View:
United States securities and exchange commission logo
January 18, 2022
Keith Gottesdiener, M.D.
President and Chief Executive Officer
Prime Medicine, Inc.
21 Erie Street
Cambridge, MA 02139
Re: Prime Medicine,
Inc.
Draft Registration
Statement on Form S-1
Submitted December
20, 2021
CIK No. 0001894562
Dear Dr. Gottesdiener:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-1
Our Prime Editing Platform, page 1
1. In an appropriate
location in your prospectus, please briefly provide support for your
disclosure that your
Prime Editing technology is capable of repairing approximately 90
percent of known
disease-causing mutations across many organisms, organs and cell
types, or revise this
claim as appropriate. Given that you are in the research stage for most
of your targeted
indications in humans, please balance this disclosure with any known
problems in editing
genes that cause human disease in various tissue types. As one
example only, we note
your disclosure on page 143 that in the second most common form
of CGD, the NCF1 gene
location is complex. If the location of the gene in the
chromosome and/or its
complex location could impact your ability to edit a targeted gene
Keith Gottesdiener, M.D.
FirstName LastNameKeith Gottesdiener, M.D.
Prime Medicine, Inc.
Comapany
January 18,NamePrime
2022 Medicine, Inc.
January
Page 2 18, 2022 Page 2
FirstName LastName
please make that clear and provide other balancing disclosure as
appropriate as to the 90
percent claim. We also note your disclosure that a significant portion
of your studies to
date have been in vitro or ex vivo, if cautionary disclosure about
this claim for in vivo gene
editing is warranted, please include appropriate balancing disclosure.
2. Please balance your disclosure that your Prime Editing technology has
broad therapeutic
applications and is capable of repairing approximately 90 percent of
known disease-
causing mutations across many organisms, organs and cell types with
disclosure regarding
the potential impact of the march-in-license under the Broad License
Agreement that is
described on page 166.
Prospectus Summary
Overview, page 1
3. Please remove the statement that your Prime Editing Technology is
"effective." Efficacy
determinations are in the exclusive purview of the FDA or other
regulators. In this regard,
we note your statements on page 20 that "[g]ene editing, including
platforms such as
Prime Editing, is a novel technology that is not yet clinically
validated for human
therapeutic use" and that "[t]he approach we are taking to discover
and develop novel
therapeutics is unproven and may never lead to marketable products."
Ensure that similar
efficacy language, which we note is present throughout the filing, is
also removed.
4. You state that Prime Editing is your "versatile, precise" and "broad
next generation gene
editing technology." Please clarify that this is your belief and
provide balancing language
that gene editing, including your Prime Editing platform, is a novel
technology that has
not been FDA approved for any indication. We note risk factor
disclosures to this effect
on pages 20 and 25.
5. We note your disclosure on this page that your Prime Editing
technology is "proprietary."
Please provide balancing disclosure that you do not currently own any
issued patents. We
note your risk factor disclosure to this effect on pages 45 and 47.
6. With regard to your disclosure that Prime Medicine was co-founded by
David Liu, Ph.D.,
please also disclose that Dr. Liu will not be an officer or director
of your company and
will work in the capacity as a consultant to your company and will
retain his positions and
affiliations with the Broad Institute, Harvard University and the
Howard Hughes Medical
Institute. Please also briefly indicate Dr. Liu s involvement with
other gene editing
companies, including Editas Medicine, Inc. and Beam Therapeutics,
Inc., and the potential
for conflicts of interest. We also note your disclosure that if
nuclease gene editing
approaches are "scissors" for the genome, and base editors are
"pencils," erasing and
rewriting a subset of single letters in the gene, then Prime Editing
is a "word processor."
To the extent there may be future improvements or enhancements to
Prime Editing, or
next-generation gene editing technologies, developed by Dr. Liu or his
group at the Broad
Institute, Harvard or HHMI, please caution investors, if true, that
the related intellectual
property rights may not necessarily be assigned to your company and
would have to be
Keith Gottesdiener, M.D.
Prime Medicine, Inc.
January 18, 2022
Page 3
negotiated for under the Broad Option Agreement which may expire in
November 2022
and is also subject to the policies and regulations of certain
institutions and certain
agreements between Dr. Liu and certain third parties, including Editas
Medicine and
Beam Therapeutics, and may not be available on commercially reasonable
terms or at all.
In this regard, we also note your disclosure under Engineered
pegRNAs on page 134
that Dr. Liu s laboratory at the Broad Institute has recently
developed engineered
pegRNAs that can improve Prime Editing efficiency by 3-fold or more in
multiple human
cell types and is an enhancement that is now being incorporated into
your research
activities. In an appropriate location, please disclose whether you
have exclusively in-
licensed the intellectual property rights to the epegRNAs and include
risk factor
disclosure, if appropriate.
Our strategy, page 4
7. We note your disclosure on this page and on page 118 that you intend
to de-risk
your Prime Editing platform. Please explain what you mean by de-risk.
It is not
appropriate to convey that your candidates are without development
risk. If necessary,
please revise this language.
Pipeline Table, page 5
8. Include all clinical stages that must be completed before
commercialization (i.e., add
columns for Phases 1, 2 and 3).
9. Please explain what is involved in "lead optimization" and why you
believe this is a
separate and distinct development phase, as opposed to part of the
discovery phases.
While we will consider your response, we do not currently believe that
the lead
optimization is distinct from the discovery phase and should thus be
depicted under the
discovery column. A textual discussion of the program is likely a more
appropriate place
to make distinctions regarding different segments within a particular
phase.
10. We note the pipeline table has seven "undisclosed" indications that
are only discussed
briefly in the business section on pages 153 (two hearing loss
indications) and 160 (three
neuromuscular indications, a muscular dystrophy indication, and a
progressive lung
disease indication). To the extent these are material programs,
disclose the specific targets
and provide more fulsome descriptions of these programs. Otherwise,
please remove
them from the table or explain the basis for your belief that they are
material and should
be included in your pipeline table.
Summary Financial Data, page 13
11. Please revise your calculation of pro forma weighted-average common
shares outstanding
FirstName LastNameKeith Gottesdiener, M.D.
to reflect the conversion of preferred stock outstanding at each period
end. In this respect,
Comapany NamePrime
it appears Medicine,
that your Inc.of weighted-average common shares
outstanding as of
calculation
JanuaryDecember 31, 2020
18, 2022 Page 3 includes the conversion of preferred shares that
were not yet issued.
FirstName LastName
Keith Gottesdiener, M.D.
FirstName LastNameKeith Gottesdiener, M.D.
Prime Medicine, Inc.
Comapany
January 18,NamePrime
2022 Medicine, Inc.
January
Page 4 18, 2022 Page 4
FirstName LastName
Risk Factors, page 15
12. We note your disclosure on page 207 that the administrator of the 2022
Plan is specifically
authorized to exercise its discretion to reduce the exercise price of
outstanding stock
options and stock appreciation rights or effect the repricing of such
awards through
cancellation and re-grants without stockholder consent. Please include
appropriate risk
factor disclosure, including whether proxy advisory firms could find
such repricing
without stockholder approval contrary to a performance-based pay
philosophy.
Our rights to develop and commercialize our Prime Editing platform technology
and product
candidates are subject to the terms..., page 45
13. Please revise to identify the product candidates that are or may be
subject to march-in
rights.
We are an "emerging growth company"..., page 74
14. We note your disclosure that you have irrevocably elected not to avail
yourselves of the
extended transition period for complying with new or revised
accounting standards, which
is inconsistent with the disclosures you have provided on the cover
sheet and pages 10 and
113. Please revise your disclosures to remedy this inconsistency.
Use of Proceeds, page 82
15. We note your disclosure that you intend to use the proceeds from the
offering to achieve
"preclinical proof-of-concept in several programs." Please identify
these programs. To
the extent that you plan to use a material portion of the proceeds to
fund the development
of a specific pipeline candidate, please separately quantify the
amounts you expect to
allocate to each product candidate and specify how far in the clinical
development for
each of these product candidates you expect to reach with the proceeds
of this offering.
Dilution, page 86
16. We note that your calculations of historical and pro forma net
tangible book (deficit) per
share assumes 100,768, 255 shares of common stock outstanding as of
September 30,
2021. Please tell us how you determined to include any unvested
restricted shares in this
calculation given that such shares are not included in your
calculation of basic and diluted
earnings per share. Expand your disclosures to clarify the number of
shares used in the
calculation. Refer to ASC 260-10-45-13.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Critical Accounting Policies and Significant Judgments and Estimates
Stock-Based Compensation Expense, page 109
17. Please expand your disclosures regarding your estimated enterprise
value to provide the
specific valuation methods under the market approach used, along with
the corresponding
Keith Gottesdiener, M.D.
FirstName LastNameKeith Gottesdiener, M.D.
Prime Medicine, Inc.
Comapany
January 18,NamePrime
2022 Medicine, Inc.
January
Page 5 18, 2022 Page 5
FirstName LastName
material estimates and assumptions used in each method to estimate the
enterprise value
that is being allocated to your various equity instruments.
18. Please expand the table included on page 111 to include all
equity-based grants for fiscal
year 2020.
Business
Overview, page 114
19. Please qualify your statement on this page and other locations that
"Prime Editing has
been extensively validated with over 50 papers published in primary
scientific
literature" by indicating, as you disclose on page 20, that "[g]ene
editing, including
platforms such as Prime Editing, is a novel technology that is not yet
clinically validated
for human therapeutic use." We also note your disclosure here that
"more than 1,500
laboratories have requested the reagents to perform Prime Editing in
their laboratories."
Please clarify what type of validation this is intended to convey to
investors and clarify if
distributing your reagents could allow competitors to reverse-engineer
or improve your
technology in ways that could circumvent your intellectual property.
20. You note that Prime Editing was "[f]irst described in a Nature
publication in December
2019[.]" Please clarify whether this publication specifically
concerned any of your
current product candidates. We also understand that there was a
publication in the science
journal Cell in October 2021 co-authored by one of your founders which
indicated that
while prime editing enables precise sequence changes in DNA, cellular
determinants of
prime editing remain poorly understood and that DNA mismatch repair
(MMR) impedes
prime editing and promotes undesired indels and that new prime editing
systems were
recently developed in an attempt to overcome these limitations. Please
update your
disclosure for the findings in this publication that would be material
to investors.
Our Prime Editing Platform, page 122
21. We note the table on page 124, which contains head-to-head comparisons
between Prime
Editing and three other methods of gene editing. Please disclose the
sources for these
comparisons. For instance, did you conduct your own head-to-head study
or are you
relying on a third-party comparison? If these methods have not been
directly compared
and studied, please remove this table.
22. Please remove the "effectiveness" section of the table on page 124. As
Prime Editing
has not been FDA approved - nor does it appear that any of the gene
editing
methodologies mentioned in this table have been FDA approved - the
inclusion of this
section is not appropriate.
Our License and Collaboration Agreements
Strategic relationship with Beam Therapeutics, page 161
23. Please revise the description of the Beam Collaboration Agreement to:
Keith Gottesdiener, M.D.
FirstName LastNameKeith Gottesdiener, M.D.
Prime Medicine, Inc.
Comapany
January 18,NamePrime
2022 Medicine, Inc.
January
Page 6 18, 2022 Page 6
FirstName LastName
disclose the the maximum aggregate milestones you may receive
under the agreement
for both protected and collaboration products;
narrow the disclosure of the sales royalty provision range to a
range that does not
exceed ten percentage points; and
state when the royalty provisions expire.
As it concerns the aggregate milestones, we do not believe your use of
the terms "low-
eight figures," "mid eight figures," or "high-eight figures" is
sufficient, and, as it concerns
the royalty range, we do not believe your reference to a
"low-double-digit" royalty
narrowed the range to 10 percentage points.
24. Please provide more specific disclosure about the material terms of
the collaboration with
Beam as it concerns the Sickle Cell product that is listed on your
pipeline table. This
disclosure should:
quantify milestone payments received to date;
narrow the disclosure of the sales royalty provision range to a
range that does not
exceed ten percentage points; and
state when the royalty provisions expire.
License agreement with The Broad Institute, page 164
25. Please revise the description of the Broad Institute License Agreement
to disclose:
the the maximum aggregate milestones you may receive under the
agreement for both
protected and collaboration products;
the expected expiry of the last-to-expire ending patent
application licensed under the
agreement; and
when the royalty provisions expire.
As it concerns the aggregate milestones, we do not believe your use of
the terms "low-
eight figures" or "mid- eight figures" is sufficient.
Option Agreement with Broad Institute, page 167
26. Please file your option agreement with Broad Institute as an exhibit
pursuant to Item
601(b)(10) of Regulation S-K or tell us why you do not believe you are
required to file
this agreement.
Pledge to the Broad Institute and Harvard University, page 168
27. If there is a written agreement underlying the Pledge to donate
$5,000,000 to Broad
Institute and Harvard University annually for 14 years, please file it
as an exhibit pursuant
to Item 601(b)(10) of Regulation S-K or tell us why you do not believe
you are required to
file this agreement.
Facilities, page 190
28. We note that you lease three different properties. Please file your
lease agreements as
exhibits pursuant to Item 601(b)(10) of Regulation S-K or tell us why
you do not believe
Keith Gottesdiener, M.D.
FirstName LastNameKeith Gottesdiener, M.D.
Prime Medicine, Inc.
Comapany
January 18,NamePrime
2022 Medicine, Inc.
January
Page 7 18, 2022 Page 7
FirstName LastName
you are required to file them.
Management, page 191
29. Please identify and provide disclosure regarding any significant
employees who are not
executive officers but who have made or are expected to make
significant contributions to
the business of the company. For example, we note your disclosure
regarding Dr. Andrew
Anzalone on page 116 but do not see disclosure in accordance with Item
401(c) of
Regulation S-K.
30. We note your disclosure on page 212 that Dr. Liu will serve as
Chairman of your
Scientific Advisory Board. In an appropriate location in your
prospectus, please identify
any other members of your advisory board and describe the role or
function of the
scientific advisory board and whether there are any rules or
procedures governing such
board.
Non-Employee Directors, page 192
31. Please clarify that John Evans is serving as a director pursuant to
the Beam Collaboration
Agreement, which we note you disclose on page 163. Review Item 401(a)
of Regulation
S-K.
Executive Compensation, page 200
32. Please file the Employment Agreement and the Employee Confidentiality,
Assignment
and Nonsolicitation Agreement with Andrew V. Anzalone as exhibits
pursuant to Item
601(b)(10) of Regulation S-K or tell us why you do not believe you are
required to file
them.
Policies for Approval of Related Party Transactions, page 213
33. Please disclose the standards that will be applied in determining
whether to approve any
of the transactions described in this section. Refer to Item
404(b)(1)(ii) of Regulation S-
K.
2. Summary of Significant Accounting Policies, page F-11
34. Please revise your Summary of Significant Accounting Policies to
describe
your accounting policy for research and development expenses,
including the type of costs
included in this line item and when costs are accrued and/or
recognized. In this respect,
we note that your current disclosures only describe your accounting
policy for acquired
IPR&D. Refer to ASC 730-10-25-2 and ASC 730-20-35-1 for guidance.
11. License and Collaboration Agreements
Related Party Beam Collaboration Agreement, page F-40
35. You disclose that there is no variable consideration under the Beam
Collaboration
Keith Gottesdiener, M.D.
Prime Medicine, Inc.
January 18, 2022
Page 8
Agreement despite your assertion that you are entitled to receive
development payments
from Beam on Beams' development of licensed products. You also disclose
that upon
Beam's opt in, which appears to have occurred in September 2020, you are
entitled to
development, regulatory and sales milestones as well as royalties. Please
explain how you
determined that such potential milestone payments are not considered
variable
consideration under the agreement. Please also disclose how you are
accounting for any
sales-based milestones and royalties.
15. Subsequent Events, page F-45
36. Please expand your disclosures for the grant of performance-based options
to list the three
separate milestones that need to be met for vesting, including whether it
was probable that
the milestones would be met.
General
37. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to do
so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
You may contact Tracey Houser at 202-551-3736 or Angela Connell at
202-551-3426 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Dillon Hagius at 202-551-7967 or Tim Buchmiller at 202-551-3635 with
any other
questions.
Sincerely,
FirstName LastNameKeith Gottesdiener, M.D.
Division of
Corporation Finance
Comapany NamePrime Medicine, Inc.
Office of Life
Sciences
January 18, 2022 Page 8
cc: Marishka DeToy, Esq.
FirstName LastName