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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2023                    
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 001-40791
2seventy bio, Inc.
(Exact name of registrant as specified in its charter)
Delaware
86-3658454
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
60 Binney Street
Cambridge, MA
02142
(Address of principal executive offices)(Zip Code)

(339) 499-9300
(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.0001 per shareTSVTThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes  ☒   No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐
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 Act).     Yes       No ☒

The registrant had outstanding 50,199,268 shares of common stock as of May 4, 2023.





TABLE OF CONTENTS
Page





CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q and other materials we have filed or will file with the SEC include, or will include, forward-looking statements. All statements in this Quarterly Report on Form 10-Q, in other materials we have filed or will file with the SEC and in related comments by our management, other than statements of historical facts, including statements about future events, future financial position, business strategy, budgets, projected costs, plans and objectives of management for future operations, are forward-looking statements that involve certain risks and uncertainties. Use of the words “may,” “will,” “would,” “could,” “should,” “believes,” “estimates,” “projects,” “potential,” “expects,” “plans,” “seeks,” “intends,” “evaluates,” “pursues,” “anticipates,” “continues,” “designs,” “impacts,” “affects,” “forecasts,” “target,” “outlook,” “initiative,” “objective,” “designed,” “priorities,” “goal” or the negative of those words or other similar expressions may identify forward-looking statements that represent our current judgment about possible future events, but the absence of these words does not necessarily mean that a statement is not forward-looking.
Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions and the following:
our post-separation relationships with bluebird bio, Inc., or bluebird bio, third parties, collaborators and our employees;
our and Bristol Myers Squibb’s, or BMS, plans for the continued commercialization of Abecma and the development and commercialization of earlier lines of therapy;
our ability to finance our operations and business initiatives and obtain funding for such activities;
the timing, investment and associated activities involved in developing, obtaining regulatory approval for, launching, and commercializing our product candidates;
our plans with respect to the development, manufacture or sale of our product candidates and the associated timing thereof, including the design and results of pre-clinical and clinical studies;
the operational capabilities and timelines with respect to our in-house manufacturing facility;
sourcing supplies for the materials used to manufacture our product candidates;
the safety profile and related adverse events of our product candidates;
the perceived therapeutic benefits of our product candidates and the potential indications and market opportunities therefor;
U.S. and foreign regulatory requirements for our product candidates, including any post-approval development and regulatory requirements, and the ability of our product candidates to meet such requirements;
our ability to attract and retain key employees needed to execute our business plans and strategies and our expectations regarding our ability to manage the impact of any loss of key employees;
our ability to obtain and maintain intellectual property protection for our product candidates and the strength thereof;





our future financial performance, including estimates of our future revenues, expenses, payments, cash flows, profitability, tax obligations, capital requirements and our needs for additional financing and liquidity sources, real estate needs and concentration of voting control, as well as the timing and drivers thereof, and internal control over financial reporting;
our ability to compete with other companies that are or may be developing or selling products that are competitive with our product candidates;
the status of government regulation in the life sciences industry, particularly with respect to healthcare reform;
the potential benefits of strategic collaboration agreements;
potential indemnification liabilities we may owe to bluebird bio after the separation;
our business and operations following the separation and any benefits or costs of the separation, including the tax treatment of the separation, the tax treatment of the distribution, and limitations imposed on us under the tax matters agreement that we entered into with bluebird bio in connection with the separation and distribution;
the impact of rising inflation rates on our business, financial condition and results of operations;
the fluctuation of the market price of our shares; and
trends and challenges in our current and potential markets.
SeeRisk Factors” for a further description of these and other factors. Although we have attempted to identify important risk factors, there may be other risk factors not presently known to us or that we presently believe are not material that could cause actual results and developments to differ materially from those made in or suggested by the forward-looking statements contained in this Quarterly Report on Form 10-Q. If any of these risks materialize, or if any of the above assumptions underlying forward-looking statements prove incorrect, actual results and developments may differ materially from those made in or suggested by the forward-looking statements contained in this Quarterly Report on Form 10-Q. For the reasons described above, we caution you against relying on any forward-looking statements, which should also be read in conjunction with the other cautionary statements that are included elsewhere in this Quarterly Report on Form 10-Q. Any forward-looking statement made by us in this Quarterly Report on Form 10-Q speaks only as of the date thereof. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update or to revise any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by law.





PART I. FINANCIAL INFORMATION

Item 1. Financial Information
2seventy bio, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands, except par value amounts)
As of March 31, 2023As of December 31, 2022
Assets
Current assets:
Cash and cash equivalents$193,629 $71,032 
Marketable securities146,301 195,238 
Prepaid expenses8,635 13,652 
Receivables and other current assets41,252 20,960 
Total current assets389,817 300,882 
Property, plant and equipment, net59,153 55,735 
Marketable securities1,432 1,414 
Intangible assets, net7,125 7,302 
Goodwill12,056 12,056 
Operating lease right-of-use assets235,264 240,885 
Restricted investments and other non-current assets37,590 38,391 
Total assets$742,437 $656,665 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$13,399 $7,208 
Accrued expenses and other current liabilities43,568 54,678 
Operating lease liability, current portion11,482 11,164 
Deferred revenue, current portion8,480 3,000 
Collaboration research advancement 3,744 
Total current liabilities76,929 79,794 
Deferred revenue, net of current portion6,311 5,000 
Operating lease liability, net of current portion255,472 259,008 
Other non-current liabilities2,401 2,397 
Total liabilities341,113 346,199 
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 10,000 shares authorized, 0 shares issued and outstanding at March 31, 2023 and December 31, 2022
  
Common stock, $0.0001 par value; 200,000 shares authorized, 50,190 and 37,928 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively
5 4 
Additional paid-in capital743,937 606,986 
Accumulated other comprehensive loss(1,950)(2,877)
Accumulated deficit(340,668)(293,647)
Total stockholders’ equity401,324 310,466 
Total liabilities and stockholders’ equity$742,437 $656,665 
See accompanying notes to unaudited condensed consolidated financial statements.
1




2seventy bio, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(unaudited)
(in thousands, except per share data)

For the three months ended March 31,
20232022
Revenue:
Service revenue$10,826 $4,055 
Collaborative arrangement revenue29,372 3,487 
Royalty and other revenue1,423 887 
Total revenues41,621 8,429 
Operating expenses:
Research and development68,246 65,879 
Cost of manufacturing for commercial collaboration3,654 3,366 
Selling, general and administrative20,720 23,861 
Share of collaboration loss 5,352 
Cost of royalty and other revenue641 511 
Change in fair value of contingent consideration73 48 
Total operating expenses93,334 99,017 
Loss from operations(51,713)(90,588)
Interest income, net2,049 115 
Other income, net2,643 4,762 
Loss before income taxes(47,021)(85,711)
Income tax (expense) benefit  
Net loss$(47,021)$(85,711)
Net loss per share - basic and diluted$(1.08)$(3.20)
Weighted-average number of common shares used in computing net loss per share - basic and diluted43,46826,751
Other comprehensive income (loss):
Other comprehensive income (loss), net of tax benefit (expense) of $0.0 million and $0.0 million for the three months ended March 31, 2023 and 2022, respectively.
$927 $(2,092)
Total other comprehensive income (loss)$927 $(2,092)
Comprehensive loss$(46,094)$(87,803)
See accompanying notes to unaudited condensed consolidated financial statements.
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2seventy bio, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(unaudited)
(in thousands)

Common stockAdditional paid-in capitalAccumulated other comprehensive lossAccumulated deficitTotal stockholders’ equity
SharesAmount
Balances at December 31, 202237,928 $4 $606,986 $(2,877)$(293,647)$310,466 
Vesting of restricted stock units237 — — — — — 
Exercise of stock options1 — 7 — — 7 
Issuance of common stock in public offering, net of issuance costs10,870 1 116,968 — — 116,969 
Issuance of common stock to Regeneron1,115 — 9,859 — — 9,859 
Stock-based compensation— — 9,666 — — 9,666 
Purchases of shares under ESPP39 — 451 — — 451 
Other comprehensive income— — — 927 — 927 
Net loss— — — — (47,021)(47,021)
Balances at March 31, 202350,190 $5 $743,937 $(1,950)$(340,668)$401,324 
Common stockAdditional paid-in capitalAccumulated other comprehensive lossAccumulated deficitTotal stockholders’ equity
SharesAmount
Balances at December 31, 202123,585 $2 $400,026 $(712)$(39,494)$359,822 
Vesting of restricted stock units97 — — — — — 
Exercise of stock options— — 1 — — 1 
Issuance of common stock in private placement, net of issuance costs13,934 2 165,655 — — 165,657 
Stock-based compensation— — 9,739 — — 9,739 
Other comprehensive loss— — — (2,092)— (2,092)
Net loss— — — — (85,711)(85,711)
Balances at March 31, 202237,616 $4 $575,421 $(2,804)$(125,205)$447,416 
See accompanying notes to unaudited condensed consolidated financial statements.
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2seventy bio, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
For the three months ended March 31,
20232022
Cash flows from operating activities:
Net loss
$(47,021)$(85,711)
Adjustments to reconcile net loss to net cash used in operating activities:
Change in fair value of contingent consideration
73 48 
Depreciation and amortization
2,255 3,530 
Stock-based compensation expense
9,666 9,739 
Other non-cash items
(1,204)1,227 
Changes in operating assets and liabilities:
Prepaid expenses and other assets
(14,103)(7,186)
Operating lease right-of-use assets
5,621 4,710 
Accounts payable
7,072 6,228 
Accrued expenses and other liabilities
(11,276)280 
Operating lease liabilities
(3,218)(2,860)
Deferred revenue
6,791  
Collaboration research advancement
(3,744)(3,487)
Net cash used in operating activities
(49,088)(73,482)
Cash flows from investing activities:
Purchases of property, plant and equipment
(6,079)(3,585)
Purchases of marketable securities(36,093)(22,450)
Proceeds from maturities of marketable securities86,976 70,784 
Purchases of restricted investments(2,506) 
Proceeds from maturities of restricted investments2,500  
Net cash provided by investing activities
44,798 44,749 
Cash flows from financing activities:
Proceeds from issuance of common stock in public offering, net of issuance costs117,058  
Proceeds from issuance of common stock to Regeneron, net of issuance costs9,876  
Proceeds from the issuance of common stock in private placement 170,000 
Proceeds from exercise of stock options and ESPP contributions150 99 
Net cash provided by financing activities
127,084 170,099 
Increase in cash, cash equivalents and restricted cash and cash equivalents
122,794 141,366 
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period
72,290 130,448 
Cash, cash equivalents and restricted cash and cash equivalents at end of period
$195,084 $271,814 
Reconciliation of cash, cash equivalents, and restricted cash and cash equivalents
Cash and cash equivalents$193,629 $270,893 
Restricted cash and cash equivalents included in restricted investments and other non-current assets1,455 921 
Total cash, cash equivalents, and restricted cash and cash equivalents $195,084 $271,814 
Supplemental cash flow disclosures:
Purchases of property, plant and equipment included in accounts payable and accrued expenses
$2,342 $2,925 
Private placement issuance costs included in accounts payable and accrued expenses$ $4,343 
Financing issuance costs included in accounts payable or accrued expenses$106 $ 
See accompanying notes to unaudited condensed consolidated financial statements.
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2seventy bio, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
1.    Description of the business
2seventy bio, Inc. (the “Company” or “2seventy bio”) was incorporated in Delaware on April 26, 2021 and is a cell and gene therapy company focused on the research, development, and commercialization of transformative treatments for cancer. The Company’s approach combines its expertise in T cell engineering technology and lentiviral vector gene delivery approaches, experience in research, development, and manufacturing of cell therapies and a suite of technologies that can be selectively deployed to develop highly innovative, targeted cellular therapies for patients with cancer. The Company is advancing multiple preclinical and clinical programs in oncology and, together with Bristol-Myers Squibb (“BMS”), delivering the first U.S. Food and Drug Administration (“FDA”)-approved CAR T therapy in multiple myeloma, Abecma (idecabtagene vicleucel, or ide-cel), to patients in the United States. Please refer to Note 10, Collaborative arrangements and strategic partnerships for further discussion of the collaboration with BMS.
2seventy bio Securities Corporation is a wholly-owned subsidiary of the Company which was incorporated in Massachusetts on December 13, 2021 and was granted securities corporation status in Massachusetts beginning in 2021. 2seventy bio Securities Corporation has no employees.
The separation from bluebird bio, Inc.
In January 2021, bluebird bio, Inc. (“bluebird bio”) announced its plans to separate its oncology portfolio and programs from its severe genetic disease portfolio and programs, and spin off its oncology portfolio and programs into a separate, publicly traded company. In furtherance of this plan, on September 30, 2021, bluebird bio’s board of directors approved the distribution of all of the issued and outstanding shares of 2seventy bio common stock on the basis of one share of 2seventy bio common stock for every three shares of bluebird bio common stock issued and outstanding on October 19, 2021, the record date for the distribution. As a result of the distribution, which occurred on November 4, 2021, 2seventy bio became an independent, publicly traded company.
On November 3, 2021, the Company also entered into a separation agreement with bluebird bio, which is referred to in this quarterly report as the “Separation Agreement”, as well as various other agreements with bluebird bio, including a tax matters agreement, an employee matters agreement, an intellectual property license agreement, a transition services agreement under which 2seventy bio temporarily receives certain services from bluebird bio, and a second transition services agreement under which 2seventy bio temporarily provides certain services to bluebird bio. These agreements also govern certain of 2seventy bio’s relationships with bluebird bio after the separation. For additional information regarding the Separation Agreement and the other related agreements, refer to Note 13, Related-party transactions and the section captioned “Part III. Item 13. Certain Relationships and Related Transactions, and Director Independence,” included in our annual report on Form 10-K, which was filed with the SEC on March 16, 2023.
Going concern
In accordance with Accounting Standards Codification 205-40, Going Concern, the Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. The Company has incurred losses and has experienced negative operating cash flows for all historical periods presented. During the three months ended March 31, 2023, the Company incurred a net loss of $47.0 million and used $49.1 million of cash in operations. The Company expects to continue to generate operating losses and negative operating cash flows for the next few years. The Company's continued operations are dependent on its ability to raise additional funding and generate operating cash flows from the commercialization of its product candidates, if approved.
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As of March 31, 2023, the Company had cash, cash equivalents, and marketable securities of $341.4 million. The Company expects that its cash, cash equivalents, and marketable securities will be sufficient to fund current planned operations for at least the next twelve months from the date of issuance of these financial statements. The Company intends to pursue additional cash resources through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances or licensing arrangements with third parties. This includes the potential sale of shares of our common stock of up to $150.0 million in gross proceeds under the at-the-market (“ATM”) facility established in November 2022 with Cowen and Company, LLC. No sales of common stock have occurred under this ATM as of the date of this Quarterly Report on Form 10-Q. There can be no assurance that such financing will be available in sufficient amounts or on acceptable terms, if at all, and some could be dilutive to existing stockholders. If the Company is unable to obtain additional funding on a timely basis, it may be forced to significantly curtail, delay, or discontinue one or more of its planned research or development programs or be unable to expand its operations.
2.    Summary of significant accounting policies and basis of presentation
Significant accounting policies
The significant accounting policies used in preparation of these condensed consolidated financial statements are consistent with those discussed in Note 2 to the consolidated financial statements for the year ended December 31, 2022 included in the Company’s 2022 annual report on Form 10-K.
Basis of presentation
The accompanying condensed consolidated financial statements reflect the historical results of the operations, financial position and cash flows of the Company and have been prepared by the Company in accordance with accounting principles generally accepted in the United States (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as included in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASUs”) of the Financial Accounting Standards Board (“FASB”).
In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all normal recurring adjustments considered necessary for a fair presentation of the Company’s financial position and the results of its operations for the interim periods presented.
Correction of immaterial error
During the first quarter of 2023, the Company identified two immaterial errors in its previously issued 2022 quarterly reports on Form 10-Q and 2021 and 2022 annual reports on Form 10-K related to: 1) restricted investments previously presented as restricted cash on its consolidated balance sheets and consolidated statements of cash flows; and 2) cash outflows related to the purchase of property, plant and equipment previously presented within operating cash outflows instead of investing cash outflows in its 2022 annual consolidated statements of cash flows.
Based on the analysis of quantitative and qualitative factors in accordance with SEC Staff Accounting Bulletin (SAB) Topic 1.M “Assessing Materiality” and SAB Topic 1.N “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements”, the Company concluded that these errors were immaterial, individually and in the aggregate, to its consolidated balance sheets and consolidated statements of cash flows as presented in its previously filed quarterly and annual financial statements. There was no impact to any other statements for any period presented.
To correct for the immaterial error related to restricted investments, the Company:
changed the caption “Restricted cash and other non-current assets” to “Restricted investments and other non-current assets” on the balance sheet;
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included additional disclosures around the restricted investments within Note 3, Marketable securities and Note 4, Fair value measurements; and
adjusted its previously filed consolidated statement of cash flows as follows:
For the three months ended March 31, 2022
in thousands
As previously reportedAdjustmentAs revised
Cash flows from operating activities:
Changes in operating assets and liabilities:
Prepaid expenses and other assets$(7,768)$582 $(7,186)
Net cash used in operating activities$(74,064)$582 $(73,482)
Increase in cash, cash equivalents and restricted cash and cash equivalents$140,784 $582 $141,366 
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period$163,266 $(32,818)$130,448 
Cash, cash equivalents and restricted cash and cash equivalents at end of period$304,050 $(32,236)$271,814 
Reconciliation of cash, cash equivalents and restricted cash and cash equivalents
Restricted cash and cash equivalents included in restricted investments and other non-current assets$33,157 $(32,236)$921 
Total cash, cash equivalents and restricted cash and cash equivalents$304,050 $(32,236)$271,814 
The Company will correct its prior period presentation for this error in its future 2023 quarterly financial statements on Form 10-Q and 2023 annual report on Form 10-K.
To correct for the immaterial misclassification of cash outflows noted above, the Company will adjust its 2022 statement of cash flows within its 2023 annual report on Form 10-K by reclassifying $8.0 million of cash outflows from net cash used in operating activities to net cash provided by investing activities.
Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could materially differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls, and in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including: expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. This process may result in actual results differing materially from those estimated amounts used in the preparation of the financial statements.
Estimates and judgments are used in the following areas, among others: future undiscounted cash flows and subsequent fair value estimates used to assess potential and measure any impairment of long-lived assets, including goodwill and intangible assets, the measurement of right-of-use assets and lease liabilities, contingent consideration, stock-based compensation expense, accrued expenses, income taxes, and the assessment of the Company's ability to fund its operations for at least the next twelve months from the date of issuance of these financial statements. In addition, estimates and judgments are used in the Company’s accounting for its revenue-generating arrangements, in particular as it relates to determining the stand-alone selling price of performance obligations, evaluating whether an
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option to acquire additional goods and services represents a material right, estimating the total transaction price, including estimating variable consideration and the probability of achieving future potential development and regulatory milestones, assessing the period of performance over which revenue may be recognized, and accounting for modifications to revenue-generating arrangements.

3.    Marketable securities
The following table summarizes the marketable securities held at March 31, 2023 and December 31, 2022 (in thousands):
Amortized
cost/ cost
Unrealized
gains
Unrealized
losses
Fair
Value
March 31, 2023
U.S. government agency securities and
   treasuries
$97,174 $13 $(1,020)$96,167 
Corporate bonds1,001  (14)987 
Commercial paper50,651 1 (73)50,579 
Total$148,826 $14 $(1,107)$147,733 
December 31, 2022
U.S. government agency securities and
   treasuries
$120,739 $3 $(1,963)$118,779 
Corporate bonds2,524  (26)2,498 
Commercial paper75,491 3 (119)75,375 
Total$198,754 $6 $(2,108)$196,652 
No available-for-sale debt securities held as of March 31, 2023 or December 31, 2022 had remaining maturities greater than five years.
The following table summarizes available-for-sale debt securities in a continuous unrealized loss position for less than and greater than twelve months, and for which an allowance for credit losses has not been recorded at March 31, 2023 and December 31, 2022 (in thousands):
Less than 12 months12 months or greaterTotal
Fair valueUnrealized lossesFair valueUnrealized lossesFair valueUnrealized losses
March 31, 2023
U.S. government agency securities and
    treasuries
$1,952 $(1)$74,463 $(1,019)$76,415 $(1,020)
Corporate bonds  987 (14)987 (14)
Commercial paper43,580 (73)  43,580 (73)
Total$45,532 $(74)$75,450 $(1,033)$120,982 $(1,107)
December 31, 2022
U.S. government agency securities and
    treasuries
$28,749 $(159)$86,176 $(1,804)$114,925 $(1,963)
Corporate bonds  2,498 (26)2,498 (26)
Commercial paper62,636 (119)  62,636 (119)
Total$91,385 $(278)$88,674 $(1,830)$180,059 $(2,108)

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As discussed further in Note 7, Leases, to the consolidated financial statements included in the Company's 2022 annual report on Form 10-K, the Company maintains letters of credit related to its leases in Cambridge and Seattle. A portion of this collateral is classified as restricted investments and included within restricted investments and other non-current assets on the condensed consolidated balance sheets.
The following table summarizes restricted investments held at March 31, 2023 and December 31, 2022 (in thousands):
Amortized
cost/ cost
Unrealized
gains
Unrealized
losses
Fair
Value
March 31, 2023
U.S. government agency securities and
   treasuries
$32,806 $ $(865)$31,941 
Total$32,806 $ $(865)$31,941 
December 31, 2022
U.S. government agency securities and
   treasuries
$32,880 $ $(1,112)$31,768 
Total$32,880 $ $(1,112)$31,768 

The following table summarizes restricted investments in a continuous unrealized loss position for less than and greater than twelve months, and for which an allowance for credit losses has not been recorded at March 31, 2023 and December 31, 2022 (in thousands):
Less than 12 months12 months or greaterTotal
Fair valueUnrealized lossesFair valueUnrealized lossesFair valueUnrealized losses
March 31, 2023
U.S. government agency securities and
    treasuries
$4,450 $(27)$27,491 $(838)$31,941 $(865)
Total$4,450 $(27)$27,491 $(838)$31,941 $(865)
December 31, 2022
U.S. government agency securities and
    treasuries
$1,942 $(27)$29,826 $(1,085)$31,768 $(1,112)
Total$1,942 $(27)$29,826 $(1,085)$31,768 $(1,112)

Accrued interest receivables on the Company's available-for-sale debt securities and restricted investments, included within receivables and other current assets in the Company’s condensed consolidated balance sheet, totaled $0.7 million and $0.3 million as of March 31, 2023 and December 31, 2022, respectively. No accrued interest receivable was written off during the three months ended March 31, 2023 or 2022.
The amortized cost of available-for-sale debt securities and restricted investments is adjusted for amortization of premiums and accretion of discounts to the earliest call date for premiums or to maturity for discounts. At March 31, 2023 and December 31, 2022, the balance in the Company’s accumulated other comprehensive loss was composed primarily of activity related to the Company’s available-for-sale debt securities and restricted investments. There were no material realized gains or losses recognized on the sale or maturity of available-for-sale securities or restricted investments during the three months ended March 31, 2023 and 2022.
The Company determined that there was no material change in the credit risk of the above investments during the three months ended March 31, 2023. As such, an allowance for credit losses was not recognized. As of
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March 31, 2023, the Company does not intend to sell such securities and it is not more likely than not that the Company will be required to sell the securities before recovery of their amortized cost bases.

4.    Fair value measurements
The following table sets forth the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022 (in thousands):
Total
Quoted prices in active markets
 (Level 1)
Significant other observable inputs
(Level 2)
Significant unobservable inputs
(Level 3)
March 31, 2023
Assets:
Cash and cash equivalents$193,629 $175,713 $17,916 $ 
Marketable securities:
U.S. government agency securities and treasuries96,167  96,167  
Corporate bonds987  987  
Commercial paper50,579  50,579  
Restricted cash and cash equivalents1,455 1,455   
Restricted investments31,941  31,941  
Total assets$374,758 $177,168 $197,590 $ 
Liabilities:
Contingent consideration$2,253 $ $ $2,253 
Total liabilities$2,253 $ $ $2,253 
December 31, 2022
Assets:
Cash and cash equivalents$71,032 $71,032 $ $ 
Marketable securities:
U.S. government agency securities and treasuries118,779  118,779  
Corporate bonds2,498  2,498  
Commercial paper75,375  75,375  
Restricted cash and cash equivalents1,257 1,257   
Restricted investments31,768  31,768  
Total assets$300,709 $72,289 $228,420 $ 
Liabilities:
Contingent consideration$2,180 $ $ $2,180 
Total liabilities$2,180 $ $ $2,180 
Contingent consideration
In connection with bluebird bio's prior acquisition of Precision Genome Engineering, Inc. (“Pregenen”), the Company may be required to pay future consideration that is contingent upon the achievement of certain commercial milestone events. Contingent consideration is measured at fair value and is based on significant unobservable inputs, which represents a Level 3 measurement within the fair value hierarchy. The valuation of contingent consideration
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uses assumptions the Company believes would be made by a market participant. The Company assesses these estimates on an on-going basis as additional data impacting the assumptions is obtained. Future changes in the fair value of contingent consideration related to updated assumptions and estimates are recognized within the condensed consolidated statements of operations and comprehensive loss. In the absence of new information related to the probability of milestone achievement, changes in fair value will reflect changing discount rates and the passage of time. Contingent consideration is included in other non-current liabilities on the condensed consolidated balance sheets.
The table below provides a roll-forward of fair value of the Company’s contingent consideration obligations that include Level 3 inputs (in thousands):
For the three months ended March 31, 2023
Beginning balance$2,180 
Additions 
Changes in fair value73 
Payments 
Ending balance$2,253 
Please refer to Note 8, Commitments and contingencies, for further information.

5.    Property, plant and equipment, net
Property, plant and equipment, net, consists of the following (in thousands):
As of March 31, 2023
As of December 31, 2022
Computer equipment and software$5,899 $5,670 
Office equipment6,159 6,159 
Laboratory equipment36,534 36,216 
Leasehold improvements27,428 27,416 
Construction-in-progress33,048 28,112 
Total property, plant and equipment109,068 103,573 
Less accumulated depreciation and amortization(49,915)(47,838)
Property, plant and equipment, net$59,153 $55,735 
Cambridge, Massachusetts drug product manufacturing facility
In February 2022, the Company began construction of a drug product manufacturing facility within its Cambridge, Massachusetts headquarters. The facility will enable rapid translational research in clinical trials and the manufacture of drug product for use in Phase 1 clinical development activities. Construction-in-progress as of March 31, 2023 includes $31.7 million related to the ongoing build-out of the facility. As of December 31, 2022, construction-in-progress included $27.0 million related to the build-out of the facility. The build out of the facility was substantially completed in February 2023 and is anticipated to be operational by mid-2023.

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6.    Accrued expenses and other current liabilities
Accrued expenses and other current liabilities consist of the following (in thousands):
As of March 31, 2023
As of December 31, 2022
Manufacturing costs$19,244 $17,962 
Royalties11,629 13,094 
Employee compensation4,547 14,845 
Property, plant, and equipment1,858 1,498 
Clinical and contract research organization costs1,692 1,619 
Professional fees858 239 
Collaboration research costs505 2,005 
Other3,235 3,416 
Total accrued expenses and other current liabilities$43,568 $54,678 
7.    Leases
The Company leases certain office and laboratory space, primarily located in Cambridge, Massachusetts and Seattle, Washington, that was assigned to it in connection with the separation. There have been no material changes to the lease obligations from those disclosed in Note 7, Leases, to the consolidated financial statements included in the Company's 2022 annual report on Form 10-K.

8.    Commitments and contingencies
Contingent consideration related to business combinations
On June 30, 2014, bluebird bio acquired Pregenen. All assets, liabilities and future obligations related to the Pregenen acquisition, including the resulting goodwill and contingent consideration, were assumed by the Company in connection with the separation. As of March 31, 2023, the Company may be required to make up to $99.9 million in contingent cash payments to the former equity holders of Pregenen upon the achievement of certain commercial milestones related to the Pregenen technology. In accordance with accounting guidance for business combinations, contingent consideration liabilities are required to be recognized on the condensed consolidated balance sheets at fair value. Estimating the fair value of contingent consideration requires the use of significant assumptions primarily relating to probabilities of successful achievement of certain clinical and commercial milestones, the expected timing in which these milestones will be achieved and discount rates. The use of different assumptions could result in materially different estimates of fair value. Please refer to Note 4, Fair value measurements, for further information.
Other funding commitments
Certain agreements that were assigned by bluebird bio to the Company in connection with the separation relate principally to licensed technology and may require future payments relating to milestones that may be met in subsequent periods or royalties on future sales of specified products. Additionally, to the extent an agreement relating to licensed technology was not assigned to the Company, bluebird bio entered into a sublicense with the Company, which may require the Company to make future milestone and/or royalty payments. Please refer to Note 10, Collaborative arrangements and strategic partnerships, for further information on the BMS, Regeneron
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Pharmaceuticals, Inc. (“Regeneron”), and Novo Nordisk A/S (“Novo”) agreements and to Note 11, Royalty and other revenue, for further information on license agreements.
Based on the Company's development plans as of March 31, 2023, the Company may be obligated to make future development, regulatory and commercial milestone payments and royalty payments on future sales of specified products. Payments under these agreements generally become due and payable upon achievement of such milestones or sales. When the achievement of these milestones or sales has not occurred, such contingencies are not recorded in the Company’s financial statements. As further discussed in Note 10, Collaborative arrangements and strategic partnerships, BMS assumed responsibility for amounts due to licensors as a result of any future ex-U.S. sales of Abecma.
In July 2021, bluebird bio and National Resilience, Inc. (“Resilience”) announced a strategic manufacturing collaboration aimed to accelerate the early research, development, and delivery of cell therapies. Agreements related to the collaboration were executed in September 2021. As part of the agreement, Resilience acquired bluebird bio's North Carolina manufacturing facility and retained all staff employed at the site. Concurrent with the sale of the manufacturing facility in Durham, North Carolina, bluebird bio entered into certain ancillary agreements, including two manufacturing agreements and a license agreement (the “Resilience License Agreement”), among others (together referred to as the “Ancillary Agreements”). One manufacturing agreement will support the future manufacturing of lentiviral vector for the commercial product marketed in collaboration with BMS, Abecma (the “Commercial Supply Agreement”), while the other will support ongoing manufacturing for lentiviral vector for development candidates (the “Development Manufacturing Supply Agreement”). Certain rights and obligations under these agreements were assigned by bluebird bio to 2seventy bio on November 4, 2021 upon the separation of 2seventy bio from bluebird bio. The assignments under the asset purchase agreement and the development manufacturing supply agreement commit the Company to reimburse Resilience for an amount equal to 50% of the net operating losses of and relating to the manufacturing facility’s business incurred during the twelve-month period ending on the first anniversary of the closing of the transaction, as calculated in accordance with the asset purchase agreement, subject to a cap of $15.0 million. In exchange, under the terms of the development manufacturing supply agreement, the Company was entitled to receive up to eight batches of lentiviral vector during the twelve-month period ending on the first anniversary of the closing of the transaction. The Company therefore committed to a minimum purchase of at least the Company's 50% share of the net operating losses during the twelve-month period ending on the first anniversary of the closing of the transaction, which occurred in September 2022. As of March 31, 2023, the Company has accrued $14.8 million representing our estimated share of the net operating losses of Resilience. The disposition of the net assets of the manufacturing facility previously assigned to 2seventy bio was reflected as a transfer to bluebird bio via net parent investment as a result of bluebird bio’s sale of such facility in the Company’s 2021 annual report on Form 10-K. As a result of the separation, the Company’s net parent investment balance was reclassified to additional paid-in capital. 2seventy bio is not a party to the sale of the manufacturing facility and, therefore, did not recognize any gain or loss arising from the transaction.
Additionally, 2seventy bio is party to various contracts with contract research organizations and contract manufacturers that generally provide for termination on notice, with the exact amounts in the event of termination to be based on the timing of the termination and the terms of the agreement. There have been no material changes in future minimum purchase commitments from those disclosed in Note 8, Commitments and Contingencies, to the consolidated financial statements included in the Company's 2022 annual report on Form 10-K.
Litigation
From time to time, the Company expects to be party to various claims and complaints arising in the ordinary course of business. However, the Company is not currently a party to any litigation or legal proceedings that, in the opinion of its management, are probable of having a material adverse effect on its business. The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to these agreements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners. In addition, pursuant to the Separation Agreement, the Company indemnifies, holds harmless, and agrees to reimburse bluebird bio for its indemnification obligations with respect to the Company’s business partners, relating to the Company’s business or arising out of the
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Company’s activities, in the past or to be conducted in the future. The term of these indemnification agreements is generally perpetual any time after execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. Management does not believe that any ultimate liability resulting from any of these claims will have a material adverse effect on its results of operations, financial position, or liquidity. However, management cannot give any assurance regarding the ultimate outcome of any claims, and their resolution could be material to operating results for any particular period.
The Company indemnifies each of its directors and officers for certain events or occurrences, subject to certain limits, while the officer or director is or was serving at the Company’s request in such capacity, as permitted under Delaware law and in accordance with its certificate of incorporation and by-laws and indemnification agreements entered into with each of its directors and officers. The term of the indemnification period will last as long as a director or officer may be subject to any proceeding arising out of acts or omissions of such director or officer in such capacity. The maximum amount of potential future indemnification is unlimited; however, the Company holds director and officer liability insurance.

9.    Equity
In March 2022, the Company entered into stock purchase agreements with certain investors, pursuant to which the Company agreed to sell and issue, in a private placement, an aggregate of 13,934,427 shares of the Company’s common stock at a purchase price per share of $12.20. This resulted in aggregate net proceeds to the Company of approximately $165.5 million, after deducting placement agent fees and other offering expenses payable by the Company.
In November 2022, the Company entered into a sales agreement with Cowen and Company, LLC (“Cowen”), relating to shares of the Company’s common stock through an “at the market” equity offering program under which Cowen will act as the Company’s sales agent (the “ATM Facility”). Pursuant to the terms of the sales agreement, the Company may offer and sell shares of common stock, having an aggregate price of up to $150.0 million, from time to time. As of March 31, 2023, the Company had not made any sales under the ATM Facility.
In January 2023, the Company entered into a Share Purchase Agreement with Regeneron, pursuant to which it sold 1,114,827 shares of its common stock to Regeneron, subject to certain restrictions, for an aggregate cash price of approximately $20.0 million. The purchase price represents $9.9 million worth of common stock plus a $10.1 million premium, which represents collaboration deferred revenue.
In March 2023, the Company sold 10,869,566 shares of common stock through an underwritten public offering at a price per share of $11.50. This resulted in aggregate net proceeds to the Company of approximately $117.0 million, after deducting underwriting fees and offering expenses. The underwriters did not exercise their option to purchase up to 1,630,434 additional shares of common stock and therefore no additional proceeds were received.

10.    Collaborative arrangements and strategic partnerships
To date, the Company’s service and collaborative arrangement revenue has been primarily generated from collaboration arrangements with BMS, Regeneron, and Novo, each as further described below. These agreements were assumed by the Company in connection with the separation.
Bristol-Myers Squibb
BMS Collaboration Agreement
In March 2013, bluebird bio entered into a collaboration agreement with BMS. The details of the collaboration agreements and the payments the Company has received, and is entitled to receive, are further described in Note 10,
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Collaborative arrangements and strategic partnerships, to the consolidated financial statements included in the Company's 2022 annual report on Form 10-K. During the first quarter of 2023, there have been no changes to the terms of the collaboration agreement with BMS.
Abecma
Under the collaboration agreement with BMS, the Company shares equally in the profit and loss related to the development and commercialization of ide-cel in the United States (marketed as Abecma). The Company has no remaining financial rights with respect to the development or commercialization of ide-cel outside of the United States. The Company accounts for its collaborative arrangement efforts with BMS in the United States within the scope of ASC 808 given that both parties are active participants in the activities and both parties are exposed to significant risks and rewards dependent on the commercial success of the activities. The calculation of collaborative activity to be recognized for joint Abecma efforts in the United States is performed on a quarterly basis and is independent of previous quarterly activity. This may result in fluctuations between revenue and expense recognition period over period, depending on the varying extent of effort performed by each party during the period. The Company recognizes revenue related to the combined unit of accounting for the ex-U.S. license and lentiviral vector manufacturing services under Topic 606.
Ide-cel U.S. Share of Collaboration Profit or Loss
The U.S. commercial and development activities under the Amended Ide-Cel CCPS are within the scope of ASC 808. On a quarterly basis, the Company determines its share of collaboration profit or loss for commercial activities. The Company’s share of any collaboration profit for commercial activities is recognized as collaborative arrangement revenue and its share of any collaboration loss for commercial activity is recognized as an operating expense and classified as share of collaboration loss on the Company's condensed consolidated statement of operations and comprehensive loss.
The Company is also responsible for equally sharing in the ongoing ide-cel research and development activities being conducted by BMS in the United States as BMS continues conducting ongoing clinical studies to support the use of Abecma in earlier lines of therapy and both companies continue to develop suspension lentiviral vector to be used in the manufacture of Abecma. The net amount owed to BMS for research and development activities determined on a quarterly basis is classified as research and development expense on the statements of operations and comprehensive loss. If BMS is obligated to reimburse the Company because the Company’s research and development costs exceeds BMS’ research and development costs in a particular quarterly period, the net amount is recorded as collaborative arrangement revenue.
The following tables summarize the components utilized in the Company’s quarterly calculation of collaborative arrangement revenue or share of collaboration loss under the BMS collaboration arrangement for the three months ended March 31, 2023, and 2022 (in thousands). The amounts reported for these periods represent the Company’s share of BMS’ Abecma product revenue, cost of goods sold, and selling costs, along with reimbursement by BMS of commercial costs incurred by the Company, and exclude expenses related to ongoing development, which are separately reflected in the consolidated statements of operations and comprehensive loss as described below.
For the three months ended March 31,
Abecma U.S. Collaboration Profit/Loss Share
20232022
2seventy's share of profits (losses), net of 2seventy's share of BMS costs for commercial activities$21,581 $(6,709)
Reimbursement from BMS for 2seventy costs of commercial manufacturing and commercial activities1,380 1,357 
Collaborative arrangement revenue (1)
$22,961 $ 
Share of collaboration loss (1)
$ $(5,352)
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(1)As noted above, the calculation is performed on a quarterly basis and consists of 2seventy's share of profits, net of 2seventy's share of BMS costs for commercial activities, offset by reimbursement from BMS for 2seventy commercial activities. The calculation is independent of previous activity, which may result in fluctuations between revenue and expense recognition period over period.

The following table summarizes the amounts associated with the research activities under the collaboration included in research and development expense or recognized as collaborative arrangement revenue for the three months ended March 31, 2023 and 2022 (in thousands):
For the three months ended March 31,
Abecma U.S. Collaboration Net R&D Expenses
20232022
2seventy's obligation for its share of BMS research and development expenses$(9,461)$(8,118)
Reimbursement from BMS for 2seventy research and development expenses4,590 1,225 
Net R&D expense (1)
$(4,871)$(6,893)
(1)As noted above, the calculation is performed on a quarterly basis and consists of 2seventy bio's obligation for its share of BMS research and development expenses, offset by reimbursement from BMS for 2seventy bio’s research and development expenses.

Ide-cel ex-U.S. Service Revenue
The Company accounts for any ex-U.S. activities under the Amended Ide-cel CCPS pursuant to ASC 606. The following table summarizes the revenue recognized related to ide-cel ex-U.S. activities for the three months ended March 31, 2023 and 2022 (in thousands). These amounts are reflected in service revenue in the consolidated statements of operations and comprehensive loss:
For the three months ended March 31,
20232022
ASC 606 ide-cel license and manufacturing revenue – ex-U.S. (included as a component of service revenue) (1)
$6,123 $2,790 
(1)These amounts include reimbursements from BMS to the Company for the Company’s ex-U.S. quality and other manufacturing costs associated with the manufacture of Abecma inventory.

bb21217
In addition to the activities related to ide-cel, BMS previously exercised its option to obtain an exclusive worldwide license to develop and commercialize bb21217, the second product candidate under the collaboration arrangement with BMS which is further described in Note 10, Collaborative arrangements and strategic partnerships, to the consolidated financial statements included in the Company's 2022 annual report on Form 10-K.
Under the collaboration arrangement with BMS, the Company had an option to co-develop and co-promote bb21217 within the United States. However, following completion of the CRB-402 clinical trial, in January 2022 the Company, along with BMS, evaluated its plans with respect to bb21217. Based in part on the strength of Abecma clinical data and commercial sales to date, the Company and BMS elected to discontinue development of bb21217 and, as such, the Company did not exercise its option to co-develop and co-promote bb21217 within the United States. The Company is still eligible to receive U.S. milestones and royalties for U.S. sales of bb21217, if further developed by BMS. Additionally, pursuant to the terms of the collaboration agreement, because it did not exercise its option to co-develop and co-promote bb21217, the Company received an additional fee in the amount of $10.0 million from BMS during the second quarter of 2022. Pursuant to the variable consideration allocation exception, the $10.0 million of consideration received was allocated to the combined performance obligation for the bb21217 license and vector manufacturing services through development, described further below.
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The transaction price associated with the collaboration arrangement consisted of $31.0 million of upfront payments and option payments received from BMS, the $10.0 million bb21217 opt-out payment discussed above, and $1.8 million in variable consideration which represented reimbursement to be received from BMS for manufacturing vector and associated payloads through development (which will never be received by the Company given the decision to discontinue development of bb21217 in 2022). The Company identified two performance obligations with respect to the arrangement with BMS. The initial performance obligation was for research and development services that were substantially completed in September 2019, associated with the initial phase 1 clinical trial of bb21217. The Company allocated $5.4 million of consideration to the research and development services performance obligation and fully recognized the consideration through September 2019. The other performance obligation relates to a combined performance obligation for the bb21217 license and vector manufacturing services through development, and the remaining $37.4 million in consideration was allocated to this combined performance obligation. All of the remaining development, regulatory, and commercial milestones related to U.S. development, regulatory and commercialization activities are fully constrained and are therefore excluded from the transaction price.
In December 2022, BMS formally notified the Company that its license and vector manufacturing services for bb21217 will no longer be required, thus releasing it from the combined performance obligation for the bb21217 license and vector manufacturing services through development. As a result, the Company recognized the remaining deferred revenue of $35.8 million associated with bb21217 performance obligations as a component of service revenue during the fourth quarter of 2022.
Contract assets and liabilities – ide-cel and bb21217
The Company receives payments from its collaborative partners based on billing schedules established in each contract. Up-front payments and fees are recorded as deferred revenue upon receipt or when due until such time as the Company satisfies its performance obligations under these arrangements. A contract asset is a conditional right to consideration in exchange for goods or services that the Company has transferred to a customer. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional.
The following table presents changes in the balances of the Company’s BMS receivables and contract liabilities during the three months ended March 31, 2023 (in thousands):
Balance at December 31, 2022
AdditionsDeductions
Balance at
March 31, 2023
Receivables$4,537 $24,212 $(4,537)$24,212 
Contract liabilities:
Deferred revenue$ $ $ $ 
The increase in the receivables balance for the three months ended March 31, 2023 is driven by amounts owed less amounts paid to the Company by BMS in the period under the settlement terms of the collaboration agreement.
Regeneron
Regeneron Collaboration Agreement
In August 2018, bluebird bio entered into a Collaboration Agreement (the “Regeneron Collaboration Agreement”) with Regeneron pursuant to which the parties will apply their respective technology platforms to the discovery, development, and commercialization of novel immune cell therapies for cancer. In August 2018, following the completion of required regulatory reviews, the Regeneron Collaboration Agreement became effective. As noted above, the agreement was assumed by the Company in connection with the separation. Under the terms of the agreement, the parties will leverage Regeneron’s proprietary platform technologies for the discovery and characterization of fully human antibodies, as well as T cell receptors directed against tumor-specific proteins and peptides and the Company will contribute its field-leading expertise in gene therapy.
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In accordance with the Regeneron Collaboration Agreement, the parties jointly selected six initial targets and intend to equally share the costs of research up to the point of submitting an IND application for a potential gene therapy product directed to a particular target. Additional targets may be selected to add to or replace any of the initial targets during the five-year research collaboration term as agreed to by the parties.
Regeneron will accrue a certain number of option rights exercisable against targets as the parties reach certain milestones under the terms of the agreement. Upon the acceptance of an IND for the first product candidate directed to a target, Regeneron will have the right to exercise an option for co-development/co-commercialization of product candidates directed to such target on a worldwide or applicable opt-in territory basis, with certain exceptions. Where Regeneron chooses to opt-in, the parties will share equally in the costs of development and commercialization and will share equally in any profits or losses therefrom in applicable opt-in territories. Outside of the applicable opt-in territories, the target becomes a licensed target and Regeneron would be eligible to receive, with respect to any resulting product, milestone payments of up to $130.0 million per product and royalties on net sales outside of the applicable opt-in territories at a rate ranging from the mid-single digits to low-double digits. A target would also become a licensed target in the event Regeneron does not have an option to such target, or Regeneron does not exercise its option with respect to such target.
Either party may terminate a given research program directed to a particular target for convenience, and the other party may elect to continue such research program at its expense, receiving applicable cross-licenses. The terminating party will receive licensed product royalties and milestone payments on the potential applicable gene therapy products. Where the Company terminates a given research program for convenience, and Regeneron elects to continue such research program, the parties will enter into a transitional services agreement. Under certain conditions, following its opt-in, Regeneron may terminate a given collaboration program and the Company may elect to continue the development and commercialization of the applicable potential gene therapy products as licensed products.
First Amendment to the Regeneron Collaboration Agreement
In January 2023, 2seventy bio and Regeneron announced an amendment to the Regeneron Collaboration Agreement (the “Amendment”), to amend and extend their current agreement, applying their respective technology platforms to the discovery, development and commercialization of novel immune cell therapies for cancer. Under the Amendment, the parties have identified four research targets to advance the next stage of research therapies. The parties will continue sharing costs for these activities in a manner largely consistent with the existing agreement, with Regeneron now covering 75% of eligible late-stage research costs to study combinations and 100% of the costs for the arms of clinical studies that include Regeneron agents through regulatory approval of two of the four targets. For other programs, cost-sharing will follow the existing 50/50 cost sharing agreement.
Additionally, Regeneron will make one-time milestone payments for each of the first Clinical Candidate directed to MUC-16 and the first Clinical Candidate directed to a selected early stage research target to achieve the applicable milestones. Clinical Candidate milestone events and payments include:
$2.0 million payment from Regeneron for Development Candidate Nomination;
$3.0 million payment from Regeneron for IND Acceptance; and
$5.0 million pay from Regeneron for the Earlier of (i) last patient dosed with a Monotherapy Regimen and (ii) dosing of the 10th patient in a Clinical Trial included in an Approved Research/ Development Plan.
The Development Candidate Nomination for MUC-16 has already occurred and will not be due until the Clinical Candidate milestone event (IND Acceptance) is achieved for MUC-16 at which time the first milestone will be reduced to $1.0 million for a total amount due for the two milestones related to MUC-16 of $4.0 million.
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Regeneron Share Purchase Agreements
A Share Purchase Agreement (“SPA”) was entered into by bluebird bio and Regeneron in August 2018. In August 2018, on the closing date of the transaction, bluebird bio issued to Regeneron 0.4 million shares of bluebird bio’s common stock, subject to certain restrictions, for $238.10 per share, or $100.0 million in the aggregate. Following the spin-off, Regeneron held approximately