer may include on-site training at Translate Bio’s facilities and also at Sanofi’s facilities as per the Technology and Process Transfer Plan.”

12. Section 4.9.5 (Escrow Period) of the Agreement, as amended by the First Amendment, is hereby amended deleting that provision and replacing it as follows:

““Escrow Period” means the period commencing [**] after the Closing Date and continuing until the earliest of (i) execution of the Technology and Process Transfer Memorandum, (ii) Deemed Completion or (iii) termination of this Agreement; provided however that, with respect to the SARS-CoV-2 Licensed Field, the Escrow Period shall mean the period commencing on the Second Closing and continuing until the earliest of (i) execution of the SARS-CoV-2 Technology and Process Transfer Memorandum, (ii) manufacture and release of a [**] batch of formulated drug substance for a Product in the Licensed Field of SARS-CoV-2 by Sanofi or a subcontractor of Sanofi, (iii) termination of this Agreement or (iv) termination of Sanofi’s license with respect to the SARS-CoV-2 Licensed Field.”

13. ARTICLE 4 MANUFACTURING of the Agreement, as amended by the First Amendment, is hereby amended by adding a new Section 4.10 (Technology Transfer: SARS-CoV-2) as follows:

“4.10.1. SARS-CoV-2 Technology and Process Transfer Plan. Translate Bio and Sanofi will establish a plan for the transfer of Licensed Technology required for the development and manufacturing of Products in the SARS-CoV-2 Licensed Field at [**] scale for each of the mRNA, LNP and formulated drug substance, consistent with Schedule 4.10.1 (the “SARS-CoV-2 Technology and Process Transfer Plan”). Translate Bio shall use Commercially Reasonable Efforts to deliver to Sanofi the tangible items of the Licensed Technology listed within the SARS-CoV-2 Technology and Process Transfer Plan within the timeframes prescribed therein. When such SARS-CoV-2 Technology and Process Transfer Plan is agreed by both Parties, it shall be incorporated herein by reference.”

4.10.2 Timing. The Parties will commence performance of activities described in the SARS-CoV-2 Technology and Process Transfer Plan upon the payment of the first milestone in accordance with Section 7.4.1(b); provided however that if such milestone is not then due and has not been paid, Sanofi may elect, in its discretion, to pay the SARS-CoV-2 Technology and Process Transfer Commencement Fee by delivering to Translate Bio notice of such election; further provided however that if the first milestone in accordance with Section 7.4.1(b) is achieved after Sanofi has paid the SARS-CoV-2 Technology and Process Transfer Commencement Fee, then the amount of such SARS-CoV-2 Technology and Process Transfer Commencement Fee shall be fully credited against such milestone payment.

- 8 -

4.10.3 Technology and Process Transfer Lead. The Parties shall each appoint a technology and process transfer lead to oversee and manage the technical transfer process in accordance with SARS-CoV-2 Technology and Process Transfer Plan.

4.10.4 Success Criteria/ SARS-CoV-2 Technology and Process Transfer Memorandum. Within [**] following successful completion of the SARS-CoV-2 Technology and Process Transfer Plan in accordance with the Success Criteria listed in the SARS-CoV-2 Technology and Process Transfer Plan, the Parties shall execute a SARS-CoV-2 Technology and Process Transfer Memorandum, a form of which SARS-CoV-2 Technology and Process Transfer memorandum is attached hereto as Schedule 4.10.4 (the “SARS-CoV-2 Technology and Process Transfer Memorandum”).

4.10.5 Qualified Personnel. Each Party will make their respective suitably qualified and experienced employees available (whether, as reasonably necessary, by telephone, e-mail, in person or such other method as the Parties may find mutually convenient) to execute the SARS-CoV-2 Technology and Process Transfer in accordance with SARS-CoV-2 Technology and Process Transfer Plan. Translate Bio’s personnel or its CMOs that are transferring SARS-CoV-2 Licensed Technology under the SARS-CoV-2 Technology and Process Transfer Plan shall have actual knowledge of the Licensed Technology and Licensed Improvements, if any, they are transferring. The SARS-CoV-2 Technology and Process Transfer may include on-site training at Translate Bio’s or its CMO’s facilities and also at Sanofi’s facilities as per the SARS-CoV-2 Technology and Process Transfer Plan. Translate Bio shall use commercially reasonable efforts to ensure that it has contracts in place with its CMOs necessary to complete any action in respect of the SARS-CoV-2 Technology and Process Transfer Plan that requires the cooperation or participation of such CMO so as to not delay the execution of such SARS-CoV-2 Technology and Process Transfer Plan.

4.10.6 Third Parties. In the event that Sanofi or Translate Bio need to retain any Third Party to assist with any aspect of executing the SARS-CoV-2 Technology and Process Transfer Plan, Sanofi or Translate Bio (as the case may be) shall execute an agreement with each such Third Party to protect the other Party’s Confidential Information the terms of which will be consistent with this Agreement.

4.10.7 Costs. Sanofi shall bear all costs and expenses associated with the execution of the SARS-CoV-2 Technology and Process Transfer Plan. A budget for the cost of executing the SARS-CoV-2 Technology and Process Transfer Plan shall be established by the Parties, and mutually agreed by the Parties as part of such plan. In the event that Sanofi and Translate Bio perform technology transfer by Sanofi observing Translate Bio’s CMO manufacturing of Product, and such Product will be supplied to Sanofi under this Agreement or a Supply Agreement, then Sanofi shall only pay the additional costs incurred by Translate Bio and such CMO for such technology transfer which are not otherwise already paid to Translate Bio pursuant to this Agreement or any Supply Agreement.

4.10.8 Technical Assistance. Upon execution of the SARS-CoV-2 Technology and Process Transfer Memorandum referred to in Section 4.10.4, and for a period of [**] thereafter, Translate Bio shall use Commercially Reasonable Efforts to provide reasonable assistance to Sanofi in connection with manufacturing of Products in the SARS-CoV-2 Licensed Field, at Sanofi’s expense, and upon Sanofi’s reasonable request.”

14. Subsection 6.1.1 of the Agreement, as amended by the First Amendment, is hereby deleted and replaced in its entirety as follows:

“Sanofi shall use Commercially Reasonable Efforts to (a) research, develop and seek Market Approval for Products indicated for up to [**] separate Licensed Fields in each Major Market, and (b) following Market Approval of a Product in a Licensed Field in a Major Market, to commercialize such Product in such Major Market.”

- 9 -

15. Subsection 6.3.5 of the Agreement, as amended by the First Amendment, is hereby deleted and replaced in its entirety as follows:

“Sanofi shall provide any report required by any Pre-Existing Agreement or Future Agreement, at the frequency and with the information required by such Pre-Existing Agreement or Future Agreement, at least [**] before Translate Bio is required to provide such report to the applicable counterparty to such agreement. Such reports include the reports referred to in Section 1.11(g) of the Shire Agreement and Section 5 of each license included in the definition of MIT License. In the event that any such report would include the same information as set forth in another report and at a similar timing set forth in this Section 6.3, the Parties may agree that the report set forth in the other provisions of this Section 6.3, but not in this Section 6.3.5, may be suspended in favor of the report set forth in this Section 6.3.5. Upon Translate Bio’s request, Sanofi shall provide any information in connection with such reports requested by Translate Bio, such as clarifications or additional information requested by the applicable counterparty to such agreement.”

16. The heading ARTICLE 7 COLLABORATION FUNDING, LICENSE AND OPTION ISSUE FEES, OPTION EXERCISE FEES, MILESTONES, ROYALTIES of the Agreement, as amended by the First Amendment, is hereby renamed, deleted and replaced as follows:

“ARTICLE 7 COLLABORATION FUNDING, OTHER FEES, LICENSE FEES, MILESTONES, ADDITIONAL MILESTONES, ROYALTIES”

17. Section 7.1 (Collaboration Funding) of the Agreement, as amended by the First Amendment, is hereby deleted and replaced in its entirety as follows:

“7.1.1 Collaboration Funding. In consideration of the performance by Translate Bio of the Translate Bio Collaboration Activities in the Collaboration, Sanofi shall pay Translate Bio the agreed sum set out in the Collaboration Budget for each of (a) FTE Costs, (b) Out-Of-Pocket Costs, and (c) Manufacturing Costs. Each of FTE Costs, Out-Of-Pocket Costs or Manufacturing Costs is a “Cost Category”, which shall be accounted for separately by Translate Bio and in no event shall Translate Bio include costs or expenses from one such Cost Category in another such Cost Category. In the event that the Collaboration Budget or Supply Agreement includes certain Out-of-Pocket Costs or Manufacturing Costs which Translate Bio is [**], Sanofi shall [**] the full amount of those Out-of-Pocket Costs and Manufacturing Costs to Translate Bio.

7.1.2 External Funding. The Parties shall discuss and coordinate efforts during the Collaboration Term (and any extension thereto) to seek and obtain funding which may be available from time to time to support the research, development, manufacture and commercialization of Products in the SARS-CoV-2 Licensed Field from Third Party organizations, including any governmental or non-governmental organization such as the United States Biomedical Advanced Research and Development Authority (BARDA) and the Coalition for Epidemic Preparedness Innovations (CEPI); provided however that no Party shall agree to accept any funding on behalf of the other Party without such Party’s express prior consent, and further provided that no Party shall be obligated to seek or accept the funding of any such Third Party. Any dispute under this Section 7.1.2 shall be resolved by referring the matter to the JSC.

- 10 -

18. Section 7.2 (License and Option Issue Fees) of the Agreement, as amended by the First Amendment, is hereby renamed, deleted and replaced in its entirety as follows:

“License Fees. As partial consideration of the license granted herein, Sanofi shall pay Translate Bio the agreed upfront fees in respect of the licenses granted herein with respect to the Licensed Technology, in two installments that are each non-refundable, non-creditable: a first payment of forty-five million dollars ($45,000,000) to be dated no earlier than the Closing, which payment Translate Bio acknowledges has been paid by Sanofi in full, and (b) a second payment of three hundred million dollars ($300,000,000) within ten (10) business days after receiving all of the following (i) Translate Bio’s invoice, (ii) Translate Bio’s wire transfer information required to process the payment and (iii) Translate Bio’s residency forms. Translate Bio’s invoice for the second payment referred to in item (b) above shall not be dated earlier than the Second Closing Date.”

19. Section 7.3 (Option Exercise Fees) of the Agreement, as amended by the First Amendment, is hereby deleted and replaced in its entirety with the following new provision entitled “Other Fees”:

“7.3.1 Collaboration Term Extension Fee. Sanofi shall pay Translate Bio a non-refundable, non-creditable fee of seventy-five million dollars ($75,000,000) (the “Collaboration Term Extension Fee”) within [**] after receiving all of the following (i) Translate Bio’s invoice, (ii) Translate Bio’s wire transfer information required to process the payment and (iii) Translate Bio’s residency forms; provided however that Translate Bio may not issue any invoice under this Section 7.3.1 (Collaboration Term Extension Fee) until Sanofi has delivered notice of its election to exercise the Collaboration Term Extension in accordance with Section 2.2.2.”

7.3.2 SARS-CoV-2 Technology and Process Transfer Commencement Fee. In the event that Sanofi delivers notice of its election to proceed with the execution of the SARS-CoV-2 Technology and Process Transfer Plan in accordance with Section 4.10.2, Sanofi shall pay Translate Bio a non-refundable, non-creditable (except as set forth in Section 4.10.2) fee of [**] dollars ($[**]) (the “SARS-CoV-2 Technology and Process Transfer Commencement Fee”) within [**] after receiving all of the following (i) Translate Bio’s invoice, (ii) Translate Bio’s wire transfer information required to process the payment and (iii) Translate Bio’s residency forms; provided however that Translate Bio may not issue any invoice under this Section 7.3.2 (SARS-CoV-2 Technology and Process Transfer Commencement Fee) until Translate Bio receives Sanofi’s notice in accordance with Section 4.10.2.”

20. Section 7.4.1 of the Agreement, as amended by the First Amendment, is hereby deleted and replaced with the following:

“7.4.1 Development and Regulatory Milestones.

(a) The following development and regulatory milestones shall be paid by Sanofi once per Licensed Field the first time such Milestone is achieved by a Product in such Licensed Field (other than the SARS-CoV-2 Licensed Field):

Milestone:	Milestone payment:
[**]	[**]
[**]	[**]

- 11 -

Milestone:	Milestone payment:
[**]	[**]
[**]	[**]
[**]	[**]

(b) The following development and regulatory milestones which demonstrate proof of concept of the Licensed Technology (which demonstration shall be the SARS-CoV-2 Licensed Field and no other Licensed Field), shall be paid by Sanofi one time only when such Milestone is first achieved by a Product:

Milestone:	Milestone payment:
[**]	[**]
[**]	[**]
[**]	[**]

21. Section 7.4.4 (Sales Milestones) of the Agreement, as amended by the First Amendment, is hereby deleted and replaced with the following:

“Sales Milestones.

(a) Sanofi will pay Translate Bio the following sales milestones on aggregate, annual, royalty-bearing Net Sales with respect to all Products in a Licensed Field (other than the SARS-CoV-2 Licensed Field), once per Licensed Field (the “Sales Milestones”):

When aggregate royalty-bearing annual Net Sales for all Products in a Licensed Field (other than the SARS-CoV-2 Licensed Field) first reach the following thresholds:	Sales Milestone payment:
(i) $[**] to less than $[**]	[**]
(ii) $[**] to less than $[**]	[**]
(iii) $[**] or more	[**]

No more than [**] Sales Milestones per the table above may be earned in any calendar year, and where [**] such Sales Milestones are earned in a single calendar year, Sanofi will pay [**] such Sales Milestone when achieved and may defer payment of [**] Sales Milestone for [**]. For example, if aggregate royalty-bearing annual Net Sales for all Products in a Licensed Field first reach $[**] or more, Sanofi shall pay Translate Bio the Sales Milestone in item [**] above plus [**] Sales Milestone, which [**] Sales Milestone shall be elected by Translate Bio by written notice to Sanofi following receipt of payment of the [**] Sales Milestone. The [**] Sales Milestone [**].

- 12 -

(b) Sanofi will pay Translate Bio the following sales milestones on aggregate, annual, royalty-bearing Net Sales with respect to all Products in the SARS-CoV-2 Licensed Field when the following thresholds (the “SARS-CoV-2 Sales Milestones”) are reached:

When aggregate royalty-bearing annual Net Sales for all Products in the SARS-CoV-2 Licensed Field first reach:	Sales Milestone payment:
(i) $[**]	[**]
(ii) $[**]	[**]

Each SARS-CoV-2 Sales Milestone would be payable one time only.”

22. Section 7.4 (Milestones) of the Agreement, as amended by the First Amendment, is hereby amended by adding a new subsection 7.4.6 (Additional Milestones) as follows:

“Additional Milestones. As partial consideration of the license rights granted herein, Sanofi agrees to pay Translate Bio the following amounts upon achievement of the milestones set forth below by Sanofi, its Affiliates or Sublicensees (or, to the extent anticipated in the applicable Collaboration Plan, by or on behalf of Translate Bio) (each an “Additional Milestone”) in accordance with Section 8.1, except as expressly provided for in this Section 7.4.6, each such Additional Milestone payment to be made one time only:

Additional Milestone:	Additional Milestone payment:
[**]	[**]
[**]	[**]
[**]	[**]
[**]	[**]

For the purpose of each of the Additional Milestones, “[**]” shall mean that [**].

In the event that [**] of the above Additional Milestone are achieved in a single calendar year, Sanofi would pay [**] such Additional Milestones in such calendar year, and [**] Additional Milestone payment will be payable [**].

- 13 -

Sanofi and Translate Bio shall each use Commercially Reasonable Efforts to achieve each of the Additional Milestones by no later than December 31, 2024.”

23. Section 7.5.2 (Third Party Royalty Reductions) of the Agreement, as amended by the First Amendment, is hereby deleted and replaced with the following:

“Third Party Royalty Reductions. Subject to Section 7.6, when Translate Bio’s royalty obligations to any Third Party under the Pre-Existing Agreements have expired, been terminated, or are reduced, the royalty Sanofi would pay Translate Bio pursuant to Section 7.5.1 would be reduced by [**] per cent ([**]%) of the amount that Translate Bio’s royalty to such Third Party is reduced. For example, if Translate Bio’s royalties payable under the Shire Agreement are reduced to [**]%, then Sanofi’s royalty under Section 7.5.1 would be reduced by [**]% in each applicable royalty tier. Notwithstanding the first sentence of this paragraph, in the event that during the Royalty Term, Translate Bio amends the Shire Agreement so as to reduce or revoke the earn-out provision of such agreement as part of an amendment to such agreement in exchange for consideration in any form (including without limitation, cash, equity, in-kind, exchange of rights or otherwise) as recorded in the audited financial statements of Translate Bio, Sanofi would pay to Translate Bio the royalty rates provided for in Section 7.5.1, except such royalty rates would be adjusted in accordance with this Section 7.5.2 with respect to (a) any then remaining royalty obligations under any Pre-Existing Agreements other than the Shire Agreement and (b) any remaining royalty obligations to Shire if the earn out provisions were reduced rather than revoked..”

24. Section 7.5 (Royalties and Royalty Reductions) of the Agreement, as amended by the First Amendment, is hereby amended by adding a new subsection 7.5.6 (Adjustments to Royalties in SARS-CoV-2 Licensed Field).

“Adjustments to Royalties in SARS-CoV-2 Licensed Field. In the SARS-CoV-2 Licensed Field, where Products are supplied as a donation or are otherwise transferred by Sanofi, its Affiliates and Sublicensees to a Third Party without any profit margin, the royalties payable to Translate Bio shall be adjusted so as to pay to Translate Bio only such royalties as would be owed by Translate Bio to any Third Party and Translate Bio hereby agrees to forego any additional royalties on such Products at no margin in the SARS-CoV-2 Licensed Field.”

25. The first paragraph of Section 8.1 (Payment Terms) of the Agreement, as amended by the First Amendment, is hereby deleted and replaced as follows:

“Payment terms. Except as provided for in Section 7.1 (Collaboration Funding), Section 7.2 (License Fees), Section 7.3 (Other Fees), Section 6.3.4, Section 7.4.5 (Special Payment Terms for Milestones under Shire Agreement) or Section 7.4.6 (Additional Milestones), all amounts payable by Sanofi hereunder shall be paid within [**] of the receipt of the invoice at the following mailing address:”

26. Section 8.7 (Pre-Existing Agreements) of the Agreement, as amended by the First Amendment, is hereby deleted in its entirety and replaced as follows:

“Pre-Existing Agreements. Prior to the Second Amendment Execution Date, Translate Bio disclosed to Sanofi the Pre-Existing Agreements listed on Schedule 1.80 (Pre-Existing Agreements). As between them, the Parties have agreed that all fees, milestones, royalties and other costs payable under such Pre-Existing Agreements shall be paid by Translate Bio and that Sanofi shall have no liability to any Third Party with respect to the payments due under such agreements, but shall, where applicable, comply with reporting and other obligations under such Pre-Existing Agreements.”

- 14 -

27. The last sentence of Section 9.1 (Exclusive Licenses Granted to Sanofi) of the Agreement, as amended by the First Amendment, is hereby deleted and replaced in its entirety as follows

“Any license under the rights granted to Translate Bio in accordance with each license included in the definition of MIT License shall be limited to the scope and purposes set forth in such MIT License.”

28. Section 9.2 (Option Rights Granted to Sanofi) of the Agreement, as amended by the First Amendment, is hereby deleted in its entirety and replaced with the word [Reserved].

29. Section 9.4 (Governmental Rights) of the Agreement, as amended by the First Amendment, is hereby deleted and replaced in its entirety as follows

“Governmental Rights. If a Product contains or is made utilizing Licensed Technology developed with resources provided by the United States Federal Government (such as the subject matter of each license included in the definition of MIT License), then the Parties shall comply with all applicable Laws relevant thereto (including the Bayh-Dole Act). Sanofi may request, where necessary, that Translate Bio request that the relevant owner of the Licensed Technology or Licensed Improvement, as the case may be, seek a waiver from the United States Federal Government to the requirement to manufacture a Product, in whole or in part, in the United States, and if necessary, Translate Bio and Sanofi shall cooperate, and provide reasonable assistance to the relevant owner, to seek such a waiver, at Sanofi’s expense.”

30. All references to “MIT License” in Sections 9.8.1 through 9.8.3 of the Agreement shall be replaced with “APPL License”. In the event that Sanofi deems it necessary or useful to further sublicense the OF-02 License, Translate Bio shall use Commercially Reasonable Efforts to amend the OF-02 License to allow for such sublicense pursuant to terms no more restrictive to Sanofi that the terms applicable under Section 9.8.1 with respect to the APPL License.

31. Section 9.9 (Affiliates) of the Agreement, as amended by the First Amendment, is hereby deleted and replaced as follows:

“Affiliates. The rights granted to Sanofi under Section 9.1 (Exclusive Licenses Granted to Sanofi) and 9.8 (Sub-Licenses) may all be practiced by its Affiliates, and the provisions of Section 17.1 (Affiliates) shall apply with respect thereto.”

32. Section 9.13 (Specific obligations re MIT License) of the Agreement, as amended by the First Amendment, is hereby deleted in its entirety and replaced as follows:

“Specific obligations re MIT License. With respect to each license included in the definition of MIT License, Sanofi agrees to comply with the provisions of Schedule 9.13 (Specific obligations re MIT License), unless Sanofi has terminated the rights it sub-licensed under such MIT License in accordance with Section 16.5 (Termination of Rights under MIT License).”

33. Section 9.14 (Waiver or Amendment of MIT License) of the Agreement, as amended by the First Amendment, is hereby deleted and replaced in its entirety as follows

“Waiver or Amendment of MIT License. In the event that a provision of any license included in the definition of MIT License may impose a material hardship on Sanofi and/or could create a material impediment to the commercialization of Products hereunder, Translate Bio shall, at Sanofi’s expense, use Commercially Reasonable Efforts to obtain a waiver from M.I.T. or execute an amendment to such MIT License to relieve Sanofi of such hardship as soon as practicable upon Sanofi’s reasonable request.”

- 15 -

34. Section 13.11.1 of the Agreement, as amended by the First Amendment, is hereby deleted and replaced in its entirety as follows

“During the Term of this Agreement, each Party agrees to (i) provide the other Party the opportunity to review any proposed abstracts, manuscripts or other form of public disclosure of scientific results under this Agreement, including any such public disclosure in the form of any poster, student thesis, slide, text of oral presentations, or text of any transmission through any electronic media, which relate to any Product in a Licensed Field (each, a “Publication”) at least [**] prior to their intended submission for publication and (ii) upon request, not to submit any such Publication until the other Party is given a reasonable period of time, not to exceed [**], to secure Patent protection for any material in such Publication which it believes to be patentable. Except as provided for in Section 13.6 (Authorized Disclosure) 13.9 (Confidential Treatment of Terms and Conditions) or 13.10 (Press Releases), no Party shall have the right to publish or present or otherwise disclose Confidential Information of the other Party without the prior written consent of such other Party, which consent may be withheld.”

35. Section 13.11 (Publications) of the Agreement, as amended by the First Amendment, is hereby amended by adding a new Section 13.11.5 as follows:

“Within [**] following the Second Closing Date, the Parties, through the JSC, shall agree to a plan regarding scientific publications arising from the Collaboration during the Collaboration Term and any Collaboration Term Extension. Translate Bio shall propose an initial draft of such plan within [**] of the Second Amendment Execution Date. The Parties may modify any publication plan, as mutually agreed by them, from time to time.”

36. Section 14.2 (Translate Bio’s Representations and Warranties) of the Agreement, as amended by the First Amendment, is hereby amended by deleting subsection (e) and replacing it as follows:

“no Licensed Patent is the subject of any pending interference, opposition, cancellation or patent protest, except, as of the Second Amendment Execution Date, those Licensed Patents listed on Schedule 14.2(e), which are, as of the Second Amendment Execution Date, the subject of opposition proceedings in the European Union.”

37. Section 14.2 (Translate Bio’s Representations and Warranties) of the Agreement, as amended by the First Amendment, is hereby amended by adding new subsections (t) and (u) as follows:

“(t) prior to the Second Amendment Execution Date, Translate Bio disclosed to Sanofi true, complete, and correct copies of the Pre-Existing Agreements, including all amendments and modifications thereto, and any material notices to the Pre-Existing Agreements and Translate Bio has the right to grant sublicenses to Sanofi and its Affiliates in accordance with the terms of the Pre-Existing Agreements; and

(u) all representations and warranties (a) through to (d) and (f) through to and including (s) are true as of the Second Amendment Execution Date;”

- 16 -

38. Section 15.2 (Indemnity by Sanofi) of the Agreement, as amended by the First Amendment, is hereby deleted and replaced in its entirety as follows

“Indemnity by Sanofi. Sanofi will defend, indemnify, and hold harmless Translate Bio, its Affiliates, and their respective directors, officers, employees, agents and representatives (collectively, “Translate Bio Indemnitees”), at Sanofi’s cost and expense, from and against any and all Losses arising out of any Third Party Claims brought against any Translate Bio Indemnitee to the extent such Losses result from: (a) the negligence or willful misconduct of Sanofi or its Affiliates (or any employees, agents or representatives of any of them) in performing Sanofi’s obligations or exercising Sanofi’s rights hereunder, (b) a breach by Sanofi of this Agreement, including a breach of Sanofi’s representations or warranties in Section 14.1 (Mutual Representations and Warranties), or any Ancillary Agreement, (c) the development, manufacture or commercialization of any Product in a Licensed Field by or on behalf of Sanofi, any of its Affiliates or its Sublicensees or (d) any claim arising from the alleged breach by Sanofi or by any of its Affiliates or its Sublicensees of its/their obligations under (i) any sub-license granted under any license included in the definition of MIT License or (ii) any Future Agreement except to the extent that such claim arises from the actions or omissions of Translate Bio or any of its Affiliates.”

39. Section 16.5 (Termination of Rights under MIT License) of the Agreement, as amended by the First Amendment, is hereby deleted in its entirety and replaced as follows:

“Termination of Rights under MIT License. Subject to the terms of each license included in the definition of MIT License, Sanofi will have the right to terminate this Agreement solely with respect to any rights sublicensed to it by Translate Bio under such MIT License on three (3) months’ prior written notice to Translate Bio. Sanofi shall remain liable for payment for all amounts due to Translate Bio arising from such sublicense until the effective date of such termination.”

40. A new Section 17.23 (Translate Bio Acquisition of Third Party) is hereby added to the Agreement, as amended by the First Amendment, as follows:

“Translate Bio Acquisition of Third Party. Notwithstanding anything to the contrary in this Agreement, in the event that Translate Bio acquires any Patent from a Third Party (an “Acquired Patent”), which Patent may be infringed by the manufacture, use, offer for sale, sale, or importation or other exploitation of a Product, Translate Bio shall provide Sanofi with notice of such Acquired Patent to enable Sanofi to determine if it wishes to obtain a license under such Acquired Patent to research, develop, make, have made, use, register, sell, have sold, offer for sale, import, have imported, have exported and export the applicable Product(s) in the Licensed Field in the Territory after having reasonable opportunity to conduct due diligence with respect thereto whether any of the foregoing activities would infringe a valid claim of such Acquired Patent, and in such event, Translate Bio shall first offer to Sanofi the opportunity to take a license under such Acquired Patent prior to offering such opportunities to any Third Party, the terms of which license agreement would be negotiated in good faith during the Negotiation Period. During the first [**] following the date of the notice of such Acquired Patent (the “Negotiation Period”), Translate Bio will not itself, or instruct any Third Party to, enforce such Acquired Patent against Sanofi, its Affiliates and Sublicensees.

41. A new Section 17.24 (Non-Solicitation) is hereby added to the Agreement, as amended by the First Amendment, as follows:

“Non-Solicitation. During the Collaboration Term and for [**] thereafter, neither Party nor any of its Affiliates, shall, without the prior consent of the other Party, solicit or recruit the employment or engagement as an independent contractor of (collectively, “Solicit”), any individual (a) who is an employee of such other Party or any of such other Party’s Affiliates and (b) who has been a member of the JSC or the JPT or an Alliance Manager. General recruiting activities, including placing a job listing with any journal, website, or any other publication or any recruitment firm, by a Party or any of its Affiliates shall not be deemed solicitation of any employee or independent contractor of the other Party or of any of its Affiliates.”

- 17 -

42. The following Schedules to the Agreement, as amended by the First Amendment, are hereby added (in the case of Schedules added to the Agreement in accordance with this Second Amendment) or are hereby deleted and replaced with the Schedules attached hereto (in the case of Schedules already included in the Agreement or the First Amendment and updated in accordance with this Second Amendment):

Schedule 1.11 (Collaboration Budget) for the following Licensed Fields: Influenza Virus[**], SARS-CoV-2, [**] and for the Vaccine Platform Development.

Schedule 1.12 (Collaboration Plan) for the following Licensed Fields: Influenza Virus, [**], SARS-CoV-2, [**] and for the Vaccine Platform Development.

Schedule 1.54 (Licensed Patents)

Schedule 1.89 (Sanofi Background Technology)

Schedule 2.5 (Responsibilities of the JSC)

Schedule 2.6 (Responsibilities of the JPT)

Schedule 4.7.1 (Technology and Process Transfer Plan)

Schedule 4.10.1 (SARS-CoV-2 Technology and Process Transfer Plan)

Schedule 4.10.4 (SARS-CoV-2 Form of Technology and Process Transfer Plan Memorandum)

Schedule 9.13 (Specification obligations re MIT License)

Schedule 14.2(e) (Licensed Patents which are the subject of opposition proceedings in the European Union.)

43. The following provisions of the First Amendment are hereby deleted and each replaced with the word [Reserved]: Section 6, Section 7, Section 12, and Section 13.

44. In accordance with Section 4.1(f)(iii) of the OF-02 License, Translate Bio shall elect to make Sanofi Pasteur Inc. a SUBLICENSEE (as that term is defined in the OF-02 License) under the OF-02 License by providing to M.I.T. written notice of such election, and by making payment of the required fee of [**] dollars ($[**]) to M.I.T. in accordance with the terms of the OF-02 License.

45. The Parties acknowledge that by the inclusion of the OF-02 License within the definition of the MIT License, it is the express intent of the Parties that the OF-02 License shall be treated in all respects under the Agreement as a Pre-Existing Agreement and not as a Future Agreement and the Agreement shall be interpreted in such a manner consistent with that intent.

- 18 -

46. This Second Amendment amends the Agreement (as amended by the First Amendment, except as provided herein) solely to the extent expressly provided herein as of the Second Amendment Execution Date. In all other respects, the Agreement (as amended by the First Amendment, except as provided herein) continues in full force and effect and is ratified in all respects. Any references in the Agreement to the “Agreement” will be deemed to mean the Agreement as amended by the First Amendment and this Second Amendment. The provisions of the Agreement apply to this Second Amendment except to the extent this Second Amendment amends any such provisions. If there is a conflict between the provisions of this Second Amendment and the Agreement (as amended by the First Amendment), the provisions of this Second Amendment control.

47. This Second Amendment has been executed on June 22, 2020 (the “Second Amendment Execution Date”).

48. This Second Amendment will become effective on the Second Closing Date.

49. The obligations of each Party to consummate the transactions contemplated by this Second Amendment will be subject to the fulfillment of each of the following conditions: (a) the filings of Translate Bio and Sanofi pursuant to the HSR Act will have been made and the applicable waiting period and any extensions thereof will have expired or been terminated without action to prevent the Parties from implementing the transactions contemplated by this Agreement with respect to the United States; and (b) no Governmental Authority will have enacted any applicable Laws which has the effect of making the transactions contemplated by this Agreement illegal, otherwise restraining or prohibiting consummation of such transaction or causing the transaction contemplated hereunder to be rescinded following completion thereof.

50. Within [**] after the Second Amendment Execution Date, both Parties shall file a copy of this Second Amendment and their respective premerger notification and report forms with DOJ and the FTC pursuant to the HSR Act.

51. The Parties shall use commercially reasonable efforts to promptly obtain clearance required under the HSR Act for the consummation of this Second Amendment and shall keep each other apprised of the status of any communications with, and any inquiries or requests for additional information from, the FTC and the DOJ and shall comply promptly with any such inquiry or request; provided, however, that neither Party shall be required to consent to the divestiture or other disposition of any of its assets or assets of its Affiliates or to consent to any other structural or conduct remedy, and each Party and its Affiliates shall have no obligation to contest, administratively or in court, any ruling, order or other action of the FTC or DOJ or any Third Party respecting the transactions contemplated by this Second Amendment. The Parties commit to instruct their respective counsel to facilitate and expedite the identification and resolution of any such issues and, consequently, the expiration of the applicable HSR Act waiting period. Each Party’s counsel will undertake (i) to keep each other appropriately informed of communications from and to personnel of the reviewing antitrust authority, and (ii) to confer with each other regarding appropriate contacts with and response to personnel of the FTC or DOJ.

52. The consummation of the transactions set forth in this Second Amendment (the “Second Closing”) shall take place at 10:00am Eastern Time at Boston, Massachusetts, US, on the third (3^rd) business day after all conditions of closing set forth in Section 49 of this Second Amendment have either been met or waived (other than conditions which by their nature are to be satisfied on the Second Closing Date), or at such other time date and place as the Parties may mutually agree on in writing. The date on which the Second Closing is to occur is referred to herein as the “Second Closing Date”.

- 19 -

53. Concurrent with the execution of this Second Amendment, Sanofi and Translate Bio will enter into a Securities Purchase Agreement.

54. This Second Amendment may be executed in counterparts with the same effect as if both Parties had signed the same document. All such counterparts will be deemed an original, will be construed together and will constitute one and the same instrument. This Second Amendment may be executed using Adobe Sign or other validated e-signature platform or other electronic means (such as in portable document format (PDF)) without affecting the validity thereof.

[signatures on next page]

- 20 -

IN WITNESS WHEREOF, the Parties have executed this Second Amendment to the Agreement effective as of the Second Amendment Execution Date.

Translate Bio MA, Inc.	Sanofi Pasteur Inc.
By: /s/ Ronald C. Renaud, Jr.	By: /s/ John Shiver
Name: Ronald C. Renaud, Jr	Name: John Shiver
Title: President and CEO	Title: Senior Vice President, Research & Development

- 21 -

EX-10.2

EXHIBIT 10.2

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of June 22, 2020, by and between Translate Bio, Inc., a Delaware corporation (the “Company”), and Sanofi, a French corporation (the “Investor”).

RECITALS

A. The Company and the Investor are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the provisions of Section 4(a)(2) of the 1933 Act (as defined below), and Rule 506 of Regulation D (“Regulation D”) as promulgated by the SEC (as defined below) under the 1933 Act;

B. The Investor wishes to purchase from the Company, and the Company wishes to sell and issue to the Investor, upon the terms and subject to the conditions stated in this Agreement, 4,884,434 shares (the “Shares”) of the Company’s Common Stock, par value $0.001 per share (the “Common Stock”);

C. Contemporaneously with the sale of the Shares, the parties hereto will execute and deliver a Registration Rights Agreement, in the form attached hereto as Exhibit A (the “Registration Rights Agreement”), pursuant to which the Company will agree to provide certain registration rights in respect of the Shares under the 1933 Act and applicable state securities laws; and

D. Contemporaneously with the execution of this Agreement, the Company and Sanofi Pasteur Inc., an affiliate of the Investor, will execute and deliver the Collaboration and License Agreement Amendment (as defined below).

In consideration of the mutual promises made herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Definitions. For the purposes of this Agreement, the following terms shall have the meanings set forth below:

“Affiliate” means, with respect to any Person, any other Person which directly or indirectly through one or more intermediaries Controls, is controlled by, or is under common Control with such Person.

“Agreement” has the meaning set forth in the first paragraph.

“Applicable Laws” has the meaning set forth in Section 4.30.

“Authorizations” has the meaning set forth in Section 4.30.

“beneficial owner,” “beneficially owns,” “beneficial ownership” and terms of similar import used in this Agreement shall, with respect to a Person, have the meaning set forth in Rule 13d-3 under the 1934 Act, assuming the full conversion into, and exercise and exchange for, shares of Common Stock of all Common Stock Equivalents beneficially owned by such Person; provided that, except for purposes of determining whether a Change of Control has occurred, a Person shall be deemed to have beneficial ownership of all shares that any such Person has the right to acquire, irrespective of whether such right may be exercised immediately or only after the passage of time.

“Business Day” means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of business.

“CFIUS” means the Committee on Foreign Investment in the United States, or any member agency thereof acting in such capacity.

“Change of Control” means, with respect to the Company, any of the following events: (a) any Third Party is or becomes the beneficial owner, directly or indirectly, of a majority of the total voting power represented by all Shares of Then Outstanding Common Stock; (b) the Company consolidates with or merges into any Third Party, or any Third Party consolidates with or merges into the Company, other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) a majority of the combined voting power of the voting securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, (ii) a merger or consolidation which would result in a majority of the board of directors of the combined entity being comprised of members of the board of directors of the pre-transaction Company and the chief executive officer of the combined entity being the chief executive officer of the pre-transaction Company, in each case immediately following the consummation of such merger or consolidation, or (iii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Third Party becomes the beneficial owner, directly or indirectly, of a majority of the total voting power of all Shares of Then Outstanding Common Stock or (c) the Company conveys, transfers, exclusively licenses or leases all or substantially all of its assets to any Third Party other than a wholly owned Affiliate of the Company.

“Closing” has the meaning set forth in Section 3.1.

“Closing Date” has the meaning set forth in Section 3.1.

“Collaboration and License Agreement” means the Collaboration and License Agreement, dated as of June 8, 2018, between Sanofi Pasteur Inc. and the Company, as amended with respect to the SARS-CoV-2 Licensed Field on March 24, 2020 and further amended by the Collaboration and License Agreement Amendment.

“Collaboration and License Agreement Amendment” means the Collaboration and License Agreement Amendment dated as of the date hereof, by and between Sanofi Pasteur Inc. and the Company.

“Collaboration Term” has the meaning set forth in the Collaboration and License Agreement.

“Common Stock” has the meaning set forth in the recitals to this Agreement.

“Common Stock Equivalents” means any securities of the Company which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

“Company” has the meaning set forth in the first paragraph.

“Company’s Knowledge” means the actual knowledge of the executive officers (as defined in Rule 405 under the 1933 Act) of the Company.

“Control” (including the terms “controlling,” “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“Disposition” or “Dispose of” means any (a) pledge, sale, contract to sell, sale of any option or contract to purchase, purchase of any option or contract to sell, grant of any option, right or warrant for the sale of, or other disposition of or transfer of any shares of Common Stock, or any Common Stock Equivalents, including, without limitation, any “short sale” or similar arrangement, or (b) swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of shares of Common Stock, whether any such swap or transaction is to be settled by delivery of securities, in cash or otherwise.

- 2 -

“DOJ” means the U.S. Department of Justice.

“DPA” means Section 721 of the Defense Production Act of 1950, as amended (50 U.S.C. § 4565), and all rules and regulations thereunder, including as codified at 31 C.F.R. Part 800 et seq.

“EDGAR system” has the meaning set forth in Section 4.9.

“Effective Date” has the meaning set forth in Section 7.5(b).

“Environmental Laws” has the meaning set forth in Section 4.15.

“FDA” has the meaning set forth in Section 4.31.

“FTC” means the U.S. Federal Trade Commission.

“GAAP” has the meaning set forth in Section 4.17.

“Governmental Authority” means any court, agency, authority, department, regulatory body or other instrumentality of any government or country or of any national, federal, state, provincial, regional, county, city or other political subdivision of any such government or country or any supranational organization of which any such country is a member.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder

“HSR Clearance” means the applicable waiting period and any extensions of the HSR Act has expired or been terminated without action to prevent the parties hereto from implementing the transactions contemplated by this Agreement and the Collaboration and License Agreement Amendment.

“Intellectual Property” has the meaning set forth in Section 4.14.

“Investor” has the meaning set forth in the first paragraph.

“Investor Questionnaire” has the meaning set forth in Section 5.8.

“Law” means all laws, statutes, rules, regulations, orders, judgments, injunctions and/or ordinances of any Governmental Authority.

“Lock-Up Securities” shall have the meaning set forth in Section 8.2(a).

“Lock-Up Term” shall mean the period from and after the date of this Agreement until the date that is 18 months after the Closing Date.

“Losses” has the meaning set forth in Section 9.2.

“Material Adverse Effect” means a material adverse effect on (a) the assets, liabilities, results of operations, financial condition or business of the Company and its subsidiaries taken as a whole, (b) the legality or enforceability of any of the Transaction Documents or (c) the ability of the Company to perform its obligations under the Transaction Documents, except that for purposes of Section 6.1(h) of this Agreement, in no event shall a change in the market price of the Common Stock alone constitute a “Material Adverse Effect.”

- 3 -

“Material Contract” means any contract, instrument or other agreement to which the Company is a party or by which it is bound that has been filed or was required to have been filed as an exhibit to the SEC Filings pursuant to Item 601(b)(4) or Item 601(b)(10) of Regulation S-K.

“Nasdaq” means the Nasdaq Global Select Market.

“Permitted Transferee” means (a) a controlled Affiliate of the Investor that is wholly owned, directly or indirectly, by the Investor, or (b) a controlling Affiliate of the Investor (or any controlled Affiliate of such controlling Affiliate) that wholly owns, directly or indirectly, the Investor, or the acquiring Person in the case of an acquisition of the Investor; it being understood that for purposes of this definition “wholly owned” shall mean an Affiliate in which the Investor owns, or an Affiliate that owns, as applicable, directly or indirectly, at least ninety-nine percent (99%) of the outstanding capital stock of such Affiliate or the Investor, as applicable.

“Person” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein, as well as any syndicate or group that would be deemed to be a Person under Section 13(d)(3) of the 1934 Act.

“Principal Trading Market” means the Trading Market on which the Common Stock is primarily listed on and quoted for trading, which, as of the date of this Agreement and the Closing Date, shall be the Nasdaq Global Select Market.

“Registration Rights Agreement” has the meaning set forth in the recitals to this Agreement.

“Regulation D” has the meaning set forth in the recitals to this Agreement.

“Regulatory Authorities” has the meaning set forth in Section 4.31.

“SEC” means the U.S. Securities and Exchange Commission.

“SEC Filings” has the meaning set forth in Section 4.8.

“Shares” has the meaning set forth in the recitals to this Agreement.

“Shares of Then Outstanding Common Stock” means, at any time, the issued and outstanding shares of Common Stock at such time, as well as all capital stock issued and outstanding as a result of any stock split, stock dividend, or reclassification of Common Stock distributable, on a pro rata basis, to all holders of Common Stock.

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the 1934 Act (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock).

“Standstill Parties” shall have the meaning set forth in Section 8.1.

“Standstill Term” means the period from the date of this Agreement until the date that is 12 months after the Closing Date.

“Third Party” means any Person other than the Investor, the Company or any of their respective Affiliates.

“Trading Day” means (a) a day on which the Common Stock is listed or quoted and traded on its Principal Trading Market (other than the OTC Bulletin Board), or (b) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (c) if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported in the “pink sheets” by OTC Markets

- 4 -

Group Inc. (or any similar organization or agency succeeding to its functions of reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (a), (b) or (c) hereof, then Trading Day shall mean a Business Day.

“Trading Market” means whichever of the New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market or the OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question.

“Transfer Agent” has the meaning set forth in Section 7.5(a).

“Transaction Documents” means this Agreement and the Registration Rights Agreement.

“1933 Act” means the Securities Act of 1933, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

“1934 Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

2. Purchase and Sale of the Shares. On the Closing Date, upon the terms and subject to the conditions set forth herein, the Company will issue and sell, and the Investor will purchase, for a price per Share of $25.59, the Shares.

3. Closing.

3.1 Upon the satisfaction of the conditions set forth in Section 6, the completion of the purchase and sale of the Shares (the “Closing”) shall occur remotely via exchange of documents and signatures at a time (the “Closing Date”) to be agreed to by the Company and the Investor but (a) in no event earlier than the second Business Day after the date of the HSR Clearance and (b) in no event later than the fifth Business Day after the date of the HSR Clearance, and of which the Investor will be notified in advance by the Company.

3.2 On the Closing Date, the Investor shall deliver or cause to be delivered to the Company, via wire transfer of immediately available funds pursuant to the wire instructions delivered to the Investor by the Company on or prior to the Closing Date, $124,992,666 for the Shares.

3.3 At or before the Closing, the Company shall deliver or cause to be delivered to the Investor the Shares, registered in the name of the Investor (or its nominee in accordance with its delivery instructions). The Shares shall be delivered via a book-entry record through the Company’s transfer agent on a “delivery versus payment” basis.

4. Representations and Warranties of the Company. The Company hereby represents and warrants to the Investor that, except as described in the Company’s SEC Filings (as defined below), which qualify these representations and warranties in their entirety:

4.1 Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all requisite corporate power and authority to carry on its business as now conducted and to own or lease its properties. The Company is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property makes such qualification or leasing necessary unless the failure to so qualify has not had and would not reasonably be expected to have a Material Adverse Effect. The Company’s subsidiaries are set forth on Exhibit 21.1 to its most recent Annual Report on Form 10-K, and the Company owns 100% of the outstanding equity of all such subsidiaries. The Company’s subsidiaries are duly organized, validly existing and in good standing under the laws of their jurisdiction of incorporation and have all requisite power and authority to carry on their business as now conducted and to own

- 5 -

or lease their properties. The Company’s subsidiaries are duly qualified to do business as foreign corporations and are in good standing in each jurisdiction in which the conduct of their business or their ownership or leasing of property makes such qualification or leasing necessary unless the failure to so qualify has not had and would not reasonably be expected to have a Material Adverse Effect.

4.2 Authorization. The Company has the requisite corporate power and authority and has taken all requisite corporate action necessary for, and no further action on the part of the Company, its officers, directors and stockholders is necessary for, (a) the authorization, execution and delivery of the Transaction Documents, (b) the authorization of the performance of all obligations of the Company hereunder or thereunder, and (c) the authorization, issuance (or reservation for issuance) and delivery of the Shares. The Transaction Documents constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally and to general equitable principles.

4.3 Capitalization. The Company is authorized under its Certificate of Incorporation to issue 200,000,000 shares of Common Stock. The Company’s disclosure of its issued and outstanding capital stock in its most recent SEC Filing containing such disclosure was accurate in all material respects as of the date indicated in such SEC Filing. All of the issued and outstanding shares of the Company’s capital stock have been duly authorized and validly issued and are fully paid and nonassessable; none of such shares were issued in violation of any preemptive rights; and such shares were issued in compliance in all material respects with applicable state and federal securities law and any rights of third parties. No Person is entitled to preemptive or similar statutory or contractual rights with respect to the issuance by the Company of any securities of the Company, including, without limitation, the Shares. Except for stock options approved pursuant to Company stock-based compensation plans described in the SEC Filings, there are no outstanding warrants, options, convertible securities or other rights, agreements or arrangements of any character under which the Company is or may be obligated to issue any equity securities of any kind, except as contemplated by this Agreement. There are no voting agreements, buy-sell agreements, option or right of first purchase agreements or other agreements of any kind among the Company and any of the securityholders of the Company relating to the securities of the Company held by them. Except as provided in the Registration Rights Agreement, and except as provided in that certain Registration Rights Agreement dated April 30, 2019, by and among the Company and certain investors signatory thereto, and that certain Amended and Restated Registration Rights Agreement, dated as of December 22, 2016, by and among the Company and certain investors signatory thereto, no Person has the right (a) to require the Company to register any securities of the Company under the 1933 Act, whether on a demand basis or in connection with the registration of securities of the Company for its own account or for the account of any other Person or (b) to prohibit the Company from filing a registration statement under the 1933 Act.

The issuance and sale of the Shares hereunder will not obligate the Company to issue shares of Common Stock or other securities to any other Person (other than the Investor) and will not result in the adjustment of the exercise, conversion, exchange or reset price of any outstanding security.

The Company does not have outstanding stockholder purchase rights or “poison pill” or any similar arrangement in effect giving any Person the right to purchase any equity interest in the Company upon the occurrence of certain events.

4.4 Valid Issuance. The Shares have been duly and validly authorized and, when issued and paid for pursuant to this Agreement, will be validly issued, fully paid and nonassessable, and shall be free and clear of all encumbrances and restrictions (other than those created by the Investor), except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws.

4.5 Consents. The execution, delivery and performance by the Company of the Transaction Documents and the offer, issuance and sale of the Shares require no consent of, action by or in respect of, or filing with, any Person, governmental body, agency, or official other than (a) (i) filings that have been made pursuant to applicable state securities laws, (ii) post-sale filings pursuant to applicable state and federal securities laws, (iii)

- 6 -

filings pursuant to the rules and regulations of Nasdaq and (iv) filing of the registration statement required to be filed by the Registration Rights Agreement, each of which the Company has filed or undertakes to file within the applicable time and (b) as may be required pursuant to the HSR Act. Subject to the accuracy of the representations and warranties of the Investor set forth in Section 5 hereof, the Company has taken all action necessary to exempt (i) the issuance and sale of the Shares and (ii) the other transactions contemplated by the Transaction Documents from the provisions of any stockholder rights plan or other “poison pill” arrangement, any anti-takeover, business combination or control share law or statute binding on the Company or to which the Company or any of its assets and properties is subject that is or could reasonably be expected to become applicable to the Investor as a result of the transactions contemplated hereby, including without limitation, the issuance of the Shares and the ownership, disposition or voting of the Shares by the Investor or the exercise of any right granted to the Investors pursuant to this Agreement or the other Transaction Documents.

4.6 [Reserved].

4.7 No Material Adverse Change. Since December 31, 2019, except as identified and described in the SEC Filings filed at least one Trading Day prior to the date hereof, there has not been:

(a) any change in the consolidated assets, liabilities, financial condition or operating results of the Company from that reflected in the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, except for changes in the ordinary course of business which have not had and would not reasonably be expected to have a Material Adverse Effect, individually or in the aggregate;

(b) any declaration or payment by the Company of any dividend, or any authorization or payment by the Company of any distribution, on any of the capital stock of the Company, or any redemption or repurchase by the Company of any securities of the Company;

(c) any material damage, destruction or loss, whether or not covered by insurance, to any assets or properties of the Company;

(d) any waiver, not in the ordinary course of business, by the Company of a material right or of a material debt owed to it;

(e) any satisfaction or discharge of any lien, claim or encumbrance or payment of any obligation by the Company, except in the ordinary course of business and which is not material to the assets, properties, financial condition, operating results or business of the Company (as such business is presently conducted);

(f) any change or amendment to the Company’s Certificate of Incorporation or Bylaws, or material change to any material contract or arrangement by which the Company is bound or to which any of its assets or properties is subject;

(g) any material labor difficulties or, to the Company’s Knowledge, labor union organizing activities with respect to employees of the Company;

(h) any material transaction entered into by the Company other than in the ordinary course of business;

(i) the loss of the services of any key employee, or material change in the composition or duties of the senior management of the Company; or

(j) any other event or condition of any character that has had or would reasonably be expected to have a Material Adverse Effect.

- 7 -

4.8 SEC Filings. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the 1933 Act and the 1934 Act, including pursuant to Section 13(a) or 15(d) thereof, for the one year period preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (collectively, the “SEC Filings”). At the time of filing thereof, the SEC Filings complied in all material respects with the requirements of the 1933 Act or the 1934 Act, as applicable, and the rules and regulations of the SEC thereunder.

4.9 No Conflict, Breach, Violation or Default. The execution, delivery and performance of the Transaction Documents by the Company and the issuance and sale of the Shares in accordance with the provisions thereof will not, except (solely in the case of clauses (a)(ii) and (b)) for such violations, conflicts or defaults as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (a) conflict with or result in a breach or violation of (i) any of the terms and provisions of, or constitute a default under, the Company’s Certificate of Incorporation or the Company’s Bylaws, both as in effect on the date hereof (true and complete copies of which have been made available to the Investor through the Electronic Data Gathering, Analysis, and Retrieval system (the “EDGAR system”)), or (ii) assuming the accuracy of the representations and warranties in Section 5, any applicable statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Company or its subsidiaries, or any of their assets or properties, or (b) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any lien, encumbrance or other adverse claim upon any of the properties or assets of the Company or its subsidiaries or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any Material Contract. This Section does not relate to matters with respect to tax status, which are the subject of Section 4.10, employee relations and labor matters, which are the subject of Section 4.13, or environmental laws, which are the subject of Section 4.15.

4.10 Tax Matters. The Company and its subsidiaries have timely prepared and filed all material tax returns required to have been filed by them with all appropriate governmental agencies and timely paid all material taxes shown thereon or otherwise owed by them. There are no material unpaid assessments against the Company nor, to the Company’s Knowledge, any audits by any federal, state or local taxing authority. All material taxes that the Company is required to withhold or to collect for payment have been duly withheld and collected and paid to the proper governmental entity or third party when due. There are no tax liens pending or, to the Company’s Knowledge, threatened against the Company or any of its assets or property. With the exception of agreements or other arrangements that are not primarily related to taxes entered into in the ordinary course of business, there are no outstanding tax sharing agreements or other such arrangements between the Company and any other corporation or entity (other than a subsidiary of the Company).

4.11 Title to Properties. The Company and its subsidiaries have good and marketable title to all real properties and all other properties and assets owned by them, in each case free from liens, encumbrances and defects, except such as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; and the Company and its subsidiaries hold any leased real or personal property under valid and enforceable leases with no exceptions, except such as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

4.12 Certificates, Authorities and Permits. The Company possesses adequate certificates, authorities or permits issued by appropriate governmental agencies or bodies necessary to conduct the business now operated by it, except where failure to so possess would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. The Company has not received any written notice of proceedings relating to the revocation or modification of any such certificate, authority or permit that would reasonably be expected to have a Material Adverse Effect, individually or in the aggregate, on the Company.

4.13 Labor Matters.

(a) The Company is not party to or bound by any collective bargaining agreements or other agreements with labor organizations. To the Company’s Knowledge, the Company has not violated in any material respect any laws, regulations, orders or contract terms affecting the collective bargaining rights of employees or labor organizations, or any laws, regulations or orders affecting employment discrimination, equal opportunity employment, or employees’ health, safety, welfare, wages and hours.

- 8 -

(b) No material labor dispute with the employees of the Company, or with the employees of any principal supplier, manufacturer, customer or contractor of the Company, exists or, to the Company’s Knowledge, is threatened or imminent.

4.14 Intellectual Property. The Company and its subsidiaries own, possess, license or have other rights to use, all patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets, technology, know-how and other intellectual property (collectively, the “Intellectual Property”) necessary for the conduct of the Company’s business in all material respects as now conducted or as proposed in the SEC Filings to be conducted. (a) There are no rights of third parties to any such Intellectual Property, including no liens, security interests or other encumbrances; (b) to the Company’s Knowledge, there is no material infringement by third parties of any such Intellectual Property; (c) there is no pending or, to the Company’s Knowledge, threatened action, suit, proceeding or claim by others challenging the Company’s rights in or to any such Intellectual Property, and, except as would not reasonably be expected to have a Material Adverse Effect, the Company is aware of no factual basis for any such claim; (d) such Intellectual Property has not been adjudged by a court of competent jurisdiction invalid or unenforceable, in whole or in part; (e) there is no pending or, to the Company’s Knowledge, threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property, including interferences, oppositions, reexaminations or government proceedings, and the Company is unaware of any facts which would form a reasonable basis for any such claim; (f) there is no pending or threatened action, suit, proceeding or claim by others that the Company infringes, misappropriates, or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of others, and the Company is unaware of any other fact which would form a reasonable basis for any such claim; (g) each employee of the Company has entered into an invention assignment agreement with the Company and no employee of the Company is in or has been in violation of any term of any employment contract, patent disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where the basis of such violation relates to such employee’s employment with the Company; (h) to the Company’s Knowledge, there is no patent or published patent application in the United States or other jurisdiction which contains valid claims that dominate any product candidate of the Company described in the SEC Filings; and (i) the Company is not aware of any prior art that may render any U.S. patent held by the Company invalid or any U.S. patent application held by the Company un-patentable which has not been disclosed to the U.S. Patent and Trademark Office and all such prior art has been disclosed to the patent office or other jurisdiction where required. The Company has complied in all material respects with all license agreements to which it is a party relating to the Intellectual Property and has not received any asserted or threatened claim of breach of any of the same.

4.15 Environmental Matters. The Company is not in violation of any statute, rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “Environmental Laws”), has not released any hazardous substances regulated by Environmental Law onto any real property that it owns or operates, and has not received any written notice or claim it is liable for any off-site disposal or contamination pursuant to any Environmental Laws, which violation, release, notice, claim, or liability would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, and to the Company’s Knowledge, there is no pending or threatened investigation that would reasonably be expected to lead to such a claim.

4.16 Legal Proceedings. There are no legal, governmental or regulatory investigations, actions, suits or proceedings pending to which the Company or its subsidiaries are or may reasonably be expected to become a party or to which any property of the Company or its subsidiaries are or may reasonably be expected to become the subject that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

- 9 -

4.17 Financial Statements. The financial statements included in each SEC Filing comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing (or to the extent corrected by a subsequent restatement) and present fairly, in all material respects, the consolidated financial position of the Company as of the dates shown and its consolidated results of operations and cash flows for the periods shown, subject in the case of unaudited financial statements to normal, immaterial year-end audit adjustments, and such consolidated financial statements have been prepared in conformity with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”) (except as may be disclosed therein or in the notes thereto, and except that the unaudited financial statements may not contain all footnotes required by GAAP, and, in the case of quarterly financial statements, except as permitted by Form 10-Q under the 1934 Act). Except as set forth in the financial statements of the Company included in the SEC Filings filed prior to the date hereof, the Company has not incurred any liabilities, contingent or otherwise, except those incurred in the ordinary course of business, consistent (as to amount and nature) with past practices since the date of such financial statements, none of which, individually or in the aggregate, have had or would reasonably be expected to have a Material Adverse Effect.

4.18 Insurance Coverage. The Company maintains in full force and effect insurance coverage that is customary for comparably situated companies for the business being conducted and properties owned or leased by the Company, and the Company reasonably believes such insurance coverage to be adequate against all liabilities, claims and risks against which it is customary for comparably situated companies to insure.

4.19 Compliance with Nasdaq Continued Listing Requirements. The Company is in compliance with applicable Nasdaq continued listing requirements. There are no proceedings pending or, to the Company’s Knowledge, threatened against the Company relating to the continued listing of the Common Stock on Nasdaq and the Company has not received any notice of, nor to the Company’s Knowledge is there any reasonable basis for, the delisting of the Common Stock from Nasdaq.

4.20 Brokers and Finders. No Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid right, interest or claim against or upon the Company or the Investor for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Company. The Investor shall not have any obligation with respect to any fees, or with respect to any claims made by or on behalf of other Persons for fees, in each case of the type contemplated by this Section 4.20 that may be due in connection with the transactions contemplated by this Agreement or the Transaction Documents.

4.21 No Directed Selling Efforts or General Solicitation. Neither the Company nor any Person acting on its behalf has conducted any general solicitation or general advertising (as those terms are used in Regulation D promulgated under the 1933 Act) in connection with the offer or sale of any of the Shares.

4.22 No Integrated Offering. Neither the Company nor its subsidiaries nor any Person acting on their behalf has, directly or indirectly, made any offers or sales of any Company security or solicited any offers to buy any Company security, under circumstances that would adversely affect reliance by the Company on Section 4(a)(2) and Regulation D for the exemption from registration for the transactions contemplated hereby or would require registration of the Shares under the 1933 Act.

4.23 Private Placement. Assuming the accuracy of the representations and warranties of the Investor set forth in Section 5, the offer and sale of the Shares to the Investor as contemplated hereby is exempt from the registration requirements of the 1933 Act. The issuance and sale of the Shares does not contravene the rules and regulations of Nasdaq.

4.24 Questionable Payments. Neither the Company nor its subsidiaries nor, to the Company’s Knowledge, any of their current or former directors, officers, employees, agents or other Persons acting on behalf of the Company or its subsidiaries, has on behalf of the Company or its subsidiaries in connection with their business: (a) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; (b) made any direct or indirect unlawful payments to any governmental officials or

- 10 -

employees from corporate funds; (c) established or maintained any unlawful or unrecorded fund of corporate monies or other assets which is in violation of law; (d) made any false or fictitious entries on the books and records of the Company; or (e) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment of any nature.

4.25 Transactions with Affiliates. None of the executive officers or directors of the Company and, to the Company’s Knowledge, none of the employees of the Company is presently a party to any transaction with the Company (other than as holders of stock options and/or restricted stock, and for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the Company’s Knowledge, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

4.26 Internal Controls. The Company has established and maintains disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 under the 1934 Act), which are designed to ensure that material information relating to the Company, including its subsidiaries, is made known to the Company’s principal executive officer and its principal financial officer by others within those entities. Since the end of the Company’s most recent audited fiscal year, there have been no material weaknesses in the Company’s internal control over financial reporting (whether or not remediated) and no change in the Company’s internal control over financial reporting that has materially affected, or would reasonably be expected to materially affect, the Company’s internal control over financial reporting. The Company is not aware of any change in its internal controls over financial reporting that has occurred during its most recent fiscal quarter that has materially affected, or would reasonably be expected to materially affect, the Company’s internal control over financial reporting.

4.27 Disclosures. Neither the Company nor any Person acting on its behalf has provided the Investor or its agents or counsel with any information that constitutes or would reasonably be expected to constitute material nonpublic information concerning the Company or its subsidiaries, other than with respect to the transactions contemplated hereby or by the Collaboration and License Agreement Amendment which will be publicly disclosed by 8:30 a.m. (New York City time) on the Business Day immediately following the date this Agreement is executed. The SEC Filings do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading. The Company understands and confirms that the Investor will rely on the foregoing representations in effecting transactions in securities of the Company.

4.28 Required Filings. Except for the transactions contemplated by this Agreement, including the acquisition of the Shares contemplated hereby, no event or circumstance has occurred or information exists with respect to the Company or its business, properties, operations or financial condition, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed (assuming for this purpose that the SEC Filings are being incorporated by reference into an effective registration statement filed by the Company under the 1933 Act).

4.29 Investment Company. The Company is not required to be registered as, and is not an Affiliate of, and immediately following the Closing will not be required to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

4.30 Healthcare Regulatory Compliance. The Company (a) is and at all times has been in compliance with all statutes, rules and regulations applicable to the ownership, testing, development, manufacture, packaging, processing, use, distribution, marketing, advertising, labeling, promotion, sale, offer for sale, storage, import, export or disposal of any product manufactured or distributed by the Company, including, without limitation, the Federal Food, Drug and Cosmetic Act (21 U.S.C. § 301 et seq.), the federal Anti-kickback Statute (42 U.S.C. § 1320a-7b(b)), the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010, the regulations promulgated pursuant to such laws, and any successor government programs, and comparable state laws,

- 11 -

regulations relating to Good Clinical Practices and Good Laboratory Practices and all other local, state, federal, national, and foreign laws, and final guidance relating to the regulation of the Company (collectively, the “Applicable Laws”), except for such non-compliance as would not, individually or in the aggregate, have a Material Adverse Effect; (b) has not received any written notice from any court or arbitrator or governmental or regulatory authority or third party alleging or asserting non-compliance with any Applicable Laws or any licenses, exemptions, certificates, approvals, clearances, authorizations, permits, registrations and supplements or amendments thereto required by any such Applicable Laws (“Authorizations”), except for such non-compliance as would not, individually or in the aggregate, have a Material Adverse Effect; (c) possesses all material Authorizations and such Authorizations are valid and in full force and effect and are not in violation of any term of any such Authorizations, except for such violations as would not, individually or in the aggregate, have a Material Adverse Effect; (d) has not received written notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any court or arbitrator or governmental or regulatory authority or third party alleging that any product operation or activity is in violation of any Applicable Laws or Authorizations nor, to the Company’s Knowledge, is any such claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action threatened; (e) has not received written notice that any court or arbitrator or governmental or regulatory authority has taken, is taking or intends to take action to materially limit, suspend, materially modify or revoke any Authorizations nor, to the Company’s Knowledge, is any such limitation, suspension, modification or revocation threatened; (f) has filed, obtained, maintained or submitted all material reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations and that all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were complete and accurate on the date filed in all material respects (or were corrected or supplemented by a subsequent submission); and (g) is not a party to any corporate integrity agreements, monitoring agreements, consent decrees, settlement orders, or similar agreements with or imposed by any governmental or regulatory authority.

4.31 Tests and Preclinical and Clinical Trials. The clinical trials and preclinical studies conducted by or on behalf of or sponsored by the Company, or in which the Company has participated, that are described in the SEC Filings or the results of which are referred to in the SEC Filings, as applicable, and are intended to be submitted to Regulatory Authorities as a basis for product approval, were and, if still pending, are being conducted in all material respects in accordance with standard medical and scientific research procedures and all applicable statutes, rules and regulations of the U.S. Food and Drug Administration (the “FDA”) and comparable drug regulatory agencies outside of the United States to which it is subject (collectively, the “Regulatory Authorities”), including, without limitation, 21 C.F.R. Parts 50, 54, 56, 58, and 312, and current Good Clinical Practices and Good Laboratory Practices; the descriptions in the SEC Filings of the results of such studies and trials are accurate and complete in all material respects and fairly present the data derived from such trials; the Company has no knowledge of any other trials the results of which are inconsistent with or otherwise call into question the results described or referred to in the SEC Filings; the Company has operated and is currently in compliance in all material respects with all applicable statutes, rules and regulations of the Regulatory Authorities; the Company has not received any written notices, correspondence or other communication from the Regulatory Authorities or any other governmental agency requiring the termination or suspension of any clinical trials or preclinical studies that are described in the SEC Filings or the results of which are referred to in the SEC Filings, and, to the Company’s Knowledge, there are no reasonable grounds for same.

4.32 Manipulation of Price. The Company has not taken, and, to the Company’s Knowledge, no Person acting on its behalf has taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Shares.

4.33 Anti-Bribery and Anti-Money Laundering Laws. To the Company’s Knowledge, each of the Company, its subsidiaries and any of their respective officers, directors, supervisors, managers, agents, or employees are and have at all times been in compliance with, and its participation in the offering will not violate: (a) anti-bribery laws, including but not limited to, any applicable law, rule, or regulation of any locality, including but not limited to any law, rule, or regulation promulgated to implement the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, signed December 17, 1997; the U.S.

- 12 -

Foreign Corrupt Practices Act of 1977, as amended; the U.K. Bribery Act 2010; or any other applicable law, rule or regulation of similar purposes and scope or (b) anti-money laundering laws, including, but not limited to, applicable federal, state, international, foreign or other laws, regulations or binding government guidance regarding anti-money laundering, including, without limitation, Title 18 U.S. Code sections 1956 and 1957, the USA PATRIOT Act, the Bank Secrecy Act, and international anti-money laundering principles or procedures by an intergovernmental group or organization, such as the Financial Action Task Force on Money Laundering, of which the United States is a member, to the extent such principles or procedures are effected through laws or regulations of the United States, and any Executive order, directive, or regulation pursuant to the authority of any of the foregoing, or any orders or licenses issued thereunder.

4.34 CFIUS. The Company does not “produce, design, test, manufacture, fabricate or develop” any “critical technologies” within the meaning of the DPA, and the Company does not have any current intention of engaging in such activities in the future.

4.35 Shell Company Status. The Company is not, and has never been, an issuer identified in Rule 144(i)(1).

5. Representations and Warranties of the Investor. The Investor hereby represents and warrants to the Company that:

5.1 Organization and Existence. The Investor is a duly incorporated or organized and validly existing French corporation, has all requisite corporate power and authority to enter into and consummate the transactions contemplated by the Transaction Documents and to carry out its obligations hereunder and thereunder, and to invest in the Shares pursuant to this Agreement, and is in good standing under the laws of the jurisdiction of its incorporation.

5.2 Authorization. The execution, delivery and performance by the Investor of the Transaction Documents have been duly authorized and each has been duly executed and when delivered will constitute the valid and legally binding obligation of the Investor, enforceable against the Investor in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally, and general principles of equity.

5.3 Purchase Entirely for Own Account. The Shares to be received by the Investor hereunder will be acquired for the Investor’s own account, not as nominee or agent, for the purpose of investment and not with a view to the resale or distribution of any part thereof in violation of the 1933 Act, and the Investor has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the 1933 Act without prejudice, however, to the Investor’s right at all times to sell or otherwise dispose of all or any part of the Shares in compliance with applicable federal and state securities laws. The Shares are being purchased by the Investor in the ordinary course of its business. Nothing contained herein shall be deemed a representation or warranty by the Investor to hold the Shares for any period of time. The Investor is not a broker-dealer registered with the SEC under the 1934 Act or an entity engaged in a business that would require it to be so registered.

5.4 Investment Experience. The Investor acknowledges that it can bear the economic risk and complete loss of its investment in the Shares and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment contemplated hereby.

5.5 Disclosure of Information. The Investor has had an opportunity to receive, review and understand all information related to the Company requested by it and to ask questions of and receive answers from the Company regarding the Company, its business and the terms and conditions of the offering of the Shares, and has conducted and completed its own independent due diligence. The Investor acknowledges that copies of the SEC Filings are available on the EDGAR system. Based on the information the Investor has deemed appropriate, it has independently made its own analysis and decision to enter into the Transaction Documents. The Investor is relying exclusively on its own investment analysis and due diligence (including professional advice it deems appropriate) with respect to the execution, delivery and performance of the Transaction Documents, the Shares

- 13 -

and the business, condition (financial and otherwise), management, operations, properties and prospects of the Company, including but not limited to all business, legal, regulatory, accounting, credit and tax matters. Neither such inquiries nor any other due diligence investigation conducted by the Investor shall modify, limit or otherwise affect the Investor’s right to rely on the Company’s representations and warranties contained in this Agreement.

5.6 Restricted Securities. The Investor understands that the Shares are characterized as “restricted securities” under the U.S. federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the 1933 Act only in certain limited circumstances. The Investor makes the following additional representations, warranties and agreements: (i) the Investor is not a “U.S. person” as defined in Rule 902(k) of Regulation S promulgated under the Securities Act (a “U.S. Person”). The offer and sale of the Shares to the Investor will be made in an “Offshore Transaction” (as defined in Rule 902(h) of Regulation S), no “Directed Selling Efforts” (as defined in Rule 902(c) of Regulation S) were or will be made to the Investor in the United States, and the Investor is not acquiring the Shares for the account or benefit of any U.S. Person; (ii) the Investor will resell the Shares only in accordance with the provisions of Regulation S, pursuant to registration under the Securities Act, or pursuant to an available exemption from registration; and the Investor shall not engage in hedging transactions with regard to such Shares unless in compliance with the Securities Act and (iii) the Investor acknowledges and agrees that the Company shall not register any transfer or resale of the Shares not made (i) in accordance with the provisions of Regulation S, (ii) pursuant to registration under the Securities Act or (iii) or pursuant to an available exemption from registration. The Investor acknowledges and agrees that the certificates evidencing the Shares will bear the legend set forth below (in addition to any other legend required by applicable federal, state or foreign securities laws or provided in any other agreement with the Company:

5.7 Legends. It is understood that, except as provided below, certificates evidencing the Shares (or uncertificated interests in the Shares) may bear the following or any similar legend:

(a) “The securities represented hereby have not been registered with the Securities and Exchange Commission or the securities commission of any state in reliance upon an exemption from registration under the Securities Act of 1933, as amended, and, accordingly, may not be transferred unless (i) such securities have been registered for sale pursuant to the Securities Act of 1933, as amended, (ii) such securities may be sold pursuant to Rule 144, (iii) the Company has received an opinion of counsel reasonably satisfactory to it that such transfer may lawfully be made without registration under the Securities Act of 1933, as amended or (iv) the securities are transferred without consideration to an affiliate of such holder or a custodial nominee (which for the avoidance of doubt shall require neither consent nor the delivery of an opinion).”

(b) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION. THE SHARES MAY NOT BE OFFERED FOR SALE OR SOLD EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S OF THE ACT, PURSUANT TO REGISTRATION UNDER THE ACT, OR AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT.

(c) If required by the authorities of any state in connection with the issuance of sale of the Shares, the legend required by such state authority.

5.8 Accredited Investor; Foreign Investor. The Investor is (a) an “accredited investor” within the meaning of Rule 501(a) of Regulation D and (b) an “Institutional Account” as defined in FINRA Rule 4512(c). The Investor has executed and delivered to the Company a questionnaire in substantially the form attached hereto as Exhibit B (the “Investor Questionnaire”), which the Investor represents and warrants is true, correct and complete. The Investor is a sophisticated institutional investor with sufficient knowledge and experience in investing in private equity transactions to properly evaluate the risks and merits of its purchase of the Shares. The Investor is not a United States person (as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended) and hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in

- 14 -

connection with any invitation to subscribe for the Shares or any use of this Agreement, including (a) the legal requirements within its jurisdiction for the receipt of the Shares, (b) any foreign exchange restrictions applicable to such purchase, (c) any governmental or other consents that may need to be obtained, and (d) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Shares. The Investor’s continued beneficial ownership of the Shares will not violate any applicable securities or other laws of the Investor’s jurisdiction as in effect on the date hereof.

5.9 No General Solicitation. The Investor did not learn of the investment in the Shares as a result of any general or public solicitation or general advertising, or publicly disseminated advertisements or sales literature, including (a) any advertisement, article, notice or other communication published in any newspaper, magazine, website, or similar media, or broadcast over television or radio, or (b) any seminar or meeting to which the Investor was invited by any of the foregoing means of communications.

5.10 Brokers and Finders. No Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid right, interest or claim against or upon the Company or the Investor for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Investor.

5.11 Short Sales and Confidentiality Prior to the Date Hereof. Other than consummating the transactions contemplated hereunder, the Investor has not, nor has any Person acting on behalf of or pursuant to any understanding with the Investor, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that the Investor was first contacted by the Company or any other Person regarding the transactions contemplated hereby and ending immediately prior to the date hereof. Other than to other Persons party to this Agreement and other than to such Person’s outside attorney, accountant, auditor or investment advisor only to the extent necessary to permit evaluation of the investment, and the performance of the necessary or required tax, accounting, financial, legal, or administrative tasks and services and other than as may be required by law, the Investor has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability of, or securing of, available shares to borrow in order to effect Short Sales or similar transactions in the future.

5.12 No Government Recommendation or Approval. The Investor understands that no United States federal or state agency, or similar agency of any other country, has reviewed, approved, passed upon, or made any recommendation or endorsement of the Company or the purchase of the Shares.

5.13 No Intent to Effect a Change of Control. The Investor has no present intent to effect a “change of control” of the Company as such term is understood under the rules promulgated pursuant to Section 13(d) of the 1934 Act.

5.14 Residency. The Investor’s office in which its investment decision with respect to the Shares was made is located at the address immediately below the Investor’s name on its signature page hereto.

5.15 No Conflicts. The execution, delivery and performance by the Investor of the Transaction Documents and the consummation by the Investor of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of the Investor or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Investor is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to the Investor, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the Investor to perform its obligations hereunder, or as may be required pursuant to the HSR Act.

- 15 -

5.16

6. Conditions to Closing.

6.1 Conditions to the Investor’s Obligations. The obligation of the Investor to purchase Shares at the Closing is subject to the fulfillment to the Investor’s satisfaction, on or prior to the Closing Date, of the following conditions, any of which may be waived by the Investor:

(a) The representations and warranties made by the Company in Section 4 hereof shall be true and correct as of the date hereof and as of the Closing Date, as though made on and as of such date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct as of such earlier date. The Company shall have performed in all material respects all obligations and covenants herein required to be performed by it on or prior to the Closing Date.

(b) The Company shall have obtained any and all consents, permits, approvals, registrations and waivers necessary for the consummation of the purchase and sale of the Shares and the consummation of the other transactions contemplated by the Transaction Documents, all of which shall be in full force and effect.

(c) The Company shall have executed and delivered the Registration Rights Agreement.

(d) No judgment, writ, order, injunction, award or decree of or by any court, or judge, justice or magistrate, including any bankruptcy court or judge, or any order of or by any governmental authority, shall have been issued, and no action or proceeding shall have been instituted by any governmental authority, enjoining or preventing the consummation of the transactions contemplated hereby or in the other Transaction Documents.

(e) The Company shall have delivered a Certificate, executed on behalf of the Company by its Chief Executive Officer or its Chief Financial Officer, dated as of the Closing Date, certifying to the fulfillment of the conditions specified in subsections (a), (b), (d), (h) and (i) of this Section 6.1.

(f) The Company shall have delivered a Certificate, executed on behalf of the Company by its Secretary, dated as of the Closing Date, certifying the resolutions adopted by the Board of Directors of the Company approving the transactions contemplated by this Agreement, the other Transaction Documents and the issuance of the Shares, certifying the current versions of the Certificate of Incorporation and Bylaws of the Company and certifying as to the signatures and authority of persons signing the Transaction Documents and related documents on behalf of the Company.

(g) The Investor shall have received an opinion from Wilmer Cutler Pickering Hale and Dorr LLP, the Company’s counsel, dated as of the Closing Date, in form and substance reasonably acceptable to the Investor and addressing such legal matters as the Investor may reasonably request.

(h) There shall have been no Material Adverse Effect with respect to the Company since the date hereof.

(i) No stop order or suspension of trading shall have been imposed by Nasdaq, the SEC or any other governmental or regulatory body with respect to public trading in the Common Stock.

(j) The Company shall have executed and delivered the Collaboration and License Agreement Amendment and there shall have been no termination of the Collaboration and License Agreement Amendment that is then effective.

(k) HSR Clearance shall have occurred.

- 16 -

6.2 Conditions to Obligations of the Company. The Company’s obligation to sell and issue Shares at the Closing is subject to the fulfillment to the satisfaction of the Company on or prior to the Closing Date of the following conditions, any of which may be waived by the Company:

(a) The representations and warranties made by the Investor in Section 5 hereof shall be true and correct as of the date hereof, and shall be true and correct as of the Closing Date with the same force and effect as if they had been made on and as of such date. The Investor shall have performed in all material respects all obligations and covenants herein required to be performed by it on or prior to the Closing Date.

(b) The Investor shall have executed and delivered the Registration Rights Agreement and Investor Questionnaire.

(c) The Investor shall have paid in full its purchase price to the Company.

(d) Sanofi Pasteur Inc. shall have executed and delivered the Collaboration and License Agreement Amendment and there shall have been no termination of the Collaboration and License Agreement Amendment that is then effective.

(e) HSR Clearance shall have occurred.

6.3 Termination of Obligations to Effect Closing; Effects.

(a) The obligations of the Company and the Investor to effect the Closing shall terminate as follows:

(i) Upon the mutual written consent of the Company and the Investor;

(ii) By the Company if any of the conditions set forth in Section 6.2 shall have become incapable of fulfillment, and shall not have been waived by the Company;

(iii) By the Investor if any of the conditions set forth in Section 6.1 shall have become incapable of fulfillment, and shall not have been waived by the Investor; or

(iv) By either the Company or the Investor (with respect to itself only) if the Closing has not occurred on or prior to December 19, 2020;

provided, however, that, except in the case of clause (i) above, the party seeking to terminate its obligation to effect the Closing shall not then be in breach of any of its representations, warranties, covenants or agreements contained in this Agreement or the other Transaction Documents if such breach has resulted in the circumstances giving rise to such party’s seeking to terminate its obligation to effect the Closing.

(b) Nothing in this Section 6.3 shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement or the other Transaction Documents.

7. Covenants and Agreements of the Parties.

7.1 No Conflicting Agreements. The Company will not take any action, enter into any agreement or make any commitment that would conflict or interfere in any material respect with the Company’s obligations to the Investor under the Transaction Documents.

- 17 -

7.2 Nasdaq Listing. The Company will use commercially reasonable efforts to continue the listing and trading of its Common Stock on Nasdaq and, in accordance therewith, will use commercially reasonable efforts to comply in all material respects with the Company’s reporting, filing and other obligations under the bylaws or rules of such market or exchange, as applicable.

7.3 Reporting Status. The Company shall timely file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would otherwise permit such termination.

7.4 Termination of Covenants. The provisions of Sections 7.1, 7.2 and 7.3 shall terminate and be of no further force and effect on the date on which the Company’s obligations under the Registration Rights Agreement to register or maintain the effectiveness of any registration covering the Registrable Securities (as such term is defined in the Registration Rights Agreement) shall terminate.

7.5 Removal of Legends.

(a) In connection with any sale, assignment, transfer or other disposition of the Shares by the Investor pursuant to Rule 144 or pursuant to any other exemption under the 1933 Act such that the purchaser acquires freely tradable shares and upon compliance by the Investor with the requirements of this Agreement, if requested by the Investor, the Company shall cause the transfer agent for the Common Stock (the “Transfer Agent”) to remove any restrictive legends related to the book entry account holding such Shares and make a new, unlegended entry for such book entry Shares sold or disposed of without restrictive legends within two (2) Trading Days of any such request therefor from the Investor, provided that the Company has timely received from the Investor customary representations and other documentation reasonably acceptable to the Company in connection therewith.

(b) Subject to receipt from the Investor by the Company and the Transfer Agent of customary representations and other documentation reasonably acceptable to the Company and the Transfer Agent in connection therewith, upon the earliest of such time as the Shares (i) have been sold or transferred pursuant to an effective registration statement, (ii) have been sold pursuant to Rule 144, or (iii) are eligible for resale under Rule 144(b)(1) or any successor provision (such earliest date, the “Effective Date”), the Company shall, in accordance with the provisions of this Section 7.5(b) and within two (2) Trading Days of any request therefor from the Investor accompanied by such customary and reasonably acceptable documentation referred to above, (A) deliver to the Transfer Agent irrevocable instructions that the Transfer Agent shall make a new, unlegended entry for such book entry Shares, and (B) cause its counsel to deliver to the Transfer Agent one or more opinions to the effect that the removal of such legends in such circumstances may be effected under the 1933 Act if required by the Transfer Agent to effect the removal of the legend in accordance with the provisions of this Agreement. The Company agrees that following the Effective Date or at such time as such legend is no longer required under this Section 7.5, it will, within two Trading Days of the delivery by the Investor to the Company or the Transfer Agent of a certificate representing shares issued with a restrictive legend and receipt from the Investor by the Company and the Transfer Agent of the customary representations and other documentation reasonably acceptable to the Company and the Transfer Agent in connection therewith that is referred to above, deliver or cause to be delivered to the Investor a certificate representing such Shares (or uncertificated interest therein) that is free from all restrictive and other legends. Shares subject to legend removal hereunder may be transmitted by the Transfer Agent to the Investor by crediting the account of the Investor’s prime broker with the DTC System as directed by such Investor. The Company shall be responsible for the fees of its Transfer Agent and all DTC fees associated with such issuance.

(c) The Investor agrees with the Company (i) that the Investor will sell any Shares pursuant to either the registration requirements of the 1933 Act, including any applicable prospectus delivery requirements, or an exemption therefrom, (ii) that if Shares are sold pursuant to a registration statement, they will be sold in compliance with the plan of distribution set forth therein and (iii) that if, after the effective date of the registration statement covering the resale of the Shares, such registration statement is not then effective and the Company has provided notice to the Investor to that effect, the Investor will sell Shares only in compliance with an exemption from the registration requirements of the 1933 Act.

- 18 -

7.6 Subsequent Equity Sales. The Company shall not, and shall use its commercially reasonable efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the 1933 Act) that will be integrated with the offer or sale of the Shares in a manner that would require the registration under the 1933 Act of the sale of the Shares to the Investor, or that will be integrated with the offer or sale of the Shares for purposes of the rules and regulations of any trading market such that it would require stockholder approval prior to the closing of such other transaction unless stockholder approval is obtained before the closing of such subsequent transaction.

7.7 Short Sales and Confidentiality After the Date Hereof. The Investor covenants that neither it nor any Affiliates acting on its behalf or pursuant to any understanding with it will execute any Short Sales during the period from the date hereof until the earlier of such time as (i) the transactions contemplated by this Agreement are first publicly announced or (ii) this Agreement is terminated in full. The Investor covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company, the Investor will maintain the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction), other than to such Person’s outside attorney, accountant, auditor or investment advisor only to the extent necessary to permit evaluation of the investment, and the performance of the necessary or required tax, accounting, financial, legal, or administrative tasks and services and other than as may be required by law. The Investor understands and acknowledges that the SEC currently takes the position that coverage of Short Sales of shares of the Common Stock “against the box” prior to effectiveness of a resale registration statement with securities included in such registration statement would be a violation of Section 5 of the 1933 Act, as set forth in Item 239.10 of the Securities Act Rules Compliance and Disclosure Interpretations compiled by the Office of Chief Counsel, Division of Corporation Finance.

7.8 Notification under the HSR Act. Each of the Investor and the Company shall, as soon as practicable, and, in any event, no later than ten (10) Business Days after the date of this Agreement, file or cause to be filed with the FTC and the DOJ the notifications required to be filed under the HSR Act with respect to the transactions contemplated by this Agreement. The parties will use all reasonable efforts to respond on a timely basis to any requests for additional information made by either of such agencies.

Each of the Investor and the Company shall use commercially reasonable efforts to promptly obtain clearance required under the HSR Act for the consummation of this Agreement and the Collaboration and License Agreement Amendment and shall keep each other apprised of the status of any communications with, and any inquiries or requests for additional information from, the FTC and the DOJ and shall comply promptly with any such inquiry or request; provided, however, that neither Party shall be required to consent to the divestiture or other disposition of any of its assets or assets of its Affiliates or to consent to any other structural or conduct remedy, and each Party and its Affiliates shall have no obligation to contest, administratively or in court, any ruling, order or other action of the FTC or DOJ or any Third Party respecting the transactions contemplated by this Second Amendment. The Parties commit to instruct their respective counsel to facilitate and expedite the identification and resolution of any such issues and, consequently, the expiration of the applicable HSR Act waiting period. Each Party’s counsel will undertake (i) to keep each other appropriately informed of communications from and to personnel of the reviewing antitrust authority, including without limitation by permitting the other Party’s counsel to review in advance, and in good faith consider the views of the other Party’s counsel, concerning any planned submission or communication after the parties’ respective HSR filings, and (ii) to confer with each other regarding appropriate contacts with and response to personnel of the FTC or DOJ.

8. Restrictions on Beneficial Ownership.

8.1 Standstill. During the Standstill Term, neither the Investor nor any of its Affiliates (collectively, the “Standstill Parties”) shall (and the Investor shall cause its Affiliates not to), except as expressly approved or invited in writing by the Company:

(a) directly or indirectly, acquire beneficial ownership of Shares of Then Outstanding Common Stock and/or Common Stock Equivalents, or make a tender, exchange or other offer to acquire Shares of Then Outstanding Common Stock and/or Common Stock Equivalents; provided, however, that notwithstanding the

- 19 -

provisions of this Section 8.1(a), if the number of shares constituting Shares of Then Outstanding Common Stock is reduced or if the aggregate ownership of the Standstill Parties is increased as a result of a repurchase by the Company of Shares of Then Outstanding Common Stock, stock split, stock dividend or a recapitalization of the Company, the Standstill Parties shall not be required to dispose of any of their holdings of Shares of Then Outstanding Common Stock even though such action resulted in the Standstill Parties’ beneficial ownership increasing;

(b) directly or indirectly, seek to have called any meeting of the stockholders of the Company, propose or nominate for election to the Company’s Board of Directors any person whose nomination has not been approved by a majority of the Company’s Board of Directors or cause to be voted in favor of such person for election to the Company’s Board of Directors any Shares of Then Outstanding Common Stock;

(c) directly or indirectly, encourage or support a tender, exchange or other offer or proposal by any Third Party with respect to Shares of Then Outstanding Common Stock or Common Stock Equivalents; provided, however, that from and after the filing of a Schedule 14D-9 (or successor form of Tender Offer Solicitation/Recommendation Statement under Rule 14d-9 under the 1934 Act) by the Company recommending that stockholders accept any such offer or proposal, Investor shall not be prohibited from taking any of the actions otherwise prohibited by this Section 8.1(c) only for so long as the Company maintains and does not withdraw such recommendation;

(d) directly or indirectly, solicit proxies or consents or become a participant in a solicitation (as such terms are defined in Regulation 14A under the 1934 Act) in opposition to the recommendation of a majority of the Company’s Board of Directors with respect to any matter, or seek to advise or influence any Person, with respect to voting of any Shares of Then Outstanding Common Stock;

(e) deposit any Shares of Then Outstanding Common Stock in a voting trust or subject any Shares of Then Outstanding Common Stock to any arrangement or agreement with respect to the voting of such Shares of Then Outstanding Common Stock;

(f) propose (i) any merger, consolidation, business combination, tender or exchange offer, purchase of the Company’s assets or businesses, or similar transaction involving the Company or (ii) any recapitalization, restructuring, liquidation or other extraordinary transaction with respect to the Company;

(g) act in concert with any Third Party to take any action in clauses (a) through (e) above, or form, join or in any way participate in a “partnership, limited partnership, syndicate, or other group” within the meaning of Section 13(d)(3) of the 1934 Act;

(h) enter into discussions, negotiations, arrangements or agreements with any Person relating to the foregoing actions referred to in (a) through (e) above; provided, however, that (A) nothing in the foregoing clause (b) shall prohibit the Investor from proposing to the Company’s Nominating and Corporate Governance Committee (and not pursuant to the advance notice provisions set forth in the Company’s bylaws), in a confidential, nonpublic manner, potential director candidates for consideration by the Company’s Nominating and Corporate Governance Committee, which candidates the Investor believes would be in the best interest of the Company and its stockholders; and (B) nothing contained in this Section 8.1 prohibits the Investor or its Affiliates from acquiring a company or business that owns Shares of Then Outstanding Common Stock and/or Common Stock Equivalents provided that any such securities of the Company so acquired will be subject to the provisions of this Section 8.1; or

(i) request or propose to the Company’s Board of Directors (or any committee thereof), any member(s) thereof or any officer of the Company that the Company amend, waive, or consider the amendment or waiver of, any provisions set forth in this Section 8.1 (including this clause (i));

provided, however, that (A) nothing contained in this Section 8.1 shall prohibit the Investor from making proposals to the Company’s Chairman or Chief Executive Officer on a confidential, nonpublic basis for a proposed transaction between the parties of the type described in the foregoing clauses (a) and (f), so long as the Investor reasonably

- 20 -

believes in good faith, based on the written advice of its outside counsel, that neither it nor the Company would reasonably be expected to be required by applicable Law or stock exchange requirement to disclose publicly any such proposal and (B) nothing in the foregoing clause (b) shall prohibit the Investor from proposing to the Company’s Nominating and Corporate Governance Committee (and not pursuant to the advance notice provisions set forth in the Company’s bylaws), on a confidential, non-public basis, potential director candidates for consideration by the Company’s Nominating and Corporate Governance Committee, which candidates the Investor believes would be in the best interest of the Company and its stockholders, so long as the Investor reasonably believes in good faith, based on the written advice of its outside counsel, that neither it nor the Company would reasonably be expected to be required by applicable Law or stock exchange requirement to disclose publicly any such proposal. None of (x) the ownership nor purchase by an employee benefit plan of the Investor or the Investor’s Affiliates in any diversified index, mutual or pension fund managed by an independent advisor, which fund in-turn holds, directly or indirectly, securities of the Company, (y) transfers or resales of the Shares by the Investor to any other person in compliance with Section 7.5 or (z) the mere voting of the Shares, will be deemed to be a breach of the Investor’s standstill obligations under this Section 8.1.

8.2 Restrictions on Dispositions.

(a) Lock-Up. During the Lock-Up Term, without the prior approval of the Company, the Investor shall not, and shall cause its Affiliates not to, Dispose of (x) any of the Shares, together with any shares of Common Stock issued in respect thereof as a result of any stock split, stock dividend, share exchange, merger, consolidation or similar recapitalization, and (y) any Common Stock issued as (or issuable upon the exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange or in replacement of, the shares of Common Stock described in clause (x) of this sentence (collectively, the “Lock-Up Securities”); provided, however, that the foregoing shall not prohibit the Investor from transferring Lock-Up Securities to a Permitted Transferee.

(b) Certain Tender Offers. Notwithstanding any other provision of this Section 8.2, this Section 8.2 shall not prohibit or restrict any Disposition of Shares of Then Outstanding Common Stock and/or Common Stock Equivalents by the Standstill Parties into (i) a tender offer by a Third Party which is not opposed by the Company’s Board of Directors (but only after the Company’s filing of a Schedule 14D-9, or any amendment thereto, with the SEC disclosing the recommendation of the Company’s Board of Directors with respect to such tender offer) or (ii) an issuer tender offer by the Company.

8.3 Termination of Certain Rights and Obligations.

(a) Section 8.1 shall terminate and have no further force or effect, upon the earliest to occur of:

(i) provided that none of the Standstill Parties has violated Section 8.1, the public announcement by the Company or any Third Party of any definitive agreement between the Company and such Third Party and/or any of its Affiliates providing for a Change of Control;

(ii) a third party commences a tender offer seeking to acquire beneficial ownership of more than 50% of the Company’s outstanding Common Stock and the Board of Directors of the Company recommends that the stockholders tender their Common Stock in such tender offer;

(iii) the expiration of the Standstill Term (subject to revival as set forth in the definition of such term);

(iv) the date on which the Common Stock ceases to be registered pursuant to Section 12 of the 1934 Act; and

(v) a liquidation or dissolution of the Company;

- 21 -

provided, however, that if Section 8.1 terminates due to (x) clause (i) above and such definitive agreement is abandoned and no other definitive agreement providing for a Change in Control has been announced and not abandoned or terminated within ninety (90) days thereafter or (y) clause (ii) above and the tender offer is withdrawn or abandoned or the Board of Directors of the Company withdraws its recommendation in favor of such tender offer prior to the completion of the tender offer, the restrictions contained in Section 8.1 shall again be applicable until otherwise terminated pursuant to this Section 8.3(a).

(b) Section 8.2 shall terminate and have no further force or effect upon the earliest to occur of:

(i) the end of the Lock-up Term;

(ii) the consummation of a Change of Control;

(iii) the date on which the Investor and any Permitted Transferees (and the respective Affiliates of the Investor and any such Permitted Transferee) together beneficially own less than five percent (5%) of the Shares of Then Outstanding Common Stock;

(iv) a liquidation or dissolution of the Company; and

(v) the date on which the Common Stock ceases to be registered pursuant to Section 12 of the 1934 Act.

8.4 Effect of Termination. No termination pursuant to either of Sections 8.3(a) or (b) shall relieve any of the parties (or the Permitted Transferee, if any) for liability for breach of or default under any of their respective obligations or restrictions under any terminated provision of this Agreement, which breach or default arose out of events or circumstances occurring or existing prior to the date of such termination.

9. Survival and Indemnification.

9.1 Survival. The representations, warranties, covenants and agreements contained in this Agreement shall survive the Closing of the transactions contemplated by this Agreement for the applicable statute of limitations.

9.2 Indemnification. The Company agrees to indemnify and hold harmless the Investor and its Affiliates, and their respective directors, officers, trustees, members, managers, employees, investment advisers and agents, from and against any and all losses, claims, damages, liabilities and expenses (including without limitation reasonable and documented attorney fees and disbursements and other documented out-of-pocket expenses reasonably incurred in connection with investigating, preparing or defending any action, claim or proceeding, pending or threatened and the costs of enforcement thereof) (collectively, “Losses”) to which such Person may become subject as a result of any breach of representation, warranty, covenant or agreement made by or to be performed on the part of the Company under the Transaction Documents, and will reimburse any such Person for all such amounts as they are incurred by such Person solely to the extent such amounts have been finally judicially determined not to have resulted from such Person’s fraud or willful misconduct.

9.3 Conduct of Indemnification Proceedings. Any person entitled to indemnification hereunder shall (a) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (b) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided that any person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such person unless (i) the indemnifying party has agreed in writing to pay such fees or expenses, (ii) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such person or (iii) in the reasonable judgment of any such

- 22 -

person, based upon written advice of its counsel, a conflict of interest exists between such person and the indemnifying party with respect to such claims (in which case, if the person notifies the indemnifying party in writing that such person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such person); and provided, further, that the failure of any indemnified party to give written notice as provided herein shall not relieve the indemnifying party of its obligations hereunder, except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the defense of any such claim or litigation. It is understood that the indemnifying party shall not, in connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any time for all such indemnified parties. No indemnifying party will, except with the consent of the indemnified party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation. No indemnified party will, except with the consent of the indemnifying party, consent to entry of any judgment or enter into any settlement.

10. Miscellaneous.

10.1 Successors and Assigns. This Agreement may not be assigned by a party hereto without the prior written consent of the other party, provided, however, that the Investor may assign its rights and delegate its duties hereunder in whole or in part to an Affiliate or to a third party acquiring some or all of its Shares in a transaction complying with applicable securities laws without the prior written consent of the Company, provided such assignee agrees in writing to be bound by the provisions hereof that apply to Investor. The provisions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties. Without limiting the generality of the foregoing, in the event that the Company is a party to a merger, consolidation, share exchange or similar business combination transaction in which the Common Stock is converted into the equity securities of another Person, from and after the effective time of such transaction, such Person shall, by virtue of such transaction, be deemed to have assumed the obligations of the Company hereunder, the term “Company” shall be deemed to refer to such Person and the term “Shares” shall be deemed to refer to the securities received by the Investor in connection with such transaction. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective permitted successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

10.2 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signatures complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

10.3 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

10.4 Notices. Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given as hereinafter described (a) if given by personal delivery, then such notice shall be deemed given upon such delivery, (b) if given by facsimile or e-mail, then such notice shall be deemed given upon receipt of confirmation of complete facsimile transmittal or confirmation of receipt of an e-mail transmission, (c) if given by mail, then such notice shall be deemed given upon the earlier of (i) receipt of such notice by the recipient or (ii) three days after such notice is deposited in first class mail, postage prepaid, and (d) if given by an internationally recognized overnight air courier, then such notice shall be deemed given one Business Day after delivery to such carrier. All notices shall be addressed to the party to be notified at the address as follows, or at such other address as such party may designate by ten days’ advance written notice to the other party:

- 23 -

If to the Company:

Translate Bio, Inc.

29 Hartwell Avenue

Lexington, Massachusetts 02421

Attention: Paul Burgess, Chief Operating Officer and Chief Legal Officer

Email: pburgess@translate.bio

With a copy (which shall not constitute notice) to:

Wilmer Cutler Pickering Hale and Dorr LLP

60 State Street

Boston, Massachusetts 02109

Attention: Susan W. Murley and Cynthia T. Mazareas

Fax: (617) 526-5000

Email: susan.murley@wilmerhale.com;

cynthia.mazareas@wilmerhale.com

If to the Investor:

Sanofi

c/o 54 rue la Boétie

75008, Paris

France

Attention: Head of Legal

Email: Global_Generalcounsel@sanofi.com

With a copy (which shall not constitute notice) to:

Covington & Burling LLP

Salesforce Tower, 415 Mission Street, Suite 5400

San Francisco, CA 94105-2533

Attention: Ingrid Rechtin

Fax: 415-955-6580

Email: irechtin@cov.com

10.5 Expenses. The parties hereto shall pay their own costs and expenses in connection herewith regardless of whether the transactions contemplated hereby are consummated; it being understood that each of the Company and the Investor has relied on the advice of its own respective counsel.

10.6 Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Investor.

10.7 Publicity. Each Party will have the right to issue press releases and disclosures in regards to the terms of the Transaction Documents only with the prior approval of the other Party; which consent shall not unreasonably withheld or delayed; provided, however, that any disclosure which is required by applicable Law or the rules of the SEC or any securities exchange, as reasonably advised by the disclosing Party’s counsel, may be made without the prior consent of the other Party, along with a press release commensurate in scope with such disclosure, although such other Party shall be given prompt notice of any such legally required disclosure and the disclosing Party shall, to the extent feasible, provide such other Party an opportunity to comment on the proposed disclosure.

10.8 Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability

- 24 -

without invalidating the remaining provisions hereof but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any provision hereof prohibited or unenforceable in any respect.

10.9 Entire Agreement. This Agreement, including the signature pages, Exhibits, and the other Transaction Documents constitute the entire agreement among the parties hereof with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter hereof and thereof.

10.10 Further Assurances. The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.

10.11 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Agreement.

[remainder of page intentionally left blank]

-25-

IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above written.

COMPANY:	TRANSLATE BIO, INC.
	By:	/s/ Ronald C. Renaud, Jr.
		Name:	Ronald C. Renaud, Jr
		Title:	Chief Executive Officer

-26-

INVESTOR:	SANOFI
	By:	/s/ Karen Linehan
		Name:	Karen Linehan
		Title:	Executive Vice President, Legal Affairs

-27-

Investor Information

Entity Name:

Contact Person:

Address:

City:

State:

Zip Code:

Telephone:

Facsimile:

Email:

Tax ID #:

Name in which Shares should be issued:

-28-

EXHIBIT A

REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of                 , by and between Translate Bio, Inc., a Delaware corporation (the “Company”), and the “Investor” named in that certain Securities Purchase Agreement by and between the Company and the Investor, dated as of June 22, 2020 (the “Purchase Agreement”). Capitalized terms used herein have the respective meanings ascribed thereto in the Purchase Agreement unless otherwise defined herein.

The parties hereby agree as follows:

1. Definitions. As used in this Agreement, the following terms shall have the following meanings:

(a) “Agreement” has the meaning set forth in the first paragraph.

(b) “Allowed Delay” has the meaning set forth in Section 2(c)(ii).

(c) “Availability Date” has the meaning set forth in Section 3(i).

(d) “Blackout Period” has the meaning set forth in Section 2(d)(ii).

(e) “Company” has the meaning set forth in the first paragraph.

(f) “Cut Back Shares” has the meaning set forth in Section 2(e).

(g) “Effectiveness Liquidated Damages” has the meaning set forth in Section 2(d)(ii).

(h) “Effectiveness Period” has the meaning set forth in Section 3(a).

(i) “Filing Deadline” has the meaning set forth in Section 2(a).

(j) “Inspectors” has the meaning set forth in Section 4.

(k) “Investor” means the Investor identified in the Purchase Agreement and any Affiliate or permitted transferee of the Investor who is a subsequent holder of Registrable Securities.

(l) “Liquidated Damages” has the meaning set forth in Section 2(d)(ii).

(m) “Maintenance Failure” has the meaning set forth in Section 2(d)(ii).

(n) “Prospectus” means (a) the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus, and (b) any “free writing prospectus” as defined in Rule 405 under the 1933 Act.

A-1

(o) “Purchase Agreement” has the meaning set forth in the first paragraph.

(p) “Records” has the meaning set forth in Section 4.

(q) “Register,” “registered” and “registration” refer to a registration made by preparing and filing a Registration Statement or similar document in compliance with the 1933 Act, and the declaration or ordering of effectiveness of such Registration Statement or document.

(r) “Registrable Securities” means (a) the Shares and (b) any other securities issued or issuable with respect to or in exchange for Shares, whether by merger, charter amendment or otherwise; provided, that a security shall cease to be a Registrable Security upon (i) sale pursuant to a Registration Statement or Rule 144 under the 1933 Act, or (ii) such security becoming eligible for sale without restriction by the Investor pursuant to Rule 144, including without any manner of sale or volume limitations, and without the requirement to be in compliance with Rule 144(c)(1) (or any successor thereto) promulgated under the 1933 Act.

(s) “Registration Liquidated Damages” has the meaning set forth in Section 2(d)(i).

(t) “Registration Statement” means any registration statement of the Company under the 1933 Act that covers the resale of any of the Registrable Securities pursuant to the provisions of this Agreement, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.

(u) “Restriction Termination Date” has the meaning set forth in Section 2(e).

(v) “SEC” means the U.S. Securities and Exchange Commission.

(w) “SEC Restrictions” has the meaning set forth in Section 2(e).

(x) “Shelf Registration Statement” has the meaning set forth in Section 2(a).

2. Registration.

(a) Registration Statements. Promptly following the Closing Date but no later than thirty (30) days after the Closing Date (the “Filing Deadline”), the Company shall prepare and file with the SEC one Registration Statement on Form S-3 (a “Shelf Registration Statement”) covering the resale of all of the Registrable Securities. In the event that Form S-3 is unavailable for such a registration, the Company shall use such other form as is available for such a registration and reasonably acceptable to the Investor. Subject to any SEC comments, such Registration Statement shall include the plan of distribution attached hereto as Exhibit A; provided, however, that the Investor shall not be named as an “underwriter” in such Registration Statement. Such Registration Statement also shall cover, to the extent allowable under the 1933 Act and the rules

-2-

promulgated thereunder (including Rule 416), such indeterminate number of additional shares of Common Stock resulting from stock splits, stock dividends or similar transactions with respect to the Registrable Securities. Such Registration Statement shall not include any shares of Common Stock or other securities for the account of any other holder without the prior written consent of the Investor. Such Registration Statement (and each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided in accordance with Section 3(c) to the Investor prior to its filing or other submission.

(b) Expenses. The Company will pay all expenses associated with each Registration Statement, including filing and printing fees, the Company’s counsel and accounting fees and expenses, costs associated with clearing the Registrable Securities for sale under applicable state securities laws and listing fees, but excluding discounts, commissions, fees of underwriters, selling brokers, dealer managers or similar securities industry professionals with respect to the Registrable Securities being sold.

(c) Effectiveness.

(i) The Company shall use commercially reasonable efforts to have each Registration Statement become or be declared effective as soon as practicable. By 5:30 p.m. (Eastern time) on the second Business Day following the date on which the Registration Statement becomes or is declared effective by the SEC, the Company shall file with the SEC, in accordance with Rule 424 under the 1933 Act, the final prospectus to be used in connection with sales pursuant to such Registration Statement. The Company shall notify the Investor by facsimile or e-mail as promptly as practicable, and in any event, within twenty-four (24) hours, after any Registration Statement is declared effective and shall simultaneously provide the Investor with copies of any related Prospectus to be used in connection with the sale or other disposition of the securities covered thereby.

(ii) For not more than thirty (30) consecutive days or for a total of not more than sixty (60) days in any twelve (12) month period, the Company may suspend the use of any Prospectus included in any Registration Statement contemplated by this Section in the event that the Company determines in good faith that such suspension is necessary to (A) delay the disclosure of material nonpublic information concerning the Company, the disclosure of which at the time is not, in the good faith opinion of the Company, in the best interests of the Company or (B) amend or supplement the affected Registration Statement or the related Prospectus so that such Registration Statement or Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the case of the Prospectus in light of the circumstances under which they were made, not misleading (an “Allowed Delay”); provided, that the Company shall promptly (a) notify the Investor in writing of the commencement of an Allowed Delay, but shall not (without the prior written consent of the Investor) disclose to the Investor any material nonpublic information giving rise to an Allowed Delay, (b) advise the Investor in writing to cease all sales under such Registration Statement until the end of the Allowed Delay and (c) use commercially reasonable efforts to terminate an Allowed Delay as promptly as practicable.

-3-

(d) Effect of Failure to File and Obtain and Maintain Effectiveness of Registration Statement.

(i) If a Registration Statement covering the Registrable Securities is not filed with the SEC on or prior to the Filing Deadline, the Company will make pro rata payments to the Investor, as liquidated damages and not as a penalty (the “Registration Liquidated Damages”), in an amount equal to one percent (1%) of the aggregate amount invested by the Investor for the initial day of failure to file such Registration Statement by the Filing Deadline and for each subsequent 30-day period (pro rata for any portion thereof) thereafter for which no such Registration Statement is filed with respect to the Registrable Securities. Such payments shall be made to the Investor in cash no later than ten (10) Business Days after the end of the date of the initial failure to file such Registration Statement by the Filing Deadline and each subsequent 30-day period, as applicable. Interest shall accrue at the rate of one percent (1%) per month on any such liquidated damages payments that shall not be paid by the applicable payment date until such amount is paid in full.

(ii) If the Company is eligible at time of filing of the Registration Statement, the Registration Statement shall become automatically effective upon filing. Otherwise, if (A) a Registration Statement covering the Registrable Securities is not declared effective by the SEC prior to the earlier of (i) five (5) Business Days after the SEC informs the Company that no review of such Registration Statement will be made or that the SEC has no further comments on such Registration Statement or (ii) the 90th day after the Closing Date, or (B) after a Registration Statement has been declared effective by the SEC, sales cannot be made pursuant to such Registration Statement for any reason (including, without limitation, by reason of a stop order or the Company’s failure to update such Registration Statement), but excluding any Allowed Delay or the inability of the Investor to sell the Registrable Securities covered thereby due to market conditions or (C) after the date six months following the Closing Date, and only in the event a Registration Statement is not effective or available to sell all Registrable Securities, the Company fails to file with the SEC any required reports under Section 13 or 15(d) of the 1934 Act such that it is not in compliance with Rule 144(c)(1), as a result of which the Investor (assuming the Investor is not an affiliate of the Company) is unable to sell Registrable Securities without restriction under Rule 144 (or any successor thereto) promulgated under the 1933 Act (each of (A), (B) and (C), a “Maintenance Failure”), then the Company will make pro rata payments to the Investor, as liquidated damages and not as a penalty (the “Effectiveness Liquidated Damages” and together with the Registration Liquidated Damages, the (“Liquidated Damages”), in an amount equal to one percent (1%) of the aggregate amount invested by the Investor for the Registrable Securities then held by the Investor for the initial day of a Maintenance Failure and for each 30-day period (pro rata for any portion thereof) thereafter until the Maintenance Failure is cured (each, a “Blackout Period”). The Effectiveness Liquidated Damages shall be paid monthly within ten (10) Business Days of the end of the date of such Maintenance Failure and each subsequent 30-day period, as applicable. Such payments shall be made to the Investor in cash. Interest shall accrue at the rate of one percent (1%) per month on any such liquidated damages payments that shall not be paid by the applicable payment date until such amount is paid in full.

-4-

(iii) The parties agree that (1) notwithstanding anything to the contrary herein or in the Purchase Agreement, no Liquidated Damages shall be payable with respect to any period after the expiration of the Effectiveness Period (as defined below) (it being understood that this sentence shall not relieve the Company of any Liquidated Damages accruing prior to the expiration of the Effectiveness Period), and in no event shall the aggregate amount of Liquidated Damages payable to the Investor exceed, in the aggregate, six percent (6%) of the aggregate purchase price paid by the Investor pursuant to the Purchase Agreement and (2) except with respect to (A) the initial day of failure to file a Registration Statement by the Filing Deadline and (B) the initial day of any Maintenance Failure, in no event shall the Company be liable in any thirty (30) day period for Liquidated Damages under this Agreement in excess of one percent (1%) of the aggregate purchase price paid by the Investor pursuant to the Purchase Agreement.

(iv) For the avoidance of doubt, the Liquidated Damages described in this Section 2(d) shall not otherwise limit or affect any other remedies at law or in equity available to the Investor with respect to any breach of the Company’s obligations under this Agreement or the Purchase Agreement.

(e) Rule 415; Cutback. If at any time the SEC takes the position that the offering of some or all of the Registrable Securities in a Registration Statement is not eligible to be made on a delayed or continuous basis under the provisions of Rule 415 under the 1933 Act or requires the Investor to be named as an “underwriter,” the Company shall use commercially reasonable efforts to advocate before the SEC its reasonable position that the offering contemplated by such Registration Statement is a valid secondary offering and not an offering “by or on behalf of the issuer” as defined in Rule 415 and the Investor is not an “underwriter.” The Investor shall have the right to select one legal counsel to review and oversee any registration or matters pursuant to this Section 2(e), including participation in any meetings or discussions with the SEC regarding the SEC’s position and to comment on any written submission made to the SEC with respect thereto, which counsel shall be designated by the holders of a majority of the Registrable Securities. In the event that, despite the Company’s commercially reasonable efforts and compliance with the terms of this Section 2(e), the SEC does not alter its position, the Company shall (i) remove from such Registration Statement such portion of the Registrable Securities (the “Cut Back Shares”) and/or (ii) agree to such restrictions and limitations on the registration and resale of the Registrable Securities as the SEC may require to assure the Company’s compliance with the requirements of Rule 415 (collectively, the “SEC Restrictions”); provided, however, that the Company shall not agree to name the Investor as an “underwriter” in such Registration Statement without the prior written consent of the Investor. No liquidated damages shall accrue as to any Cut Back Shares until such date as the Company is able to effect the registration of such Cut Back Shares in accordance with any SEC Restrictions applicable to such Cut Back Shares (such date, the “Restriction Termination Date”). From and after the Restriction Termination Date applicable to any Cut Back Shares, all of the provisions of this Section 2 (including the Company’s obligations with respect to the filing of a Registration Statement and its obligations to use commercially reasonable efforts to have such Registration Statement declared effective within the time periods set forth herein and the liquidated damages provisions relating thereto) shall again be applicable to such Cut Back Shares; provided, however, that (i) the Filing Deadline and/or the Qualification Deadline, as applicable, for such Registration Statement including such Cut Back Shares shall be ten (10) Business Days after such Restriction Termination Date, and (ii) the date by which the Company is required to obtain effectiveness with respect to such Cut Back Shares under Section 2(c) shall be the 90th day immediately after the Restriction Termination Date.

-5-

3. Company Obligations. The Company will use commercially reasonable efforts to effect the registration of the Registrable Securities in accordance with the terms hereof, and pursuant thereto the Company will, as expeditiously as possible:

(a) use commercially reasonable efforts to cause such Registration Statement to become effective and to remain continuously effective for a period that will terminate upon the earlier of (i) the date on which all Registrable Securities covered by such Registration Statement, as amended from time to time, have been sold, and (ii) the date on which all Shares cease to be Registrable Securities (the “Effectiveness Period”) and advise the Investor promptly in writing when the Effectiveness Period has expired;

(b) prepare and file with the SEC such amendments and post-effective amendments to such Registration Statement and the related Prospectus as may be necessary to keep such Registration Statement effective for the Effectiveness Period and to comply with the provisions of the 1933 Act and the 1934 Act with respect to the distribution of all of the Registrable Securities covered thereby;

(c) provide copies to and permit the Investor to review each Registration Statement and all amendments and supplements thereto no fewer than two (2) days prior to their filing with the SEC and to furnish reasonable comments thereon;

(d) furnish to the Investor (i) promptly after the same is prepared and filed with the SEC, if requested by the Investor, one (1) copy of any Registration Statement and any amendment thereto, each preliminary prospectus and Prospectus and each amendment or supplement thereto, and each letter written by or on behalf of the Company to the SEC or the staff of the SEC, and each item of correspondence from the SEC or the staff of the SEC, in each case relating to such Registration Statement (other than any portion thereof which contains information for which the Company has sought confidential treatment), and (ii) such number of copies of a Prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents as the Investor may reasonably request in order to facilitate the disposition of the Registrable Securities owned by the Investor that are covered by such Registration Statement;

(e) use commercially reasonable efforts to (i) prevent the issuance of any stop order or other suspension of effectiveness and, (ii) if such order is issued, obtain the withdrawal of any such order at the earliest practical moment;

(f) prior to any public offering of Registrable Securities, use commercially reasonable efforts to register or qualify or cooperate with the Investor and its counsel in connection with the registration or qualification of such Registrable Securities for the offer and sale under the securities or blue sky laws of such jurisdictions requested by the Investor and do any and all other commercially reasonable acts or things necessary or advisable to enable the distribution in such jurisdictions of the Registrable Securities covered by the Registration Statement; provided,

-6-

however, that the Company shall not be required in connection therewith or as a condition thereto to (i) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(f), (ii) subject itself to general taxation in any jurisdiction where it would not otherwise be so subject but for this Section 3(f), or (iii) file a general consent to service of process in any such jurisdiction;

(g) use commercially reasonable efforts to cause all Registrable Securities covered by a Registration Statement to be listed on each securities exchange, interdealer quotation system or other market on which similar securities issued by the Company are then listed;

(h) promptly notify the Investor, at any time prior to the end of the Effectiveness Period, upon discovery that, or upon the happening of any event as a result of which, the Prospectus includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing (provided that such notice shall not, without the prior written consent of the Investor, disclose to the Investor any material nonpublic information regarding the Company), and promptly prepare, file with the SEC and furnish to such holder a supplement to or an amendment of such Prospectus as may be necessary so that such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;

(i) otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the SEC under the 1933 Act and the 1934 Act, including, without limitation, Rule 172 under the 1933 Act, file any final Prospectus, including any supplement or amendment thereof, with the SEC pursuant to Rule 424 under the 1933 Act, promptly inform the Investor in writing if, at any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof, the Investor is required to deliver a Prospectus in connection with any disposition of Registrable Securities and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder; and make available to its security holders, as soon as reasonably practicable, but not later than the Availability Date (as defined below), an earnings statement covering a period of at least twelve (12) months, beginning after the effective date of each Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the 1933 Act, including Rule 158 promulgated thereunder (for the purpose of this subsection 3(i), “Availability Date” means the 45th day following the end of the fourth fiscal quarter that includes the effective date of such Registration Statement, except that, if such fourth fiscal quarter is the last quarter of the Company’s fiscal year, “Availability Date” means the 90th day after the end of such fourth fiscal quarter);

(j) if requested by the Investor, the Company shall (i) as soon as practicable, incorporate in a prospectus supplement or post-effective amendment such information as the Investor reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) as soon as practicable, make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) as soon as practicable, supplement or make amendments to any Registration Statement if reasonably requested by the Investor;

-7-

(k) within two (2) Business Days after a Registration Statement which covers Registrable Securities is ordered effective by the SEC, the Company shall deliver to the transfer agent for such Registrable Securities (with copies to the Investor) confirmation that such Registration Statement has been declared effective by the SEC; and

(l) with a view to making available to the Investor the benefits of Rule 144 (or its successor rule) and any other rule or regulation of the SEC that may at any time permit the Investor to sell shares of Common Stock to the public without registration, the Company covenants and agrees to: (i) make and keep adequate current public information available, as those terms are understood and defined in Rule 144, until the earlier of (A) six months after such date as all of the Registrable Securities may be sold without restriction by the holders thereof pursuant to Rule 144 or any other rule of similar effect or (B) such date as all of the Registrable Securities shall have been resold; (ii) file with the SEC in a timely manner all reports and other documents required of the Company under the 1934 Act; and (iii) furnish to the Investor upon request, as long as the Investor owns any Registrable Securities, (A) a written statement by the Company that it has complied with the reporting requirements of the 1934 Act, (B) a copy of the Company’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other information as may be reasonably requested in order to avail the Investor of any rule or regulation of the SEC that permits the selling of any such Registrable Securities without registration.

4. Due Diligence Review; Information. The Company shall, upon reasonable prior notice, make available, during normal business hours, for inspection and review by the Investor, and advisors to and representatives of the Investor (who may or may not be affiliated with the Investor and who are reasonably acceptable to the Company) (collectively, the “Inspectors”), all pertinent financial and other records, and all other corporate documents and properties of the Company (collectively, the “Records”), as may be reasonably necessary for the purpose of such review, and cause the Company’s officers, directors and employees, within a reasonable time period, to supply all such information reasonably requested by the Inspectors (including, without limitation, in response to all questions and other inquiries reasonably made or submitted by any of them), prior to and from time to time after the filing and effectiveness of such Registration Statement for the sole purpose of enabling the Investor and its accountants and attorneys to conduct initial and ongoing due diligence with respect to the Company and the accuracy of such Registration Statement; provided, however, that each Inspector shall have agreed in writing to hold in strict confidence and to not make any disclosure (except to the Investor) or use of any Record or other information which the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (a) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required under the 1933 Act, (b) the release of such Records is ordered pursuant to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction, or (c) the information in such Records has been made generally available to the public other than by disclosure in violation of this Section 4 or any other Transaction Document.

-8-

Notwithstanding the foregoing, the Company shall not disclose material nonpublic information to the Investor, or to advisors to or representatives of the Investor, unless prior to disclosure of such information the Company identifies such information as being material nonpublic information and provides the Investor, such advisors and such representatives with the opportunity to accept or refuse to accept such material nonpublic information for review and the Investor enters into an appropriate confidentiality and non-use agreement with the Company with respect thereto.

5. Obligations of the Investor.

(a) The Investor shall furnish in writing to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably required to effect the registration of such Registrable Securities, and shall execute such documents in connection with such registration as the Company may reasonably request. At least five (5) Business Days prior to the first anticipated filing date of any Registration Statement, the Company shall notify the Investor of the information the Company requires from the Investor. The Investor shall provide such information to the Company at least two (2) Business Days prior to the first anticipated filing date of such Registration Statement.

(b) The Investor, by its acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of a Registration Statement hereunder.

(c) The Investor agrees that, upon receipt of any notice from the Company of either (i) the commencement of an Allowed Delay pursuant to Section 2(c)(ii) or (ii) the happening of an event pursuant to Section 3(h) hereof, the Investor will immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement covering such Registrable Securities, until the Investor is advised by the Company that such dispositions may again be made.

(d) The Investor covenants and agrees that it will comply with the prospectus delivery requirements of the 1933 Act as applicable to it or an exemption therefrom in connection with sales of Registrable Securities pursuant to any Registration Statement.

6. Indemnification.

(a) Indemnification by the Company. The Company will indemnify and hold harmless the Investor and its officers, directors, partners, members, employees, investment advisers and agents, and each other person, if any, who controls the Investor within the meaning of the 1933 Act, against any losses, claims, damages or liabilities, joint or several, to which they may become subject under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement or omission or alleged omission of any material fact contained in any Registration Statement, any preliminary Prospectus or final Prospectus, or any amendment or supplement thereof or (ii) any violation by the Company or its agents of any rule or regulation promulgated under the 1933 Act or 1934 Act applicable to the Company or its agents and relating

-9-

to action or inaction required of the Company in connection with such registration, and will reimburse the Investor, and each such officer, director, partner, member, employee, investment adviser, agent and each such controlling person for any legal or other documented, out-of-pocket expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage or liability (or action in respect thereof); provided, however, that the Company will not be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon (i) an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by the Investor or any such controlling person in writing specifically for use in such Registration Statement or Prospectus, (ii) the use by the Investor of an outdated or defective Prospectus after the Company has notified the Investor in writing that such Prospectus is outdated or defective; (iii) the Investor’s failure to send or give a copy of the Prospectus or supplement (as then amended or supplemented), if required (and not exempted) to the Persons asserting an untrue statement or omission or alleged untrue statement or omission at or prior to the written confirmation of the sale of Registrable Securities; or (iv) the Investor’s bad faith, gross negligence, recklessness, fraud or willful misconduct.

(b) Indemnification by the Investor. The Investor agrees to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors, officers, employees, stockholders and each person who controls the Company (within the meaning of the 1933 Act) against any losses, claims, damages, liabilities and expense (including reasonable attorney fees) resulting from any untrue statement of a material fact or any omission of a material fact required to be stated in any Registration Statement or Prospectus or preliminary Prospectus or amendment or supplement thereto or necessary to make the statements therein not misleading, to the extent, but only to the extent that such untrue statement or omission is contained in any information furnished in writing by the Investor to the Company specifically for inclusion in such Registration Statement or Prospectus or amendment or supplement thereto. Except to the extent that any such losses, claims, damages, liabilities or expenses are finally judicially determined to have resulted from the Investor’s bad faith, gross negligence, recklessness, fraud or willful misconduct, in no event shall the liability of the Investor be greater in amount than the dollar amount of the proceeds (net of all expense paid by the Investor in connection with any claim relating to this Section 6 and the amount of any damages the Investor has otherwise been required to pay by reason of such untrue statement or omission) received by the Investor upon the sale of the Registrable Securities included in such Registration Statement giving rise to such indemnification obligation.

(c) Conduct of Indemnification Proceedings. Any person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided that any person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such person unless (A) the indemnifying party has agreed in writing to pay such fees or expenses, (B) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such person or (C) in the reasonable judgment of any such person, based upon written advice of its counsel, a conflict of interest exists between such person and the indemnifying party with respect to such claims (in which case, if the person notifies the indemnifying party in writing that such person elects to

-10-

employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such person); and provided, further, that the failure of any indemnified party to give written notice as provided herein shall not relieve the indemnifying party of its obligations hereunder, except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the defense of any such claim or litigation. It is understood that the indemnifying party shall not, in connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any time for all such indemnified parties. No indemnifying party will, except with the consent of the indemnified party, which shall not be unreasonably withheld or conditioned, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation.

(d) Contribution. If for any reason the indemnification provided for in the preceding paragraphs (a) and (b) is unavailable to an indemnified party or insufficient to hold it harmless, other than as expressly specified therein, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations. No person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution from any person not guilty of such fraudulent misrepresentation. Except to the extent that any such losses, claims, damages or liabilities are finally judicially determined to have resulted from a holder of Registrable Securities’ bad faith, gross negligence, recklessness, fraud or willful misconduct, in no event shall the contribution obligation of such holder be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such holder in connection with any claim relating to this Section 6 and the amount of any damages such holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission) received by it upon the sale of the Registrable Securities giving rise to such contribution obligation.

7. Miscellaneous.

(a) Amendments and Waivers. This Agreement may be amended only by a writing signed by the Company and the Investor. The Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company shall have obtained the written consent to such amendment, action or omission to act of the Investor.

(b) Notices. All notices and other communications provided for or permitted hereunder shall be made as set forth in Section 10.4 of the Purchase Agreement.

(c) Assignments and Transfers by Investor. The provisions of this Agreement shall be binding upon and inure to the benefit of the Investor and their respective successors and assigns. The Investor may transfer or assign, in whole or from time to time in part, to one or more persons its rights hereunder in connection with the transfer of Registrable Securities by the Investor to such person, provided that the Investor complies with all laws applicable thereto, and the provisions of the Purchase Agreement, and provides written notice of assignment to the Company promptly after such assignment is effected, and such person agrees in writing to be bound by all of the provisions contained herein.

-11-

(d) Assignments and Transfers by the Company. This Agreement may not be assigned by the Company (whether by operation of law or otherwise) without the prior written consent of the Investor, provided, however, that in the event that the Company is a party to a merger, consolidation, share exchange or similar business combination transaction in which the Common Stock is converted into the equity securities of another Person, from and after the effective time of such transaction, such Person shall, by virtue of such transaction, be deemed to have assumed the obligations of the Company hereunder, the term “Company” shall be deemed to refer to such Person and the term “Registrable Securities” shall be deemed to include the securities received by the Investor in connection with such transaction unless such securities are otherwise freely tradable by the Investor after giving effect to such transaction.

(e) Benefits of the Agreement. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

(f) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signatures complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

(g) Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

(h) Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any provisions hereof prohibited or unenforceable in any respect.

(i) Further Assurances. The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.

-12-

(j) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

(k) Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Agreement.

(l) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law.

[remainder of page intentionally left blank]

-13-

IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above written.

COMPANY:	TRANSLATE BIO, INC.
	By:
	Name:	Ronald Renaud
	Title:	President and CEO

INVESTOR:	SANOFI
	By:
	Name:
	Title:

Exhibit A

Plan of Distribution

The selling stockholders, which as used herein includes donees, pledgees, transferees or other successors-in-interest selling shares of common stock or interests in shares of common stock received after the date of this prospectus from a selling stockholder as a gift, pledge, partnership distribution or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of common stock or interests in shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices.

The selling stockholders may use any one or more of the following methods when disposing of shares or interests therein:

• ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

• block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;

• purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

• an exchange distribution in accordance with the rules of the applicable exchange;

• privately negotiated transactions;

• short sales effected after the date the registration statement of which this prospectus is a part is declared effective by the SEC;

• through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

• broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;

• a combination of any such methods of sale; and

• any other method permitted by applicable law.

The selling stockholders may, from time to time, pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933, as amended

(the “Securities Act”), amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

In connection with the sale of our common stock or interests therein, the selling stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume. The selling stockholders may also sell shares of our common stock short and deliver these securities to close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

The aggregate proceeds to the selling stockholders from the sale of the common stock offered by them will be the purchase price of the common stock less discounts or commissions, if any. Each of the selling stockholders reserves the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents. We will not receive any of the proceeds from this offering. Upon any exercise of the warrants by payment of cash, however, we will receive the exercise price of the warrants.

The selling stockholders also may resell all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act of 1933, provided that they meet the criteria and conform to the requirements of that rule.

The selling stockholders and any underwriters, broker-dealers or agents that participate in the sale of the common stock or interests therein may be “underwriters” within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of the shares may be underwriting discounts and commissions under the Securities Act. Selling stockholders who are “underwriters” within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the Securities Act.

To the extent required, the shares of our common stock to be sold, the names of the selling stockholders, the respective purchase prices and public offering prices, the names of any agents, dealer or underwriter, and any applicable commissions or discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement that includes this prospectus.

In order to comply with the securities laws of some states, if applicable, the common stock may be sold in these jurisdictions only through registered or licensed brokers or dealers. In addition, in some states the common stock may not be sold unless it has been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied with.

-2-

We have advised the selling stockholders that the anti-manipulation rules of Regulation M under the Securities Exchange Act of 1934, as amended, may apply to sales of shares in the market and to the activities of the selling stockholders and their affiliates. In addition, to the extent applicable, we will make copies of this prospectus (as it may be supplemented or amended from time to time) available to the selling stockholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The selling stockholders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act.

We have agreed to indemnify the selling stockholders against liabilities, including liabilities under the Securities Act and state securities laws, relating to the registration of the shares offered by this prospectus.

We have agreed with the selling stockholders to use commercially reasonable efforts to cause the registration statement of which this prospectus constitutes a part effective and to remain continuously effective until the earlier of (1) such time as all of the shares covered by this prospectus have been disposed of pursuant to and in accordance with such registration statement or (2) the date on which all of the shares may be sold without restriction pursuant to Rule 144 of the Securities Act.

-3-

EX-10.3

EXHIBIT 10.3

REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of July 20, 2020, by and between Translate Bio, Inc., a Delaware corporation (the “Company”), and the “Investor” named in that certain Securities Purchase Agreement by and between the Company and the Investor, dated as of June 22, 2020 (the “Purchase Agreement”). Capitalized terms used herein have the respective meanings ascribed thereto in the Purchase Agreement unless otherwise defined herein.

The parties hereby agree as follows:

1. Definitions. As used in this Agreement, the following terms shall have the following meanings:

(a) “Agreement” has the meaning set forth in the first paragraph.

(b) “Allowed Delay” has the meaning set forth in Section 2(c)(ii).

(c) “Availability Date” has the meaning set forth in Section 3(i).

(d) “Blackout Period” has the meaning set forth in Section 2(d)(ii).

(e) “Company” has the meaning set forth in the first paragraph.

(f) “Cut Back Shares” has the meaning set forth in Section 2(e).

(g) “Effectiveness Liquidated Damages” has the meaning set forth in Section 2(d)(ii).

(h) “Effectiveness Period” has the meaning set forth in Section 3(a).

(i) “Filing Deadline” has the meaning set forth in Section 2(a).

(j) “Inspectors” has the meaning set forth in Section 4.

(k) “Investor” means the Investor identified in the Purchase Agreement and any Affiliate or permitted transferee of the Investor who is a subsequent holder of Registrable Securities.

(l) “Liquidated Damages” has the meaning set forth in Section 2(d)(ii).

(m) “Maintenance Failure” has the meaning set forth in Section 2(d)(ii).

(n) “Prospectus” means (a) the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus, and (b) any “free writing prospectus” as defined in Rule 405 under the 1933 Act.

(o) “Purchase Agreement” has the meaning set forth in the first paragraph.

(p) “Records” has the meaning set forth in Section 4.

(q) “Register,” “registered” and “registration” refer to a registration made by preparing and filing a Registration Statement or similar document in compliance with the 1933 Act, and the declaration or ordering of effectiveness of such Registration Statement or document.

(r) “Registrable Securities” means (a) the Shares and (b) any other securities issued or issuable with respect to or in exchange for Shares, whether by merger, charter amendment or otherwise; provided, that a security shall cease to be a Registrable Security upon (i) sale pursuant to a Registration Statement or Rule 144 under the 1933 Act, or (ii) such security becoming eligible for sale without restriction by the Investor pursuant to Rule 144, including without any manner of sale or volume limitations, and without the requirement to be in compliance with Rule 144(c)(1) (or any successor thereto) promulgated under the 1933 Act.

(s) “Registration Liquidated Damages” has the meaning set forth in Section 2(d)(i).

(t) “Registration Statement” means any registration statement of the Company under the 1933 Act that covers the resale of any of the Registrable Securities pursuant to the provisions of this Agreement, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.

(u) “Restriction Termination Date” has the meaning set forth in Section 2(e).

(v) “SEC” means the U.S. Securities and Exchange Commission.

(w) “SEC Restrictions” has the meaning set forth in Section 2(e).

(x) “Shelf Registration Statement” has the meaning set forth in Section 2(a).

2. Registration.

(a) Registration Statements. Promptly following the Closing Date but no later than thirty (30) days after the Closing Date (the “Filing Deadline”), the Company shall prepare and file with the SEC one Registration Statement on Form S-3 (a “Shelf Registration Statement”) covering the resale of all of the Registrable Securities. In the event that Form S-3 is unavailable for such a registration, the Company shall use such other form as is available for such a registration and reasonably acceptable to the Investor. Subject to any SEC comments, such Registration Statement shall include the plan of distribution attached hereto as Exhibit A; provided, however, that the Investor shall not be named as an “underwriter” in such Registration Statement. Such Registration Statement also shall cover, to the extent allowable under the 1933 Act and the rules

- 2 -

promulgated thereunder (including Rule 416), such indeterminate number of additional shares of Common Stock resulting from stock splits, stock dividends or similar transactions with respect to the Registrable Securities. Such Registration Statement shall not include any shares of Common Stock or other securities for the account of any other holder without the prior written consent of the Investor. Such Registration Statement (and each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided in accordance with Section 3(c) to the Investor prior to its filing or other submission.

(b) Expenses. The Company will pay all expenses associated with each Registration Statement, including filing and printing fees, the Company’s counsel and accounting fees and expenses, costs associated with clearing the Registrable Securities for sale under applicable state securities laws and listing fees, but excluding discounts, commissions, fees of underwriters, selling brokers, dealer managers or similar securities industry professionals with respect to the Registrable Securities being sold.

(c) Effectiveness.

(i) The Company shall use commercially reasonable efforts to have each Registration Statement become or be declared effective as soon as practicable. By 5:30 p.m. (Eastern time) on the second Business Day following the date on which the Registration Statement becomes or is declared effective by the SEC, the Company shall file with the SEC, in accordance with Rule 424 under the 1933 Act, the final prospectus to be used in connection with sales pursuant to such Registration Statement. The Company shall notify the Investor by facsimile or e-mail as promptly as practicable, and in any event, within twenty-four (24) hours, after any Registration Statement is declared effective and shall simultaneously provide the Investor with copies of any related Prospectus to be used in connection with the sale or other disposition of the securities covered thereby.

(ii) For not more than thirty (30) consecutive days or for a total of not more than sixty (60) days in any twelve (12) month period, the Company may suspend the use of any Prospectus included in any Registration Statement contemplated by this Section in the event that the Company determines in good faith that such suspension is necessary to (A) delay the disclosure of material nonpublic information concerning the Company, the disclosure of which at the time is not, in the good faith opinion of the Company, in the best interests of the Company or (B) amend or supplement the affected Registration Statement or the related Prospectus so that such Registration Statement or Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the case of the Prospectus in light of the circumstances under which they were made, not misleading (an “Allowed Delay”); provided, that the Company shall promptly (a) notify the Investor in writing of the commencement of an Allowed Delay, but shall not (without the prior written consent of the Investor) disclose to the Investor any material nonpublic information giving rise to an Allowed Delay, (b) advise the Investor in writing to cease all sales under such Registration Statement until the end of the Allowed Delay and (c) use commercially reasonable efforts to terminate an Allowed Delay as promptly as practicable.

- 3 -

(d) Effect of Failure to File and Obtain and Maintain Effectiveness of Registration Statement.

(i) If a Registration Statement covering the Registrable Securities is not filed with the SEC on or prior to the Filing Deadline, the Company will make pro rata payments to the Investor, as liquidated damages and not as a penalty (the “Registration Liquidated Damages”), in an amount equal to one percent (1%) of the aggregate amount invested by the Investor for the initial day of failure to file such Registration Statement by the Filing Deadline and for each subsequent 30-day period (pro rata for any portion thereof) thereafter for which no such Registration Statement is filed with respect to the Registrable Securities. Such payments shall be made to the Investor in cash no later than ten (10) Business Days after the end of the date of the initial failure to file such Registration Statement by the Filing Deadline and each subsequent 30-day period, as applicable. Interest shall accrue at the rate of one percent (1%) per month on any such liquidated damages payments that shall not be paid by the applicable payment date until such amount is paid in full.

(ii) If the Company is eligible at time of filing of the Registration Statement, the Registration Statement shall become automatically effective upon filing. Otherwise, if (A) a Registration Statement covering the Registrable Securities is not declared effective by the SEC prior to the earlier of (i) five (5) Business Days after the SEC informs the Company that no review of such Registration Statement will be made or that the SEC has no further comments on such Registration Statement or (ii) the 90th day after the Closing Date, or (B) after a Registration Statement has been declared effective by the SEC, sales cannot be made pursuant to such Registration Statement for any reason (including, without limitation, by reason of a stop order or the Company’s failure to update such Registration Statement), but excluding any Allowed Delay or the inability of the Investor to sell the Registrable Securities covered thereby due to market conditions or (C) after the date six months following the Closing Date, and only in the event a Registration Statement is not effective or available to sell all Registrable Securities, the Company fails to file with the SEC any required reports under Section 13 or 15(d) of the 1934 Act such that it is not in compliance with Rule 144(c)(1), as a result of which the Investor (assuming the Investor is not an affiliate of the Company) is unable to sell Registrable Securities without restriction under Rule 144 (or any successor thereto) promulgated under the 1933 Act (each of (A), (B) and (C), a “Maintenance Failure”), then the Company will make pro rata payments to the Investor, as liquidated damages and not as a penalty (the “Effectiveness Liquidated Damages” and together with the Registration Liquidated Damages, the (“Liquidated Damages”), in an amount equal to one percent (1%) of the aggregate amount invested by the Investor for the Registrable Securities then held by the Investor for the initial day of a Maintenance Failure and for each 30-day period (pro rata for any portion thereof) thereafter until the Maintenance Failure is cured (each, a “Blackout Period”). The Effectiveness Liquidated Damages shall be paid monthly within ten (10) Business Days of the end of the date of such Maintenance Failure and each subsequent 30-day period, as applicable. Such payments shall be made to the Investor in cash. Interest shall accrue at the rate of one percent (1%) per month on any such liquidated damages payments that shall not be paid by the applicable payment date until such amount is paid in full.

- 4 -

(iii) The parties agree that (1) notwithstanding anything to the contrary herein or in the Purchase Agreement, no Liquidated Damages shall be payable with respect to any period after the expiration of the Effectiveness Period (as defined below) (it being understood that this sentence shall not relieve the Company of any Liquidated Damages accruing prior to the expiration of the Effectiveness Period), and in no event shall the aggregate amount of Liquidated Damages payable to the Investor exceed, in the aggregate, six percent (6%) of the aggregate purchase price paid by the Investor pursuant to the Purchase Agreement and (2) except with respect to (A) the initial day of failure to file a Registration Statement by the Filing Deadline and (B) the initial day of any Maintenance Failure, in no event shall the Company be liable in any thirty (30) day period for Liquidated Damages under this Agreement in excess of one percent (1%) of the aggregate purchase price paid by the Investor pursuant to the Purchase Agreement.

(iv) For the avoidance of doubt, the Liquidated Damages described in this Section 2(d) shall not otherwise limit or affect any other remedies at law or in equity available to the Investor with respect to any breach of the Company’s obligations under this Agreement or the Purchase Agreement.

(e) Rule 415; Cutback. If at any time the SEC takes the position that the offering of some or all of the Registrable Securities in a Registration Statement is not eligible to be made on a delayed or continuous basis under the provisions of Rule 415 under the 1933 Act or requires the Investor to be named as an “underwriter,” the Company shall use commercially reasonable efforts to advocate before the SEC its reasonable position that the offering contemplated by such Registration Statement is a valid secondary offering and not an offering “by or on behalf of the issuer” as defined in Rule 415 and the Investor is not an “underwriter.” The Investor shall have the right to select one legal counsel to review and oversee any registration or matters pursuant to this Section 2(e), including participation in any meetings or discussions with the SEC regarding the SEC’s position and to comment on any written submission made to the SEC with respect thereto, which counsel shall be designated by the holders of a majority of the Registrable Securities. In the event that, despite the Company’s commercially reasonable efforts and compliance with the terms of this Section 2(e), the SEC does not alter its position, the Company shall (i) remove from such Registration Statement such portion of the Registrable Securities (the “Cut Back Shares”) and/or (ii) agree to such restrictions and limitations on the registration and resale of the Registrable Securities as the SEC may require to assure the Company’s compliance with the requirements of Rule 415 (collectively, the “SEC Restrictions”); provided, however, that the Company shall not agree to name the Investor as an “underwriter” in such Registration Statement without the prior written consent of the Investor. No liquidated damages shall accrue as to any Cut Back Shares until such date as the Company is able to effect the registration of such Cut Back Shares in accordance with any SEC Restrictions applicable to such Cut Back Shares (such date, the “Restriction Termination Date”). From and after the Restriction Termination Date applicable to any Cut Back Shares, all of the provisions of this Section 2 (including the Company’s obligations with respect to the filing of a Registration Statement and its obligations to use commercially reasonable efforts to have such Registration Statement declared effective within the time periods set forth herein and the liquidated damages provisions relating thereto) shall again be applicable to such Cut Back Shares; provided, however, that (i) the Filing Deadline and/or the Qualification Deadline, as applicable, for such Registration Statement including such Cut Back Shares shall be ten (10) Business Days after such Restriction Termination Date, and (ii) the date by which the Company is required to obtain effectiveness with respect to such Cut Back Shares under Section 2(c) shall be the 90th day immediately after the Restriction Termination Date.

- 5 -

3. Company Obligations. The Company will use commercially reasonable efforts to effect the registration of the Registrable Securities in accordance with the terms hereof, and pursuant thereto the Company will, as expeditiously as possible:

(a) use commercially reasonable efforts to cause such Registration Statement to become effective and to remain continuously effective for a period that will terminate upon the earlier of (i) the date on which all Registrable Securities covered by such Registration Statement, as amended from time to time, have been sold, and (ii) the date on which all Shares cease to be Registrable Securities (the “Effectiveness Period”) and advise the Investor promptly in writing when the Effectiveness Period has expired;

(b) prepare and file with the SEC such amendments and post-effective amendments to such Registration Statement and the related Prospectus as may be necessary to keep such Registration Statement effective for the Effectiveness Period and to comply with the provisions of the 1933 Act and the 1934 Act with respect to the distribution of all of the Registrable Securities covered thereby;

(c) provide copies to and permit the Investor to review each Registration Statement and all amendments and supplements thereto no fewer than two (2) days prior to their filing with the SEC and to furnish reasonable comments thereon;

(d) furnish to the Investor (i) promptly after the same is prepared and filed with the SEC, if requested by the Investor, one (1) copy of any Registration Statement and any amendment thereto, each preliminary prospectus and Prospectus and each amendment or supplement thereto, and each letter written by or on behalf of the Company to the SEC or the staff of the SEC, and each item of correspondence from the SEC or the staff of the SEC, in each case relating to such Registration Statement (other than any portion thereof which contains information for which the Company has sought confidential treatment), and (ii) such number of copies of a Prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents as the Investor may reasonably request in order to facilitate the disposition of the Registrable Securities owned by the Investor that are covered by such Registration Statement;

(e) use commercially reasonable efforts to (i) prevent the issuance of any stop order or other suspension of effectiveness and, (ii) if such order is issued, obtain the withdrawal of any such order at the earliest practical moment;

(f) prior to any public offering of Registrable Securities, use commercially reasonable efforts to register or qualify or cooperate with the Investor and its counsel in connection with the registration or qualification of such Registrable Securities for the offer and sale under the securities or blue sky laws of such jurisdictions requested by the Investor and do any and all other commercially reasonable acts or things necessary or advisable to enable the distribution in such jurisdictions of the Registrable Securities covered by the Registration Statement; provided,

- 6 -

however, that the Company shall not be required in connection therewith or as a condition thereto to (i) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(f), (ii) subject itself to general taxation in any jurisdiction where it would not otherwise be so subject but for this Section 3(f), or (iii) file a general consent to service of process in any such jurisdiction;

(g) use commercially reasonable efforts to cause all Registrable Securities covered by a Registration Statement to be listed on each securities exchange, interdealer quotation system or other market on which similar securities issued by the Company are then listed;

(h) promptly notify the Investor, at any time prior to the end of the Effectiveness Period, upon discovery that, or upon the happening of any event as a result of which, the Prospectus includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing (provided that such notice shall not, without the prior written consent of the Investor, disclose to the Investor any material nonpublic information regarding the Company), and promptly prepare, file with the SEC and furnish to such holder a supplement to or an amendment of such Prospectus as may be necessary so that such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;

(i) otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the SEC under the 1933 Act and the 1934 Act, including, without limitation, Rule 172 under the 1933 Act, file any final Prospectus, including any supplement or amendment thereof, with the SEC pursuant to Rule 424 under the 1933 Act, promptly inform the Investor in writing if, at any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof, the Investor is required to deliver a Prospectus in connection with any disposition of Registrable Securities and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder; and make available to its security holders, as soon as reasonably practicable, but not later than the Availability Date (as defined below), an earnings statement covering a period of at least twelve (12) months, beginning after the effective date of each Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the 1933 Act, including Rule 158 promulgated thereunder (for the purpose of this subsection 3(i), “Availability Date” means the 45th day following the end of the fourth fiscal quarter that includes the effective date of such Registration Statement, except that, if such fourth fiscal quarter is the last quarter of the Company’s fiscal year, “Availability Date” means the 90th day after the end of such fourth fiscal quarter);

(j) if requested by the Investor, the Company shall (i) as soon as practicable, incorporate in a prospectus supplement or post-effective amendment such information as the Investor reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) as soon as practicable, make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) as soon as practicable, supplement or make amendments to any Registration Statement if reasonably requested by the Investor;

- 7 -

(k) within two (2) Business Days after a Registration Statement which covers Registrable Securities is ordered effective by the SEC, the Company shall deliver to the transfer agent for such Registrable Securities (with copies to the Investor) confirmation that such Registration Statement has been declared effective by the SEC; and

(l) with a view to making available to the Investor the benefits of Rule 144 (or its successor rule) and any other rule or regulation of the SEC that may at any time permit the Investor to sell shares of Common Stock to the public without registration, the Company covenants and agrees to: (i) make and keep adequate current public information available, as those terms are understood and defined in Rule 144, until the earlier of (A) six months after such date as all of the Registrable Securities may be sold without restriction by the holders thereof pursuant to Rule 144 or any other rule of similar effect or (B) such date as all of the Registrable Securities shall have been resold; (ii) file with the SEC in a timely manner all reports and other documents required of the Company under the 1934 Act; and (iii) furnish to the Investor upon request, as long as the Investor owns any Registrable Securities, (A) a written statement by the Company that it has complied with the reporting requirements of the 1934 Act, (B) a copy of the Company’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other information as may be reasonably requested in order to avail the Investor of any rule or regulation of the SEC that permits the selling of any such Registrable Securities without registration.

4. Due Diligence Review; Information. The Company shall, upon reasonable prior notice, make available, during normal business hours, for inspection and review by the Investor, and advisors to and representatives of the Investor (who may or may not be affiliated with the Investor and who are reasonably acceptable to the Company) (collectively, the “Inspectors”), all pertinent financial and other records, and all other corporate documents and properties of the Company (collectively, the “Records”), as may be reasonably necessary for the purpose of such review, and cause the Company’s officers, directors and employees, within a reasonable time period, to supply all such information reasonably requested by the Inspectors (including, without limitation, in response to all questions and other inquiries reasonably made or submitted by any of them), prior to and from time to time after the filing and effectiveness of such Registration Statement for the sole purpose of enabling the Investor and its accountants and attorneys to conduct initial and ongoing due diligence with respect to the Company and the accuracy of such Registration Statement; provided, however, that each Inspector shall have agreed in writing to hold in strict confidence and to not make any disclosure (except to the Investor) or use of any Record or other information which the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (a) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required under the 1933 Act, (b) the release of such Records is ordered pursuant to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction, or (c) the information in such Records has been made generally available to the public other than by disclosure in violation of this Section 4 or any other Transaction Document.

- 8 -

Notwithstanding the foregoing, the Company shall not disclose material nonpublic information to the Investor, or to advisors to or representatives of the Investor, unless prior to disclosure of such information the Company identifies such information as being material nonpublic information and provides the Investor, such advisors and such representatives with the opportunity to accept or refuse to accept such material nonpublic information for review and the Investor enters into an appropriate confidentiality and non-use agreement with the Company with respect thereto.

5. Obligations of the Investor.

(a) The Investor shall furnish in writing to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably required to effect the registration of such Registrable Securities, and shall execute such documents in connection with such registration as the Company may reasonably request. At least five (5) Business Days prior to the first anticipated filing date of any Registration Statement, the Company shall notify the Investor of the information the Company requires from the Investor. The Investor shall provide such information to the Company at least two (2) Business Days prior to the first anticipated filing date of such Registration Statement.

(b) The Investor, by its acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of a Registration Statement hereunder.

(c) The Investor agrees that, upon receipt of any notice from the Company of either (i) the commencement of an Allowed Delay pursuant to Section 2(c)(ii) or (ii) the happening of an event pursuant to Section 3(h) hereof, the Investor will immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement covering such Registrable Securities, until the Investor is advised by the Company that such dispositions may again be made.

(d) The Investor covenants and agrees that it will comply with the prospectus delivery requirements of the 1933 Act as applicable to it or an exemption therefrom in connection with sales of Registrable Securities pursuant to any Registration Statement.

6. Indemnification.

(a) Indemnification by the Company. The Company will indemnify and hold harmless the Investor and its officers, directors, partners, members, employees, investment advisers and agents, and each other person, if any, who controls the Investor within the meaning of the 1933 Act, against any losses, claims, damages or liabilities, joint or several, to which they may become subject under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement or omission or alleged omission of any material fact contained in any Registration Statement, any preliminary Prospectus or final Prospectus, or any amendment or supplement thereof or (ii) any violation by the Company or its agents of any rule or regulation promulgated under the 1933 Act or 1934 Act applicable to the Company or its agents and relating

- 9 -

to action or inaction required of the Company in connection with such registration, and will reimburse the Investor, and each such officer, director, partner, member, employee, investment adviser, agent and each such controlling person for any legal or other documented, out-of-pocket expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage or liability (or action in respect thereof); provided, however, that the Company will not be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon (i) an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by the Investor or any such controlling person in writing specifically for use in such Registration Statement or Prospectus, (ii) the use by the Investor of an outdated or defective Prospectus after the Company has notified the Investor in writing that such Prospectus is outdated or defective; (iii) the Investor’s failure to send or give a copy of the Prospectus or supplement (as then amended or supplemented), if required (and not exempted) to the Persons asserting an untrue statement or omission or alleged untrue statement or omission at or prior to the written confirmation of the sale of Registrable Securities; or (iv) the Investor’s bad faith, gross negligence, recklessness, fraud or willful misconduct.

(b) Indemnification by the Investor. The Investor agrees to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors, officers, employees, stockholders and each person who controls the Company (within the meaning of the 1933 Act) against any losses, claims, damages, liabilities and expense (including reasonable attorney fees) resulting from any untrue statement of a material fact or any omission of a material fact required to be stated in any Registration Statement or Prospectus or preliminary Prospectus or amendment or supplement thereto or necessary to make the statements therein not misleading, to the extent, but only to the extent that such untrue statement or omission is contained in any information furnished in writing by the Investor to the Company specifically for inclusion in such Registration Statement or Prospectus or amendment or supplement thereto. Except to the extent that any such losses, claims, damages, liabilities or expenses are finally judicially determined to have resulted from the Investor’s bad faith, gross negligence, recklessness, fraud or willful misconduct, in no event shall the liability of the Investor be greater in amount than the dollar amount of the proceeds (net of all expense paid by the Investor in connection with any claim relating to this Section 6 and the amount of any damages the Investor has otherwise been required to pay by reason of such untrue statement or omission) received by the Investor upon the sale of the Registrable Securities included in such Registration Statement giving rise to such indemnification obligation.

(c) Conduct of Indemnification Proceedings. Any person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided that any person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such person unless (A) the indemnifying party has agreed in writing to pay such fees or expenses, (B) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such person or (C) in the reasonable judgment of any such person, based upon written advice of its counsel, a conflict of interest exists between such person and the indemnifying party with respect to such claims (in which case, if the person notifies the indemnifying party in writing that such person elects to

- 10 -

employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such person); and provided, further, that the failure of any indemnified party to give written notice as provided herein shall not relieve the indemnifying party of its obligations hereunder, except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the defense of any such claim or litigation. It is understood that the indemnifying party shall not, in connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any time for all such indemnified parties. No indemnifying party will, except with the consent of the indemnified party, which shall not be unreasonably withheld or conditioned, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation.

(d) Contribution. If for any reason the indemnification provided for in the preceding paragraphs (a) and (b) is unavailable to an indemnified party or insufficient to hold it harmless, other than as expressly specified therein, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations. No person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution from any person not guilty of such fraudulent misrepresentation. Except to the extent that any such losses, claims, damages or liabilities are finally judicially determined to have resulted from a holder of Registrable Securities’ bad faith, gross negligence, recklessness, fraud or willful misconduct, in no event shall the contribution obligation of such holder be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such holder in connection with any claim relating to this Section 6 and the amount of any damages such holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission) received by it upon the sale of the Registrable Securities giving rise to such contribution obligation.

7. Miscellaneous.

(a) Amendments and Waivers. This Agreement may be amended only by a writing signed by the Company and the Investor. The Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company shall have obtained the written consent to such amendment, action or omission to act of the Investor.

(b) Notices. All notices and other communications provided for or permitted hereunder shall be made as set forth in Section 10.4 of the Purchase Agreement.

(c) Assignments and Transfers by Investor. The provisions of this Agreement shall be binding upon and inure to the benefit of the Investor and their respective successors and assigns. The Investor may transfer or assign, in whole or from time to time in part, to one or more persons its rights hereunder in connection with the transfer of Registrable Securities by the Investor to such person, provided that the Investor complies with all laws applicable thereto, and the provisions of the Purchase Agreement, and provides written notice of assignment to the Company promptly after such assignment is effected, and such person agrees in writing to be bound by all of the provisions contained herein.

- 11 -

(d) Assignments and Transfers by the Company. This Agreement may not be assigned by the Company (whether by operation of law or otherwise) without the prior written consent of the Investor, provided, however, that in the event that the Company is a party to a merger, consolidation, share exchange or similar business combination transaction in which the Common Stock is converted into the equity securities of another Person, from and after the effective time of such transaction, such Person shall, by virtue of such transaction, be deemed to have assumed the obligations of the Company hereunder, the term “Company” shall be deemed to refer to such Person and the term “Registrable Securities” shall be deemed to include the securities received by the Investor in connection with such transaction unless such securities are otherwise freely tradable by the Investor after giving effect to such transaction.

(e) Benefits of the Agreement. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

(f) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signatures complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

(g) Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

(h) Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any provisions hereof prohibited or unenforceable in any respect.

(i) Further Assurances. The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.

- 12 -

(j) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

(k) Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Agreement.

(l) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law.

[remainder of page intentionally left blank]

- 13 -

IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above written.

COMPANY:	TRANSLATE BIO, INC.
	By:	/s/ Ronald Renaud
	Name: Ronald Renaud
	Title: President and CEO

INVESTOR:	SANOFI
	By:	/s/ Karen Linehan
	Name: Karen Linehan
	Title: Executive Vice President, Legal Affairs

Exhibit A

Plan of Distribution

The selling stockholders, which as used herein includes donees, pledgees, transferees or other successors-in-interest selling shares of common stock or interests in shares of common stock received after the date of this prospectus from a selling stockholder as a gift, pledge, partnership distribution or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of common stock or interests in shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices.

The selling stockholders may use any one or more of the following methods when disposing of shares or interests therein:

• ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

• block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;

• purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

• an exchange distribution in accordance with the rules of the applicable exchange;

• privately negotiated transactions;

• short sales effected after the date the registration statement of which this prospectus is a part is declared effective by the SEC;

• through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

• broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;

• a combination of any such methods of sale; and

• any other method permitted by applicable law.

The selling stockholders may, from time to time, pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933, as amended (the

“Securities Act”), amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

In connection with the sale of our common stock or interests therein, the selling stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume. The selling stockholders may also sell shares of our common stock short and deliver these securities to close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

The aggregate proceeds to the selling stockholders from the sale of the common stock offered by them will be the purchase price of the common stock less discounts or commissions, if any. Each of the selling stockholders reserves the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents. We will not receive any of the proceeds from this offering. Upon any exercise of the warrants by payment of cash, however, we will receive the exercise price of the warrants.

The selling stockholders also may resell all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act of 1933, provided that they meet the criteria and conform to the requirements of that rule.

The selling stockholders and any underwriters, broker-dealers or agents that participate in the sale of the common stock or interests therein may be “underwriters” within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of the shares may be underwriting discounts and commissions under the Securities Act. Selling stockholders who are “underwriters” within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the Securities Act.

To the extent required, the shares of our common stock to be sold, the names of the selling stockholders, the respective purchase prices and public offering prices, the names of any agents, dealer or underwriter, and any applicable commissions or discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement that includes this prospectus.

In order to comply with the securities laws of some states, if applicable, the common stock may be sold in these jurisdictions only through registered or licensed brokers or dealers. In addition, in some states the common stock may not be sold unless it has been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied with.

- 2 -

We have advised the selling stockholders that the anti-manipulation rules of Regulation M under the Securities Exchange Act of 1934, as amended, may apply to sales of shares in the market and to the activities of the selling stockholders and their affiliates. In addition, to the extent applicable, we will make copies of this prospectus (as it may be supplemented or amended from time to time) available to the selling stockholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The selling stockholders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act.

We have agreed to indemnify the selling stockholders against liabilities, including liabilities under the Securities Act and state securities laws, relating to the registration of the shares offered by this prospectus.

We have agreed with the selling stockholders to use commercially reasonable efforts to cause the registration statement of which this prospectus constitutes a part effective and to remain continuously effective until the earlier of (1) such time as all of the shares covered by this prospectus have been disposed of pursuant to and in accordance with such registration statement or (2) the date on which all of the shares may be sold without restriction pursuant to Rule 144 of the Securities Act.

- 3 -

EX-10.4

Exhibit 10.4

Certain identified information has been marked in the exhibit because it is both (i) not material and

(ii) would likely cause competitive harm to the Company, if publicly disclosed.

Double asterisks denote omissions.

Supply Agreement

This Supply Agreement is made effective as of the Effective Date by and between:

Translate Bio MA, Inc., a corporation organized and existing under the laws of the State of Delaware, having offices located at 29 Hartwell Avenue, Lexington, MA 02421 USA (“TBio”)

- and -

Sanofi Pasteur Inc., a corporation organized and existing under the laws of the State of Delaware, having offices located at Discovery Drive, Swiftwater, PA 18370 USA (“Sanofi Pasteur” or “Sanofi”)

Sanofi Pasteur and TBio are sometimes referred to herein individually as a “Party”, and collectively as the “Parties”.

WHEREAS:

1. The Parties entered into a Collaboration and License Agreement executed on June 8, 2018 (as amended, the “Collaboration and License Agreement”), for the purpose of licensing TBio’s mRNA technologies to Sanofi Pasteur in support of certain Sanofi Pasteur vaccine development activities;

2. Section 4.1.1 of the Collaboration and License Agreement provides that TBio shall be responsible for manufacturing and supplying non-clinical cGLP or cGMP Products, related Materials and investigational Products, in each case, as required by and pursuant to the Collaboration Plan, and once executed, the Supply Agreement;

3. Section 4.4 contemplates the negotiation and execution of a supply agreement between the Parties within [**] of the Closing Date, whereby such supply agreement shall govern the terms of the supply of Products by TBio as required by the Collaboration;

4. TBio shall also supply under this Supply Agreement certain Research Materials and Tech Transfer Materials (each as defined below), whereas supply of Research Materials being provided pursuant to material transfer terms set forth herein; and whereas supply of Tech Transfer Materials in support of manufacturing shall be pursuant to separate technical transfer terms; and

5. This Supply Agreement is intended to satisfy the foregoing requirements.

NOW THEREFORE in consideration of the premises and the terms and conditions contained in this Supply Agreement and other good and valuable consideration (the receipt and sufficiency of which is acknowledged), the Parties agree as follows:

Article 1 – Purpose, Definitions and Interpretation

1.1 The purpose of this Supply Agreement is to provide the terms and conditions under which TBio shall use Commercially Reasonable Efforts to manufacture and supply Sanofi Pasteur with (1) non-cGMP pre-clinical Products and (2) cGMP clinical Products ((1) and (2) defined further below as “Non-clinical Supply” and “Clinical Supply”, respectively), as well as (3) Research Materials and (4) Tech Transfer Materials ((1), (2), (3), and (4) collectively, “Deliverables”).

CONFIDENTIAL

Page 1 of 11

1.2 The terms of this Supply Agreement are meant to supplement the provisions of the Collaboration and License Agreement with regard to the supply of Deliverables.

1.3 In addition to the Collaboration and License Agreement and the Supply Agreement, the Parties have entered into Quality Agreements attached hereto as Schedules B and C. In the event of any inconsistency between the terms of the Quality Agreements and the terms of this Supply Agreement and the terms of the Collaboration and License Agreement, the terms of the Collaboration and License Agreement shall prevail and govern except: 1) in regard to the specific supply of Deliverables, in which case this Supply Agreement shall prevail and govern, but the Collaboration and License Agreement shall govern as to the time periods that TBio is required to supply Deliverables, and 2) in regard to the specific quality aspects of the supply of Deliverables, in which case the terms of the applicable Quality Agreement shall prevail and govern.

1.4 The following terms shall have the following meanings in this Supply Agreement:

(a) “cGLP” means current Good Laboratory Practice (GLP) regulations as defined in:

• FDA regulations for current good laboratory practices as set forth in 21 CFR Part 58 and any related or successor regulations thereto; and

• FDA Guidance for Industry cGLP for Investigational Drugs.

(b) “Clinical Supply” means cGMP Products to be used by Sanofi Pasteur for clinical purposes in accordance with the Collaboration and License Agreement.

(c) “Non-clinical Supply” means cGLP (but non-cGMP) Products to be used by Sanofi Pasteur for preclinical safety purposes and therefore must be produced with appropriate characterization and documentation and otherwise in accordance with the Non-Clinical Supply Quality Agreement in Schedule B. Sanofi Pasteur shall be entitled to complete comparability exercises between such cGMP-like batches and their cGMP equivalents.

(d) “Tech Transfer Materials” means non-GMP Products and other Materials supporting tech transfer and process improvement activities in accordance with the Technology and Process Transfer Plan (as amended).

(e) “Research Materials” means Products and other Materials, non-cGMP, provided in support of Sanofi Pasteur’s research activities per the terms of section 2.3 hereunder.

(f) “Specifications” means any specifications related to the quality, composition, or other attributes of the Deliverables.

(g) “Technical Reports” means any reports generated by a Party, or in the case of TBio, by its Service Providers, which document the Know-How generated through any manufacturing or other activities performed hereunder.

1.5 Capitalized terms used and not defined herein shall have the meanings ascribed to them in the Collaboration and License Agreement.

CONFIDENTIAL

Page 2 of 11

1.6 All references to monetary amounts are to USD ($).

1.7 The descriptive headings of Articles are inserted solely for convenience of reference and are not intended as complete or accurate descriptions of the content of such Articles. The use of words in the singular or plural, or with a particular gender, shall not limit the scope or exclude the application of any provision of this Supply Agreement to such Person or circumstances as the context otherwise permits.

Article 2 – Supply of Deliverables

2.1 TBio has agreed to supply Sanofi Pasteur with Non-clinical Supply as required by and pursuant to the Collaboration and License Agreement. The payment terms of such supply arrangements are set out in Article 5 and Schedule A attached hereto. The Specifications for Non-clinical Supply furnished under this Section 2.1 are set out in the Quality Agreement in Schedule B attached hereto.

2.2 TBio has agreed to supply Sanofi Pasteur with Clinical Supply as required by and pursuant to the Collaboration and License Agreement. Such Deliverables shall consist of vialed materials. The payment terms of such supply arrangements are set out in Schedule A attached hereto. The Specifications for Deliverables furnished under this Section 2.2 are set out in the Quality Agreement in Schedule C attached hereto.

2.3 TBio hereby agrees to supply Sanofi Pasteur with Research Materials as set forth in Schedule E hereto; provided, however, that such supply shall only include research grade proprietary, purified and characterized mRNA and stable mRNA-LNP formulations for performing optimization and formulation studies, in an amount not to exceed [**] of total Research Materials in a calendar year unless mutually agreed in writing by the Parties. The payment arrangements of such supply shall be consistent with the treatment of Collaboration funding (see Collaboration and License Agreement Section 7.1), however, Research Materials need not be included in the Collaboration Budget.

2.4 TBio hereby agrees to supply Sanofi Pasteur with Tech Transfer Materials in accordance with the Technology and Process Transfer Plan, as part of which plan TBio agrees to make available those materials set forth in RC1, RC2, DC1, DC2, DC3, DC4, and proprietary raw material for process optimization consistent with the Technology and Process Transfer Plan, as well as any additional Tech Transfer Materials as mutually agreed by the Parties. This shall include supply of Tech Transfer Materials for support training for lab scale (up to [**]), [**]-scale drug substance and [**]-scale drug product in accordance with the Tech Transfer Plan. The payment arrangements of such supply shall be consistent with the Technology and Process Transfer Plan.

2.5 The Parties agree that if Sanofi Pasteur requests TBio to perform additional activities or supply Deliverables for further uses not set out expressly herein, Sanofi Pasteur shall generate a draft Work Order, the Parties shall mutually discuss such draft Work Order, TBio shall issue a quotation for such additional activities, the Work Order shall be updated accordingly and shall be deemed to be accepted by Sanofi Pasteur if it signs such in respect thereof referencing this Supply Agreement, and which Work Order shall be deemed accepted by TBio if the Work Order is filled out completely, including Table D, and an authorized representative of TBio signs such Work Order, which acceptance shall not be unreasonably withheld.

CONFIDENTIAL

Page 3 of 11

Article 3 – Monitoring, Ordering, Release, Delivery & Storage of Non-clinical Supply and Clinical Supply

3.1 To the end of monitoring Sanofi’s demand of Non-clinical Supply and Clinical Supply so that TBio is able to meet Sanofi’s requirements without interference with TBio’s other programs, Sanofi Pasteur shall share with TBio a non-binding, confidential document estimating Sanofi Pasteur’s expected Non-clinical Supply and Clinical Supply needs and related timelines; and TBio shall, within a reasonable response time not to exceed [**], share with Sanofi Pasteur a non-binding, confidential document detailing TBio’s estimates of its costs and available manufacturing capabilities to meet Sanofi’s expected Non-clinical Supply and Clinical Supply needs, including insofar as such capabilities are to be provided by Service Providers. Sanofi’s estimates of its expected Non-clinical Supply and Clinical Supply needs shall cover an initial period of [**], and shall be updated or confirmed at least every [**], but may be updated at any other times at its discretion, and TBio shall update its document in response thereto within a reasonable response time. TBio shall also submit to Sanofi [**] reports detailing work progress in support of the supply activities hereunder.

3.2 For orders of Non-clinical Supply and Clinical Supply covered by Sections 2.1 and 2.2 hereto, respectively, specific orders for Non-clinical Supply and Clinical Supply shall be placed by Sanofi Pasteur using an appropriately modified version of the Work Order set forth in Schedule D attached hereto, which may or may not follow issuance of a quotation or Work Order by TBio. Each Work Order shall be mutually agreed by the Parties, such agreement not to be unreasonably withheld or delayed, with such Work Order being effective only after the Work Order is filled out completely, including Table D, and authorized representatives of both Parties sign the Work Order.

3.3 Clinical Supply supplied by TBio hereunder shall be manufactured in accordance with cGMP and shall conform to the Specifications in Schedule C.

3.4 Non-clinical Supply and Clinical Supply provided to Sanofi Pasteur shall be released by TBio in accordance with its standard operating procedures, applicable laws and the terms of the Quality Agreements attached hereto as Schedules B and C.

3.5 Non-clinical Supply and Clinical Supply supplied by TBio shall be supplied delivery duty unpaid (DAP, Incoterms 2010) to the delivery address specified on the applicable Work Order, at Sanofi Pasteur’s expense. Any taxes incurred by TBio in the manufacture and supply of Non-clinical Supply and Clinical Supply to Sanofi Pasteur shall be at Sanofi Pasteur’s expense, in accordance with the relevant Work Order.

3.7 Tech Transfer Materials and Research Materials may be manufactured on a non cGMP/non GLP basis.

3.8 Title to the Deliverables supplied by TBio hereunder shall pass to Sanofi Pasteur once the Products are delivered to the applicable destination as agreed by the Parties in accordance with Section 3.5 above. Upon request, TBio may secure such insurance as Sanofi Pasteur may require with regard to such shipments, at Sanofi Pasteur’s expense.

3.9 TBio shall, in accordance with the terms of a Work Order and the requirements of the relevant Quality Agreement, provide storage for any Deliverables supplied hereunder either at its own facilities, or at its Service Providers’ facilities, if available, at Sanofi Pasteur’s expense.

CONFIDENTIAL

Page 4 of 11

Article 4 – Regulatory and Service Provider Change of Control

4.1 Each Party shall promptly inform the other Party of any material changes in Deliverables of which it becomes aware that may affect the other Party’s ability to use the Deliverables or otherwise impact the Parties rights and obligations under the Collaboration and License Agreement. In addition to any obligations under Section 4.2.2 of the Collaboration and License Agreement, with regard to any Deliverables, TBio shall use Commercially Reasonable Efforts to notify Sanofi Pasteur of any material change to the manufacturing process for Deliverables that TBio believes may have regulatory impact as set out in the Quality Agreements in Schedule B & C attached hereto.

4.2 TBio shall promptly notify Sanofi Pasteur in the event it becomes aware of a change of control of a Service Provider and/or supplier of raw material engaged in support of manufacturing of Deliverables supplied hereunder.

Article 5 – Prices and Payment

5.1 From the Effective Date until December 31, 2020, Sanofi Pasteur shall pay TBio the price for the Non-clinical and Clinical Supply as set out in Schedule A and in any subsequent Work Orders issued by Sanofi Pasteur hereunder, to which price shall be added a mark-up of [**] percent ([**]%) for all applicable costs and expenses scheduled to be incurred, and activities scheduled to occur, under such Work Orders prior to January 1, 2021, and to which price shall be added a mark-up of [**] percent ([**]%) for all applicable costs and expenses scheduled to be incurred, and activities scheduled to occur, under such Work Orders on or after January 1, 2021.

5.2 Beginning on January 1, 2021, Sanofi Pasteur shall pay TBio the price for the Non-clinical and Clinical Supply as set out in Schedule A and in any subsequent Work Orders issued by Sanofi Pasteur hereunder, to which price shall be added a mark-up of [**] percent ([**]%) for all such Work Orders placed after January 1, 2021.

5.3 Beginning on the Second Closing Date, Sanofi Pasteur shall pay TBio, within [**] of receipt of a properly submitted invoice, a sum of [**] dollars ($[**]) per year, payable in four quarterly payments of $[**], to serve as pre-payment for Manufacturing Costs and the [**]% or [**]% mark-up, as applicable, actually incurred hereunder. The first such quarterly payment shall be eligible for invoicing at the beginning of the first full calendar quarter following the Second Closing Date. In the event that Manufacturing Costs and the [**]% or [**]% mark-up, as applicable, in a given quarter are less than the amount of the quarterly pre-payment, TBio shall credit the difference to future Manufacturing Costs and the [**]% or [**]% mark-up, as applicable, incurred in the same calendar year. If a quarterly payment is insufficient to cover Manufacturing Costs and the [**]% or [**]% mark-up, as applicable, for a given quarter, TBio shall invoice such additional Manufacturing Costs and the [**]% or [**]% mark-up, as applicable, in that quarter. In the event of termination of this Agreement, Sanofi Pasteur shall pay any non-cancellable or already incurred Manufacturing Costs for the [**] following the effective date of such termination, and shall receive a refund of any unused credit.

5.4 TBio will invoice Sanofi Pasteur for the manufacture of Non-clinical and Clinical Supply in accordance with Schedule A on a [**] basis for costs actually incurred over the previous [**]. In addition to the applicable price, Sanofi Pasteur agrees to reimburse TBio for shipping, storage and duties levied on, each shipment of Deliverables, as set forth in the corresponding invoice.

5.5 If there is any increase in the price for Deliverables estimated in any effective Work Order, TBio will issue to Sanofi Pasteur a change order for such Work Order for Sanofi Pasteur to approve the increase in price, where such Work Order will include prominent language that it requires a response within [**] or a prominently identified shorter time period if absolutely required because the applicable work is in progress. If Sanofi Pasteur fails to return an executed change order (or other written communication) approving the increase in price within [**], or such shorter time period if absolutely required, of TBio’s issuance of such change order, such Work Order shall be deemed accepted, and TBio may proceed with the work per the updated budget.

CONFIDENTIAL

Page 5 of 11

5.6 Each invoice shall include details for each charge corresponding to the items in Schedule A.

5.7 The Parties agree that the payment of such invoices shall be made in US Dollars by Sanofi Pasteur not later than [**] from the date the invoice is received, and in any event before the date on which TBio must make a corresponding payment to its Service Provider(s) (advance notice of which TBio shall provide to Sanofi Pasteur in the relevant Work Order), by wire transfer to the following account:

Company Name: Translate Bio MA, Inc.

Bank Name: [**]

Bank Address: [**]

ABA Wire Transfer: [**]

Account Number: [**]

In the event that a Service Provider engaged in support of manufacturing of Product supplied hereunder demands payment in a foreign currency, TBio shall perform currency conversions in a manner consistent with its standard accounting practices applicable to any similar transaction.

5.8 All payments under this Supply Agreement shall be made by Sanofi Pasteur to TBio without deduction of any applicable withholding taxes.

5.9 TBio shall also issue invoices to Sanofi Pasteur using a modified Work Order for any Manufacturing Costs and the [**]% or [**]%, as applicable, that TBio is required by the applicable Service Provider to prepay and for which TBio seeks advance payment from Sanofi, but only to the extent such prepayment obligations exceed the any unused funds available from any of Sanofi Pasteur’s prior quarterly pre-payments (Section 5.2).

5.10 TBio shall notify Sanofi Pasteur if a Service Provider offers to reduce its portion of Manufacturing Costs or delivery times under a Work Order through payment to a Service Provider of upfront fees, and, if Sanofi Pasteur provides written approval thereof, TBio shall issue invoices to Sanofi Pasteur for the pro rata portion of such upfront fees attributable to Deliverables to be delivered under this Agreement.

5.11 Sanofi Pasteur agrees to pay all undisputed invoices under Sections 5.6 and 5.7 in accordance with Section 5.7 and the remainder of this Article 5. TBio shall have no obligation to transfer any affected Deliverable while any such undisputed invoice is both past due or outstanding.

5.12 To expedite resolution of any payment issues, the Parties shall be entitled to communicate with each other via the following Finance contacts:

For TBio:     [**]

 29 Hartwell Avenue

 Lexington, MA 02421

 [**]

For SP:         [**]

 1755 Steeles Avenue West

 Toronto, ON M2R 3T4 Canada

 [**]

CONFIDENTIAL

Page 6 of 11

Article 6 – Conditions of Use of Deliverables

6.1 Except as provided for in the case of Research Materials, Sanofi Pasteur shall use the Deliverables solely in accordance with the Collaboration and License Agreement and applicable, executed material transfer agreement in the form set forth in Schedule E.

6.2 TBio has no obligation to provide to Sanofi Pasteur any Deliverable or related documentation disclosing technology that Sanofi Pasteur has not licensed under the Collaboration and License Agreement. However, delivery of such Deliverable or documentation constitutes Sanofi Pasteur’s acceptance of Licensed Technology associated with such Deliverable or related documentation.

Article 7 – Advice regarding Manufacturing Costs

7.1 Sanofi Pasteur may provide, and TBio agrees to consider in good faith, advice with regard to measures that could be taken to reduce Manufacturing Costs.

Article 8 – Non-Conforming Deliverables

8.1 In the event that either: a) any Clinical Supply does not comply with cGMP (if intended for human or toxicological use) or b) otherwise any Clinical Supply or Non-clinical Supply fails to comply in all material respects with its Specifications, in either case due to the negligence, willful misconduct or breach of agreement by TBio or any of its Service Providers, TBio’s sole and exclusive liability shall be either:

(i) to seek production of replacement Materials by the TBio Service Provider(s), or to have TBio perform such production or replacement itself (if the failure happened during a manufacturing step that TBio was to perform itself), or

(ii) to refund to Sanofi Pasteur the markup ([**]% or [**]%, as applicable) over Manufacturing Costs charged by TBio and, in the event that any non-compliance event was due to the negligence, willful misconduct or breach of agreement by a TBio Service Provider, to pay to Sanofi Pasteur any and all recovery amounts it receives from the applicable Service Provider, and in the event due to TBio’s breach of agreement, negligence or willful misconduct, to pay to Sanofi Pasteur a sum equal to the Manufacturing Costs plus the applicable mark-up in each of (i) and (ii) to the extent not already refunded or credited to Sanofi Pasteur, with respect to such Deliverable’s non-compliance or non-conformity. TBio hereby agrees to use Commercially Reasonable Efforts to seek production of replacement Materials or compensation from the applicable Service Provider for any such non-compliance or non-conformity.

8.2 In the event that either: a) any Clinical Supply does not comply with cGMP (if intended for human or toxicological use) or b) otherwise any Clinical Supply or Non-clinical Supply fails to comply in all material respects with its Specifications, in either case due to causes solely other than the negligence, willful misconduct or breach of this Agreement by TBio or any of its Service Providers, then Sanofi Pasteur shall be wholly responsible for, and bear all costs associated with, such Deliverable’s non-compliance or non-conformity but solely to the extent of such other causes..

8.3 To the extent a claim for damages is attributable under Sections 8.1 to TBio or TBio Service Providers, any liability and/or recovery shall be apportioned in an amount relative to TBio’s negligence, willful misconduct or breach of this Agreement or such Service Provider’s negligence, willful misconduct or breach of agreement. Any claim for damages under Section 8.1 must be made in writing by Sanofi Pasteur, accompanied by test results confirming the relevant non-conformance and return to TBio of

CONFIDENTIAL

Page 7 of 11

the non-conforming Deliverables, within [**] after delivery of the non-conforming Deliverable unless such non-conformance cannot reasonably be assessed during such [**] period, in which case Sanofi Pasteur must provide such information and return within [**] after Sanofi Pasteur first becomes aware of such non-conformance.

Article 9 – Audits

9.1 TBio shall keep or have kept accurate records in compliance with cGMP, any other applicable Laws, the terms of this Supply Agreement, the Quality Agreements, TBio’s Third Party contracts, the Collaboration and License Agreement and any other applicable agreements, in connection with the production of all Clinical Supply hereunder. TBio shall permit Sanofi Pasteur to conduct audits and examine such records and manufacturing facilities in accordance with the Quality Agreements.

Article 10 – Indemnity, Liability and Insurance

10.1 Sanofi Pasteur agrees to indemnify, defend and hold harmless the Translate Bio Indemnitees in accordance with Section 15.2 of the Collaboration and License Agreement.

10.2 TBio agrees to indemnify, defend and hold harmless the Sanofi Indemnitees in accordance with Section 15.1 of the Collaboration and License Agreement.

10.3 TBio will procure and maintain during the Term, at its own expense, a property damage and a cargo insurance policy, as well as a comprehensive general liability insurance coverage, each in an amount so as to adequately cover its activities and obligations hereunder and consistent with the normal business practices of prudent biopharmaceutical companies of similar size and scope. Such insurance policies shall include coverage for the liability incurred for property damage to Products (including Clinical Supply and other materials supplied hereunder) while such goods are in TBio’s possession, care, custody or control. The existence of such insurance will not limit TBio’s liability hereunder; provided however that, TBio’s liability shall be limited to $[**] in any given calendar year with respect to all claims made against TBio under this Agreement in that same calendar year. Upon written request of Sanofi, TBio shall provide evidence of such insurance coverage, and shall, name Sanofi Pasteur as a loss payee under such policies.

Article 11 – Recalls and Other Similar Actions

11.1 If, at any time, a Governmental Authority requires Sanofi Pasteur to recall or take a similar action with respect to the Products for whatever reason, Sanofi Pasteur shall promptly notify TBio and shall share with TBio all the decisions made by Sanofi Pasteur relating to this recall or similar action.

11.2 If, at any time, any Governmental Authority requires TBio to proceed with a recall of a Product or take a similar action, including but not limited to a clinical hold, with respect thereto, TBio shall promptly notify Sanofi Pasteur and shall share with Sanofi Pasteur all the decisions made by TBio relating to this recall or similar action.

Article 12 – Term and Termination

12.1 This Supply Agreement shall be effective as of December 20, 2019 (the “Effective Date”) and shall remain in effect unless terminated in accordance with Section 12.2, 12.3 or 12.4.

CONFIDENTIAL

Page 8 of 11

12.2 This Supply Agreement may be terminated by mutual consent of the Parties.

12.3 This Supply Agreement may be terminated by Sanofi Pasteur at will on six (6) months’ prior written notice to TBio.

12.4 TBio may terminate this Supply Agreement in the event of a breach by Sanofi Pasteur of its payment obligations hereunder if Sanofi Pasteur does not cure such breach within [**] of receipt of written notice thereof; provided however that such termination shall not relieve TBio of any of its obligations under the Collaboration and License Agreement.

12.5 Sanofi Pasteur may terminate this Supply Agreement immediately in the event that TBio does not provide Products, Clinical Supply and/or Non-Clinical Supply in a timely manner, evidenced by a delay of more than [**] from an agreed delivery date for reasons other than Force Majeure.

12.6 In the event of termination of this Supply Agreement, further work on Work Orders in process as of such termination notice shall be immediately terminated unless Sanofi Pasteur requests that such work continue, in its sole discretion. Sanofi Pasteur’s payment obligations with respect to such immediately terminated Work Orders under this Section 12.6 shall survive any termination of this Supply Agreement, provided that such obligations are incurred prior to the effective date of, or due to, such termination and are non-cancellable.

12.7 For the sake of clarity, this Supply Agreement shall not imply any additional rights to Sanofi Pasteur to terminate the Collaboration and License Agreement.

Article 13 – General

13.1 This Supply Agreement, including its recitals, which form a part hereof, embodies the entire understanding of the Parties relating to the subject matter hereof and supersedes all prior understandings and agreements whether express or implied, written or oral, as to such subject matter except as set out in the Collaboration and License Agreement and the Quality Agreements attached hereto.

13.2 No provision on any Sanofi Pasteur Work Order form or on TBio’s general terms and conditions of sale or invoice, which may purport to impose different terms and conditions upon Sanofi Pasteur or TBio, shall modify the terms and conditions set forth herein.

13.3 Should any provision of this Supply Agreement be considered void under applicable laws, the Parties will meet and replace in good faith the said provision with respect to the spirit of the Collaboration and License Agreement, this Supply Agreement and their common understanding. It is clearly understood that the other provisions of this Supply Agreement will remain in full force and shall bind the Parties.

13.4 The United Nations Convention on Contracts for the International Sale of Goods will not apply to this Supply Agreement.

Article 14 – Incorporation of Various Terms of Collaboration and License Agreement

14.1 In addition to any specific provisions of the Collaboration and License Agreement that have already been referred to elsewhere in this Supply Agreement, the following additional provisions of the Collaboration and License Agreement, as amended from time to time, are hereby also incorporated by reference, however subject to any necessary and applicable modifications in the interpretation of this Supply Agreement.

CONFIDENTIAL

Page 9 of 11

(a) Article 1—Definitions

(b) Section 2.1 – Purpose

(c) Article 4 – Manufacturing & Technology and Process Transfer

(d) Article 13 – Confidentiality, Publications and Press Releases

(e) Article 14 – Representations and Warranties

(f) Section 17.4 – Dispute Resolution

(g) Section 17.8 – Force Majeure

(h) Section 17.11 – Notices

(i) Section 17.18 – Governing Law

Article 15 – Counterparts

This Supply Agreement may be executed in two (2) counterparts each of which shall be deemed an original, and which taken together shall constitute one and the same instrument.

[signatures on next page]

CONFIDENTIAL

Page 10 of 11

IN WITNESS WHEREOF, the Parties have executed this Supply Agreement as of the date last signed below by their duly authorized officers.

Sanofi Pasteur Inc.   By: /s/ John Shiver   Name: John Shiver   Title: Senior Vice President Research &           Development Translate Bio MA, Inc.   By: /s/ Ronald C. Renaud, Jr.   Name: Ronald C. Renaud, Jr   Title: Chief Executive Officer

CONFIDENTIAL

Page 11 of 11

EX-10.5

Exhibit 10.5

Certain identified information has been marked in the exhibit because it is both (i) not material

and (ii) would likely cause competitive harm to the Company, if publicly disclosed.

Double asterisks denote omissions.

THIRD AMENDMENT

This Third Amendment, effective as of the date set forth above the signatures of the parties below (the “Third Amendment Effective Date”), amends the Exclusive Patent License Agreement having an effective date of November 1, 2013, for M.I.T. Case No. [**] (the “Agreement”) between the Massachusetts Institute of Technology (“M.I.T.”), a Massachusetts corporation having its principal office at 77 Massachusetts Avenue, Cambridge, Massachusetts, 02139, USA and Translate Bio Inc. (formerly, RaNA Therapeutics, Inc.) (“COMPANY”), a Delaware corporation having a principal place of business at 29 Hartwell Ave., Lexington, MA 02421. Capitalized terms used herein and not defined shall have the meanings set forth in the Agreement.

WHEREAS RaNA Therapeutics, Inc., changed its name to Translate Bio, Inc. on June 26, 2017; and

WHEREAS, COMPANY desires to modify the diligence provisions of the Agreement consistent with its ongoing work; and

NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein, the parties hereby agree as follows:

1. Section 3.1, Diligence Requirements, of the Agreement is hereby amended to delete Sections 3.l(d) and 3.l(e) in their entirety and to replace them with the following:

(d) First LICENSED PRODUCT.

(1) [**], COMPANY shall [**]

(2) [**], COMPANY shall [**].

(3) [**], COMP ANY shall [**].

(4) [**], COMPANY shall [**].

(5) [**], COMPANY shall [**].

(6) [**], COMPANY shall [**].

(e) Second LICENSED PRODUCT.

(1) [**], COMPANY shall [**].

(2) [**], COMPANY shall [**].

(3) [**], COMP ANY shell [**].

(4) [**], COMPANY shall [**].

(5) [**], COMPANY shall [**].

2. The parties acknowledge that COMPANY has fulfilled the diligence obligations set forth in Section 3.1(d)(1) and 3.1(d)(2).

3. Except as specifically amended hereby, all other terms of the Agreement are hereby ratified and shall continue in full force and effect. The Agreement shall, together with this Third Amendment, be read and construed as a single instrument.

IN WITNESS WHEREOF, the parties have caused this Third Amendment to be executed under seal by their duly authorized representatives.

The Effective Date of this Third Amendment is December 31, 2019.

Massachusetts Institute of Technology Translate Bio, Inc.

By:	/s/ Leslie Millar-Nicholson	By:	/s/ Randall Morin
Name: Leslie Millar-Nicholson		Name: Randall Morin
Title: Director, TLO		Title:	Vice President, Head of IP

Page 2 of 2

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ronald C. Renaud, Jr., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Translate Bio, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 6, 2020	By:	/s/ Ronald C. Renaud, Jr.
		Ronald C. Renaud, Jr.
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John R. Schroer, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Translate Bio, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 6, 2020	By:	/s/ John R. Schroer
		John R. Schroer
		Treasurer and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report on Form 10-Q of Translate Bio, Inc. (the “Company”) for the quarter ended June 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Quarterly Report”), the undersigned, Ronald C. Renaud, Jr., President and Chief Executive Officer, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge on the date hereof:

(1) The Quarterly Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 6, 2020	By:	/s/ Ronald C. Renaud, Jr.
		Ronald C. Renaud, Jr. President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report on Form 10-Q of Translate Bio, Inc. (the “Company”) for the quarter ended June 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Quarterly Report”), the undersigned, John R. Schroer, Treasurer and Chief Financial Officer, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge on the date hereof:

(1) The Quarterly Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 6, 2020	By:	/s/ John R. Schroer
		John R. Schroer Treasurer and Chief Financial Officer

XML

Cover Page - shares	6 Months Ended
	Jun. 30, 2020	Aug. 03, 2020
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-38550
Entity Registrant Name	Translate Bio, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	61-1807780
Entity Address, Address Line One	29 Hartwell Avenue
Entity Address, City or Town	Lexington
Entity Address, Postal Zip Code	02421
City Area Code	617
Local Phone Number	945-7361
Trading Symbol	TBIO
Entity Central Index Key	0001693415
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Address, State or Province	MA
Title of 12(b) Security	Common Stock
Entity Interactive Data Current	Yes
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		74,243,943

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 272,193	$ 84,580
Short-term investments	20,029	104,098
Collaboration receivables	15,131	4,596
Prepaid expenses and other current assets	7,918	9,391
Restricted cash	950	950
Total current assets	316,221	203,615
Property and equipment, net	15,154	12,539
Right-of-use assets, net	10,130	10,400
Goodwill	21,359	21,359
Intangible assets, net	81,280	85,536
Other assets	10,134	2,752
Total assets	454,278	336,201
Current liabilities:
Accounts payable	12,912	15,968
Accrued expenses	11,126	7,072
Current portion of deferred revenue	27,109	18,100
Current portion of operating lease liability	619	530
Total current liabilities	51,766	41,670
Contingent consideration	109,550	103,655
Deferred revenue, net of current portion	9,818	25,256
Operating lease liability, net of current portion	11,751	12,084
Total liabilities	182,885	182,665
Commitments and contingencies (Notes 3, 4 and 12)
Stockholders' equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized as of June 30, 2020 and December 31, 2019, respectively; no shares issued and outstanding as of June 30, 2020 and December 31, 2019	0	0
Common stock, $0.001 par value; 200,000,000 shares authorized as of June 30, 2020 and December 31, 2019; 69,359,509 shares and 60,022,067 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively	69	60
Additional paid-in capital	680,850	512,231
Accumulated deficit	(410,066)	(359,496)
Accumulated other comprehensive income	540	741
Total stockholders' equity	271,393	153,536
Total liabilities and stockholders' equity	$ 454,278	$ 336,201

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares Issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	69,359,509	60,022,067
Common stock, shares outstanding	69,359,509	60,022,067

XML

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Statement [Abstract]
Collaboration revenue	$ 16,319	$ 1,174	$ 20,974	$ 2,648
Operating expenses:
Research and development	29,002	16,625	50,442	34,048
General and administrative	8,601	7,850	16,060	14,403
Change in fair value of contingent consideration	15,347	4,889	5,895	16,591
Total operating expenses	52,950	29,364	72,397	65,042
Loss from operations	(36,631)	(28,190)	(51,423)	(62,394)
Interest income	343	358	853	878
Loss before benefit from income taxes	(36,288)	(27,832)	(50,570)	(61,516)
Benefit from income taxes	0	0	0	486
Net loss	$ (36,288)	$ (27,832)	$ (50,570)	$ (61,030)
Net loss per share—basic and diluted	$ (0.58)	$ (0.57)	$ (0.83)	$ (1.30)
Weighted average common shares outstanding—basic and diluted	62,282,291	48,749,627	61,145,254	46,866,842

XML

Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Statement of Comprehensive Income [Abstract]
Net loss	$ (36,288)	$ (27,832)	$ (50,570)	$ (61,030)
Other comprehensive income (loss):
Unrealized gains (losses) on available-for-sale securities, net of tax of $0	(315)	219	(201)	374
Comprehensive loss	$ (36,603)	$ (27,613)	$ (50,771)	$ (60,656)

XML

Condensed Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Statement of Comprehensive Income [Abstract]
Unrealized gains on available-for-sale securities, net of tax	$ 0	$ 0	$ 0	$ 0

XML

Condensed Consolidated Statements Of Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Income [Member]
Beginning balances at Dec. 31, 2018	$ 125,295	$ 45	$ 371,257	$ (246,203)	$ 196
Beginning balance, Shares at Dec. 31, 2018		45,139,955
Exercise of stock options	897		897
Exercise of stock options, Shares		154,484
Stock-based compensation expense	1,959		1,959
Unrealized gains (losses) on available-for-sale securities	155				155
Net loss	(33,198)			(33,198)
Ending balances at Mar. 31, 2019	95,108	$ 45	374,113	(279,401)	351
Ending balance, shares at Mar. 31, 2019		45,294,439
Beginning balances at Dec. 31, 2018	125,295	$ 45	371,257	(246,203)	196
Beginning balance, Shares at Dec. 31, 2018		45,139,955
Issuance of common stock in connection with a former employee letter agreement	847
Unrealized gains (losses) on available-for-sale securities	374
Net loss	(61,030)
Ending balances at Jun. 30, 2019	115,697	$ 51	422,309	(307,233)	570
Ending balance, shares at Jun. 30, 2019		51,010,368
Beginning balances at Mar. 31, 2019	95,108	$ 45	374,113	(279,401)	351
Beginning balance, Shares at Mar. 31, 2019		45,294,439
Issuance of common stock in connection with private placement, net of placement agent fees and offering costs	44,134	$ 6	44,128
Issuance of common stock in connection with private placement, net of placement agent fees and offering costs,shares		5,582,940
Issuance of common stock in connection with a former employee letter agreement	847		847
Issuance of common stock in connection with a former employee letter agreement , Shares		67,406
Forfeited restricted common stock	(1)		(1)
Forfeited restricted common stock, Shares		(1,334)
Exercise of stock options	519		519
Exercise of stock options, Shares		66,917
Stock-based compensation expense	2,703		2,703
Unrealized gains (losses) on available-for-sale securities	219				219
Net loss	(27,832)			(27,832)
Ending balances at Jun. 30, 2019	115,697	$ 51	422,309	(307,233)	570
Ending balance, shares at Jun. 30, 2019		51,010,368
Beginning balances at Dec. 31, 2019	153,536	$ 60	512,231	(359,496)	741
Beginning balance, Shares at Dec. 31, 2019		60,022,067
Exercise of stock options	132		132
Exercise of stock options, Shares		15,596
Stock-based compensation expense	3,172		3,172
Unrealized gains (losses) on available-for-sale securities	114				114
Net loss	(14,282)			(14,282)
Ending balances at Mar. 31, 2020	142,672	$ 60	515,535	(373,778)	855
Ending balance, shares at Mar. 31, 2020		60,037,663
Beginning balances at Dec. 31, 2019	153,536	$ 60	512,231	(359,496)	741
Beginning balance, Shares at Dec. 31, 2019		60,022,067
Issuance of common stock in connection with a former employee letter agreement	0
Unrealized gains (losses) on available-for-sale securities	(201)
Net loss	(50,570)
Ending balances at Jun. 30, 2020	271,393	$ 69	680,850	(410,066)	540
Ending balance, shares at Jun. 30, 2020		69,359,509
Beginning balances at Mar. 31, 2020	142,672	$ 60	515,535	(373,778)	855
Beginning balance, Shares at Mar. 31, 2020		60,037,663
Issuance of common stock in connection with public offerings, net of underwriting discounts and commissions and offering costs	153,611	$ 9	153,602	0	0
Issuance of common stock in connection with public offerings, net of underwriting discounts and commissions and offering costs ,Shares		8,544,982
Exercise of stock options	5,699	$ 0	5,699	0	0
Exercise of stock options, Shares		776,864
Stock-based compensation expense	6,014	$ 0	6,014	0	0
Unrealized gains (losses) on available-for-sale securities	(315)	0	0	0	(315)
Net loss	(36,288)	0	0	(36,288)	0
Ending balances at Jun. 30, 2020	$ 271,393	$ 69	$ 680,850	$ (410,066)	$ 540
Ending balance, shares at Jun. 30, 2020		69,359,509

XML

Condensed Consolidated Statements of Cash flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash flows from operating activities:
Net loss	$ (50,570)	$ (61,030)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense	5,617	1,960
Stock-based compensation expense	9,186	5,509
Change in fair value of contingent consideration	5,895	16,591
Deferred income tax benefit	0	(486)
Changes in operating assets and liabilities:
Collaboration receivables	(10,535)	177
Prepaid expenses and other assets	(5,909)	(1,766)
Right-of-use assets	270	234
Accounts payable	(2,783)	(1,858)
Accrued expenses	4,013	600
Lease liability	(244)	(170)
Deferred revenue	(6,429)	(1,206)
Net cash used in operating activities	(51,489)	(41,445)
Cash flows from investing activities:
Purchases of investments	(27,409)	(38,438)
Sales and maturities of investments	111,277	55,756
Purchases of property and equipment	(4,446)	(1,793)
Net cash provided by investing activities	79,422	15,525
Cash flows from financing activities:
Proceeds from public offerings, net of underwriting discounts and commissions	154,292	0
Payments of public offering costs	(443)	0
Proceeds from private placement, net of placement agent fees	0	44,608
Payments of private placement offering costs	0	(474)
Proceeds from option exercises	5,831	1,416
Net cash provided by financing activities	159,680	45,550
Net increase in cash, cash equivalents and restricted cash	187,613	19,630
Cash, cash equivalents and restricted cash at beginning of period	85,530	56,224
Cash, cash equivalents and restricted cash at end of period	273,143	75,854
Cash, cash equivalents and restricted cash at end of period:
Cash and cash equivalents	272,193	74,904
Restricted cash	950	950
Total cash, cash equivalents and restricted cash at end of period	273,143	75,854
Supplemental disclosure of non-cash investing and financing activities:
Purchases of property and equipment included in accounts payable and accrued expenses	718	59
Offering costs included in accrued expenses	238
Deferred offering costs included in accounts payable and accrued expenses	0	123
Issuance of common stock in connection with a former employee letter agreement	$ 0	$ 847

XML

Nature of the Business and Basis of Presentation

6 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of the Business and Basis of Presentation

1. Nature of the Business and Basis of Presentation

Translate Bio, Inc. (the “Company”) is a clinical-stage messenger RNA (“mRNA”) therapeutics company developing a new class of potentially transformative medicines to treat diseases caused by protein or gene dysfunction. Using its proprietary mRNA therapeutic platform (“MRT platform”), the Company creates mRNA that encodes functional proteins. The Company’s mRNA is designed to be delivered to the target cell where the cell’s own machinery recognizes it and translates it, restoring or augmenting protein function to treat or prevent disease. The Company is primarily focused on applying its MRT platform to treat pulmonary diseases caused by insufficient protein production or where production of proteins can modify disease. The Company is also pursuing the applicability of its MRT platform for the development of mRNA vaccines for infectious diseases under a collaboration with Sanofi Pasteur Inc. (“Sanofi”), the vaccines global business unit of Sanofi S.A. The Company’s MRT platform may also be applied to produce various classes of treatments, such as therapeutic antibodies for infectious diseases and other diseases. 

The outbreak of a novel strain of coronavirus named SARS-CoV-2 (severe acute respiratory syndrome 2), which causes coronavirus disease (“COVID-19”) has presented a substantial public health and economic challenge around the world and is affecting the Company’s employees, patients, communities and business operations, as well as the U.S. economy and financial markets. While the Company has progressed certain of its preclinical programs, specifically in therapeutics for pulmonary diseases and in vaccine development under its collaboration with Sanofi, as further discussed below, enrollment and dosing has been paused in the Company’s Phase 1/2 clinical trial in patients with cystic fibrosis (“CF”) as a consequence of the response to the COVID-19 pandemic. The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations and financial condition will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning COVID-19, the actions taken in an effort to contain it or to potentially treat or vaccinate against COVID-19 and the economic impact on local, regional, national and international markets. The Company is actively monitoring this situation and the possible effects on its financial condition, liquidity, operations, suppliers, industry and workforce.

The Company is developing MRT5005 for the treatment of CF. The Company is conducting a Phase 1/2 clinical trial to evaluate the safety and tolerability of single and multiple-ascending doses of MRT5005. Percent predicted forced expiratory volume in one second (“ppFEV1”), which is a well-defined and accepted endpoint measuring lung function, is also being measured at pre-defined timepoints throughout the trial. In April 2019, the Company completed dosing of all patients in the single-ascending dose (“SAD”) portion of the Phase 1/2 clinical trial and in July 2019, the Company reported interim data from the SAD portion of the clinical trial through one-month follow up post dosing. MRT5005 was generally well-tolerated at low and mid-dose levels with no serious adverse events reported at any dose level. Marked increases in ppFEV1 were observed after a single dose of MRT5005, primarily at the mid-dose level. Based on the analysis of the interim results, the Company has amended the clinical trial protocol to include one additional SAD dose group and two additional dose groups in the ongoing multiple-ascending dose (“MAD”) portion of this trial. The Company began dosing patients in the MAD portion of the trial in early 2019. In April 2020, the Company announced that enrollment and dosing have been paused in the ongoing Phase 1/2 clinical trial in patients with CF as a consequence of the response to the COVID-19 pandemic. The Company and the clinical trial sites are assessing the potential for patients to safely return to the clinic for study enrollment and dosing. At this time the Company is unable to predict the timing for reporting data.

The Company is leveraging its lung delivery platform and focusing its preclinical research efforts on identifying lead product candidates for a next-generation CF program, as well as beyond CF in additional pulmonary diseases with unmet medical need, including primary ciliary dyskinesia, idiopathic pulmonary fibrosis and pulmonary arterial hypertension.

The Company has a collaboration with Sanofi to develop infectious disease vaccines using the Company’s mRNA technology. Under the collaboration, the Company and Sanofi will jointly conduct research and development activities to advance mRNA vaccines targeting up to seven infectious disease pathogens (see Note 14). Two of the target pathogens under development are SARS-CoV-2 and influenza. Multiple COVID-19 vaccine candidates are being evaluated in vivo for immunogenicity and neutralizing antibody activity to support lead candidate selection with the goal to initiate a first-in-human clinical trial in the fourth quarter of 2020. The Company is conducting preclinical studies with a lead candidate for influenza to support an anticipated investigational new drug filing with clinical trial initiation anticipated mid-year 2021.  

The Company is subject to risks common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Product candidates currently under development will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

The preparation of the accompanying condensed consolidated financial statements requires the Company to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis the Company evaluates its estimates, judgments and methodologies. The Company bases its estimates on historical experience and on various other assumptions that it believes are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenues and expenses. The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations and financial condition, including revenue, expenses, reserves and allowances, manufacturing, clinical trials, research and development costs and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken in an effort to contain it or to potentially treat or vaccinate against COVID-19, as well as the economic impact on local, regional, national and international customers and markets. The Company has made estimates of the impact of COVID-19 within its financial statements and have determined them to be immaterial. There may be changes to those estimates in future periods. Actual results may differ from these estimates.

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its two wholly owned subsidiaries, Translate Bio MA, Inc. and Translate Bio Securities Corporation, from their date of incorporation. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated balance sheet as of June 30, 2020, the unaudited condensed consolidated statements of operations and of comprehensive loss for the three and six months ended June 30, 2020 and 2019, the unaudited condensed consolidated statements of stockholders’ equity for the three and six months ended June 30, 2020 and 2019 and the unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2020 and 2019 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. The accompanying balance sheet as of December 31, 2019 has been derived from the Company’s audited financial statements for the year ended December 31, 2019. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K that was filed with the SEC on March 12, 2020.

The accompanying unaudited interim condensed consolidated financial presentation has been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflects all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of June 30, 2020, the results of its operations for the three and six months ended June 30, 2020 and 2019, and its cash flows for the six months ended June 30, 2020 and 2019. The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2020 and 2019 are also unaudited. The results for the three and six months ended June 30, 2020 are not necessarily indicative of results to be expected for the year ending December 31, 2020, any other interim periods, or any future year or period.

Sales of Common Stock

In July 2019, the Company filed a universal shelf registration statement on Form S-3 with the SEC (the “2019 Shelf”) to register for sale from time to time up to $250.0 million of common stock, preferred stock, debt securities, warrants and/or units in one or more offerings, which became effective on July 19, 2019 (File No. 333-232543).  

In July 2019, the Company entered into an Open Market Sale AgreementSM (the “Sales Agreement”) with Jefferies LLC (“Jefferies”) under which the Company may issue and sell shares of its common stock, from time to time, having an aggregate offering price of up to $50.0 million. The offer and sales of shares under the Sales Agreement were also registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the 2019 Shelf. 

On March 13, 2020, the Company filed a universal shelf registration statement on Form S-3 with the SEC (the “2020 Shelf”) to register for sale from time to time up to $350.0 million of common stock, preferred stock, debt securities, warrants and/or units in one of more offerings (File No. 333-237159). This registration statement was declared effective on May 4, 2020. Upon the effectiveness of the 2020 Shelf, the Company deregistered the 2019 Shelf and no more sales may be made pursuant to the 2019 Shelf.

On March 13, 2020, the Company entered into Amendment No. 1 to the Open Market Sale AgreementSM with Jefferies, which increased the aggregate dollar amount of shares of common stock that the Company may issue and sell pursuant to the Sales Agreement from $50.0 million to $100.0 million, which became effective when the 2020 Shelf was declared effective. As of June 30, 2020, the Company has issued and sold an aggregate of 2,863,163 shares of its common stock, resulting in gross proceeds of $37.9 million, before deducting commissions of $1.1 million and other offering expenses of $0.2 million. In the future, $62.1 million of shares of common stock remain available to be sold pursuant to the Sales Agreement, which sales, if any, would be made under the 2020 Shelf.

On June 24, 2020, the Company filed a registration statement on Form S-3ASR, which became automatically effective upon filing with the SEC (File No. 333-239405) (the “June 2020 Registration Statement”). The June 2020 Registration Statement registered for sale from time to time common stock, preferred stock, debt securities, warrants and/or units in one or more offerings. On June 30, 2020, the Company issued and sold 5,681,819 shares of common stock and a stockholder of the Company sold 6,824,992 shares of common stock through a public offering pursuant to the June 2020 Registration Statement. The price to the public was $22.00 per share, resulting in gross proceeds to the Company of $125.0 million, before deducting underwriting discounts and commissions of $7.5 million and other offering expenses of $0.5 million. The Company did not receive any proceeds from the sale of shares of common stock by the stockholder.

Sanofi Pasteur Collaboration and Licensing Agreement

In 2018, the Company entered into a collaboration and license agreement with Sanofi (the “Original Sanofi Agreement”) to develop mRNA vaccines for up to five infectious disease pathogens (the “Licensed Fields”). On March 26, 2020, the Company and Sanofi amended the Original Sanofi Agreement (the “First Sanofi Amendment”) to include vaccines against SARS-CoV-2 as an additional Licensed Field, increasing the number of infectious disease pathogens to up to six. On June 22, 2020, the Company and Sanofi agreed to further amend the Original Sanofi Agreement to expand the scope of the collaboration and licenses granted to Sanofi (the “Second Sanofi Amendment”) (see Note 14). The Original Sanofi Agreement, as amended by the First Sanofi Amendment and the Second Sanofi Amendment, is referred to as the “Amended Sanofi Agreement.”

Pursuant to the Amended Sanofi Agreement, the Company and Sanofi have agreed to jointly conduct research and development activities to advance mRNA vaccines targeting up to seven infectious disease pathogens. The term of the collaboration expires in June 2022 with an option for Sanofi to extend for one additional year. If Sanofi elects to so extend, the collaboration may be further expanded to jointly conduct research and development activities to advance mRNA vaccines for up to an additional three infectious disease pathogens, bringing the total to ten pathogens.

Under the terms of the Amended Sanofi Agreement, the Company has granted to Sanofi exclusive, worldwide licenses under applicable patents, patent applications, know-how and materials, including those arising under the collaboration, to develop, commercialize and manufacture mRNA vaccines to prevent, treat or cure diseases, disorders or conditions in humans caused by any infectious disease pathogens, with certain specified exceptions.

Pursuant to the Second Sanofi Amendment, Sanofi agreed to pay the Company an additional upfront payment of $300.0 million, which was received in August 2020. Additionally, in connection with the execution of the Second Sanofi Amendment, the Company and Sanofi, a French corporation, and an affiliate of Sanofi (the “Investor”) entered into a securities purchase agreement (the “Securities Purchase Agreement”) for the sale and issuance of 4,884,434 shares of the Company’s common stock to the Investor at a price of $25.59 per share representing a 50 percent premium to the 20-day moving average share price prior to signing, for an aggregate purchase price of approximately $125.0 million. The closing of the transaction contemplated by the Securities Purchase Agreement was consummated on July 20, 2020, the effective date (see Note 14).

Liquidity

In accordance with Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.

The Company’s financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities in the ordinary course of business. Through June 30, 2020, the Company has funded its operations primarily through sales of equity securities and research and development collaboration agreements. The Company has incurred recurring losses and cash outflows from operations since its inception, including net losses of $50.6 million and $61.0 million for the six months ended June 30, 2020 and 2019, respectively. In addition, the Company had an accumulated deficit of $410.1 million as of June 30, 2020. The Company expects to continue to generate operating losses for the foreseeable future.

As of August 6, 2020, the date of issuance of these unaudited interim condensed consolidated financial statements, the Company expects that its cash, cash equivalents and short-term investments of $292.2 million as of June 30, 2020, together with the upfront payment of $300.0 million from Sanofi under the Second Sanofi Amendment and the aggregate purchase price of approximately $125.0 million from the Investor under the Securities Purchase Agreement, both received as of August 6, 2020, will be sufficient to fund its operating expenses and capital expenditure requirements for at least the next 36 months. The future viability of the Company beyond that point is dependent on the Company’s ability to raise additional capital to finance its operations.

Although the Company has been successful in raising capital in the past, there is no assurance that it will be successful in obtaining such additional financing on terms acceptable to the Company, if at all. The Company expects that its expenses will increase in connection with its ongoing business activities. As a result, the Company will need substantial additional funding to support its continuing operations and pursue its growth strategy. Until such time as the Company can generate significant revenue from product sales, if ever, it expects to finance its operations through the sale of equity, debt financings or other capital sources, including collaborations with other companies or other strategic transactions. The Company may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If the Company is unable to obtain funding, the Company will be forced to delay, reduce or eliminate some or all of its research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect its business prospects, or the Company may be unable to continue operations.

XML

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

The significant accounting policies and estimates used in preparation of the consolidated financial statements are described in the Company’s audited financial statements as of and for the year ended December 31, 2019, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K. During the six months ended June 30, 2020, there were no material changes to the Company’s significant accounting policies.

Recently Adopted Accounting Pronouncements

In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2017-04, Intangibles—Goodwill and Other: Simplifying the Test for Goodwill Impairment (Topic 350), which provides for the elimination of Step 2 from the goodwill impairment test. If impairment charges are recognized, the amount recorded will be the amount by which the carrying amount exceeds the reporting unit’s fair value with certain limitations. The Company adopted this new standard as of the required effective date of January 1, 2020, and its adoption had no impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. This new standard removes the disclosure requirement for the amount and reasons for transfers between Level 1 and Level 2 fair value measurements as well as the process for Level 3 fair value measurements. In addition, the ASU adds the disclosure requirements for changes in unrealized gains and losses included in other comprehensive income (loss) for recurring Level 3 fair value measurements held at the end of the reporting period as well as the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The Company adopted this new standard as of the required effective date of January 1, 2020, and its adoption had no impact on the Company’s consolidated financial statements.

In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606. This update provides clarification on the interaction between Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), and ASC 808, Collaborative Arrangements (“ASC 808”), including the alignment of unit of account guidance between the two topics. The Company adopted this new standard as of the required effective date of January 1, 2020, and its adoption had no impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The guidance requires that credit losses be reported using an expected losses model rather than the incurred losses model that is currently used, and establishes additional disclosures related to credit risks. For available-for-sale debt securities with unrealized losses, the standard now requires allowances to be recorded instead of reducing the amortized cost of the investment. This standard will be effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact that the adoption of this new standard will have on its consolidated financial statements and disclosures.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes-Simplifying the Accounting for Income Taxes. This new standard eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for annual periods beginning after December 15, 2020 and interim periods within, with early adoption permitted. Adoption of the standard requires certain changes to be made prospectively, with some changes to be made retrospectively. The Company does not expect the adoption of this new standard to have a material impact on its consolidated financial statements.

XML

Collaboration Agreement

6 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Sanofi Collaboration and License Agreement

3. Collaboration Agreement

Sanofi Collaboration and License Agreement

In 2018, the Company and Sanofi entered into the Original Sanofi Agreement to develop mRNA vaccines and an mRNA vaccine platform for up to five infectious disease pathogens. In March 2020, the Company and Sanofi entered into the First Sanofi Amendment to include vaccines against SARS-CoV-2 as an additional Licensed Field, increasing the number of infectious disease pathogens to up to six. On June 22, 2020, the Company and Sanofi entered into the Second Sanofi Amendment, which became effective on July 20, 2020, to expand the scope of the collaboration and licenses granted to Sanofi (see Note 14). In this Note 3, the Company is describing matters in relation to the Original Sanofi Agreement, as amended by the First Sanofi Amendment. Certain of those matters have been amended in accordance with the Second Sanofi Amendment, resulting in rights and obligations that may be different than those set forth in this Note 3, as further described in Note 14.

Pursuant to the Original Sanofi Agreement, as amended by the First Sanofi Amendment, the Company and Sanofi  agreed to collaborate to perform certain research and development activities to advance mRNA vaccines and mRNA vaccine platform development during a three-year research term, which could have been extended by mutual agreement. The Company was obligated to manufacture and supply certain non-clinical and clinical product until the Company transferred such manufacturing capabilities to Sanofi, which the Company originally estimated to take up to eight years to complete. The collaboration activities were subject to a collaboration plan to be updated annually. During March 2020, the joint steering committee revised the collaboration timeline and the Company estimated the completion of the transfer of manufacturing capabilities to be six years from the date of the Original Sanofi Agreement, or 2024.

Pursuant to the Original Sanofi Agreement, as amended by the First Sanofi Amendment, the Company and Sanofi agreed to a governance structure, including committees and working groups, to manage the activities under the collaboration. If the Company and Sanofi did not mutually agree on certain decisions, Sanofi would be able to break a deadlock without the Company’s consent. The collaboration included an estimated budget. Sanofi was responsible for paying reimbursable development costs, including the Company’s employee costs, out-of-pocket costs paid to third parties and manufacturing costs, up to a specified amount for the Licensed Field. During the second quarter of 2020, the joint steering committee revised the estimated budget to include reimbursable manufacturing costs for development of the vaccine against SARS-CoV-2.

Under the terms of the Original Sanofi Agreement, as amended by the First Sanofi Amendment, the Company granted to Sanofi exclusive, worldwide licenses under applicable patents, patent applications, know-how and materials, including those arising under the collaboration, to develop, commercialize and manufacture mRNA vaccines to prevent, treat or cure diseases, disorders or conditions in humans caused by any of four of the Licensed Fields. In addition, pursuant to the terms of the Original Sanofi Agreement, as amended by the First Sanofi Amendment, and subject to certain limitations, Sanofi had options to add up to two additional infectious disease pathogens within the granted licenses to the Licensed Fields by exercising either option or both options during a specified option term and paying the Company a $5.0 million fee per added pathogen, subject to certain limitations on the pathogens. If, prior to the exercise of the options by Sanofi, the Company received a bona fide third-party offer to acquire rights to the field to which an option relates, the Company was required to notify Sanofi of such offer, and if Sanofi did not exercise its option as to the applicable field, such field would no longer be subject to the option.

The Company and Sanofi retained the rights to perform their respective obligations and exercise their respective rights under the Original Sanofi Agreement, as amended by the First Sanofi Amendment. Sanofi also granted the Company non-exclusive, sublicensable licenses under patent rights claiming certain improvements that Sanofi could have made to the technology the Company had licensed to it or claiming certain technology arising from the collaboration and owned by Sanofi. The Company could have exercised such licenses to develop, manufacture and commercialize products, other than products that use a vaccine to prevent, treat or cure a disease, disorder or condition in humans caused by an infectious disease pathogen. Sanofi could have terminated these licenses to the Company if the Company materially breached the terms of the license and the breach remained uncured for a specified period, which could have been extended in certain circumstances.

The Original Sanofi Agreement, as amended by the First Sanofi Amendment, provided that the Company was eligible to receive aggregate potential payments of up to $805.0 million from Sanofi, which included the $45.0 million upfront payment the Company received in 2018, potential milestone payments and potential option exercise payments. Sanofi would also pay the Company $5.0 million with respect to each additional Licensed Field for which it exercised an option. Under the First Sanofi Amendment, Sanofi did not pay an upfront fee to the Company with respect to the addition of SARS-CoV-2 as a Licensed Field. As part of the Original Sanofi Agreement, Sanofi had also agreed to pay the Company milestone payments upon the achievement of specified development, regulatory and commercialization milestones. In particular, the Company was entitled to receive development and regulatory milestone payments of up to $63.0 million per Licensed Field and sales milestone payments of up to $85.0 million per Licensed Field. In addition, the Company was entitled to receive a $10.0 million milestone payment from Sanofi following completion of the technology and process transfer.

Notwithstanding the foregoing, milestone payments provisions of the Original Sanofi Agreement, as amended by the First Sanofi Agreement, did not apply to vaccine products for the prevention, treatment or cure of SARS-CoV-2 that are purchased by a governmental authority while SARS-CoV-2 is a declared pandemic. Among other changes to the provisions described in this Note 3, this provision regarding milestone payments has been amended under the Second Sanofi Amendment (see Note 14).

Pursuant to the Original Sanofi Agreement, as amended by the First Sanofi Amendment, Sanofi had agreed to pay the Company a tiered royalty on worldwide net sales of all mRNA vaccines within each Licensed Field ranging from a high single-digit percentage to a low teens percentage, depending on quarterly net sales by Sanofi, its affiliates and its sublicensees. The royalty percentage payable to the Company could have been reduced with respect to a product once the relevant licensed patent rights expired or if additional licensed technology was required, but such royalty percentage could not fall below the Company’s royalty obligations to third parties plus a royalty of a low single-digit percentage. Royalty payments were payable on a product-by-product and country-by-country basis beginning on the launch of the product in the country until the later of the expiration of the last valid claim covering such product or 10 years after the launch of such product in such country. Notwithstanding the foregoing, pursuant to the Original Sanofi Agreement, as amended by the First Sanofi Amendment, royalty payments would not apply to vaccine products for the prevention, treatment or cure of SARS-CoV-2 that are purchased by a governmental authority while SARS-CoV-2 is a declared pandemic, and instead the parties would negotiate in good faith royalty terms to apply to such vaccine products, which royalty terms were to reflect the economic conditions applicable to commercializing such vaccine products, and in no event would be higher than those set out in the Original Sanofi Agreement. Among other changes to the provisions described in this Note 3, the provision regarding royalties payable in respect of SARS-CoV-2 vaccine products has been amended under the Second Sanofi Amendment (see Note 14).

The Original Sanofi Agreement, as amended by the First Sanofi Amendment, provided that it would remain in effect until terminated in accordance with its terms. Either the Company or Sanofi could have terminated the Original Sanofi Agreement, as amended by the First Sanofi Amendment, in its entirety if the other party was subject to certain insolvency proceedings. Either party could have terminated the Original Sanofi Agreement, as amended by the First Sanofi Amendment, in its entirety or with respect to a particular Licensed Field, country or product if the other party materially breached the Original Sanofi Agreement, as amended by the First Sanofi Amendment, and the breach remained uncured for a specified period, which could have been extended in certain circumstances. Sanofi could have also terminated the Original Sanofi Agreement, as amended by the First Sanofi Amendment, in its entirety or with respect to a particular Licensed Field, country or product for safety reasons or for convenience, in each case after a specified notice period. After termination of the Original Sanofi Agreement, as amended by the First Sanofi Amendment, Sanofi could have continued to manufacture and commercialize the terminated products for a specified period of time, subject to Sanofi’s payment obligations.

Moreover, under the Original Sanofi Agreement, as amended by the First Sanofi Amendment, in the event that the Company and Sanofi were unable to mutually agree on terms relating to the conduct of clinical development and commercialization of a product related to SARS-CoV-2 vaccine products, the Company had the right to terminate and revoke the license granted to Sanofi with respect to SARS-CoV-2 with sixty (60) days written notice, and SARS-CoV-2 would have ceased to be a Licensed Field. Upon any such termination and revocation by the Company, the Company and Sanofi had agreed to negotiate in good faith a termination agreement with respect to the Company’s use of any technology arising from the collaboration that was owned by Sanofi or jointly owned by the Company and Sanofi, that was necessary or useful to the further development or commercialization of a product directed to SARS-CoV-2. Among other changes to the provisions described in this Note 3, the provision regarding termination of the SARS-CoV-2 Licensed Field has been amended under the Second Sanofi Amendment (see Note 14). Sanofi has sole responsibility for all commercialization activities for mRNA vaccines in the Licensed Fields and is obligated to bear all costs in connection with any such commercialization.

The Company and Sanofi entered into a separate supply agreement on June 22, 2020, with an effective date of December 20, 2019, governing the terms of the supply of products by the Company (the “Supply Agreement”). Pursuant to the Supply Agreement, the Company has agreed to use commercially reasonable efforts to manufacture and supply Sanofi with non-clinical and clinical supply of products and other research materials in certain Licensed Fields. The Supply Agreement will remain in effect until terminated in accordance with its terms. However, the Company’s obligation to manufacture and supply products is limited to a defined duration based on the Licensed Field of the applicable product. The Supply Agreement may be terminated by the mutual consent of the parties. Sanofi may terminate the Supply Agreement for convenience after a specified notice period, or in the event that the Company does not provide the supply in a timely manner. The Company may terminate the Supply Agreement in the event of a breach by Sanofi of its payment obligations and such breach remains uncured for a specified period. As part of the Second Sanofi Amendment, the Company and Sanofi agreed to negotiate in good faith and enter into a further supply agreement in respect of supply of products in the SARS-CoV-2 Licensed Field for use in Phase 3 clinical trials or commercial supply.

Accounting for the Sanofi Collaboration

The Company accounts for the Original Sanofi Agreement, as amended by the First Sanofi Amendment, under ASC 606. In determining the appropriate amount of revenue to be recognized under ASC 606, the Company performed the following steps: (i) identified the promised goods or services in the contract; (ii) determined whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

The Company identified the following promised goods or services contained in the Original Sanofi Agreement, as amended by the First Sanofi Amendment: (i) the license it conveyed to Sanofi with respect to the Licensed Fields, (ii) the licensed know-how to be conveyed to Sanofi with respect to the Licensed Fields, (iii) its obligation to perform research and development on the Licensed Fields, (iv) its obligation to transfer licensed materials to Sanofi, (v) its obligation to manufacture and supply certain non-clinical and clinical mRNA vaccines and materials containing mRNA until the Company transfers such manufacturing capabilities to Sanofi; and (vi) the technology and process transfer. The Company assessed whether each of these promised goods or services are distinct performance obligations on their own or if they need to be combined with other promises to create a bundle that is a distinct performance obligation. The Company determined that the promised goods and services do not have standalone value and are highly interrelated. Accordingly, the promised goods and services represent one performance obligation. Sanofi’s right to exercise options for up to two additional infectious disease pathogens within the granted licenses to the Licensed Fields are accounted for separately as they do not represent material rights, based on the criteria of ASC 606. Upon the exercise of any option by Sanofi, the contract promises associated with an option target would use a separate proportional performance model for purposes of revenue recognition under ASC 606. There is no significant financing component or non-cash consideration included in the Original Sanofi Agreement, as amended by the First Sanofi Amendment.

Under ASC 606, at the end of each reporting period, the Company re-evaluates the probability that the consideration associated with each milestone or reimbursement will not be subject to a significant reversal in the cumulative amount of revenue recognized, and, if necessary, adjusts the estimate of the overall transaction price. The estimated collaboration budget is consistently re-evaluated and changes to the budget, if any, require approval by the Joint Steering Committee. If an approved change occurs, the Company will re-evaluate the transaction price which could potentially affect the cumulative amount of revenue recognized. In March 2020 and in June 2020, the joint steering committee agreed to a revised budget and collaboration plan. As a result, during the six months ended June 30, 2020, the Company increased the overall transaction price by $42.9 million. The transaction price includes the upfront, non-refundable payment of $45.0 million for the transfer of the combined license, supply and development obligations under the Original Sanofi Agreement, an estimated $34.3 million in reimbursable employee costs, an estimated $100.7 million in reimbursable development costs including out-of-pocket costs paid to third parties and manufacturing costs and an estimated $14.0 million in milestone payments.

Under ASC 606, the Company recognized revenue using the cost-to-cost input method, which it believes best depicts the transfer of control to the customer. Under the cost-to-cost input method, the extent of progress towards completion is measured based on the ratio of actual costs incurred to the total estimated costs expected upon satisfying the identified performance obligation. Under this method, revenue is recorded as a percentage of the estimated transaction price based on the extent of progress towards completion. The estimate of the Company’s measure of progress and estimate of variable consideration to be included in the transaction price will be updated at each reporting date as a change in estimate. The amount related to the unsatisfied portion will be recognized as that portion is satisfied over time.

The following table summarizes the Company’s collaboration revenue (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Collaboration revenue	$	16,319	$	1,174	$	20,974	$	2,648

The following table presents the balance of the Company’s contract liabilities (in thousands):

	June 30, 2020		December 31, 2019
Contract liabilities
Deferred revenue	$	36,927	$	43,356

The Company considers the total consideration expected to be earned in the next 12 months for services to be performed as short-term deferred revenue, and consideration that is expected to be earned subsequent to 12 months from the balance sheet date as long-term deferred revenue. The Company expects to complete its obligations and recognize all net revenues from the collaboration over six years. Revenue recognized from contract liabilities was $6.4 million and $1.2 million during the six months ended June 30, 2020 and 2019, respectively.

XML

Intangible Assets and Goodwill

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill

4. Intangible Assets and Goodwill

Acquisition of Shire’s MRT Program

In December 2016, the Company entered into an asset purchase agreement (as amended in June 2018) with Shire Human Genetic Therapies, Inc. (“Shire”), a subsidiary of Takeda Pharmaceutical Company Ltd., pursuant to which Shire sold equipment to and assigned to the Company all of its rights to certain patent rights, permits, real property leases, contracts, regulatory documentation, books and records, and materials related to Shire’s mRNA therapy platform (the “MRT Program”), including its cystic fibrosis transmembrane conductance regulator program.

Intangible Assets, Net

The acquisition of Shire’s MRT Program was accounted for in accordance with the acquisition method of accounting for business combinations. The total purchase consideration transferred was allocated to the tangible and identifiable intangible assets acquired based on their estimated fair values. The tables below present the Company’s definite-lived intangible assets that are subject to amortization and indefinite-lived intangible assets:

	June 30, 2020
	Estimated Life		Gross Carrying Amount		Accumulated Amortization			Impairment Charge		Net Carrying Amount
			(In thousands)
Definite-lived intangible assets:
MRT		6 years	$	45,992	$	(7,003	)	$	—	$	38,989
Indefinite-lived intangible assets:
IPR&D - CF		Indefinite		42,291		—			—		42,291
Total intangible assets, net			$	88,283	$	(7,003	)	$	—	$	81,280

	December 31, 2019
	Estimated Life		Gross Carrying Amount		Accumulated Amortization			Impairment Charge			Net Carrying Amount
			(In thousands)
Definite-lived intangible assets:
MRT		8 years	$	45,992	$	(2,747	)	$	—		$	43,245
Indefinite-lived intangible assets:
IPR&D - CF		Indefinite		42,291		—			—			42,291
IPR&D - OTC		Indefinite		18,559		—			(18,559	)		—
Total intangible assets, net			$	106,842	$	(2,747	)	$	(18,559	)	$	85,536

Identifiable intangible assets acquired in the acquisition of Shire’s MRT Program consisted of in-process research and development (“IPR&D”), which included ongoing projects that could further the Company’s preclinical and clinical development activities related to CF, ornithine transcarbamylase (“OTC”) deficiency and other potential rare diseases. As of the date of acquisition, the IPR&D was determined to be indefinite-lived.

Upon commencement of the Original Sanofi Agreement, the IPR&D - MRT intangible asset was reclassified from indefinite-lived to definite-lived intangible assets and the Company began amortization of this intangible asset. Amortization will be recorded over the intangible asset’s estimated life based on an economic consumption model. The Company recorded amortization expense of $3.6 million and $0.3 million during the three months ended June 30, 2020 and 2019, respectively, and $4.3 million and $0.8 million during the six months ended June 30, 2020 and 2019, respectively, related to the definite-lived MRT intangible asset. The estimated aggregate amortization expense for each of the five succeeding fiscal years is $11.6 million, $8.3 million, $8.4 million, $10.9 million and $4.0 million for the years ending December 31, 2020, 2021, 2022, 2023 and 2024, respectively.

Indefinite-lived IPR&D is not subject to amortization, but is tested annually for impairment or more frequently if there are indicators of impairment. The Company tests its indefinite-lived IPR&D annually for impairment on October 1st. The Company determined that the discontinuation of the development of MRT5201 in September 2019 was an indicator of impairment and as a result, retested the indefinite-lived IPR&D related to the OTC deficiency program for impairment. The Company is not investing any additional funds in this program and has reallocated all resources previously dedicated to the OTC deficiency program to other programs within the Company. The Company determined that there was no residual value to the indefinite-lived IPR&D related to the OTC deficiency program and, as a result, the Company recorded an impairment charge of $18.6 million during the year ended December 31, 2019, representing the entire value of the indefinite-lived IPR&D related to the OTC deficiency program. Concurrent with the impairment charge, the Company removed the contingent consideration liability related to this program (see Note 5). As a result of the termination of the planned Phase 1/2 clinical trial for MRT5201 in patients with OTC deficiency, the Company had recorded $0.9 million in short-term receivables, which was received during the quarter ended June 30, 2020, related to refundable advance payments for this program with one of the Company’s contract research organizations.

Goodwill

The excess of the fair value of the consideration transferred over the fair value of identifiable assets acquired in the acquisition of Shire’s MRT Program was allocated to goodwill in the amount of $21.4 million. There have been no changes to the carrying amount of goodwill during the six months ended June 30, 2020. Goodwill is not subject to amortization, but is tested annually for impairment or more frequently if there are indicators of impairment. The Company tests its goodwill annually for impairment on October 1st. During the six months ended June 30, 2020 and 2019, the Company did not recognize any impairment charges related to goodwill.

XML

Fair Value of Financial Assets and Liabilities

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value of Financial Assets and Liabilities

5. Fair Value of Financial Assets and Liabilities

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis (in thousands):

	Fair Value Measurements as of June 30, 2020 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	—	$	191,447	$	—	$	191,447
U.S. government agency bonds		—		20,029		—		20,029
	$	—	$	211,476	$	—	$	211,476
Liabilities:
Contingent consideration	$	—	$	—	$	109,550	$	109,550
	$	—	$	—	$	109,550	$	109,550

	Fair Value Measurements as of December 31, 2019 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	—	$	56,591	$	—	$	56,591
U.S. government agency bonds		—		104,098		—		104,098
	$	—	$	160,689	$	—	$	160,689
Liabilities:
Contingent consideration	$	—	$	—	$	103,655	$	103,655
	$	—	$	—	$	103,655	$	103,655

During the six months ended June 30, 2020 and the year ended December 31, 2019, there were no transfers between Level 1, Level 2 and Level 3.

Cash equivalents as of June 30, 2020 and December 31, 2019 consisted of money market funds totaling $191.4 million and $56.6 million, respectively. The money market funds were valued using inputs observable in active markets for similar securities, which represent a Level 2 measurement in the fair value hierarchy. The Company’s short-term investments as of June 30, 2020 and December 31, 2019 consisted of U.S. government agency bonds and were classified as available-for-sale securities. The U.S. government agency bonds were valued using inputs observable in active markets for similar securities, which represent a Level 2 measurement in the fair value hierarchy. As of June 30, 2020, the Company’s short-term investments had an amortized cost of $19.5 million, an unrealized gain of $0.5 million and a fair value of $20.0 million. All of these securities have a maturity of one year or less.

Valuation of Contingent Consideration

The contingent consideration liability related to the acquisition of Shire’s MRT Program in 2016 was classified as a Level 3 measurement within the fair value hierarchy. The Company may be required to pay future consideration to Shire contingent upon the achievement of potential future milestones and earnout payments.

The fair value of the liability to make potential future milestone and earnout payments was estimated by the Company at each reporting date based, in part, on the results of a third-party valuation using a discounted cash flow analysis based on various assumptions, including the probability of achieving specified events, discount rates, and the period of time until earnout payments are payable and the conditions triggering the milestone payments are met. The actual settlement of contingent consideration could differ from current estimates based on the actual occurrence of these specified events.

The following table presents the unobservable inputs and fair value of the components of the contingent consideration (dollar amounts in thousands):

	Unobservable Inputs		Fair Value at
	Projected Year of Payment		June 30, 2020		December 31, 2019
Earnout payments		2026 - 2039		101,570	$	96,097
Milestone payments		2026 - 2030		7,980		7,558
			$	109,550	$	103,655

The discount rate used in the third-party valuation was 13.5% as of June 30, 2020 and December 31, 2019.

The following table presents a roll-forward of the total acquisition-related contingent consideration liability (in thousands):

	Fair Value
Balance as of December 31, 2019	$	103,655
Increase in fair value of contingent consideration		5,895
Balance as of June 30, 2020	$	109,550

The increase in the fair value of contingent consideration was primarily due to  the time value of money due to the passage of time.

XML

Property and Equipment, Net

6 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

6. Property and Equipment, Net

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

	June 30, 2020			December 31, 2019
Laboratory equipment	$	10,500		$	9,044
Computer equipment		893			779
Office equipment		883			883
Leasehold improvements		5,635			5,635
Construction in progress		5,865			3,460
		23,776			19,801
Less: Accumulated depreciation and amortization		(8,622	)		(7,262	)
	$	15,154		$	12,539

Depreciation and amortization expense related to property and equipment was $0.7 million and $0.6 million during the three months ended June 30, 2020 and 2019, respectively, and $1.4 million and $1.1 million during the six months ended June 30, 2020 and 2019, respectively.

XML

Accrued Expenses

6 Months Ended

Jun. 30, 2020

Payables and Accruals [Abstract]

Accrued Expenses

7. Accrued Expenses

Accrued expenses consisted of the following (in thousands):

	June 30, 2020		December 31, 2019
Accrued employee compensation and benefits	$	3,244	$	3,547
Accrued external research and development expenses		2,820		1,763
Accrued consultant and professional fees		2,165		1,390
Other		2,897		372
	$	11,126	$	7,072

Included in other accrued expenses is $2.8 million representing income taxes withheld from exercises of stock options during the three months ended June 30, 2020.

XML

Incentive Stock Options and Restricted Stock

6 Months Ended

Jun. 30, 2020

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Incentive Stock Options and Restricted Stock

8. Incentive Stock Options and Restricted Stock

2018 Equity Incentive Plan

On March 7, 2018, the Company’s Board of Directors (the “Board of Directors”), subject to stockholder approval, adopted, and on June 15, 2018, its stockholders approved, the 2018 Equity Incentive Plan (the “2018 Plan”), which became effective on June 27, 2018. The 2018 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards.

The number of shares initially reserved for issuance under the 2018 Plan is the sum of 2,512,187, plus the number of shares (up to 1,013,167 shares) equal to the sum of (i) the number of shares remaining available for issuance under the 2016 Stock Incentive Plan, as amended (the “2016 Plan”), upon the effectiveness of the 2018 Plan, which was 360,514 shares, and (ii) the number of shares of common stock subject to outstanding awards under the 2016 Plan that expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right. The number of shares of common stock that may be issued under the 2018 Plan will automatically increase on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2019 and continuing for each fiscal year until, and including, the fiscal year ending December 31, 2028, by an amount equal to the lowest of (i) 3,349,582 shares, (ii) 4% of the outstanding shares of common stock on such date and (iii) an amount determined by the Board of Directors. As of December 31, 2019, there were 4,829,847 shares of common stock reserved for issuance under the 2018 Plan. On January 1, 2020, the number of shares of common stock that may be issued under the 2018 Plan increased by 2,400,829 shares of common stock. During the six months ended June 30, 2020, a total of 35,233 shares issued under the 2016 Plan have been cancelled and rolled over to the 2018 Plan, such that there are a total of 7,265,909 shares of common stock reserved for issuance under the 2018 Plan as of June 30, 2020. The shares of common stock underlying any awards that are forfeited, canceled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, repurchased or are otherwise terminated by the Company under the 2018 Plan will be added back to the shares of common stock available for issuance under the 2018 Plan.

The 2018 Plan is administered by the Board of Directors. The exercise prices, vesting periods and other restrictions are determined at the discretion of the Board of Directors, except that the exercise price per share of options may not be less than 100% of the fair market value of the common stock on the date of grant. Stock options awarded under the 2018 Plan expire 10 years after the grant date, unless the Board of Directors sets a shorter term. Awards granted to employees, officers, members of the Board of Directors and consultants typically vest over a period of one to four years.

Typically, unvested stock options are forfeited upon the recipient ceasing to provide services to the Company.

2018 Employee Stock Purchase Plan

On March 7, 2018, the Board of Directors, subject to stockholder approval, adopted, and on June 15, 2018, the Company’s stockholders approved the 2018 Employee Stock Purchase Plan (the “2018 ESPP”), which became effective on June 27, 2018. A total of 418,697 shares of common stock were initially reserved for issuance under this plan. The number of shares of common stock that may be issued under the 2018 ESPP will automatically increase on the first day of each fiscal year, beginning with the fiscal year commencing on January 1, 2019 and continuing for each fiscal year until, and including, the fiscal year commencing on January 1, 2029, by an amount equal to the lowest of (i) 837,395 shares, (ii) 1% of the outstanding shares of common stock on such date and (iii) an amount determined by the Board of Directors. In December 2019, the Board of Directors elected to add no shares of common stock to the 2018 ESPP. As of June 30, 2020, 870,096 shares of common stock were reserved for issuance under this plan and no shares had been issued under the 2018 ESPP.

2016 Stock Incentive Plan

The 2016 Plan provided for the grant of stock options, stock appreciation rights, restricted stock and restricted stock units. Shares that are expired, terminated, surrendered or canceled under the 2016 Plan without having been exercised will be available for future grants of awards under the 2018 Plan. In addition, shares of common stock that are tendered to the Company by a participant to exercise an award are added to the number of shares of common stock available for the grant of awards under the 2018 Plan.

The 2016 Plan is administered by the Board of Directors. The exercise prices, vesting periods and other restrictions were determined at the discretion of the Board of Directors, except that the exercise price per share of options could not be less than 100% of the fair market value of the common stock on the date of grant. Stock options awarded under the 2016 Plan expire 10 years after the grant date, unless the Board of Directors set a shorter term. Stock options and restricted stock granted to employees, officers, members of the Board of Directors and consultants typically vest over a four-year period.

Upon the effectiveness of the 2018 Plan on June 27, 2018, no further awards will be made under the 2016 Plan, but awards outstanding under the 2016 Plan will continue to be governed by their existing terms.

Stock Options

The following table summarizes the Company’s stock option activity since December 31, 2019 (in thousands, except share and per share amounts):

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Intrinsic Value
						(in years)
Outstanding as of December 31, 2019		8,646,378		$	8.06		8.42	$	3,687
Granted		2,861,118		$	8.98
Exercised		(792,460	)	$	7.36
Forfeited		(220,047	)	$	7.98
Outstanding as of June 30, 2020		10,494,989		$	8.37		8.21	$	100,634
Exercisable as of June 30, 2020		4,422,596		$	7.94		7.56	$	44,150
Vested and expected to vest as of June 30, 2020		10,494,989		$	8.37		8.21	$	100,634

The aggregate intrinsic value of options is calculated as the difference between the exercise price of the options and the fair value of the Company’s common stock for those options that had exercise prices lower than the fair value of the Company’s common stock. The aggregate intrinsic value of stock options exercised during the six months ended June 30, 2020 and 2019 was $10.7 million and $0.6 million, respectively.

The weighted average grant-date fair value per share of stock options granted was $5.50 and $5.56 during the six months ended June 30, 2020 and 2019, respectively.

Stock Option Valuation

The fair value of stock option grants is estimated using the Black-Scholes option-pricing model. The Company completed its IPO in July 2018 and therefore lacks company-specific historical and implied volatility information before that date. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. For options with service-based vesting conditions, the expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The expected term of stock options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

The following table presents, on a weighted average basis, the assumptions used in the Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted to employees and directors:

	Six Months Ended June 30,
	2020			2019
Risk-free interest rate		0.79	%		2.42	%
Expected term (in years)		6.1			6.0
Expected volatility		68.6	%		73.3	%
Expected dividend yield		0	%		0	%

Restricted Common Stock

The following table summarizes the Company’s restricted stock activity since December 31, 2019:

	Number of Shares			Weighted Average Grant-Date Fair Value
Unvested restricted common stock outstanding as of December 31, 2019		34,168		$	1.28
Forfeited restricted common stock		—		$	—
Vested restricted common stock		(32,477	)	$	1.28
Unvested restricted common stock outstanding as of June 30, 2020		1,691		$	1.28

Stock-Based Compensation

Stock-based compensation expense was classified in the condensed consolidated statements of operations as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Research and development expenses	$	4,091	$	1,284	$	5,545	$	2,153
General and administrative expenses		1,923		2,265		3,641		3,356
	$	6,014	$	3,549	$	9,186	$	5,509

Included in research and development stock-based compensation expense for the three and six months ended June 30, 2020 was $2.4 million related to the modification of options in connection with the resignation of the Company’s former Executive Vice President and Founder (“EVP and Founder”). In connection with this resignation the Company entered into a separation agreement with the EVP and Founder. Under the terms of the separation agreement, vesting of options for the purchase of 176,266 shares of common stock held by the EVP and Founder was accelerated with no change to the exercise price of such options. Stock options for the purchase of 550,278 shares of common stock, representing all of the options held by the  EVP and Founder, will be exercisable for 18 months following his resignation.

As of June 30, 2020, total unrecognized compensation cost related to the unvested stock-based awards was $31.4 million, which is expected to be recognized over a weighted average period of 2.6 years.

XML

Income Taxes

6 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

9. Income Taxes

The Company recognized an income tax benefit of $0 and $0.5 million during the six months ended June 30, 2020 and 2019, respectively. There was no income tax benefit recognized during the three months ended June 30, 2020 and 2019. The income tax benefits recognized during the six months ended June 30, 2019 resulted from a reduction in the deferred tax liabilities recorded as part of the Company’s acquisition of the MRT Program as well as deferred tax assets recorded for net operating losses generated that have an unlimited carryforward period. Net operating losses generated in 2018 and years thereafter can be carried forward indefinitely. 

XML

Net Loss per Share

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Net Loss per Share

10. Net Loss per Share

Basic and diluted net loss per share attributable to common stockholders was calculated as follows (in thousands, except share and per share amounts):

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Numerator:
Net loss	$	(36,288	)	$	(27,832	)	$	(50,570	)	$	(61,030	)
Denominator:
Weighted average common shares outstanding—basic and diluted		62,282,291			48,749,627			61,145,254			46,866,842
Net loss per share—basic and diluted	$	(0.58	)	$	(0.57	)	$	(0.83	)	$	(1.30	)

The Company excluded 3,790 shares and 147,914 shares of restricted common stock, presented on a weighted average basis, from the calculations of basic net loss per share attributable to common stockholders for the three months ended June 30, 2020 and 2019, respectively, because those shares had not vested. The Company excluded 11,149 shares and 172,941 shares of restricted common stock, presented on a weighted average basis, from the calculations of basic net loss per share attributable to common stockholders for the six months ended June 30, 2020 and 2019, respectively, because those shares had not vested.

The Company’s potentially dilutive securities, which include stock options and unvested restricted common stock, have been excluded from the computation of diluted net loss per share attributable to common stockholders as the effect would be to reduce the net loss per share. Therefore, the weighted average number of shares of common stock outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same.

The Company excluded the following potential shares of common stock, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

	June 30,
	2020		2019
Options to purchase common stock		10,494,989		8,548,660
Unvested restricted common stock		1,691		119,988
		10,496,680		8,668,648

XML

Leases

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Leases

11. Leases

Suite Retention and Development Agreement

In September 2019, the Company entered into a suite retention and development agreement with Albany Molecular Research, Inc. (“AMRI”) under which a series of cleanroom suites will be built at AMRI’s manufacturing facility in accordance with the Company’s objectives (“AMRI Agreement”). The Company will have exclusive use of the space once the build-out is completed and a certificate of occupancy is obtained. The build-out is expected to be completed during the third quarter of 2020. The AMRI Agreement shall continue for five years after the build-out is completed, and the Company has the right to extend for an additional three years. Under the AMRI Agreement, the Company agreed to provide $6.0 million to finance the costs of the build-out (“Build-Out Costs”). In the event the Build-Out Costs exceed $6.0 million, the Company and AMRI will share overage costs equally, up to $11.0 million. The Company will be responsible for any Build-Out Costs exceeding $11.0 million. The Company has paid $10.1 million towards the Build-Out Costs, which is included in other long-term assets in the condensed consolidated balance sheets as of June 30, 2020, and paid $1.2 million for certain initial deliverables, which is included in prepaid expenses and other current assets in the condensed consolidated balance sheets as of June 30, 2020. Beginning with the month following the build-out completion, the Company will pay monthly fees of $1.0 million, which are subject to a 3% increase on January 1 of each calendar year following the first anniversary of the build-out completion. The Company has determined this is a lease under ASU No. 2016-02, Leases (Topic 842) (“ASC 842”). As of June 30, 2020, the Company has determined that it does not have control of the space, as defined in ASC 842, during the build-out and as such, this lease was not included in the right-of-use assets or lease liabilities on the Company’s condensed consolidated balance sheet.

XML

Commitments and Contingencies

6 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

12. Commitments and Contingencies

Research, Supply and License Agreements

Roche Master Supply Agreement

The Company is a party to a master supply agreement with Roche Diagnostics Corporation (“Roche”) pursuant to which Roche will custom manufacture certain products for the Company. The agreement requires the Company to purchase from Roche specified manufactured products and the related raw materials in an amount equal to the greater of (i) quantities of raw materials in the Company’s annual forecast to be purchased or (ii) 80% of the Company’s demand for products as the same or similar type (the “Purchase Commitment”). In June 2017, the Company exercised its option under the agreement to extend the agreement through December 31, 2024. In September 2018, the Company and Roche amended the agreement to remove and replace the Purchase Commitment for certain manufactured products and related raw materials supplied by Roche. The agreement, as amended, specifies a minimum purchase requirement for certain custom manufactured products. As of June 30, 2020, the Company’s purchase commitments under the agreement totaled $14.0 million, with $3.5 million committed as payments each year from 2021 to 2024. Research and development expenses related to this agreement totaled $1.3 million and $1.0 million during the three months ended June 30, 2020 and 2019, respectively, and $2.6 million and $3.5 million during the six months ended June 30, 2020 and 2019, respectively.

MIT Research Agreement

In September 2019, the Company entered into a research agreement with the Massachusetts Institute of Technology (“MIT”) pursuant to which the Company is obligated to reimburse MIT up to $4.1 million for specified direct and indirect costs to be incurred from January 2020 through December 2022 for specified research activities conducted for the Company (the “2019 MIT Agreement”). As of June 30, 2020, the Company paid MIT $1.2 million towards the total committed amount. Research and development expenses related to this agreement during the three and six months ended June 30, 2020 were $0.3 million and $0.7 million, respectively. There were no amounts payable by the Company under the agreement as of June 30, 2020. The 2019 MIT Agreement expires in December 2022 and may be extended thereafter by mutual agreement of the parties.

MIT Exclusive Patent License Agreement

The Company is a party to at least one exclusive patent license agreement with MIT pursuant to which the Company received an exclusive license under the licensed patent rights to develop, manufacture and commercialize any product containing both (i) any RNA sequences, including mRNA, that encode a protein or peptide suitable for human therapeutic use which may include operably linked non-coding sequences that facilitate translation of the coding portion of such RNA sequence, but such non-coding sequences do not include nucleic acids that function through an RNA interface mechanism or transcriptional activation mechanism (the “coding RNA component”), and (ii) products covered by the licensed patent rights (the “lipid products”). A product containing both a coding RNA component and a lipid product is referred to as a “licensed product.” Under the licensed patent rights, the Company is permitted to develop, manufacture and commercialize the licensed products for the delivery of coding RNA components to treat disease in humans.

The Company has the right to grant sublicenses under this license. The patent rights licensed to the Company by MIT include claims that cover certain of the Company’s customized lipid-based nanoparticles used for delivery of coding RNA components in its MRT platform, including products that may be developed under the Company’s collaboration with Sanofi.

Under the license agreement, the Company is obligated to make annual license maintenance payments to MIT, payable on January 1 of each calendar year, of up to $0.2 million, which may be credited against royalties subsequently due on net sales of licensed products earned in the same calendar year. The Company paid no annual license maintenance fees to MIT during each of the three months ended June 30, 2020 and 2019 and paid $0.2 million during each of the six months ended June 30, 2020 and 2019.

The Company is also obligated to make milestone payments to MIT aggregating up to $1.375 million upon the achievement of specified clinical and regulatory milestones with respect to each licensed product and $1.250 million upon the Company’s first commercial sale of each licensed product, and to pay royalties of a low single-digit percentage to MIT based on the Company’s, and any of its affiliates’ and sublicensees’, net sales of licensed products. The royalties are payable on a product-by-product and country-by-country basis, and may be reduced in specified circumstances. The Company’s obligation to make royalty payments extends with respect to a licensed product in a country until  four years past the expiration of the last-to-expire patent or patent application licensed from MIT covering the licensed product in the country. In addition, the Company is obligated to pay MIT a low double-digit percentage of the portion of income from sublicensees that the Company ascribes to the MIT-licensed patents, excluding royalties on net sales and research support payments. In 2019, pursuant to such provision, the Company paid $0.7 million to MIT as MIT’s share of sublicense income with respect to the upfront payment received under the Original Sanofi Agreement. Additionally, the Company will be required to pay MIT a portion of the $300.0 million upfront payment from Sanofi and a portion of the 50 percent premium payment in consideration for the common stock purchased by the Investor under the Securities Purchase Agreement (see Note 14), as well as future option and milestone payments that the Company may receive pursuant to the Second Sanofi Amendment. The amounts that the Company may owe to MIT will depend upon the relative value of the patents the Company licensed from MIT and sublicensed to Sanofi as compared to the other rights that the Company licensed to Sanofi (see Notes 3 and 14). The determination of the relative value of such rights is subject to a process described in the Company’s license agreement with MIT.

The agreement obligates the Company to use commercially reasonable efforts and expend a minimum amount of resources each year to develop licensed products in accordance with a development plan, and a development milestone timetable specified in the agreement; to use commercially reasonable efforts to commercialize licensed products; and upon commercialization, to make the licensed products reasonably available to the public.

MIT has the right to terminate the agreement if the Company fails to pay amounts when due or otherwise materially breaches the agreement and fails to cure such nonpayment or breach within specified cure periods or in the event the Company ceases to carry on its business related to the agreement. In the event of a termination due to the Company’s breach caused by a due diligence failure of a licensed product, but where the Company has fulfilled its obligations with respect to a different licensed product, MIT may not terminate the agreement with respect to the different licensed product. MIT may immediately terminate the agreement if the Company or any of its affiliates brings specified patent challenges against MIT or assists others in bringing a patent challenge against MIT. The Company has the right to terminate the agreement for its convenience at any time on three months’ prior written notice to MIT and payment of all amounts due to MIT through the date of termination.

The Company’s patent rights, and the rights of its affiliates and sublicensees, in specified licensed products may also terminate, if the Company, its affiliates or MIT receives a request from a third party to develop such licensed product for which the Company is unable to, within nine months of receiving notice of any such request, either demonstrate that the Company has initiated a fully funded project for the commercial development of such licensed product, and provide a business plan with acceptable milestones; demonstrate that the licensed product proposed by such third party would be competitive with a licensed product for which the Company has initiated a fully funded project; or enter into a sublicense agreement with such third party on commercially reasonable terms, and, in each case, MIT, in its sole discretion, grants a license to such third party for the specified patent rights.

Research and development expenses related to this agreement totaled less than $0.1 million during each of the three months ended June 30, 2020 and 2019 and $0.1 million during each of the six months ended June 30, 2020 and 2019, respectively. As of June 30, 2020 and December 31, 2019, there were no liabilities recorded by the Company related to this agreement.

Indemnification Agreements

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company does not believe that the outcome of any claims under indemnification arrangements will have a material effect on its financial position, results of operations or cash flows, and it has not accrued any liabilities related to such obligations in its consolidated financial statements as of June 30, 2020 and December 31, 2019.

Legal Proceedings

The Company is not a party to any litigation and does not have contingency reserves established for any litigation liabilities.

XML

Related Party Transactions

6 Months Ended

Jun. 30, 2020

Related Party Transactions [Abstract]

Related Party Transactions

13. Related Party Transactions

Private Placement

In connection with a private placement of the Company’s common stock in May 2019, entities affiliated with Baupost Group, L.L.C. (“Baupost”), a substantial stockholder, purchased 2,352,941 shares of the Company’s common stock at a price per share of $8.50 for an aggregate purchase price of $20.0 million.

Public Offerings

In connection with a public offering of the Company’s common stock in September 2019, Baupost purchased 5,000,000 shares of the Company’s common stock at a price per share of $10.00 for an aggregate purchase price of $50.0 million.

In connection with a public offering of the Company’s common stock in June 2020, Baupost purchased 500,000 shares of the Company’s common stock at a price per share of $22.00 for an aggregate purchase price of $11.0 million.  

XML

Subsequent Event

6 Months Ended

Jun. 30, 2020

Subsequent Events [Abstract]

Subsequent Event

14. Subsequent Events

Second Amendment to Sanofi Collaboration and License Agreement

On June 22, 2020, the Company and Sanofi entered into the Second Sanofi Amendment. The Second Sanofi Amendment became effective on July 20, 2020, following early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 by the Federal Trade Commission.

Pursuant to the Second Sanofi Amendment, the Company and Sanofi have agreed to jointly conduct research and development activities to advance mRNA vaccines targeting up to seven infectious disease pathogens. The parties have agreed to extend the collaboration term until June 2022 (the “Collaboration Term”), with an option for Sanofi to extend the Collaboration Term for one additional year. If Sanofi elects to so extend, the collaboration may be further expanded to jointly conduct research and development activities to advance mRNA vaccines for up to an additional three infectious disease pathogens, bringing the total to ten pathogens. In connection with the Second Sanofi Amendment, the Company and Sanofi entered into the Supply Agreement on June 22, 2020, with an effective date of December 20, 2019, for non-clinical and clinical supply of products in the SARS-CoV-2 Licensed Field. Sanofi will pay the Company for the non-clinical and clinical supply at the Company’s cost to manufacture plus a specified markup (see Note 3).

Under the terms of the Second Sanofi Amendment, the Company has agreed to expand the licenses granted under the Original Sanofi Agreement to grant to Sanofi exclusive, worldwide licenses under applicable patents, patent applications, know-how and materials, including those arising under the collaboration, to develop, commercialize and manufacture mRNA vaccines to prevent, treat or cure diseases, disorders or conditions in humans caused by any infectious disease pathogens, with certain specified exceptions.

As a result, the license option in the Original Sanofi Agreement, as amended by the First Sanofi Amendment, under which Sanofi had an option to obtain licenses to two additional pathogens from the Company, has been removed from the Amended Sanofi Agreement.

Pursuant to the Second Sanofi Amendment, the Company and the investor entered into the Securities Purchase Agreement, further described below, and Sanofi agreed to pay the Company an additional upfront payment of $300.0 million, which was received in August 2020. If Sanofi chooses to exercise its option to extend the Collaboration Term for an additional year, Sanofi has agreed to pay the Company an additional $75.0 million. The Amended Sanofi Agreement provides that the Company is eligible to receive aggregate potential payments of up to $1.9 billion upon the achievement of additional specified development, regulatory, manufacturing and commercialization milestones, which $1.9 billion is inclusive of the fee to exercise the option to extend the Collaboration Term. In particular, the Company is entitled to receive development, regulatory and sales milestone payments of up to $148.0 million for each Licensed Field, other than the SARS-CoV-2 Licensed Field, development, regulatory and sales milestone payments of up to $250.0 million in the SARS-CoV-2 Licensed Field, and one-time manufacturing milestone payments of up to $200.0 million. Under the terms of the Second Sanofi Amendment, Sanofi has also agreed to pay the Company royalties on net sales of mRNA vaccines in the SARS-CoV-2 Licensed Field in accordance with the terms of and at the same high single digits to low teens percentages set forth in the Original Sanofi Agreement, except where such vaccines are provided as a donation or transferred to a third party without any profit margin, in which case the Company will be paid royalties sufficient to cover its royalty obligations.

Securities Purchase Agreement

In connection with the execution of the Second Sanofi Amendment, the Investor and the Company also entered into the Securities Purchase Agreement on June 22, 2020 for the sale and issuance of 4,884,434 shares of common stock (the “Shares”) to the Investor at a price of $25.59 per share representing a 50 percent premium to the 20-day moving average share price prior to signing, for an aggregate purchase price of approximately $125.0 million. The closing of the transaction contemplated by the Securities Purchase Agreement was consummated on July 20, 2020 (the “SPA Closing Date”).

Pursuant to the terms of the Securities Purchase Agreement, the Investor agreed not to, without the prior written approval of the Company and subject to specified conditions, directly or indirectly acquire shares of the Company’s outstanding common stock, make a tender, exchange, or other offer to acquire shares of the Company’s outstanding common stock, solicit proxies or consents with respect to any matter, or undertake other specified actions related to the potential acquisition of additional equity interests in the Company (the “Standstill Restrictions”). Further, the Investor agreed not to, and to cause its affiliates not to, sell or transfer the Shares without the prior written approval of the Company subject to specified conditions (the “Lock-Up Restrictions”). The Standstill Restrictions terminate 12 months after the SPA Closing Date. The Lock-Up Restrictions terminate 18 months from the SPA Closing Date.

Registration Rights Agreement

Upon the closing of the Securities Purchase Agreement on July 20, 2020, the Investor and the Company entered into a registration rights agreement (the “Registration Rights Agreement”) providing the Investor with certain registration rights with respect to the Shares.

Pursuant to the Registration Rights Agreement, the Company agreed to provide the Investor with certain registration rights (the “Registration Rights”) such that, promptly, but no later than August 19, 2020, the Company agreed to prepare and file with the SEC a registration statement covering the resale of the Shares (the “Sanofi Registration Statement”). The Company has agreed to use commercially reasonable efforts to keep such Sanofi Registration Statement effective until the date on which all Shares (i) are sold pursuant to a Registration Statement or Rule 144 under the Securities Act or (ii) may be sold without restriction pursuant to Rule 144 under the Securities Act. The Company will be responsible for specified fees and expenses incurred in connection with the registration of the Investor’s Shares for resale. The Registration Rights Agreement contained customary indemnification rights in connection with the Sanofi Registration Statement.

XML

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Recently Adopted Accounting Pronouncement

Recently Adopted Accounting Pronouncements

In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2017-04, Intangibles—Goodwill and Other: Simplifying the Test for Goodwill Impairment (Topic 350), which provides for the elimination of Step 2 from the goodwill impairment test. If impairment charges are recognized, the amount recorded will be the amount by which the carrying amount exceeds the reporting unit’s fair value with certain limitations. The Company adopted this new standard as of the required effective date of January 1, 2020, and its adoption had no impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. This new standard removes the disclosure requirement for the amount and reasons for transfers between Level 1 and Level 2 fair value measurements as well as the process for Level 3 fair value measurements. In addition, the ASU adds the disclosure requirements for changes in unrealized gains and losses included in other comprehensive income (loss) for recurring Level 3 fair value measurements held at the end of the reporting period as well as the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The Company adopted this new standard as of the required effective date of January 1, 2020, and its adoption had no impact on the Company’s consolidated financial statements.

In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606. This update provides clarification on the interaction between Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), and ASC 808, Collaborative Arrangements (“ASC 808”), including the alignment of unit of account guidance between the two topics. The Company adopted this new standard as of the required effective date of January 1, 2020, and its adoption had no impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The guidance requires that credit losses be reported using an expected losses model rather than the incurred losses model that is currently used, and establishes additional disclosures related to credit risks. For available-for-sale debt securities with unrealized losses, the standard now requires allowances to be recorded instead of reducing the amortized cost of the investment. This standard will be effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact that the adoption of this new standard will have on its consolidated financial statements and disclosures.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes-Simplifying the Accounting for Income Taxes. This new standard eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for annual periods beginning after December 15, 2020 and interim periods within, with early adoption permitted. Adoption of the standard requires certain changes to be made prospectively, with some changes to be made retrospectively. The Company does not expect the adoption of this new standard to have a material impact on its consolidated financial statements.

XML

Collaboration Agreement (Tables)

6 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Collaboration Revenue

The following table summarizes the Company’s collaboration revenue (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Collaboration revenue	$	16,319	$	1,174	$	20,974	$	2,648

Balance of Contract Liabilities Related to Collaboration Agreements

The following table presents the balance of the Company’s contract liabilities (in thousands):

	June 30, 2020		December 31, 2019
Contract liabilities
Deferred revenue	$	36,927	$	43,356

XML

Intangible Assets and Goodwill (Tables)

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Definite-Lived Intangible Assets Subject to Amortization and Indefinite-Lived Intangible Assets

The tables below present the Company’s definite-lived intangible assets that are subject to amortization and indefinite-lived intangible assets:

	June 30, 2020
	Estimated Life		Gross Carrying Amount		Accumulated Amortization			Impairment Charge		Net Carrying Amount
			(In thousands)
Definite-lived intangible assets:
MRT		6 years	$	45,992	$	(7,003	)	$	—	$	38,989
Indefinite-lived intangible assets:
IPR&D - CF		Indefinite		42,291		—			—		42,291
Total intangible assets, net			$	88,283	$	(7,003	)	$	—	$	81,280

	December 31, 2019
	Estimated Life		Gross Carrying Amount		Accumulated Amortization			Impairment Charge			Net Carrying Amount
			(In thousands)
Definite-lived intangible assets:
MRT		8 years	$	45,992	$	(2,747	)	$	—		$	43,245
Indefinite-lived intangible assets:
IPR&D - CF		Indefinite		42,291		—			—			42,291
IPR&D - OTC		Indefinite		18,559		—			(18,559	)		—
Total intangible assets, net			$	106,842	$	(2,747	)	$	(18,559	)	$	85,536

XML

Fair Value of Financial Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis (in thousands):

	Fair Value Measurements as of June 30, 2020 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	—	$	191,447	$	—	$	191,447
U.S. government agency bonds		—		20,029		—		20,029
	$	—	$	211,476	$	—	$	211,476
Liabilities:
Contingent consideration	$	—	$	—	$	109,550	$	109,550
	$	—	$	—	$	109,550	$	109,550

	Fair Value Measurements as of December 31, 2019 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	—	$	56,591	$	—	$	56,591
U.S. government agency bonds		—		104,098		—		104,098
	$	—	$	160,689	$	—	$	160,689
Liabilities:
Contingent consideration	$	—	$	—	$	103,655	$	103,655
	$	—	$	—	$	103,655	$	103,655

Schedule of Unobservable Inputs and Fair Value Components of Contingent Consideration

The following table presents the unobservable inputs and fair value of the components of the contingent consideration (dollar amounts in thousands):

	Unobservable Inputs		Fair Value at
	Projected Year of Payment		June 30, 2020		December 31, 2019
Earnout payments		2026 - 2039		101,570	$	96,097
Milestone payments		2026 - 2030		7,980		7,558
			$	109,550	$	103,655

Schedule of Total Acquisition Related Contingent Consideration Liability

The following table presents a roll-forward of the total acquisition-related contingent consideration liability (in thousands):

	Fair Value
Balance as of December 31, 2019	$	103,655
Increase in fair value of contingent consideration		5,895
Balance as of June 30, 2020	$	109,550

XML

Property and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment, Net

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

	June 30, 2020			December 31, 2019
Laboratory equipment	$	10,500		$	9,044
Computer equipment		893			779
Office equipment		883			883
Leasehold improvements		5,635			5,635
Construction in progress		5,865			3,460
		23,776			19,801
Less: Accumulated depreciation and amortization		(8,622	)		(7,262	)
	$	15,154		$	12,539

XML

Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2020

Payables and Accruals [Abstract]

Schedule of Accrued Expenses

Accrued expenses consisted of the following (in thousands):

	June 30, 2020		December 31, 2019
Accrued employee compensation and benefits	$	3,244	$	3,547
Accrued external research and development expenses		2,820		1,763
Accrued consultant and professional fees		2,165		1,390
Other		2,897		372
	$	11,126	$	7,072

XML

Incentive Stock Options and Restricted Stock (Tables)

6 Months Ended

Jun. 30, 2020

Summary of Stock Option Activity

The following table summarizes the Company’s stock option activity since December 31, 2019 (in thousands, except share and per share amounts):

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Intrinsic Value
						(in years)
Outstanding as of December 31, 2019		8,646,378		$	8.06		8.42	$	3,687
Granted		2,861,118		$	8.98
Exercised		(792,460	)	$	7.36
Forfeited		(220,047	)	$	7.98
Outstanding as of June 30, 2020		10,494,989		$	8.37		8.21	$	100,634
Exercisable as of June 30, 2020		4,422,596		$	7.94		7.56	$	44,150
Vested and expected to vest as of June 30, 2020		10,494,989		$	8.37		8.21	$	100,634

Summary of Assumptions Used in Black-Scholes Option-Pricing Model to Determine Grant-Date Fair Value of Stock Option Granted

The following table presents, on a weighted average basis, the assumptions used in the Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted to employees and directors:

	Six Months Ended June 30,
	2020			2019
Risk-free interest rate		0.79	%		2.42	%
Expected term (in years)		6.1			6.0
Expected volatility		68.6	%		73.3	%
Expected dividend yield		0	%		0	%

Summary of Restricted Stock Activity

The following table summarizes the Company’s restricted stock activity since December 31, 2019:

	Number of Shares			Weighted Average Grant-Date Fair Value
Unvested restricted common stock outstanding as of December 31, 2019		34,168		$	1.28
Forfeited restricted common stock		—		$	—
Vested restricted common stock		(32,477	)	$	1.28
Unvested restricted common stock outstanding as of June 30, 2020		1,691		$	1.28

Summary of Stock-Based Compensation Expense

Stock-based compensation expense was classified in the condensed consolidated statements of operations as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Research and development expenses	$	4,091	$	1,284	$	5,545	$	2,153
General and administrative expenses		1,923		2,265		3,641		3,356
	$	6,014	$	3,549	$	9,186	$	5,509

XML

Net Loss per Share (Tables)

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Summary of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders

Basic and diluted net loss per share attributable to common stockholders was calculated as follows (in thousands, except share and per share amounts):

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Numerator:
Net loss	$	(36,288	)	$	(27,832	)	$	(50,570	)	$	(61,030	)
Denominator:
Weighted average common shares outstanding—basic and diluted		62,282,291			48,749,627			61,145,254			46,866,842
Net loss per share—basic and diluted	$	(0.58	)	$	(0.57	)	$	(0.83	)	$	(1.30	)

Schedule of Potential Securities Excluded from Computation of Earnings Per Share

The Company excluded the following potential shares of common stock, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

	June 30,
	2020		2019
Options to purchase common stock		10,494,989		8,548,660
Unvested restricted common stock		1,691		119,988
		10,496,680		8,668,648

XML

Nature of the Business and Basis of Presentation - Additional Information (Detail) $ / shares in Units, $ in Thousands		3 Months Ended				6 Months Ended
	Jul. 20, 2020 USD ($) $ / shares shares	Jun. 30, 2020 USD ($) $ / shares shares	Mar. 31, 2020 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Jun. 30, 2020 USD ($) Subsidiary $ / shares shares	Jun. 30, 2019 USD ($)	Mar. 13, 2020 USD ($)	Dec. 31, 2019 USD ($) Disease shares	Jul. 31, 2019 USD ($)	Jul. 03, 2019 USD ($)
Initial Public Offering [Line Items]
Number of wholly owned subsidiaries | Subsidiary						2
Accumulated deficit		$ (410,066)				$ (410,066)			$ (359,496)
Net loss		(36,288)	$ (14,282)	$ (27,832)	$ (33,198)	(50,570)	$ (61,030)
Stock available to be sold under sales agreement		$ 62,100				$ 62,100
Common stock issued | shares		69,359,509				69,359,509			60,022,067
Cash, cash equivalents and short-term investments		$ 292,200				$ 292,200
Proceeds from issuance of common stock						$ 154,292	$ 0
Sale from time to time of equity and debt securities								$ 350,000			$ 250,000
Sanofi Pasteur Inc [Member]
Initial Public Offering [Line Items]
Number of infectious disease pathogens		10				10
Second Sanofi Amendment Agreement [Member]
Initial Public Offering [Line Items]
Additional upfront payment	$ 300,000
Securities Purchase Agreement [Member]
Initial Public Offering [Line Items]
Additional upfront payment	$ 300,000
Shares Issued, Price Per Share | $ / shares	$ 25.59
Shares issued premium percent	50.00%
Stock Issued During Period, Value, New Issues	$ 125,000
Shares issued through public offering | shares	4,884,434
Sanofi Pasteur Collaboration and Licensing Agreement [Member] | Sanofi Pasteur Inc [Member]
Initial Public Offering [Line Items]
Number of infectious disease pathogens | Disease									6
Open Market Sale Agreement [Member]
Initial Public Offering [Line Items]
Payments of other offering expenses						$ 200
Payment of issuance commissions						$ 1,100
Issuance of common, shares | shares						2,863,163
Proceeds from issuance of common stock						$ 37,900
Market sale aggreement of common stock										$ 50,000
Open Market Sale Agreement [Member] | Maximum [Member]
Initial Public Offering [Line Items]
Market sale aggreement of common stock								100,000
Open Market Sale Agreement [Member] | Minimum [Member]
Initial Public Offering [Line Items]
Market sale aggreement of common stock								$ 50,000
Public Offering [Member]
Initial Public Offering [Line Items]
Payments of other offering expenses						$ 500
Common stock issued | shares		5,681,819				5,681,819
Gross proceeds from issuance of public offering						$ 125,000
Underwriting discounts and commissions						$ 7,500
Shares issued through public offering | shares						6,824,992
Common stock issued and sold, per share | $ / shares		$ 22.00				$ 22.00

XML

Collaboration Agreement - Additional Information (Detail) $ in Millions	6 Months Ended
	Jun. 30, 2020 USD ($) Disease	Jun. 30, 2019 USD ($)
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Period of research term	3 years
Sanofi Agreement [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Initial revenue recognizing period	8 years
Number of infectious disease pathogens for vaccine development | Disease	5
Upfront payment received	$ 45.0
Reimbursable development costs payable period	60 days
Additional fee per added pathogen option	$ 5.0
Maximum development and regulatory milestone payment receivable	63.0
Technology and process transfer milestone payment receivable	$ 10.0
Royalty payment term	10 years
Reduction in transaction price	$ 42.9
Non-refundable upfront payment	45.0
Estimated reimbursable employee cost	34.3
Estimated reimbursable development cost	100.7
Estimated milestone payments	14.0
Revenue recognized from contract liabilities	$ 6.4	$ 1.2
Sanofi Agreement [Member] | Maximum [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Revenue recognizing period	6 years
Number of infectious disease pathogens for vaccine development | Disease	6
Receivable from collaboration	$ 805.0
Sales milestone payment receivable	$ 85.0

XML

Collaboration Agreement - Summary of Collaboration Revenue (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Collaboration revenue	$ 16,319	$ 1,174	$ 20,974	$ 2,648

XML

Collaboration Agreement - Balance of Contract Liabilities Related to Collaboration Agreements (Detail) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Contract liabilities
Deferred revenue	$ 36,927	$ 43,356

XML

Intangible Assets and Goodwill - Summary of Definite-Lived Intangible Assets Subject to Amortization and Indefinite-Lived Intangible Assets (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Finite Lived Intangible Assets [Line Items]
Definite-lived intangible assets, accumulated amortization	$ (7,003)	$ (2,747)
Definite-lived intangible assets, Impairment Charge	0	(18,559)
Total intangible assets, gross carrying amount	88,283	106,842
Total intangible assets, net carrying amount	$ 81,280	$ 85,536
In-Process Research and Development [Member] | MRT Product [Member] | Shire's MRT Program [Member]
Finite Lived Intangible Assets [Line Items]
Definite-lived intangible assets, estimated life	6 years	8 years
Definite-lived intangible assets, gross carrying amount	$ 45,992	$ 45,992
Definite-lived intangible assets, accumulated amortization	(7,003)	(2,747)
Definite-lived intangible assets, Impairment Charge	0
Definite-lived intangible assets, net carrying amount	38,989	43,245
In-Process Research and Development [Member] | Cystic Fibrosis [Member] | Shire's MRT Program [Member]
Finite Lived Intangible Assets [Line Items]
Definite-lived intangible assets, accumulated amortization	0
Definite-lived intangible assets, Impairment Charge	0
Indefinite-lived intangible assets, gross carrying amount/net carrying amount	$ 42,291	42,291
In-Process Research and Development [Member] | OTC Deficiency [Member] | Shire's MRT Program [Member]
Finite Lived Intangible Assets [Line Items]
Definite-lived intangible assets, Impairment Charge		(18,559)
Indefinite-lived intangible assets, gross carrying amount/net carrying amount		$ 18,559

XML

Intangible Assets and Goodwill - Additional Information (Detail) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	May 01, 2020	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Finite Lived Intangible Assets [Line Items]
indefinite lived intangible assets Impairment charge				$ 0		$ 18,559,000
Goodwill, Impairment Charges				0	$ 0
Goodwill		$ 21,359,000		21,359,000		21,359,000
Goodwill changes	$ 0
Shire's MRT Program [Member]
Finite Lived Intangible Assets [Line Items]
Goodwill		21,400,000		21,400,000
Shire's MRT Program [Member] | Sanofi Agreement [Member]
Finite Lived Intangible Assets [Line Items]
Estimated amortization expense of intangible assets for 2020		11,600,000		11,600,000
Estimated amortization expense of intangible assets for 2021		8,300,000		8,300,000
Estimated amortization expense of intangible assets for 2022		8,400,000		8,400,000
Estimated amortization expense of intangible assets for 2023		10,900,000		10,900,000
Estimated amortization expense of intangible assets for 2024		4,000,000.0		4,000,000.0
OTC Deficiency Program [Member]
Finite Lived Intangible Assets [Line Items]
Amortization of Intangible Assets		3,600,000	$ 300,000	4,300,000	$ 800,000
OTC Deficiency [Member] | Prepaid Expenses and Other Current Assets [Member]
Finite Lived Intangible Assets [Line Items]
short-term receivables		$ 900,000		$ 900,000
In Process Research and Development [Member] | OTC Deficiency [Member] | Shire's MRT Program [Member]
Finite Lived Intangible Assets [Line Items]
indefinite lived intangible assets Impairment charge						$ 18,559,000

XML

Fair Value of Financial Assets and Liabilities - Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Assets:
Total, assets	$ 211,476	$ 160,689
Liabilities:
Total, liabilities	109,550	103,655
Fair Value, Inputs, Level 1
Assets:
Total, assets	0
Liabilities:
Total, liabilities	0
Fair Value, Inputs, Level 2
Assets:
Total, assets	211,476	160,689
Liabilities:
Total, liabilities	0
Fair Value, Inputs, Level 3
Assets:
Total, assets	0
Liabilities:
Total, liabilities	109,550	103,655
Money Market Funds
Assets:
Total, assets	191,447	56,591
Money Market Funds | Fair Value, Inputs, Level 1
Assets:
Total, assets	0
Money Market Funds | Fair Value, Inputs, Level 2
Assets:
Total, assets	191,447	56,591
Money Market Funds | Fair Value, Inputs, Level 3
Assets:
Total, assets	0
U.S. Government Agency Bonds
Assets:
Total, assets	20,029	104,098
U.S. Government Agency Bonds | Fair Value, Inputs, Level 1
Assets:
Total, assets	0
U.S. Government Agency Bonds | Fair Value, Inputs, Level 2
Assets:
Total, assets	20,029	104,098
U.S. Government Agency Bonds | Fair Value, Inputs, Level 3
Assets:
Total, assets	0
Contingent Consideration
Liabilities:
Total, liabilities	109,550	103,655
Contingent Consideration | Fair Value, Inputs, Level 1
Liabilities:
Total, liabilities	0
Contingent Consideration | Fair Value, Inputs, Level 2
Liabilities:
Total, liabilities	0
Contingent Consideration | Fair Value, Inputs, Level 3
Liabilities:
Total, liabilities	$ 109,550	$ 103,655

XML

Fair Value of Financial Assets and Liabilities - Schedule of Unobservable Inputs and Fair Value Components of Contingent Consideration (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Earnout Payments | Minimum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Projected Year of Payment	2026	2026
Earnout Payments | Maximum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Projected Year of Payment	2039	2039
Milestone Payments | Minimum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Projected Year of Payment	2026	2026
Milestone Payments | Maximum [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Projected Year of Payment	2030	2030
Contingent Consideration
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair Value at	$ 109,550	$ 103,655
Contingent Consideration | Earnout Payments
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair Value at	101,570	96,097
Contingent Consideration | Milestone Payments
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair Value at	$ 7,980	$ 7,558

XML

Fair Value of Financial Assets and Liabilities - Schedule of Total Acquisition Related Contingent Consideration Liability (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Business Acquisition, Contingent Consideration [Line Items]
Beginning Balance			$ 103,655
Discontinuation of MRT5201 and Increase in fair value of contingent consideration	$ 15,347	$ 4,889	5,895	$ 16,591
Ending Balance	$ 109,550		109,550
Contingent Consideration
Business Acquisition, Contingent Consideration [Line Items]
Discontinuation of MRT5201 and Increase in fair value of contingent consideration			$ 5,895

XML

Fair Value of Financial Assets and Liabilities - Additional Information (Detail)	6 Months Ended	12 Months Ended
	Jun. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)	Jun. 30, 2019 USD ($)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash and cash equivalents	$ 272,193,000	$ 84,580,000	$ 74,904,000
Short-term investments amortized cost	19,500,000
Short-term investments unrealized gain	500,000
Short-term investments fair value	$ 20,000,000.0
Contingent Consideration
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Discount Rate		13.5
Minimum [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Short term investments maturity period	1 year
Money Market Funds | Fair Value, Inputs, Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash and cash equivalents	$ 191,400,000	$ 56,600,000
Fair Value, Measurements, Recurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value, assets transfers into (out of) Level 3	0	0
Fair value,assets transfers from Level 2 to Level 1	0	0
Fair value,assets transfers from Level 1 to Level 2	0	0
Fair value, liabilities transfers from Level 1 to Level 2	0	0
Fair value, liabilities transfers from Level 2 to Level 1	0	0
Fair Value, liabilities transfers into (out of) Level 3	$ 0	$ 0

XML

Property and Equipment, Net - Schedule of Property and Equipment, Net (Detail) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 23,776	$ 19,801
Less: Accumulated depreciation and amortization	(8,622)	(7,262)
Property and equipment, net	15,154	12,539
Laboratory Equipment [Member]
Property Plant And Equipment [Line Items]
Property and equipment, gross	10,500	9,044
Computer Equipment [Member]
Property Plant And Equipment [Line Items]
Property and equipment, gross	893	779
Office Equipment [Member]
Property Plant And Equipment [Line Items]
Property and equipment, gross	883	883
Leasehold Improvements [Member]
Property Plant And Equipment [Line Items]
Property and equipment, gross	5,635	5,635
Construction In Progress [Member]
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 5,865	$ 3,460

XML

Property and Equipment, Net - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Property, Plant and Equipment [Abstract]
Depreciation and amortization expense	$ 0.7	$ 0.6	$ 1.4	$ 1.1

XML

Accrued Expenses - Schedule of Accrued Expenses (Detail) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Payables and Accruals [Abstract]
Accrued employee compensation and benefits	$ 3,244	$ 3,547
Accrued external research and development expenses	2,820	1,763
Accrued consultant and professional fees	2,165	1,390
Other	2,897	372
Total accrued expenses	$ 11,126	$ 7,072

XML

Accrued Expenses - Additional Information (Detail) $ in Millions	Jun. 30, 2020 USD ($)
Payables and Accruals [Abstract]
other accrued expenses	$ 2.8

XML

Incentive Stock Options and Restricted Stock - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands				3 Months Ended		6 Months Ended
	Jan. 01, 2020	Jun. 15, 2018	Mar. 07, 2018	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019	Jan. 01, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense					$ 847	$ 0	$ 847
Unrecognized compensation cost related to unvested stock-based awards				$ 31,400		$ 31,400
Unrecognized compensation cost, period for recognition						2 years 7 months 6 days
Stock Options [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vested Stock options for purchase of common stock				10,494,989		10,494,989
Intrinsic value of stock options, exercised						$ 10,700	$ 600
Weighted average grant-date fair value						$ 5.50	$ 5.56
2018 Stock Incentive Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Sharebased Compensation Arrangement by Sharebased Payment Award Shares Cancelled in Period						7,265,909
Number of common shares reserved for issuance								4,829,847
Number of shares remaining available for issuance			360,514
Increase in common stock issued	2,400,829
Percentage threshold of outstanding shares under the plan		4.00%
Percentage of exercise price per share of fair market value		100.00%
Expiration period of stock options after grant date		10 years
2018 Stock Incentive Plan [Member] | Minimum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of stock issued during period under the plan		3,349,582
Stock options for purchase of common stock held, exercisable period		1 year
2018 Stock Incentive Plan [Member] | Maximum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options for purchase of common stock held, exercisable period		4 years
2018 Stock Incentive Plan [Member] | Share-based Compensation Award, Tranche One [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of common shares reserved for issuance			2,512,187
2018 Stock Incentive Plan [Member] | Share-based Compensation Award, Tranche Two [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of common shares reserved for issuance			1,013,167
2018 Employee Stock Purchase Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of common shares reserved for issuance			418,697						870,096
Percentage threshold of outstanding shares under the plan			1.00%
2018 Employee Stock Purchase Plan [Member] | Minimum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of stock issued during period under the plan			837,395
2016 Stock Incentive Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Sharebased Compensation Arrangement by Sharebased Payment Award Shares Cancelled in Period						35,233
Percentage of exercise price per share of fair market value		100.00%
Expiration period of stock options after grant date		10 years
Stock options for purchase of common stock held, exercisable period		4 years
Research and Development Expense [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense				$ 2,400		$ 2,400
EVP and Founder [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options for purchase of common stock held						550,278
Vested Stock options for purchase of common stock				176,266		176,266
Stock options for purchase of common stock held, exercisable period						18 months

XML

Incentive Stock Options and Restricted Stock - Summary of Stock Option Activity (Detail) - Stock Options [Member] $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020 USD ($) $ / shares shares	Dec. 31, 2019 USD ($) $ / shares shares
Number of shares
Number of shares, beginning balance | shares	8,646,378
Number of shares, granted | shares	2,861,118
Number of shares, exercised | shares	(792,460)
Number of shares, forfeited | shares	(220,047)
Number of shares, ending balance | shares	10,494,989	8,646,378
Number of shares, exercisable | shares	4,422,596
Number of shares, vested and expected to vest, ending balance | shares	10,494,989
Weighted average exercise price
Weighted average exercise price, beginning balance | $ / shares	$ 8.06
Weighted average exercise price, granted | $ / shares	8.98
Weighted average exercise price, exercised | $ / shares	7.36
Weighted average exercise price, forfeited | $ / shares	7.98
Weighted average exercise price, ending balance | $ / shares	8.37	$ 8.06
Weighted average exercise price, exercisable | $ / shares	7.94
Weighted average exercise price, vested and expected to vest, ending balance | $ / shares	$ 8.37
Weighted average remaining contractual term
Weighted average remaining contractual term, ending balance	8 years 2 months 15 days	8 years 5 months 1 day
Weighted average remaining contractual term, exercisable	7 years 6 months 21 days
Weighted average remaining contractual term, vested and expected to vest, ending balance	8 years 2 months 15 days
Intrinsic value
Intrinsic value, ending balance | $	$ 100,634	$ 3,687
Intrinsic value, exercisable | $	44,150
Intrinsic value, vested and expected to vest, ending balance | $	$ 100,634

XML

Incentive Stock Option and Restricted Stock - Summary of Assumptions Used in Black-Scholes Option-Pricing Model to Determine Grant-Date Fair Value of Stock Option Granted (Detail) - Employees And Directors [Member] - Stock Options [Member]	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Risk-free interest rate	0.79%	2.42%
Expected term (in years)	6 years 1 month 6 days	6 years
Expected volatility	68.60%	73.30%
Expected dividend yield	0.00%	0.00%

XML

Incentive Stock Option and Restricted Stock - Summary of Restricted Stock Activity (Detail) - Restricted Common Stock [Member]	6 Months Ended
	Jun. 30, 2020 $ / shares shares
Number of shares
Number of shares, beginning balance | shares	34,168
Number of shares, forfeited | shares	0
Number of shares, vested | shares	(32,477)
Number of shares, ending balance | shares	1,691
Weighted average grant-date fair value
Weighted average grant-date fair value, beginning balance | $ / shares	$ 1.28
Weighted average grant-date fair value, forfeited | $ / shares	0
Weighted average grant-date fair value, vested | $ / shares	1.28
Weighted average grant-date fair value, ending balance | $ / shares	$ 1.28

XML

Incentive Stock Option and Restricted Stock - Summary of Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Stock-based compensation expense	$ 6,014	$ 3,549	$ 9,186	$ 5,509
Research and Development Expenses [Member]
Stock-based compensation expense	4,091	1,284	5,545	2,153
General and Administrative Expenses [Member]
Stock-based compensation expense	$ 1,923	$ 2,265	$ 3,641	$ 3,356

XML

Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Operating Loss Carryforwards [Line Items]
Income tax benefits	$ 0	$ 0	$ 0	$ (486)
Shires Mrt Program [Member]
Operating Loss Carryforwards [Line Items]
Income tax benefits			$ 0	$ 500

XML

Net Loss per Share - Summary of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
Numerator:
Net loss	$ (36,288)	$ (14,282)	$ (27,832)	$ (33,198)	$ (50,570)	$ (61,030)
Denominator:
Weighted average common shares outstanding—basic and diluted	62,282,291		48,749,627		61,145,254	46,866,842
Net loss per share—basic and diluted	$ (0.58)		$ (0.57)		$ (0.83)	$ (1.30)

XML

Net Loss per Share - Additional Information (Detail) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Antidilutive securities excluded from computation of basic net loss per share			10,496,680	8,668,648
Restricted Common Stock [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Antidilutive securities excluded from computation of basic net loss per share			1,691	119,988
Restricted Common Stock [Member] | Weighted Average [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Antidilutive securities excluded from computation of basic net loss per share	3,790	147,914	11,149	172,941

XML

Net Loss per Share - Summary of Potential Common Shares Excluded from Computation of Diluted Net Loss per Share Attributable to Common Stockholders (Detail) - shares	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Antidilutive securities excluded from computation of basic net loss per share	10,496,680	8,668,648
Stock Options [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Antidilutive securities excluded from computation of basic net loss per share	10,494,989	8,548,660
Restricted Common Stock [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Antidilutive securities excluded from computation of basic net loss per share	1,691	119,988

XML

Leases - Additional Information (Details) $ in Millions	6 Months Ended
	Jun. 30, 2020 USD ($)
Suite Retention And Development Agreement [Member]
Lessee Lease Description [Line Items]
Operating Lease Term Of Contract	5 years
Commitment to Build Out Cost	$ 6.0
Shared Overage cost commitment	$ 11.0
Albany Molecular Research, Inc. ("AMRI") [Member]
Lessee Lease Description [Line Items]
Operating Lease Renewal Term	3 years
Albany Molecular Research, Inc. ("AMRI") [Member] | Suite Retention And Development Agreement [Member]
Lessee Lease Description [Line Items]
Monthly lease payments	$ 1.0
Payment terms of Build-Out Costs	In the event the Build-Out Costs exceed $6.0 million, the Company and AMRI will share overage costs equally, up to $11.0 million.
Operating lease option to extend description	the Company has the right to extend for an additional three years
Percentage Of Increase In The Monthly Rental Expense	3.00%
Albany Molecular Research, Inc. ("AMRI") [Member] | Suite Retention And Development Agreement [Member] | Other Noncurrent Assets [Member]
Lessee Lease Description [Line Items]
Build Out Costs paid	$ 10.1
Albany Molecular Research, Inc. ("AMRI") [Member] | Suite Retention And Development Agreement [Member] | Prepaid Expenses and Other Current Assets [Member]
Lessee Lease Description [Line Items]
Payments For Purchase Of Deliverables	$ 1.2

XML

Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	Sep. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Loss Contingencies [Line Items]
Research and development		$ 29,002	$ 16,625	$ 50,442	$ 34,048
Research agreement, expiration period				2022-12
Research agreement, payment				$ 1,200
Roche Diagnostics Corporation Master Supply Agreement [Member]
Loss Contingencies [Line Items]
Raw material to purchase as percentage of demand				80.00%
Agreement extended date				Dec. 31, 2024
Commitment amount				$ 14,000
Purchase commitments, year 2021		3,500		3,500
Purchase commitments, year 2022		3,500		3,500
Purchase commitments, year 2023		3,500		3,500
Purchase commitments, year 2024		3,500		3,500
Research and development		1,300	1,000	2,600	3,500
MIT Research Agreement [Member]
Loss Contingencies [Line Items]
Research and development		300		700
Research agreement, committed amount	$ 4,100
Research agreement, expiration period	2022-12
MIT Exclusive Patent License Agreement [Member]
Loss Contingencies [Line Items]
Research and development		100	$ 100	100	$ 100
Annual license maintenance payments		200		200
Payments of annual license maintenance fees		200
MIT Exclusive Patent License Agreement [Member] | Sanofi Pasteur Inc [Member]
Loss Contingencies [Line Items]
Upfront payment received		700		700
MIT Exclusive Patent License Agreement [Member] | Milestone Payment One [Member]
Loss Contingencies [Line Items]
License agreement, milestone payments				1,375
MIT Exclusive Patent License Agreement [Member] | Milestone Payment Two [Member]
Loss Contingencies [Line Items]
License agreement, milestone payments				1,250
Sublicense Second Amendment Agreement With Sanofi [Member] | Massachusetts Institute Of Technology Exclusive Patent License Agreement Member [Member] | Sanofi Pasteur Inc [Member]
Loss Contingencies [Line Items]
Additional upfront payment payable		$ 300,000		$ 300,000
Percentage of the premium payment to be received on share issue payable as additional upfront payment		50.00%		50.00%

XML

Related Party Transactions - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended		6 Months Ended
	Jun. 30, 2020	Sep. 30, 2019	Jun. 30, 2020
Private Placement [Member] | Baupost Group LLC [Member]
Related Party Transaction [Line Items]
Sale of Stock, Number of Shares Issued in Transaction			2,352,941
Sale of Stock, Price Per Share	$ 8.50		$ 8.50
Sale of Stock, Consideration Received on Transaction			$ 20.0
Public Offering [Member]
Related Party Transaction [Line Items]
Sale of Stock, Price Per Share	$ 22.00		$ 22.00
Public Offering [Member] | Baupost Group LLC [Member]
Related Party Transaction [Line Items]
Sale of Stock, Number of Shares Issued in Transaction	500,000	5,000,000
Sale of Stock, Price Per Share	$ 22.00	$ 10.00	$ 22.00
Sale of Stock, Consideration Received on Transaction	$ 11.0	$ 50.0

XML

Subsequent Event - Additional Information (Detail) - Sanofi Pasteur Inc [Member] - Subsequent Event [Member] - USD ($) $ / shares in Units, $ in Millions		1 Months Ended
	Jul. 20, 2020	Jul. 31, 2020	Jul. 01, 2020
Subsequent Event [Line Items]
Shares issued during period shares	4,884,434
Shares issued during the period value	$ 125.0
Percentage premium on the moving average shar eprice	50.00%
Shares Issued, Price Per Share	$ 25.59
Sublicense Second Amendment Agreement With Sanofi [Member] | Massachusetts Institute Of Technology Exclusive Patent License Agreement Member [Member]
Subsequent Event [Line Items]
Non-refundable upfront payment		$ 300.0
Additional upfront payment receivable			$ 75.0
Milestone payment receivable upon the achievement of additional specified regulatory development manufacturing and commercial milestones			1,900.0
Maximum development and regulatory milestone payment receivable			148.0
Lumpsum or one time manufacturing milestone amount receivable			200.0
Sars Cov2 Licensed Filed [Member] | Sublicense Second Amendment Agreement With Sanofi [Member] | Massachusetts Institute Of Technology Exclusive Patent License Agreement Member [Member]
Subsequent Event [Line Items]
Additional upfront payment receivable			$ 250.0