Caribou Biosciences(CRBU) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements, including the balance sheets, statements of operations and comprehensive loss, statements of stockholders' equity, and statements of cash flows, along with detailed notes explaining significant accounting policies, fair value measurements, significant agreements, revenue recognition, balance sheet items, related party transactions, commitments, common stock, stock-based compensation, net loss per share, segment information, restructuring charges, and subsequent events Condensed Consolidated Balance Sheets This statement presents the company's financial position, detailing assets, liabilities, and stockholders' equity at specific reporting dates ASSETS (in thousands) | ASSETS (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | CURRENT ASSETS | | | | Cash and cash equivalents | $25,201 | $16,293 | | Marketable securities, short-term | $158,747 | $193,244 | | Total current assets | $192,506 | $219,377 | | NON-CURRENT ASSETS| | | | Investments in equity securities | $132 | $9,276 | | Marketable securities, long-term | — | $39,849 | | Property and equipment, net | $8,179 | $19,281 | | TOTAL ASSETS | $220,903 | $313,313 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | CURRENT LIABILITIES | | | | Total current liabilities | $28,887 | $30,651 | | LONG-TERM LIABILITIES | | | | Total liabilities | $54,771 | $60,362 | | STOCKHOLDERS' EQUITY | | | | Total stockholders' equity | $166,132 | $252,951 | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $220,903 | $313,313 | - Total assets decreased from $313.3 million as of December 31, 2024, to $220.9 million as of June 30, 2025, primarily due to a reduction in marketable securities and property and equipment[11] - Total stockholders' equity decreased from $252.9 million as of December 31, 2024, to $166.1 million as of June 30, 2025, largely due to accumulated deficit[11] Condensed Consolidated Statements of Operations and Comprehensive Loss This statement reports the company's revenues, expenses, and net loss over specific periods, including comprehensive loss (in thousands, except share and per share amounts) | (in thousands, except share and per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Licensing and collaboration revenue | $2,667 | $3,464 | $5,020 | $5,893 | | Research and development | $27,692 | $35,480 | $63,223 | $69,268 | | General and administrative | $10,403 | $11,485 | $20,138 | $26,128 | | Impairment charges | $12,150 | — | $12,150 | — | | Total operating expenses | $50,245 | $46,965 | $95,511 | $95,396 | | Loss from operations | $(47,578) | $(43,501) | $(90,491) | $(89,503) | | Impairment of equity investment | $(9,158) | — | $(9,158) | — | | Change in fair value of MSKCC success payments liability | $451 | $1,795 | $785 | $2,098 | | Other income, net | $2,187 | $4,009 | $4,775 | $8,474 | | Net loss | $(54,098) | $(37,697) | $(94,089) | $(78,931) | | Net loss per share, basic and diluted | $(0.58) | $(0.42) | $(1.01) | $(0.88) | - Net loss increased significantly for both the three and six months ended June 30, 2025, primarily due to impairment charges and impairment of equity investment, despite decreases in R&D and G&A expenses[14] Condensed Consolidated Statements of Stockholders' Equity This statement details changes in the company's equity accounts, including common stock, additional paid-in capital, and accumulated deficit, over specific periods (in thousands, except share amounts) | (in thousands, except share amounts) | Common Stock Shares | Common Stock Amount | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit | Total Stockholders' Equity | | :----------------------------------- | :------------------ | :------------------ | :------------------------- | :-------------------------------------------- | :------------------ | :------------------------- | | BALANCE—December 31, 2024 | 92,378,577 | $9 | $701,077 | $255 | $(448,390) | $252,951 | | Issuances of common stock under ESPP | 408,282 | — | $468 | — | — | $468 | | Stock-based compensation expense | — | — | $3,882 | — | — | $3,882 | | Net loss | — | — | — | — | $(39,991) | $(39,991) | | Other comprehensive loss | — | — | — | $(88) | — | $(88) | | BALANCE—March 31, 2025 | 93,004,602 | $9 | $705,427 | $167 | $(488,381) | $217,222 | | Stock-based compensation expense | — | — | $3,129 | — | — | $3,129 | | Net loss | — | — | — | — | $(54,098) | $(54,098) | | Other comprehensive loss | — | — | — | $(127) | — | $(127) | | BALANCE—June 30, 2025 | 93,123,239 | $9 | $708,562 | $40 | $(542,479) | $166,132 | - The accumulated deficit increased significantly from $(448.4) million at December 31, 2024, to $(542.5) million at June 30, 2025, primarily due to net losses incurred during the period[17] Condensed Consolidated Statements of Cash Flows This statement summarizes the cash inflows and outflows from operating, investing, and financing activities over specific periods (in thousands) | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------- | :----------------------------- | :----------------------------- | | CASH FLOWS FROM OPERATING ACTIVITIES: | | | | Net loss | $(94,089) | $(78,931) | | Net cash used in operating activities | $(64,983) | $(70,069) | | CASH FLOWS FROM INVESTING ACTIVITIES: | | | | Proceeds from maturities of marketable securities | $122,628 | $204,889 | | Purchases of marketable securities | $(47,751) | $(155,419) | | Net cash provided by investing activities | $73,417 | $44,156 | | CASH FLOWS FROM FINANCING ACTIVITIES: | | | | Proceeds from exercise of stock options | $6 | $619 | | Proceeds from issuances of common stock under ESPP | $468 | $669 | | Proceeds from issuances of common stock related to ATM, net of offering expenses | — | $11,329 | | Net cash provided by financing activities | $474 | $12,617 | | NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | $8,908 | $(13,296) | | CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — END OF PERIOD | $25,247 | $37,912 | - Net cash used in operating activities decreased by $5.1 million to $65.0 million for the six months ended June 30, 2025, compared to $70.1 million for the same period in 2024[20] - Net cash provided by investing activities increased significantly to $73.4 million in H1 2025 from $44.2 million in H1 2024, primarily due to lower purchases of marketable securities[20] - Net cash provided by financing activities decreased substantially to $0.5 million in H1 2025 from $12.6 million in H1 2024, mainly due to no ATM stock sales in 2025[20] Notes to Unaudited Condensed Consolidated Financial Statements This section provides detailed explanations of the company's significant accounting policies, fair value measurements, and other financial statement items 1. Description of the Business, Organization, and Liquidity Caribou Biosciences, Inc. is a clinical-stage CRISPR genome-editing biopharmaceutical company focused on developing allogeneic CAR-T cell therapies. The company has incurred significant operating losses and negative cash flows since inception, with an accumulated deficit of $542.5 million as of June 30, 2025. Management expects existing cash, cash equivalents, and marketable securities of $183.9 million to fund operations for at least the next 12 months - Caribou Biosciences is a clinical-stage CRISPR genome-editing biopharmaceutical company developing allogeneic CAR-T cell therapies[23] - The company had an accumulated deficit of $542.5 million as of June 30, 2025[25] - Net loss for the six months ended June 30, 2025, was $94.1 million, with $65.0 million cash used in operating activities[25] - Existing cash, cash equivalents, and marketable securities ($183.9 million as of June 30, 2025) are expected to fund operations for at least the next 12 months[25] 2. Summary of Significant Accounting Policies This note confirms no material changes to significant accounting policies since December 31, 2024, and outlines the basis of presentation, principles of consolidation, use of estimates, and concentrations of credit risk. It also details recent accounting pronouncements not yet adopted, including ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation), which the company is currently evaluating - No changes to significant accounting policies since December 31, 2024[26] - The company is evaluating the impact of ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation), effective for fiscal years beginning after December 15, 2024, and December 15, 2026, respectively[31][32] Licensees Representing 10% or More of Revenue and Accounts Receivable/Contract Assets | Licensee | Revenue (3 Months Ended June 30, 2025) | Revenue (6 Months Ended June 30, 2025) | Accounts Receivable and Contract Assets (As of June 30, 2025) | | :--------- | :------------------------------------- | :------------------------------------- | :------------------------------------------------------------ | | Licensee B | 21.8 % | 19.4 % | 60.6 % | | Licensee C | 23.3 % | 24.8 % | * | | Licensee F | 37.5 % | 19.9 % | * | | Total | 82.6 % | 76.4 % | 82.3 % | 3. Fair Value Measurements and Fair Value of Financial Instruments This note details the company's fair value measurements, classifying financial instruments into a three-level hierarchy. It provides tables for recurring fair value measurements of assets (U.S. Treasury bills, government agency bonds, money market funds, commercial paper) and liabilities (MSKCC success payments liability). The MSKCC success payments liability was re-measured to zero as of June 30, 2025, due to the termination of the MSKCC Agreement. An impairment expense of $9.2 million was recorded for the equity investment in Edge Animal Health Fair Value Measurements of Assets (in thousands) | Assets (in thousands) | Total (June 30, 2025) | Level 1 (June 30, 2025) | Level 2 (June 30, 2025) | Level 3 (June 30, 2025) | | :-------------------- | :-------------------- | :---------------------- | :---------------------- | :---------------------- | | U.S. Treasury bills | $122,717 | $122,717 | — | — | | U.S. government agency bonds | $30,483 | — | $30,483 | — | | Money market fund investments | $15,843 | $15,843 | — | — | | Commercial paper | $14,905 | — | $14,905 | — | | Total fair value of assets | $183,948 | $138,560 | $45,388 | — | - The MSKCC success payments liability was re-measured to zero as of June 30, 2025, due to the termination of the MSKCC Agreement, resulting in a gain of $0.5 million for the three months and $0.8 million for the six months ended June 30, 2025[36][37][38] - An impairment expense of $9.2 million was recorded for the equity investment in Edge Animal Health for the three and six months ended June 30, 2025, reducing its fair value to zero[40] 4. Significant Agreements This note states there have been no material changes to ongoing significant agreements since December 31, 2024. It outlines various payment obligations under these agreements, such as upfront payments, license fees, milestones, and royalties. The company recorded $0.4 million and $0.7 million in R&D expenses related to license agreements for the three and six months ended June 30, 2025, respectively. Potential future payments for development, regulatory, and sales milestones total approximately $48.9 million as of June 30, 2025 - No material changes to ongoing significant agreements since December 31, 2024[41] - Research and development expenses related to license agreements were $0.4 million for Q2 2025 (down from $0.3 million in Q2 2024) and $0.7 million for H1 2025 (down from $1.6 million in H1 2024)[43] - Potential future payments for development, regulatory, and sales milestones total approximately $48.9 million as of June 30, 2025[44] 5. Revenue Revenue is disaggregated by geographical market and by performance obligations satisfied at a point in time versus over time. Total revenue decreased for both the three and six months ended June 30, 2025, compared to the prior year. Contract balances, including accounts receivable, contract assets, and deferred revenue, are also detailed, with $1.8 million of revenue recognized from opening contract liabilities in H1 2025 Revenue by Geographic Location (in thousands) | Geographic Location | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States | $1,662 | $3,444 | $3,886 | $5,713 | | Rest of world | $1,005 | $20 | $1,134 | $180 | | Total | $2,667 | $3,464 | $5,020 | $5,893 | - For the six months ended June 30, 2025, $3.8 million of revenue was recognized from performance obligations satisfied at a point in time, and $1.2 million from obligations satisfied over time[46] - The value of transaction prices allocated to remaining unsatisfied performance obligations was approximately $4.6 million as of June 30, 2025, with $2.8 million expected to be recognized in the next 12 months[52] 6. Balance Sheet Items This note provides a breakdown of prepaid expenses and other current assets, property and equipment (net), and accrued expenses and other current liabilities. Property and equipment, net, significantly decreased from $19.3 million to $8.2 million, primarily due to impairment charges on leasehold improvements and lab equipment Prepaid Expenses and Other Current Assets (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Prepaid contract manufacturing and clinical costs | $3,060 | $3,919 | | Other | $2,718 | $2,670 | | Total | $5,778 | $6,589 | Property and Equipment, Net (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Lab equipment | $15,833 | $19,054 | | Leasehold improvements | $3,016 | $11,518 | | Total property and equipment, gross | $20,443 | $32,166 | | Less: accumulated depreciation and amortization | $(12,264) | $(12,885) | | Property and equipment, net | $8,179 | $19,281 | Accrued Expenses and Other Current Liabilities (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Accrued research and development expenses | $11,680 | $12,020 | | Accrued employee compensation and related expenses | $5,240 | $8,560 | | Total | $20,528 | $23,620 | 7. Related Party Transactions This note details related party transactions, specifically with Pfizer and Edge Animal Health. The company recognized $0.6 million in revenue from Pfizer for both the three-month periods ended June 30, 2025 and 2024, and $1.2 million for the six-month periods. Deferred revenue from Pfizer was $2.5 million as of June 30, 2025. No revenue was recognized from Edge Animal Health in 2025, compared to $1.6 million in 2024, and the investment in Edge was deemed impaired - Recognized $0.6 million in revenue from Pfizer for the three months ended June 30, 2025, and $1.2 million for the six months ended June 30, 2025[58] - Deferred revenue from Pfizer was approximately $2.5 million as of June 30, 2025[58] - No revenue was recognized from Edge Animal Health in 2025, compared to $1.6 million in 2024, and the investment in Edge was deemed impaired[59] 8. Commitments and Contingencies The company enters into various agreements with CMOs, CROs, and licensors, which are generally cancellable with less than one-year notice. Contingent payments for development, regulatory, clinical, and commercial milestones are uncertain and cannot be reasonably estimated. The company is involved in a consolidated shareholder derivative action filed in March 2025, alleging breach of fiduciary duties related to disclosures challenged in a previously dismissed class action lawsuit - Agreements with CMOs, CROs, and licensors are generally cancellable with less than one-year notice[60] - A putative class action lawsuit (Saylor v. Caribou Biosciences, Inc., et al.) filed in December 2024 was voluntarily dismissed without prejudice on April 27, 2025[63] - Two shareholder derivative complaints were consolidated into a single action (In re Caribou Biosciences, Inc. Derivative Litigation) in April 2025, alleging breach of fiduciary duties by directors and officers[64] 9. Common Stock This note details common stock reserved for future issuances, including stock options, authorized shares for future issuances, ESPP, and unvested RSUs. It also describes the filing of a new $300.0 million universal shelf registration statement (2025 Shelf Registration Statement) and the refreshing of the at-the-market (ATM) equity offering program for up to $100.0 million. No shares were sold under the ATM program during the three or six months ended June 30, 2025 Common Stock Reserved for Future Issuances | Item | As of June 30, 2025 | As of December 31, 2024 | | :------------------------------------ | :------------------ | :---------------------- | | Stock options, issued and outstanding | 12,909,834 | 10,782,103 | | Stock options, authorized for future issuances | 9,430,205 | 7,618,931 | | Stock available under ESPP | 2,655,169 | 2,139,666 | | Unvested RSUs | 1,684,339 | 1,297,327 | | Total common stock reserved for future issuances | 26,679,547 | 21,838,027 | - A new $300.0 million universal shelf registration statement (2025 Shelf Registration Statement) was filed and became effective on May 14, 2025[67] - The at-the-market (ATM) equity offering program was refreshed for up to $100.0 million under the 2025 Shelf Registration Statement[68] - No shares were sold under the ATM Sales Agreement during the three or six months ended June 30, 2025[69] 10. Stock-Based Compensation This note provides details on equity incentive plans, including stock option activity, grant date fair values, and restricted stock units (RSUs). It also summarizes stock-based compensation expense recognized across research and development and general and administrative categories. Total stock-based compensation expense decreased for both the three and six months ended June 30, 2025, compared to the prior year Stock Option Activity (Six Months Ended June 30, 2025) | Item | Stock Options | Weighted Average Exercise Price | | :------------------------------------ | :------------ | :------------------------------ | | Outstanding as of December 31, 2024 | 10,782,103 | $7.47 | | Options granted | 3,365,288 | $1.43 | | Options exercised | (15,000) | $0.40 | | Options cancelled or forfeited | (1,222,557) | $4.92 | | Outstanding as of June 30, 2025 | 12,909,834 | $6.15 | Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $1,298 | $1,994 | $3,041 | $3,610 | | General and administrative | $1,831 | $2,744 | $3,970 | $5,116 | | Total | $3,129 | $4,738 | $7,011 | $8,726 | - Unrecognized stock-based compensation expense related to employee stock options was $14.9 million as of June 30, 2025, expected to be recognized over 2.7 years[74] 11. Net Loss Per Share This note presents the computation of basic and diluted net loss per share. Due to the net loss position, basic and diluted net loss per share are the same for all periods presented, as the inclusion of common stock equivalents would be anti-dilutive Net Loss Per Share (in thousands, except share and per share amounts) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(54,098) | $(37,697) | $(94,089) | $(78,931) | | Weighted-average common shares outstanding | 93,028,698 | 90,340,932 | 92,855,060 | 89,821,935 | | Net loss per share, basic and diluted | $(0.58) | $(0.42) | $(1.01) | $(0.88) | - Basic and diluted net loss per share are identical due to the company being in a net loss position, making all common stock equivalents anti-dilutive[78] 12. Segment Information The company operates and manages its business as one reportable segment, focused on developing allogeneic CAR-T cell therapies. The Chief Operating Decision Maker (CODM) assesses performance based on consolidated net loss and total consolidated assets - The company operates as a single reportable segment, focused on developing allogeneic CAR-T cell therapies[79] - Performance is assessed by the CODM based on consolidated net loss and total consolidated assets[79] Reportable Segment Profit and Loss (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Licensing and collaboration revenue | $2,667 | $3,464 | $5,020 | $5,893 | | Total research and development | $25,359 | $32,727 | $58,095 | $64,301 | | General and administrative | $8,463 | $8,644 | $15,947 | $20,802 | | Other segment items | $25,130 | $3,799 | $29,842 | $8,195 | | Segment and consolidated net loss | $(54,098) | $(37,697) | $(94,089) | $(78,931) | 13. Restructuring Charges In April 2025, the company announced a strategic pipeline prioritization, discontinuing preclinical research and two clinical programs (CB-010 for lupus and CB-012). This led to a workforce reduction of 47 employees (32%) and resulted in $1.8 million in severance costs and $0.3 million in wind-down costs. Additionally, impairment charges totaling $12.2 million were recognized for leased office/lab space and lab equipment due to reduced usage - Strategic pipeline prioritization in April 2025 led to the discontinuation of preclinical research and two clinical programs (CB-010 for lupus and CB-012)[81] - Workforce reduced by 47 employees (approximately 32%), resulting in $1.8 million in severance costs for the three and six months ended June 30, 2025[81] - Wind-down costs of $0.3 million were recorded for the discontinuation of clinical trials[81] - Impairment charges totaled $12.2 million for the three and six months ended June 30, 2025, including $7.4 million for tenant improvements, $2.6 million for right-of-use assets, and $2.2 million for lab equipment[83][84][85] 14. Subsequent Events This note mentions the enactment of the OneBig Beautiful BillAct on July 4, 2025, which includes significant changes to federal tax law and other regulatory provisions. The company is currently evaluating the potential impact of this new legislation on deferred taxes and related disclosures - The OneBig Beautiful BillAct was enacted on July 4, 2025, introducing significant changes to federal tax law[86] - The company is evaluating the potential impact of the new legislation on deferred taxes and disclosures[86] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results of operations, including an overview of its business, pipeline, and recent strategic prioritization. It analyzes the components of revenue and expenses, compares financial results for the three and six months ended June 30, 2025, and discusses liquidity, capital resources, funding requirements, and cash flow changes. It also touches upon critical accounting policies and recently issued accounting pronouncements Overview Caribou Biosciences is a clinical-stage CRISPR genome-editing biopharmaceutical company focused on allogeneic CAR-T cell therapies. Key clinical programs include CB-010 for r/r B-NHL and CB-011 for r/r MM. The company recently underwent a strategic pipeline prioritization, discontinuing two clinical programs and preclinical research, and reducing its workforce by 32%. This prioritization resulted in significant impairment charges and severance costs. The company has incurred operating losses since inception and relies on capital stock sales and licensing revenue for funding - Caribou Biosciences is a clinical-stage CRISPR genome-editing biopharmaceutical company developing allogeneic CAR-T cell therapies[90] - Key clinical programs are CB-010 (anti-CD19 CAR-T for r/r B-NHL) and CB-011 (anti-BCMA CAR-T for r/r MM)[91][92] - A strategic pipeline prioritization in April 2025 discontinued the GALLOP phase 1 trial (CB-010 for lupus), AMpLify phase 1 clinical trial (CB-012), and preclinical research[94] - Workforce was reduced by 47 employees (approximately 32%), leading to $1.8 million in severance costs and $0.3 million in wind-down costs[94] - Impairment charges of $10.0 million for leased space and $2.2 million for lab equipment were recognized due to reduced usage[95] - Net losses for the three and six months ended June 30, 2025, were $54.1 million and $94.1 million, respectively, with an accumulated deficit of $542.5 million[98] Components of Results of Operations This section outlines the primary components of the company's results of operations: licensing and collaboration revenue, operating expenses (research and development, general and administrative, impairment charges), and other income (expense). It details the types of costs included in R&D and G&A, and explains the nature of impairment charges and other income/expense items - Revenue is primarily from licensing and collaboration agreements, including upfront fees, annual maintenance fees, milestone payments, and royalties[103] - Research and development expenses include both external costs (e.g., CMOs, CROs, licenses) and internal costs (e.g., personnel, facilities)[105] - General and administrative expenses cover personnel, intellectual property, consulting, and allocated overhead costs[110] - Impairment charges relate to the strategic pipeline prioritization, specifically for leasehold improvements, right-of-use assets, and lab equipment[112] - Other income (expense) includes impairment of equity investment, interest income, and changes in the fair value of the MSKCC success payments liability[113] Results of Operations This section provides a detailed comparison of the company's financial performance for the three and six months ended June 30, 2025, versus the same periods in 2024. It highlights significant changes in licensing and collaboration revenue, operating expenses (R&D, G&A, impairment charges), and other income/expense, which collectively led to increased net losses Comparison of Three Months Ended June 30, 2025 vs. 2024 (in thousands) | Item | 2025 | 2024 | Change | | :------------------------------------ | :---------- | :---------- | :---------- | | Licensing and collaboration revenue | $2,667 | $3,464 | $(797) | | Research and development | $27,692 | $35,480 | $(7,788) | | General and administrative | $10,403 | $11,485 | $(1,082) | | Impairment charges | $12,150 | — | $12,150 | | Total operating expenses | $50,245 | $46,965 | $3,280 | | Loss from operations | $(47,578) | $(43,501) | $(4,077) | | Impairment of equity investment | $(9,158) | — | $(9,158) | | Change in fair value of MSKCC success payments liability | $451 | $1,795 | $(1,344) | | Other income, net | $2,187 | $4,009 | $(1,822) | | Net loss | $(54,098) | $(37,697) | $(16,401) | - Licensing and collaboration revenue decreased by $0.8 million for the three months ended June 30, 2025, primarily due to a $1.6 million decrease from Edge Animal Health, partially offset by an increase from other licensees[116][117] - Research and development expenses decreased by $7.8 million for the three months ended June 30, 2025, driven by reductions in other R&D expenses, external CMO/CRO activities, and personnel costs due to workforce reduction[118] - Impairment charges of $12.2 million were recorded in Q2 2025, related to tenant improvements, right-of-use assets, and lab equipment[120] Comparison of Six Months Ended June 30, 2025 vs. 2024 (in thousands) | Item | 2025 | 2024 | Change | | :------------------------------------ | :---------- | :---------- | :---------- | | Licensing and collaboration revenue | $5,020 | $5,893 | $(873) | | Research and development | $63,223 | $69,268 | $(6,045) | | General and administrative | $20,138 | $26,128 | $(5,990) | | Impairment charges | $12,150 | — | $12,150 | | Total operating expenses | $95,511 | $95,396 | $(12,035) | | Loss from operations | $(90,491) | $(89,503) | $11,162 | | Impairment of equity investment | $(9,158) | — | $(9,158) | | Change in fair value of MSKCC success payments liability | $785 | $2,098 | $(1,313) | | Other income, net | $4,775 | $8,474 | $(3,699) | | Net loss | $(94,089) | $(78,931) | $6,150 | - General and administrative expenses decreased by $6.0 million for the six months ended June 30, 2025, primarily due to a $4.7 million decrease in legal expenses (including a 2024 litigation settlement accrual) and a $1.3 million decrease in personnel-related expenses[128] - Total other income (expense) decreased by $12.3 million for the three months and $5.0 million for the six months ended June 30, 2025, mainly due to the $9.2 million impairment of equity investment in Edge and a decrease in interest income[121][123][130][132] Liquidity, Capital Resources, and Capital Requirements The company has raised $840.0 million since inception and held $183.9 million in cash, cash equivalents, and marketable securities as of June 30, 2025. It has a $300.0 million universal shelf registration statement and a $100.0 million at-the-market equity offering program, though no shares were sold in H1 2025. Management expects current liquidity to fund operations for at least the next 12 months but anticipates needing additional capital for future development and commercialization, facing risks from market volatility and funding availability - Since inception through June 30, 2025, the company has raised $840.0 million in net proceeds[133] - As of June 30, 2025, cash, cash equivalents, and marketable securities totaled $183.9 million[134] - A new $300.0 million universal shelf registration statement (2025 Shelf Registration Statement) was declared effective on May 14, 2025[136] - The at-the-market (ATM) equity offering program was refreshed for up to $100.0 million, but no shares were sold in H1 2025[137][138] - Existing cash, cash equivalents, and marketable securities are expected to fund operations for at least the next 12 months[139] - Future funding requirements depend on clinical trial progress, regulatory approvals, manufacturing, and potential commercialization, with reliance on equity/debt financing or collaborations[141][143] Cash Flows (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 | 2024 | Change | | :---------------------------------- | :---------- | :---------- | :---------- | | Cash used in operating activities | $(64,983) | $(70,069) | $5,086 | | Cash provided by investing activities | $73,417 | $44,156 | $29,261 | | Cash provided by financing activities | $474 | $12,617 | $(12,143) | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $8,908 | $(13,296) | $22,204 | Critical Accounting Policies and Significant Judgments and Estimates This section states that there have been no material changes to the company's critical accounting policies since December 31, 2024, except for estimates related to impairment of long-lived assets. The policy for impairment review involves grouping assets, testing for recoverability based on undiscounted cash flows, and measuring impairment loss using fair value (market or income approach) - No material changes to critical accounting policies since December 31, 2024, except for estimates related to impairment of long-lived assets[148] - Impairment of long-lived assets is recognized when projected undiscounted cash flows are less than the carrying value, with the loss measured by the difference between fair value and carrying value[149] Recently Issued Accounting Pronouncements This section refers to Note 2 for information on recently issued accounting pronouncements not yet adopted - Refer to Note 2 for details on recently issued accounting pronouncements not yet adopted[150] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section states that there have been no material changes to the company's market risk during the six months ended June 30, 2025, and refers to the Form 10-K for a detailed discussion of market risk exposure - No material changes to market risk during the six months ended June 30, 2025[151] - Refer to the Form 10-K for a discussion of market risk exposure[151] Item 4. Controls and Procedures Management, with the participation of the principal executive and financial officers, evaluated the effectiveness of the company's disclosure controls and procedures as of June 30, 2025, and concluded they were effective. There were no changes in internal control over financial reporting during the three months ended June 30, 2025, that materially affected or are reasonably likely to materially affect internal control over financial reporting - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[153] - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025[154] PART II. OTHER INFORMATION This section provides additional information on legal proceedings, risk factors, equity sales, and exhibits Item 1. Legal Proceedings This section details the company's involvement in legal proceedings. A putative class action lawsuit filed in December 2024 was voluntarily dismissed in April 2025. However, two shareholder derivative complaints were consolidated into a single action in April 2025, alleging breach of fiduciary duties by directors and officers, with an amended complaint filed in July 2025. The defendants intend to file a motion to dismiss this litigation - A putative class action lawsuit (Saylor v. Caribou Biosciences, Inc., et al.) filed in December 2024 was voluntarily dismissed without prejudice on April 27, 2025[158] - Two shareholder derivative complaints were consolidated into a single action (In re Caribou Biosciences, Inc. Derivative Litigation) in April 2025, alleging breach of fiduciary duties[159] - An amended complaint was filed in the Consolidated Derivative Action on July 7, 2025, and defendants intend to file a motion to dismiss[159] Item 1A. Risk Factors This section updates the risk factors, primarily focusing on the company's compliance with Nasdaq's continued listing requirements. The company regained compliance with the Minimum Bid Price Rule in June 2025 but faces ongoing risks of delisting if it fails to maintain compliance. Stockholders approved a reverse stock split, which could increase the stock price but does not guarantee sustained compliance or prevent dilution from future issuances - The company regained compliance with Nasdaq's Minimum Bid Price Rule ($1.00 per share) in June 2025 after its stock price closed below $1.00 for 30 consecutive business days[161] - There is no assurance of continued compliance with Nasdaq listing requirements, and future delisting could negatively impact liquidity, market price, and ability to raise equity financing[162][163] - Stockholders approved a reverse stock split (ratio 1-for-5 to 1-for-50) at the board's discretion, which aims to increase stock price but does not guarantee sustained compliance or prevent future price declines[165] - A reverse stock split could effectively increase authorized shares available for future issuance, potentially leading to dilution for existing stockholders[167] Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities This section states that there were no unregistered sales of equity securities during the three months ended June 30, 2025 - No unregistered sales of equity securities occurred during the three months ended June 30, 2025[168] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including organizational documents, descriptions of common stock, an advisory consulting agreement, certifications from executive officers (Sections 302 and 906 of Sarbanes-Oxley Act), and Inline XBRL documents - Exhibits include Amended and Restated Certificate of Incorporation and Bylaws, Description of Common Stock, an Advisory Consulting Agreement, and certifications (31.1, 31.2, 32.1, 32.2)[169] - Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, Presentation Linkbase Documents, and Cover Page Interactive Data File) are also filed[169] SIGNATURES This section contains the required signatures for the Form 10-Q, affirming that the report has been duly caused to be signed on behalf of Caribou Biosciences, Inc. by its President and Chief Executive Officer (Principal Executive Officer) and its Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) - The report is signed by Rachel E. Haurwitz, Ph.D., President and Chief Executive Officer (Principal Executive Officer), and Sriram Ryali, M.B.A., Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)[174] - Signatures are dated August 12, 2025[174]