blue-20210331
false2021Q1000129397112/3100012939712021-01-012021-03-31xbrli:shares00012939712021-04-30iso4217:USD00012939712021-03-3100012939712020-12-31iso4217:USDxbrli:shares0001293971us-gaap:ServiceMember2021-01-012021-03-310001293971us-gaap:ServiceMember2020-01-012020-03-3100012939712020-01-012020-03-310001293971blue:RoyaltyAndOtherRevenueMember2021-01-012021-03-310001293971blue:RoyaltyAndOtherRevenueMember2020-01-012020-03-310001293971us-gaap:CommonStockMember2020-12-310001293971us-gaap:AdditionalPaidInCapitalMember2020-12-310001293971us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001293971us-gaap:RetainedEarningsMember2020-12-310001293971us-gaap:CommonStockMember2021-01-012021-03-310001293971us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001293971us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001293971us-gaap:RetainedEarningsMember2021-01-012021-03-310001293971us-gaap:CommonStockMember2021-03-310001293971us-gaap:AdditionalPaidInCapitalMember2021-03-310001293971us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310001293971us-gaap:RetainedEarningsMember2021-03-310001293971us-gaap:CommonStockMember2019-12-310001293971us-gaap:AdditionalPaidInCapitalMember2019-12-310001293971us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001293971us-gaap:RetainedEarningsMember2019-12-3100012939712019-12-310001293971us-gaap:CommonStockMember2020-01-012020-03-310001293971us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-310001293971us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-310001293971us-gaap:RetainedEarningsMember2020-01-012020-03-310001293971us-gaap:CommonStockMember2020-03-310001293971us-gaap:AdditionalPaidInCapitalMember2020-03-310001293971us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-310001293971us-gaap:RetainedEarningsMember2020-03-3100012939712020-03-31blue:segment0001293971us-gaap:USTreasuryAndGovernmentMember2021-03-310001293971us-gaap:CorporateBondSecuritiesMember2021-03-310001293971us-gaap:CommercialPaperMember2021-03-310001293971us-gaap:USTreasuryAndGovernmentMember2020-12-310001293971us-gaap:CorporateBondSecuritiesMember2020-12-310001293971us-gaap:CommercialPaperMember2020-12-310001293971us-gaap:FairValueMeasurementsRecurringMember2021-03-310001293971us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001293971us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-03-310001293971us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001293971us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2021-03-310001293971us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2021-03-310001293971us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:USTreasuryAndGovernmentMember2021-03-310001293971us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2021-03-310001293971us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2021-03-310001293971us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2021-03-310001293971us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CorporateBondSecuritiesMember2021-03-310001293971us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2021-03-310001293971us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2021-03-310001293971us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2021-03-310001293971us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CommercialPaperMember2021-03-310001293971us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2021-03-310001293971us-gaap:FairValueMeasurementsRecurringMember2020-12-310001293971us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001293971us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2020-12-310001293971us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001293971us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2020-12-310001293971us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2020-12-310001293971us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:USTreasuryAndGovernmentMember2020-12-310001293971us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2020-12-310001293971us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2020-12-310001293971us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2020-12-310001293971us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CorporateBondSecuritiesMember2020-12-310001293971us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2020-12-310001293971us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2020-12-310001293971us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2020-12-310001293971us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CommercialPaperMember2020-12-310001293971us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2020-12-310001293971us-gaap:USGovernmentAgenciesDebtSecuritiesMember2021-03-310001293971us-gaap:CorporateBondSecuritiesMember2021-03-310001293971us-gaap:USGovernmentAgenciesDebtSecuritiesMember2020-12-310001293971us-gaap:CorporateBondSecuritiesMember2020-12-3100012939712021-01-012021-01-310001293971us-gaap:OtherNonoperatingIncomeExpenseMember2021-01-012021-03-310001293971us-gaap:OtherNonoperatingIncomeExpenseMember2020-01-012020-03-310001293971us-gaap:LandMember2021-03-310001293971us-gaap:LandMember2020-12-310001293971us-gaap:BuildingMember2021-03-310001293971us-gaap:BuildingMember2020-12-310001293971blue:ComputerEquipmentAndSoftwareMember2021-03-310001293971blue:ComputerEquipmentAndSoftwareMember2020-12-310001293971us-gaap:OfficeEquipmentMember2021-03-310001293971us-gaap:OfficeEquipmentMember2020-12-310001293971blue:LaboratoryEquipmentMember2021-03-310001293971blue:LaboratoryEquipmentMember2020-12-310001293971us-gaap:LeaseholdImprovementsMember2021-03-310001293971us-gaap:LeaseholdImprovementsMember2020-12-310001293971us-gaap:ConstructionInProgressMember2021-03-310001293971us-gaap:ConstructionInProgressMember2020-12-310001293971blue:RemainingConstructionInProgressNorthCarolinaManufacturingFacilityMember2021-03-310001293971blue:RemainingConstructionInProgressNorthCarolinaManufacturingFacilityMember2020-12-310001293971us-gaap:ManufacturingFacilityMember2020-07-310001293971us-gaap:ManufacturingFacilityMember2020-07-012020-07-310001293971blue:PregenenMember2014-06-300001293971blue:PregenenMemberblue:ClinicalMilestoneEventsMember2014-06-300001293971blue:PregenenMemberblue:CommercialMilestonesMember2014-06-300001293971blue:BristolMyersSquibbMemberus-gaap:CollaborativeArrangementMember2013-03-310001293971blue:BristolMyersSquibbMember2013-03-012013-03-310001293971blue:BristolMyersSquibbMemberblue:AmendedCollaborativeAgreementMember2015-06-012015-06-300001293971blue:BristolMyersSquibbMemberblue:AmendedCollaborativeAgreementMember2015-06-30blue:product0001293971blue:BristolMyersSquibbMemberblue:FirstProductCandidateMemberblue:IdeCelLicenseAgreementMember2016-02-012016-02-290001293971blue:BristolMyersSquibbMemberblue:FirstProductCandidateMemberblue:IdeCelLicenseAgreementMembercountry:US2016-02-290001293971us-gaap:NonUsMemberblue:BristolMyersSquibbMemberblue:FirstProductCandidateMemberblue:IdeCelLicenseAgreementMember2016-02-290001293971blue:BristolMyersSquibbMemberblue:IdeCelCoDevelopmentCoPromoteAndProfitShareAgreementMembercountry:US2018-03-310001293971us-gaap:NonUsMemberblue:BristolMyersSquibbMemberblue:IdeCelCoDevelopmentCoPromoteAndProfitShareAgreementMember2018-03-310001293971blue:BristolMyersSquibbMemberblue:IdeCelCoDevelopmentCoPromoteAndProfitShareAgreementMember2019-04-012019-06-300001293971blue:BristolMyersSquibbMemberblue:AmendedIdeCelCoDevelopmentCoPromoteAndProfitShareAgreementMember2020-05-310001293971blue:BristolMyersSquibbMemberblue:BBTwoOneTwoOneSevenLicenseAgreementMember2017-09-012017-09-300001293971blue:BristolMyersSquibbMemberblue:BBTwoOneTwoOneSevenLicenseAgreementMembercountry:US2017-09-300001293971us-gaap:NonUsMemberblue:BristolMyersSquibbMemberblue:BBTwoOneTwoOneSevenLicenseAgreementMember2017-09-300001293971blue:BristolMyersSquibbMemberblue:BBTwoOneTwoOneSevenLicenseAgreementMember2021-01-012021-03-310001293971blue:BristolMyersSquibbMemberblue:BBTwoOneTwoOneSevenLicenseAgreementMember2017-09-300001293971blue:BristolMyersSquibbMemberus-gaap:CollaborativeArrangementMember2021-01-012021-03-310001293971blue:BristolMyersSquibbMemberblue:AmendedIdeCelCoDevelopmentCoPromoteAndProfitShareAgreementMember2021-03-310001293971blue:BristolMyersSquibbMemberblue:VectorsAndAssociatedPayloadMember2021-03-310001293971blue:BristolMyersSquibbMemberblue:IdeCelTransactionPriceMember2021-03-310001293971blue:IdeCelResearchAndDevelopmentServicesMemberblue:BristolMyersSquibbMember2021-03-310001293971blue:IdeCelLicenseAndManufacturingServicesMemberblue:BristolMyersSquibbMember2021-03-310001293971blue:BristolMyersSquibbMemberblue:IdeCelResearchAndDevelopmentMember2020-01-012020-03-310001293971blue:BristolMyersSquibbMemberblue:IdeCelResearchAndDevelopmentMember2021-01-012021-03-310001293971blue:IdeCelResearchAndDevelopmentServicesMemberblue:BristolMyersSquibbMemberblue:LicenseAndManufacturingServicesMembercountry:US2021-01-012021-03-310001293971blue:IdeCelResearchAndDevelopmentServicesMemberblue:BristolMyersSquibbMemberblue:LicenseAndManufacturingServicesMembercountry:US2020-01-012020-03-310001293971blue:IdeCelLicenseAndManufacturingServicesMemberus-gaap:NonUsMemberblue:BristolMyersSquibbMemberblue:LicenseAndManufacturingServicesMember2021-01-012021-03-310001293971blue:IdeCelLicenseAndManufacturingServicesMemberus-gaap:NonUsMemberblue:BristolMyersSquibbMemberblue:LicenseAndManufacturingServicesMember2020-01-012020-03-310001293971blue:IdeCelLicenseAndManufacturingServicesMemberblue:BristolMyersSquibbMemberblue:LicenseAndManufacturingServicesMember2021-03-310001293971blue:IdeCelLicenseAndManufacturingServicesMemberblue:BristolMyersSquibbMemberblue:LicenseAndManufacturingServicesMember2020-12-310001293971blue:BristolMyersSquibbMemberblue:BBTwoOneTwoOneSevenLicenseAgreementMember2021-03-310001293971blue:BristolMyersSquibbMemberblue:ManufacturingServicesMember2021-03-310001293971blue:BristolMyersSquibbMemberblue:BbTwoOneTwoOneSevenTransactionPriceMember2021-03-310001293971blue:BristolMyersSquibbMemberblue:BbTwoOneTwoOneSevenResearchAndDevelopmentServicesMember2021-03-310001293971blue:BristolMyersSquibbMemberblue:BbTwoOneTwoOneSevenLicenseAndManufacturingServicesMember2021-03-310001293971blue:BristolMyersSquibbMemberblue:BbTwoOneTwoOneSevenResearchAndDevelopmentServicesMemberblue:PhaseIAdditionalObligationMember2021-01-012021-03-310001293971blue:BristolMyersSquibbMemberblue:BbTwoOneTwoOneSevenResearchAndDevelopmentServicesMemberblue:PhaseIAdditionalObligationMember2020-01-012020-03-310001293971blue:BristolMyersSquibbMemberblue:BbTwoOneTwoOneSevenLicenseAndManufacturingServicesMemberblue:LicenseAndManufacturingServicesMember2021-01-012021-03-310001293971blue:BristolMyersSquibbMemberblue:BbTwoOneTwoOneSevenLicenseAndManufacturingServicesMemberblue:LicenseAndManufacturingServicesMember2020-01-012020-03-310001293971blue:BristolMyersSquibbMemberblue:BbTwoOneTwoOneSevenLicenseAndManufacturingServicesMemberblue:LicenseAndManufacturingServicesMember2021-03-310001293971blue:BristolMyersSquibbMemberblue:BbTwoOneTwoOneSevenLicenseAndManufacturingServicesMemberblue:LicenseAndManufacturingServicesMember2020-12-310001293971blue:BristolMyersSquibbMember2020-12-310001293971blue:BristolMyersSquibbMember2021-01-012021-03-310001293971blue:BristolMyersSquibbMember2021-03-31blue:target0001293971blue:RegeneronPharmaceuticalsIncorporationMember2018-08-012018-08-310001293971srt:MaximumMemberblue:RegeneronPharmaceuticalsIncorporationMember2018-08-240001293971blue:SharePurchaseAgreementMemberblue:RegeneronPharmaceuticalsIncorporationMember2018-08-242018-08-240001293971blue:SharePurchaseAgreementMemberblue:RegeneronPharmaceuticalsIncorporationMember2018-08-240001293971us-gaap:CommonStockMemberblue:SharePurchaseAgreementMemberblue:RegeneronPharmaceuticalsIncorporationMember2018-08-242018-08-24xbrli:pure0001293971us-gaap:ResearchAndDevelopmentArrangementMemberblue:RegeneronPharmaceuticalsIncorporationMember2018-08-242018-08-240001293971us-gaap:ResearchAndDevelopmentArrangementMemberblue:RegeneronPharmaceuticalsIncorporationMember2018-08-240001293971blue:RegeneronPharmaceuticalsIncorporationMember2018-08-242018-08-240001293971blue:RegeneronPharmaceuticalsIncorporationMember2021-03-310001293971blue:RegeneronPharmaceuticalsIncorporationMember2020-12-310001293971blue:CollaborationArrangementMemberblue:RegeneronPharmaceuticalsIncorporationMember2021-01-012021-03-310001293971blue:CollaborationArrangementMemberblue:RegeneronPharmaceuticalsIncorporationMember2020-01-012020-03-310001293971blue:RoyaltyAndOtherRevenueMemberblue:JunoTherapeuticsMember2021-01-012021-03-3100012939712020-01-012020-01-310001293971blue:EmployeeAndNonEmployeeStockOptionMember2021-01-012021-03-310001293971blue:EmployeeAndNonEmployeeStockOptionMember2020-01-012020-03-310001293971us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-03-310001293971us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-03-310001293971blue:EmployeeStockPurchasePlanAndOtherMember2021-01-012021-03-310001293971blue:EmployeeStockPurchasePlanAndOtherMember2020-01-012020-03-310001293971us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-03-310001293971us-gaap:ResearchAndDevelopmentExpenseMember2020-01-012020-03-310001293971us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-03-310001293971us-gaap:SellingGeneralAndAdministrativeExpensesMember2020-01-012020-03-310001293971srt:MaximumMember2020-01-012020-03-310001293971srt:MaximumMemberblue:CostOfRoyaltyAndOtherRevenueMember2021-01-012021-03-310001293971blue:A2020AnnualIncentiveProgramMemberblue:UnrestrictedStockAwardsMember2021-01-012021-03-310001293971blue:RetentionProgramMember2021-01-012021-03-310001293971blue:RetentionProgramMemberblue:UnrestrictedStockAwardsMember2021-01-012021-03-310001293971us-gaap:RestrictedStockUnitsRSUMember2020-12-310001293971us-gaap:RestrictedStockUnitsRSUMember2021-03-310001293971blue:EmployeeStockPurchasePlanAndOtherMember2013-06-300001293971blue:EmployeeStockPurchasePlanAndOtherMembersrt:MaximumMember2021-01-012021-03-310001293971blue:EmployeeStockPurchasePlanAndOtherMembersrt:MaximumMember2020-01-012020-03-310001293971us-gaap:StockOptionMember2021-01-012021-03-310001293971us-gaap:StockOptionMember2020-01-012020-03-310001293971us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-03-310001293971us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-03-310001293971blue:EmployeeStockPurchasePlanAndOtherMember2021-01-012021-03-310001293971blue:EmployeeStockPurchasePlanAndOtherMember2020-01-012020-03-31



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
__________________________________________________________________
FORM 10-Q
__________________________________________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
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: 001-35966
__________________________________________________________________
bluebird bio, Inc.
(Exact Name of Registrant as Specified in Its Charter)
__________________________________________________________________
Delaware13-3680878
(State or Other Jurisdiction of
Incorporation or Organization)
(IRS Employer
Identification No.)

60 Binney Street
Cambridge,Massachusetts02142
(Address of Principal Executive Offices)(Zip Code)
(339) 499-9300
(Registrant’s Telephone Number, Including Area Code)
__________________________________________________________________
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, $0.01 par value per shareBLUEThe 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 filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes      No  
As of April 30, 2021, there were 67,447,548 shares of the registrant’s Common Stock, par value $0.01 per share, outstanding.



Table of Contents
This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q are forward-looking statements. In some cases, you can identify forward-looking statements by words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “would,” or the negative of these words or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:
the initiation, timing, progress and results of our preclinical and clinical studies, and our research and development programs;
our ability to advance product candidates into, and successfully complete, clinical studies;
our ability to advance our viral vector and drug product manufacturing capabilities, and to ensure adequate supply of our viral vectors and drug products;
the timing or likelihood of regulatory filings and approvals for our product candidates;
the timing or success of commercialization of our approved product, and any future approved products;
our ability to obtain adequate pricing and reimbursement of our approved product, and any future approved products;
the implementation of our business model, strategic plans for our business, product candidates and technology;
the scope of protection we are able to establish and maintain for intellectual property rights covering our approved product, product candidates and technology;
estimates of our expenses, future revenues, capital requirements and our needs for additional financing;
the potential benefits of strategic collaboration agreements and our ability to enter into strategic arrangements;
our ability to maintain and establish collaborations and licenses;
developments relating to our competitors and our industry;
the impact of the COVID-19 pandemic;
the timing and results of our investigation into the cause of recent safety events in our HGB-206 clinical study, and whether there is a relationship with the use of our lentiviral vector in the manufacture of LentiGlobin for SCD;
the timing, effects, costs, and benefits, including the tax treatment of the planned separation of our portfolio of products and programs into two independent, publicly-traded companies; and
other risks and uncertainties, including those listed under Part II, Item 1A. Risk Factors.
Any forward-looking statements in this Quarterly Report on Form 10-Q reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Part II, Item 1A. Risk Factors and elsewhere in this Quarterly Report on Form 10-Q. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.
This Quarterly Report on Form 10-Q also contains estimates, projections and other information concerning our industry, our business, and the markets for certain diseases, including data regarding the estimated size of those markets, and the incidence and prevalence of certain medical conditions. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources.


Table of Contents
Summary of the Material and Other Risks Associated with Our Business
Below is a summary of the material risks to our business, operations and the investment in our common stock. This summary does not address all of the risks that we face. Risks and uncertainties not presently known to us or that we presently deem less significant may also impair our business operations. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other information in this Quarterly Report on Form 10-Q in its entirety before making investment decisions regarding our common stock.

The EMA has paused the renewal procedure for the conditional marketing authorization of ZYNTEGLOTM while the EMA's pharmacovigilance risk assessment committee reviews the risk-benefit assessment for ZYNTEGLO and determines whether any additional pharmacovigilance measures are necessary, and we have no assurance as to what the EMA may require, or the timing, if ever, of when ZYNTEGLO may return to the market in Europe.
The FDA has placed our HGB-206 and HGB-210 clinical studies of LentiGlobin for SCD on clinical hold, and we have no assurance as to what the FDA may require, or the timing, if ever, of when the clinical hold may be lifted.
We have limited experience as a commercial company and the marketing and sale of ZYNTEGLO or future products may be unsuccessful or less successful than anticipated.
The commercial success of ZYNTEGLO, and of any future products, will depend upon the degree of market acceptance by physicians, patients, third-party payers and others in the medical community. If we fail to obtain sufficient pricing or reimbursement approval for ZYNTEGLO or any future products, our revenues may be adversely affected and our business may suffer.
If the market opportunities for our product or any future products are smaller than we believe they are, and if we are not able to successfully identify patients and achieve significant market share, our revenues may be adversely affected and our business may suffer.
We rely on a complex supply chain for ZYNTEGLO and our product candidates. The manufacture and delivery of our lentiviral vector and drug products present significant challenges for us, and we may not be able to produce our vector and drug products at the quality, quantities, locations or timing needed to support commercialization and clinical programs. In addition, we may encounter challenges with engaging or coordinating with qualified treatment centers needed to support commercialization.
We cannot predict when or if we will obtain marketing approval to commercialize our product candidates, and the marketing approval of our product and any future products may ultimately be for more narrow indications than we expect.
We face intense competition and rapid technological change and the possibility that our competitors may develop therapies that are more advanced or effective than ours, which may adversely affect our financial condition and our ability to successfully commercialize our product and any future products. If our competitors obtain orphan drug exclusivity for products that regulatory authorities determine constitute the same drug and treat the same indications as our product or any future products, we may not be able to have competing products approved by the applicable regulatory authority for a significant period of time.
We may not be successful in our efforts to identify or discover additional product candidates.
We are dependent on BMS for the successful development and commercialization of ABECMA® (idecabtagene vicleucel; ide-cel) and bb21217. If BMS does not devote sufficient resources to the development of ABECMA and bb21217, is unsuccessful in its efforts, or chooses to terminate its agreements with us, our business will be materially harmed.
We have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future.
From time to time, we will need to raise additional funding, which may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations.
Our business may be materially and adversely affected by the ongoing COVID-19 pandemic. The COVID-19 pandemic has had, and will likely continue to have, an impact on various aspects of our business and that of third parties on which we rely. The extent to which the COVID-19 pandemic impacts our business will depend in part on future developments, which are uncertain and unpredictable in nature.


Table of Contents
The proposed separation of our business into two independent, publicly traded companies is subject to various risks and uncertainties and may not be completed on the terms or timeline currently contemplated, if at all, and will involve significant time, effort and expense, which could harm our business, results of operations and financial condition.


Table of Contents
bluebird bio, Inc.
Table of Contents
Page
CERTIFICATIONS



Table of Contents
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
bluebird bio, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands, except par value amounts)
As of
March 31,
2021
As of
December 31,
2020
Assets
Current assets:
Cash and cash equivalents$439,714 $317,705 
Marketable securities572,722 833,546 
Prepaid expenses42,258 37,472 
Receivables and other current assets24,762 16,116 
Inventory18,079 10,698 
Total current assets1,097,535 1,215,537 
Marketable securities81,115 122,891 
Property, plant and equipment, net165,198 162,831 
Intangible assets, net11,469 10,041 
Goodwill13,128 13,128 
Operating lease right-of-use assets197,970 184,019 
Restricted cash and other non-current assets70,864 72,805 
Total assets$1,637,279 $1,781,252 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$20,232 $21,602 
Accrued expenses and other current liabilities146,791 145,406 
Operating lease liability, current portion28,063 25,024 
Deferred revenue, current portion1,330 2,320 
Collaboration research advancement, current portion9,899 9,236 
Total current liabilities206,315 203,588 
Deferred revenue, net of current portion25,762 25,762 
Collaboration research advancement, net of current portion19,399 21,581 
Operating lease liability, net of current portion177,702 167,997 
Other non-current liabilities7,768 7,268 
Total liabilities436,946 426,196 
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.01 par value, 5,000 shares authorized; 0 shares issued and outstanding at March 31, 2021 and December 31, 2020
  
Common stock, $0.01 par value, 125,000 shares authorized; 67,422 and 66,432 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively
675 665 
Additional paid-in capital4,311,462 4,260,443 
Accumulated other comprehensive loss(5,449)(5,505)
Accumulated deficit(3,106,355)(2,900,547)
Total stockholders’ equity1,200,333 1,355,056 
Total liabilities and stockholders’ equity$1,637,279 $1,781,252 
See accompanying notes to unaudited condensed consolidated financial statements.
2

Table of Contents
bluebird bio, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(unaudited)
(in thousands, except per share data)
For the three months ended March 31,
20212020
Revenue:
Service revenue$5,918 $16,833 
Collaborative arrangement revenue1,519 2,302 
Royalty and other revenue5,357 2,728 
Total revenues
12,794 21,863 
Operating expenses:
Research and development
154,478 154,123 
Selling, general and administrative86,874 73,248 
Cost of royalty and other revenue2,281 1,025 
Change in fair value of contingent consideration
369 (3,108)
Total operating expenses
244,002 225,288 
Loss from operations
(231,208)(203,425)
Interest income, net
710 5,355 
Other income (expense), net24,756 (4,447)
Loss before income taxes
(205,742)(202,517)
Income tax expense(66)(94)
Net loss
$(205,808)$(202,611)
Net loss per share - basic and diluted:
$(3.07)$(3.64)
Weighted-average number of common shares used in computing net loss per share - basic and diluted:
66,976 55,590 
Other comprehensive income (loss):
Other comprehensive income (loss), net of tax benefit (expense) of $0.0 million for the three months ended March 31, 2021 and 2020
56 (906)
Total other comprehensive income (loss)56 (906)
Comprehensive loss
$(205,752)$(203,517)
See accompanying notes to unaudited condensed consolidated financial statements.
3

Table of Contents
bluebird bio, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(unaudited)
(in thousands)
Common stock
Additional
paid-in
capital
Accumulated
other
comprehensive
loss
Accumulated
deficit
Total
stockholders'
equity
Shares
Amount
Balances at December 31, 202066,432 $665 $4,260,443 $(5,505)$(2,900,547)$1,355,056 
Vesting of restricted stock units
294 3 (3)— —  
Exercise of stock options
207 2 1,217 — — 1,219 
Purchase of common stock under ESPP
67 1 1,706 — — 1,707 
Stock-based compensation
— — 36,090 — — 36,090 
Issuance of unrestricted stock awards to settle
    accrued employee compensation
422 4 12,009 — — 12,013 
Other comprehensive income— — — 56 — 56 
Net loss
— — — — (205,808)(205,808)
Balances at March 31, 202167,422 $675 $4,311,462 $(5,449)$(3,106,355)$1,200,333 

Common stock
Additional
paid-in
capital
Accumulated
other
comprehensive
loss
Accumulated
deficit
Total
stockholders'
equity
SharesAmount
Balances at December 31, 201955,368 $554 $3,568,184 $(1,893)$(2,281,852)$1,284,993 
Vesting of restricted stock units
204 2 (2)— —  
Exercise of stock options
20 — 750 — — 750 
Purchase of common stock under ESPP
28 — 1,872 — — 1,872 
Stock-based compensation
— — 36,335 — — 36,335 
Other comprehensive loss— — — (906)— (906)
Net loss
— — — — (202,611)(202,611)
Balances at March 31, 202055,620 $556 $3,607,139 $(2,799)$(2,484,463)$1,120,433 
See accompanying notes to unaudited condensed consolidated financial statements.
4

Table of Contents
bluebird bio, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
For the three months ended
March 31,
20212020
Cash flows from operating activities:
Net loss$(205,808)$(202,611)
Adjustments to reconcile net loss to net cash used in operating activities:
Change in fair value of contingent consideration369 (3,108)
Depreciation and amortization5,360 4,880 
Stock-based compensation expense42,527 36,293 
(Gain) loss on equity securities(28,372)4,520 
Other non-cash items2,513 (1,387)
Changes in operating assets and liabilities:
Prepaid expenses and other assets(8,979)(9,285)
Inventory(7,103)(1,699)
Operating lease right-of-use assets8,098 5,842 
Accounts payable67 (9,519)
Accrued expenses and other liabilities(184)(20,557)
Operating lease liabilities(9,306)(5,070)
Deferred revenue(990)(2,118)
Collaboration research advancement(1,519)(2,302)
Net cash used in operating activities(203,327)(206,121)
Cash flows from investing activities:
Purchase of property, plant and equipment(7,626)(10,676)
Purchases of marketable securities(53,200)(101,421)
Proceeds from maturities of marketable securities350,860 336,675 
Proceeds from sales of marketable securities31,318  
Net cash provided by investing activities321,352 224,578 
Cash flows from financing activities:
Proceeds from exercise of stock options and ESPP contributions3,796 963 
Net cash provided by financing activities3,796 963 
Increase in cash, cash equivalents and restricted cash121,821 19,420 
Cash, cash equivalents and restricted cash at beginning of period373,728 381,709 
Cash, cash equivalents and restricted cash at end of period$495,549 $401,129 
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents$439,714 $346,629 
Restricted cash included in receivables and other current assets$1,330 $ 
Restricted cash included in restricted cash and other non-current assets$54,505 $54,500 
Total cash, cash equivalents and restricted cash$495,549 $401,129 
Supplemental cash flow disclosures from investing and financing activities:
Purchases of property, plant and equipment included in accounts payable and accrued expenses
$2,238 $1,125 
Right-of-use assets obtained in exchange for operating lease liabilities$22,049 $14,425 
Issuance of unrestricted stock awards to settle accrued employee compensation$12,013 $ 
See accompanying notes to unaudited condensed consolidated financial statements.
5

Table of Contents
bluebird bio, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
1. Description of the business
bluebird bio, Inc. (the “Company” or “bluebird”) was incorporated in Delaware on April 16, 1992, and is headquartered in Cambridge, Massachusetts. The Company is a biotechnology company committed to researching, developing and commercializing potentially transformative gene therapies for severe genetic diseases and cancer. Since its inception, the Company has devoted substantially all of its resources to its research and development efforts relating to its product candidates, including activities to manufacture product candidates, conduct clinical studies of its product candidates, perform preclinical research to identify new product candidates and provide selling, general and administrative support for these operations, including commercial-readiness activities.
The Company’s programs in severe genetic diseases include programs for transfusion-dependent β-thalassemia, or TDT, sickle cell disease, or SCD, and cerebral adrenoleukodystrophy, or CALD. The Company’s programs in oncology are focused on developing novel engineered cell and gene therapies for cancer, including the anti-BCMA CAR T programs for multiple myeloma under the Company’s collaboration arrangement with Bristol-Myers Squibb ("BMS"). Please refer to Note 10, Collaborative arrangements, for further discussion of the Company’s collaboration with BMS.
In March 2021, BMS received marketing approval from the U.S. Food and Drug Administration for ABECMA® (idecabtagene vicleucel; ide-cel) as a treatment of adult patients with relapsed or refractory multiple myeloma after four or more prior lines of therapy, including an immunomodulatory agent, a proteasome inhibitor, and an anti-CD38 monoclonal antibody. In October 2020, the Company's marketing authorization application was accepted by the European Medicines Agency, or EMA, for elivaldogene autotemcel (eli-cel; formerly Lenti-D gene therapy) as a treatment for cerebral adrenoleukodystrophy. In June 2019, the Company received conditional marketing authorization from the European Commission for betibeglogene autotemcel (beti-cel; formerly LentiGlobin for β-thalassemia gene therapy) as a treatment of patients 12 years and older with TDT who do not have a β00 genotype, for whom hematopoietic stem cell (HSC) transplantation is appropriate but a human leukocyte-matched related HSC donor is not available. beti-cel is being marketed as ZYNTEGLO™ in the European Union. The Company began recognizing product revenue from product sales of ZYNTEGLO during the first quarter of 2021. In February 2021, the Company temporarily suspended marketing of ZYNTEGLO in light of safety events in the HGB-206 study of LentiGlobin gene therapy for SCD, which is manufactured using the same vector as ZYNTEGLO. Additionally, the EMA has paused the renewal procedure for ZYNTEGLO's conditional marketing authorization while the EMA's pharmacovigilance risk assessment committee reviews the risk-benefit assessment for ZYNTEGLO and determines whether any additional pharmacovigilance measures are necessary.
In January 2021, the Company announced its intent to separate its severe genetic disease and oncology programs into two separate, independent publicly traded companies, bluebird bio, Inc. and 2seventy bio, Inc., a newly-formed Delaware corporation and wholly-owned subsidiary of the Company prior to the separation. bluebird bio, Inc. intends to retain focus on its severe genetic disease programs and 2seventy bio, Inc. is expected to focus on the Company's oncology programs. The transaction is expected to be completed in late 2021 and is anticipated to be tax-free, subject to receipt of a favorable Internal Revenue Service (“IRS”) ruling.
In accordance with Accounting Standards Codification (“ASC”) 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 consolidated financial statements are issued. The Company has incurred losses since inception and to date has financed its operations primarily through the sale of equity securities and, to a lesser extent, through collaboration agreements and grants from governmental agencies and charitable foundations. As of March 31, 2021, the Company had an accumulated deficit of $3.11 billion. During the three months ended March 31, 2021, the Company incurred a loss of $205.8 million and used $203.3 million of cash in operations. The Company expects to continue to generate operating losses and negative operating cash flows for the next few years and will need additional funding to support its planned operating activities through profitability. The transition to profitability is dependent upon the successful development, approval, and commercialization of the Company’s product and product candidates and the achievement of a level of revenues adequate to support its cost structure.
As of March 31, 2021, the Company had cash, cash equivalents and marketable securities of $1.09 billion. The Company expects 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, though it may pursue additional cash resources
6

Table of Contents
through public or private equity or debt financings or by establishing additional collaborations with other companies. Management's expectations with respect to its ability to fund current planned operations is based on estimates that are subject to risks and uncertainties. If actual results are different from management's estimates, the Company may need to seek additional strategic or financing opportunities sooner than would otherwise be expected. However, there is no guarantee that any of these strategic or financing opportunities will be executed or executed on favorable terms, 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 or otherwise capitalize on its commercialization of its product and product candidates.
2. Basis of presentation, principles of consolidation and significant accounting policies
Basis of presentation
The accompanying condensed consolidated financial statements are unaudited and have been prepared by the Company in accordance with accounting principles generally accepted in the United States (“GAAP”) as found in the Accounting Standards Codification ("ASC") and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. These condensed consolidated financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the Company’s financial position and results of operations for the interim periods ended March 31, 2021 and 2020.
The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2020, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 23, 2021.
Inventory in the prior year’s condensed consolidated financial statements have been reclassified to conform to the current presentation on the condensed consolidated balance sheets and condensed consolidated statements of cash flows.  However, no subtotals in the prior year condensed consolidated financial statements were impacted as a result.
Amounts reported are computed based on thousands. As a result, certain totals may not sum due to rounding.
The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Any reference in these notes to applicable guidance is meant to refer to GAAP. The Company views its operations and manages its business in one operating segment.
Significant accounting policies
The significant accounting policies used in preparation of these condensed consolidated financial statements for the three months ended March 31, 2021 are consistent with those discussed in Note 2 to the consolidated financial statements included in the Company’s 2020 Annual Report on Form 10-K, except as noted immediately below and as noted within the "Recent accounting pronouncements - Recently adopted" section.
Royalty and other revenue
During the first quarter of 2021, the Company recognized an immaterial amount of product revenue related to the sale of ZYNTEGLO in the European Union and the related cost of goods sold, which is included within royalty and other revenue and cost of royalty and other revenue, respectively.
Inventory
Inventories are stated at the lower of cost or net realizable value under the first-expired, first-out (FEFO) methodology. Given human gene therapy products are a new and novel category of therapeutics and future economic benefit is not probable until regulatory approval for the product has been obtained, the Company has only considered inventory for capitalization upon regulatory approval. Manufacturing costs incurred prior to regulatory approval for pre-launch inventory that did not qualify for capitalization and clinical manufacturing costs are charged to research and development expense in the Company’s condensed consolidated statements of operations and comprehensive loss as costs are incurred. Additionally, inventory that initially
7

Table of Contents
qualifies for capitalization but that may ultimately be used for the production of clinical drug product is expensed as research and development expense when it has been designated for the manufacture of clinical drug product.
Inventory consists of cell banks, plasmids, vectors, other materials and compounds sourced from third party suppliers and utilized in the manufacturing process, and drug product, which has been produced for the treatment of specific patients, that are owned by the Company.
Management periodically reviews inventories for excess or obsolescence, considering factors such as sales forecasts compared to quantities on hand and firm purchase commitments as well as remaining shelf life of on hand inventories. The Company writes-down its inventory that is obsolete or otherwise unmarketable to its estimated net realizable value in the period in which the impairment is first identified. Any such adjustments are included as a component of cost of goods sold.
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 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, and the measurement of right-of-use assets and lease liabilities, contingent consideration, stock-based compensation expense, accrued expenses, revenue recognition, income taxes, inventory capitalization, 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.
Recent accounting pronouncements
Recently adopted
ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify the accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The new standard was effective beginning January 1, 2021. The adoption of ASU 2019-12 did not have a material impact on the Company's financial position or results of operations upon adoption.
ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity
In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). ASU 2020-06 simplifies the complexity associated with applying U.S. GAAP for certain financial instruments with characteristics of liabilities and equity. More specifically, the amendments focus on the guidance for convertible instruments and derivative scope exception for contracts in an entity's own equity. The Company early adopted the new standard, effective January 1, 2021. The adoption of ASU 2020-06 did not have an impact on the Company's financial position or results of operations upon adoption.
ASU No. 2020-08, Codification Improvements to Subtopic 310-20, Receivables - Nonrefundable Fees and Other Costs
In October 2020, the FASB issued ASU 2020-08, Codification Improvements to Subtopic 310-20, Receivables - Nonrefundable Fees and Other Costs (“ASU 2020-08”) to provide further clarification and update the previously issued guidance in ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20: Premium Amortization on
8

Table of Contents
Purchased Callable Debt Securities) (“ASU 2017-08”). ASU 2017-08 shortened the amortization period for certain callable debt securities purchased at a premium by requiring that the premium be amortized to the earliest call date. ASU 2020-08 requires that at each reporting period, to the extent that the amortized cost of an individual callable debt security exceeds the amount repayable by the issuer at the next call date, the excess premium shall be amortized to the next call date. The new standard was effective beginning January 1, 2021. The adoption of ASU 2020-08 did not have a material impact on the Company's financial position or results of operations upon adoption.
ASU No. 2020-10, Codification Improvements
In October 2020, the FASB issued ASU 2020-10, Codification Improvements ("ASU 2020-10"). The amendments in this ASU represent changes to clarify the ASC, correct unintended application of the guidance, or make minor improvements to the ASC that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. This new standard was effective beginning January 1, 2021. The adoption of ASU 2020-10 did not have a material impact on the Company's financial position or results of operations upon adoption.
3. Marketable securities
The following table summarizes the marketable securities held at March 31, 2021 and December 31, 2020 (in thousands):
Description
Amortized
cost / Cost
Unrealized
gains
Unrealized
losses
Fair
value
March 31, 2021
U.S. government agency securities and treasuries
$429,039 $256 $(16)$429,279 
Corporate bonds
142,773 163 (40)142,896 
Commercial paper
78,955   78,955 
Equity securities
4,305 (1,598)2,707 
Total
$655,072 $419 $(1,654)$653,837 
December 31, 2020
U.S. government agency securities and treasuries$675,043 $302 $(74)$675,271 
Corporate bonds
197,171 432 (40)197,563 
Commercial paper
77,949 1  77,950 
Equity securities
20,017  (14,364)5,653 
Total
$970,180 $735 $(14,478)$956,437 
No available-for-sale debt securities held as of March 31, 2021 or December 31, 2020 had remaining maturities greater than five years.
9

Table of Contents
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, 2021 and December 31, 2020 (in thousands):
Description
Total
Quoted
prices in
active
markets
(Level 1)
Significant
other
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
March 31, 2021
Assets:
Cash and cash equivalents$439,714 $410,715 $28,999 $ 
Marketable securities:
U.S. government agency securities and treasuries429,279  429,279  
Corporate bonds142,896  142,896  
Commercial paper78,955  78,955  
Equity securities2,707 2,707   
Total$1,093,551 $413,422 $680,129 $ 
Liabilities:
Contingent consideration$1,878 $ $ $1,878 
Total$1,878 $ $ $1,878 
December 31, 2020
Assets:
Cash and cash equivalents$317,705 $317,705 $ $ 
Marketable securities:
U.S. government agency securities and treasuries675,271  675,271  
Corporate bonds197,563  197,563  
Commercial paper77,950  77,950  
Equity securities5,653 5,653   
Total$1,274,142 $323,358 $950,784 $ 
Liabilities:
Contingent consideration$1,509 $ $ $1,509 
Total$1,509 $ $ $1,509 
Cash and cash equivalents
The Company considers all highly liquid securities with original final maturities of 90 days or less from the date of purchase to be cash equivalents. As of March 31, 2021, cash and cash equivalents comprise funds in cash, money market accounts, and commercial paper. As of December 31, 2020, cash and cash equivalents comprise funds in cash and money market accounts.
Marketable securities
Marketable securities classified as Level 2 within the valuation hierarchy generally consist of U.S. government agency securities and treasuries, corporate bonds, and commercial paper. The Company estimates the fair values of these marketable securities by taking into consideration valuations obtained from third-party pricing sources. These pricing sources utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include market pricing based on real-time trade data for the same or similar securities, issuer credit spreads, benchmark yields, and other observable inputs. The Company validates the prices provided by its third-party pricing sources by understanding the models used, obtaining market values from other pricing sources and analyzing pricing data in certain instances.
The amortized cost of available-for-sale debt securities is adjusted for amortization of premiums and accretion of discounts to the next call date for premiums or to maturity for discounts. At March 31, 2021 and December 31, 2020, the balance in the Company’s accumulated other comprehensive loss includes activity related to the Company’s available-for-sale debt securities.
10

Table of Contents
There were no material realized gains or losses recognized on the sale or maturity of available-for-sale debt securities during the three months ended March 31, 2021 or 2020.
Accrued interest receivable on the Company's available-for-sale debt securities totaled $2.2 million and $3.1 million as of March 31, 2021 and December 31, 2020, respectively. No accrued interest receivable was written off during the three months ended March 31, 2021 or 2020.
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, 2021 and December 31, 2020 (in thousands):
Less than 12 months12 months or greaterTotal
DescriptionFair valueUnrealized lossesFair valueUnrealized lossesFair valueUnrealized losses
March 31, 2021
U.S. government agency securities
   and treasuries
$48,802 $(16)$ $ $48,802 $(16)
Corporate bonds92,855 (40)  92,855 (40)
Total$141,657 $(56)$ $ $141,657 $(56)
December 31, 2020
U.S. government agency securities
   and treasuries
$211,384 $(74)$ $ $211,384 $(74)
Corporate bonds76,598 (40)1,205  77,803 (40)
Total$287,982 $(114)$1,205 $ $289,187 $(114)
The Company determined that there was no material change in the credit risk of the above investments during the three months ended March 31, 2021. As such, an allowance for credit losses was not recognized. As of March 31, 2021, 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.
The Company held equity securities with an aggregate fair value of $2.7 million and $5.7 million as of March 31, 2021 and December 31, 2020, respectively, within short-term marketable securities on its condensed consolidated balance sheets. In January 2021, the Company sold a portion of its equity securities for proceeds of $31.3 million. During the three months ended March 31, 2021 and 2020, the Company recorded gains of $28.4 million and losses of $4.5 million, respectively, related to its equity securities, which are included in other income (expense), net on the condensed consolidated statements of operations and comprehensive loss.
Contingent consideration
In connection with its prior acquisition of Precision Genome Engineering, Inc. (“Pregenen”), the Company may be required to pay future consideration that is contingent upon the achievement of specified development, regulatory approvals or sales-based milestone events. Contingent consideration is measured at fair value and is based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The valuation of contingent consideration 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, changes in fair value will reflect changing discount rates and the passage of time. Contingent consideration is included in accrued expenses and other current liabilities and other non-current liabilities on the condensed consolidated balance sheets.
Please refer to Note 9, Commitments and contingencies, for further information.
11

Table of Contents
5. Inventory
Inventory consists of the following (in thousands):
As of March 31, 2021As of December 31, 2020
Raw materials$16,892 $8,967 
Finished goods1,187 1,731 
Inventory$18,079 $10,698 

6. Property, plant and equipment, net
Property, plant and equipment, net, consists of the following (in thousands):
As of March 31, 2021As of December 31, 2020
Land
$1,210 $1,210 
Building
88,591 15,745 
Computer equipment and software
6,919 6,950 
Office equipment
7,633 7,665 
Laboratory equipment
66,600 55,521 
Leasehold improvements
34,104 34,286 
Construction-in-progress
14,939 92,514 
Total property, plant and equipment
219,996 213,891 
Less accumulated depreciation and amortization
(54,798)(51,060)
Property, plant and equipment, net
$165,198 $162,831 
North Carolina manufacturing facility
In November 2017, the Company acquired a manufacturing facility in Durham, North Carolina for the future manufacture of lentiviral vector for the Company’s gene therapies. As of March 31, 2021, the majority of the facility has been placed into service. The remainder of the facility is still in process of qualification, which is required for the facility to be ready for its intended use. Construction-in-progress as of March 31, 2021 and December 31, 2020 includes $14.2 million and $91.1 million, respectively, related to the North Carolina manufacturing facility.
7. Accrued expenses and other current liabilities
Accrued expenses and other current liabilities consist of the following (in thousands):
As of March 31, 2021As of December 31, 2020
Employee compensation$45,916 $55,802 
Manufacturing costs24,726 22,571 
Clinical and contract research organization costs23,377 23,766 
Collaboration research costs23,679 20,004 
Property, plant and equipment1,543 789 
License and milestone fees303 278 
Professional fees1,993 1,541 
Other25,254 20,655 
Accrued expenses and other current liabilities$146,791 $145,406 

12

Table of Contents
8. Leases
The Company leases certain office and laboratory space, primarily located in Cambridge, Massachusetts and Seattle, Washington.  Additionally, the Company has embedded leases at various contract manufacturing organizations in both the United States and internationally. Except as described below, there have been no material changes in lease obligations from those disclosed in Note 8 to the consolidated financial statements included in the Company's 2020 Annual Report on Form 10-K.
Embedded operating leases
In July 2020, the Company entered into an agreement reserving manufacturing capacity with a contract manufacturing organization. The Company concluded that this agreement contains an embedded operating lease as a controlled environment room at the facility is designated for the Company's exclusive use during the term of the agreement, with the option to sublease the space if the Company provides notice that it will not utilize it for a specified duration of time. Under the terms of the agreement, the Company will be required to pay up to $5.4 million per year in maintenance fees in addition to the cost of any services provided and may terminate this agreement with eighteen months' notice. The term of the agreement is five years, with the option to extend. The Company recorded a right-of-use asset and lease liability for this operating lease upon lease commencement in March 2021 and is recognizing rent expense on a straight-line basis throughout the remaining term of the embedded lease.
9. Commitments and contingencies
Contingent consideration related to business combinations
In June 2014, the Company acquired Pregenen. The Company may be required to make up to $120.0 million in remaining future contingent cash payments to the former equity holders of Pregenen upon the achievement of certain clinical and commercial milestones related to the Pregenen technology, of which $20.1 million relates to clinical milestones and $99.9 million relates to commercial milestones. 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.
Other funding commitments
The Company may be obligated to make future development, regulatory, and commercial milestone payments, and royalty payments on future sales of specified products associated with its collaboration and license agreements. Payments under these agreements generally become due and payable upon achievement of such milestones or sales. When the achievement of these milestones or sales have occurred, the corresponding amounts are recognized in the Company’s financial statements. Please refer to Note 10, Collaborative arrangements, for further information on the Company's collaboration agreements and to Note 11, Royalty and other revenue, for further information on the Company's license agreements.
Additionally, the Company 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 9 to the consolidated financial statements included in the Company's 2020 Annual Report on Form 10-K.
While there are no material legal proceedings the Company is aware of, the Company may become party to various claims and complaints arising in the ordinary course of business. The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to the 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. 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.
13

Table of Contents
The Company also 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. The term of the indemnification period lasts as long as a director 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 currently holds director and officer liability insurance. This insurance allows the transfer of risk associated with the Company's exposure and may enable it to recover a portion of any future amounts paid. The Company believes that the fair value of these indemnification obligations is minimal. Accordingly, it has not recognized any liabilities relating to these obligations.
10. Collaborative arrangements
To date, the Company’s revenue has been primarily generated from its collaboration arrangements with BMS and Regeneron Pharmaceuticals, Inc. ("Regeneron"), each as further described below.
Bristol-Myers Squibb
BMS Original Collaboration Agreement
In March 2013, the Company entered into a Master Collaboration Agreement (the “BMS Collaboration Agreement”) with Celgene (now BMS following its acquisition of Celgene in November 2019) to discover, develop and commercialize potentially disease-altering gene therapies in oncology. The collaboration is focused on applying gene therapy technology to genetically modify a patient’s own T cells, known as chimeric antigen receptor, or CAR T cells, to target and destroy cancer cells. Additionally, in March 2013, the Company entered into a Platform Technology Sublicense Agreement (the “Sublicense Agreement”) with BMS pursuant to which the Company obtained a sublicense to certain intellectual property from BMS, originating under BMS’s license from Baylor College of Medicine, for use in the collaboration.
Under the terms of the BMS Collaboration Agreement, the Company received an up-front, non-refundable, non-creditable payment of $75.0 million. The Company was responsible for conducting discovery, research and development activities through completion of phase 1 clinical studies, if any, during the initial term of the BMS Collaboration Agreement, or three years.
BMS Amended Collaboration Agreement
In June 2015, the Company and BMS amended and restated the BMS Collaboration Agreement (the “Amended BMS Collaboration Agreement”).  Under the Amended BMS Collaboration Agreement, the parties narrowed the focus of the collaboration to exclusively work on anti- B-cell maturation antigen (“BCMA”) product candidates for a new three-year term. In connection with the Amended BMS Collaboration Agreement, the Company received an up-front, non-refundable, non-creditable payment of $25.0 million to fund research and development under the collaboration. Under the terms of the Amended BMS Collaboration Agreement, for up to two product candidates selected for development under the collaboration, the Company was responsible for conducting and funding all research and development activities performed up through completion of the initial phase 1 clinical study of such product candidate.
On a product candidate-by-product candidate basis, up through a specified period following enrollment of the first patient in an initial phase 1 clinical study for such product candidate, the Company had granted BMS an option to obtain an exclusive worldwide license to develop and commercialize such product. Following BMS’s license of each product candidate, the Company is entitled to elect to co-develop and co-promote each product candidate in the U.S.
BMS Ide-cel License Agreement
In February 2016, BMS exercised its option to obtain an exclusive worldwide license to develop and commercialize ide-cel, the first product candidate under the Amended BMS Collaboration Agreement, pursuant to an executed license agreement (“Ide-cel License Agreement”) entered into by the parties in February 2016 and paid to the Company the associated $10.0 million option fee. Pursuant to the Ide-cel License Agreement, BMS was responsible for development and related funding of ide-cel after the substantial completion of the phase 1 clinical trial.  The Company was responsible for the manufacture of vector and associated payload throughout development and upon BMS’s request, throughout commercialization, the costs of which were reimbursable by BMS in accordance with the terms of the Amended and Restated Co-Development, Co-Promote and Profit Share Agreement, as further described below. BMS was responsible for the manufacture of drug product throughout development and commercialization. Under the Ide-cel License Agreement, the Company was eligible to receive U.S. milestones of up to $85.0 million for the first indication to be addressed by ide-cel and royalties for U.S. sales of ide-cel.
14

Table of Contents
Additionally, the Company was eligible to receive ex-U.S. milestones of up to $55.0 million and royalties for ex-U.S. sales of ide-cel.
BMS Ide-cel Co-Development, Co-Promote and Profit Share Agreement
In March 2018, the Company elected to co-develop and co-promote ide-cel within the U.S. pursuant to the execution of the Amended and Restated Co-Development, Co-Promote and Profit Share Agreement (“Ide-cel CCPS”), which replaced the Ide-cel License Agreement.  As a result of executing the Ide-cel CCPS, the responsibilities of the parties remained unchanged from those under the Ide-cel License Agreement, however, the Company will share equally in all profits and losses relating to developing, commercializing and manufacturing ide-cel within the U.S. and has the right to participate in the development and promotion of ide-cel in the U.S.  BMS is responsible for the costs incurred to manufacture vector and associated payload for use outside of the U.S., plus a mark-up. As a result of electing to co-develop and co-promote ide-cel within the U.S., the milestones and royalties payable under the Ide-cel License Agreement were adjusted. Under the Ide-cel CCPS, the Company was eligible to receive a $10.0 million milestone related to the development of ide-cel in the U.S. and, for the first indication to be addressed by ide-cel, ex-U.S. regulatory and commercial milestones of up to $60.0 million. Additionally, the Company was eligible to receive royalties for ex-U.S. sales of ide-cel, but not for U.S. sales of ide-cel. Under the Ide-cel CCPS, the $10.0 million development milestone was achieved in the second quarter of 2019 and subsequently paid by BMS.
In May 2020, the First Amendment to the Amended and Restated Co-Development, Co-Promote and Profit Share Agreement (as amended, the "Amended Ide-cel CCPS") was executed, which amended the Ide-cel CCPS. Under the Amended Ide-cel CCPS, the parties will continue to share equally in all profits and losses relating to developing, commercializing and manufacturing ide-cel within the U.S. Under the Amended Ide-cel CCPS and the Amended bb21217 License Agreement, described further below, BMS was relieved of its obligations to pay the Company for future ex-U.S. milestones and royalties on ex-U.S. sales for each of ide-cel and bb21217 in exchange for an up-front, non-refundable, non-creditable payment of $200.0 million, which represents the aggregate of the probability-weighted, net present value of the future ex-U.S. milestones and royalties on ex-U.S. sales for each of ide-cel and bb21217. In connection with these amendments, BMS assumed the contract manufacturing agreements relating to ide-cel adherent lentiviral vector. Over time, BMS is assuming responsibility for manufacturing ide-cel suspension lentiviral vector outside of the U.S., with bluebird responsible for manufacturing ide-cel suspension lentiviral vector in the U.S. In addition, under the Amended Ide-cel CCPS and the Amended bb21217 License Agreement, described further below, the parties are released from future exclusivity related to BCMA-directed T cell therapies. There are no remaining milestones or royalties under the Amended Ide-cel CCPS.
Ide-cel is marketed as ABECMA in the U.S. following its approval by the FDA in March 2021 for the treatment of adult patients with relapsed or refractory multiple myeloma after four or more prior lines of therapy, including an immunomodulatory agent, a proteasome inhibitor, and an anti-CD38 monoclonal antibody. Under the Amended Ide-cel CCPS, BMS is primarily responsible for the commercialization of ABECMA and the Company has concluded BMS is the principal for purposes of recognition of product sales. Accordingly, the Company will continue to account for its share of the profits and losses relating to developing, commercializing, and manufacturing ABECMA in the U.S. as collaborative arrangement revenue (expense). There were no product sales of ABECMA during the first quarter of 2021.
BMS bb21217 License Agreement
In September 2017, BMS exercised its option to obtain an exclusive worldwide license to develop and commercialize bb21217, the second product candidate under the Amended BMS Collaboration Agreement, pursuant to an executed license agreement (“bb21217 License Agreement”) entered into by the parties in September 2017 and paid the Company an option fee of $15.0 million.  Pursuant to the bb21217 License Agreement, BMS is responsible for development and related funding of bb21217 after the substantial completion of the ongoing phase 1 clinical trial. In 2019, the parties amended the protocol for the ongoing phase 1 clinical trial to enroll additional patients for which the Company will be reimbursed based upon an agreed-upon amount per patient. Under the bb21217 License Agreement, the Company is eligible to receive U.S. milestones of up to $85.0 million for the first indication to be addressed by bb21217 and royalties for U.S. sales of bb21217. Additionally, the Company was eligible to receive ex-U.S. milestones of up to $55.0 million and royalties for ex-U.S. sales of bb21217.
In May 2020, the Second Amended and Restated License Agreement ("Amended bb21217 License Agreement") was executed, which replaced the bb21217 License Agreement. Under the Amended bb21217 License Agreement, over time, BMS is assuming responsibility for manufacturing suspension lentiviral vector outside of the U.S., with bluebird responsible for manufacturing suspension lentiviral vector in the U.S. Under the Amended bb21217 License Agreement, expenses incurred by the Company associated with these activities are fully reimbursable by BMS at cost plus a mark-up. Throughout both development and commercialization, BMS is responsible for the manufacture of drug product. There are no remaining
15

Table of Contents
milestones and royalties related to the ex-U.S. development or commercialization of bb21217 following execution of the Amended bb21217 License Agreement.
The Company currently expects it will exercise its option to co-develop and co-promote bb21217 within the U.S.  The Company’s election to co-develop and co-promote bb21217 must be made by the substantial completion of the on-going phase 1 clinical trial of bb21217.  If elected, the Company expects the responsibilities of the parties to remain largely unchanged, however, the Company expects it will share equally in all profits and losses relating to developing, commercializing and manufacturing bb21217 within the U.S. and to have the right to participate in the development and promotion of bb21217 in the U.S.  Under this scenario, the U.S. milestones and royalties payable under the Amended bb21217 License Agreement would be adjusted and the Company would be eligible to receive a $10.0 million development milestone payment related to the development of bb21217 within the U.S. The Company would not be eligible for royalties on U.S. sales of bb21217 under this scenario.
In the event the Company does not exercise its option to co-develop and co-promote bb21217, the Company will receive an additional fee in the amount of $10.0 million. Under this scenario, there would be no change to the U.S. milestones and royalties for U.S. sales of bb21217, as previously described above, for which the Company would be eligible to receive.
Accounting Analysis – Amended Ide-cel CCPS and Amended bb21217 License Agreement
In accordance with the Company’s accounting policies related to variable consideration, as further described in the Company’s Annual Report on Form 10-K filed with the SEC on February 23, 2021, if an arrangement includes variable consideration, including milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price of an arrangement. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s control, such as regulatory approvals, are generally not considered probable of being achieved until those approvals are received. The Company recognizes royalty revenue and sales-based milestones at the later of (i) when the related sales occur, or (ii) when the performance obligation to which the royalty has been allocated has been satisfied.
Prior to the May 2020 amendments, the Company had constrained all variable consideration related to the remaining ex-U.S. milestones and royalties for ex-U.S. sales under the Ide-cel CCPS and bb21217 License Agreement. As a result of the May 2020 amendments, the uncertainty associated with the previously constrained variable consideration for future ex-U.S. milestones and royalties on ex-U.S. sales for each of ide-cel and bb21217 was resolved in exchange for an up-front, non-refundable, non-creditable payment of $200.0 million.
While the Ide-cel CCPS and bb21217 License Agreement were historically accounted for as separate contracts, the May 2020 amendments to each agreement were negotiated as a package with a single commercial objective and, as such, the Amended Ide-cel CCPS and Amended bb21217 License Agreement were combined for accounting purposes and treated as a single arrangement.
At the time of the May 2020 amendments, there was one remaining performance obligation under each of the Ide-cel CCPS and bb21217 License Agreement, neither of which were fully satisfied: a combined performance obligation of the ide-cel license and ide-cel vector manufacturing through development; and a combined performance obligation of the bb21217 license and bb21217 vector manufacturing through development. Subsequent to the May 2020 amendments, the Company concluded the two performance obligations are distinct from each other as BMS can benefit from each license and associated manufacturing services separately and the respective licenses and manufacturing services do not modify one another and are not interdependent. Accordingly, the Company will continue to account for each performance obligation separately.
The Company allocated the $200.0 million up-front payment received in connection with the May 2020 amendments to the remaining performance obligations described above based on the general allocation principles of Topic 606. In applying these principles, the Company considered the $200.0 million up-front payment is representative of previously constrained variable consideration that has been changed and the related uncertainties resolved by the May 2020 amendments. Moreover, the Company considered that a portion of the $200.0 million was specifically attributable to each remaining performance obligation as the amount represents the aggregate of the probability-weighted, net present value of the future ex-U.S. milestones and royalties on ex-U.S. sales for each of ide-cel and bb21217 and that each respective portion therefore (i) relates specifically to the Company's satisfaction of each of its remaining performance obligations and (ii) is representative of the amount of consideration the Company expects to be entitled to in exchange for satisfying the respective performance obligations. As such, the Company concluded that the portion of the $200.0 million up-front payment specifically attributable to each of ide-cel and
16

Table of Contents
bb21217 should be allocated to each respective performance obligation pursuant to the variable consideration allocation exception.
The Amended Ide-cel CCPS and Amended bb21217 License Agreement represent a contract modification to an existing contract under Topic 606 given the May 2020 amendments resulted in a reduction in scope of the Company's responsibilities under each performance obligation described above. Specifically, the May 2020 amendments reduced the scope of the Company's obligation to provide ex-U.S. vector manufacturing services through development for both ide-cel and bb21217 as those activities will transition to BMS over time. In addition, the May 2020 amendments resulted in a change in the overall transaction price under the arrangement. The May 2020 amendments did not include any additional promised goods and services.
The remaining goods and services to be provided in order to fully satisfy each performance obligation described above are not distinct from those previously provided with respect to each performance obligation. Therefore, for each performance obligation, the remaining goods and services are part of a single performance obligation that is partially satisfied at the date of the contract modification. Accordingly, the effect that the contract modification had on the transaction price and the measure of progress toward complete satisfaction of each respective performance obligation has been recognized on a cumulative catch-up basis. The accounting for any previously satisfied performance obligations as of the contract modification date are not affected by the modification.
Ide-cel transaction price
The following tables summarize the total transaction price, the allocation of the total transaction price to the identified performance obligations under the arrangement (including those performance obligations that were completed as of the May 2020 contract modification date), and the amount of the transaction price unsatisfied as of March 31, 2021 (in thousands):
Ide-cel transaction price as of March 31,
2021
Up-front non-refundable payments, option fee and milestone payments received prior to May 2020
   contract modification (1)
$120,000 
Allocated portion of the up-front non-refundable payment received in connection with the Amended Ide-cel CCPS and bb21217 License Agreement (2)
184,029 
Estimated variable consideration (3)83,900 
$387,929 
(1) Composed of all up-front payments and option fee and milestone payments received under the BMS Collaboration Agreement, Amended BMS Collaboration Agreement, Ide-cel License Agreement, and Ide-cel CCPS. This consideration was allocated to the performance obligations under the Ide-cel CCPS based on a relative standalone selling price (“SSP”) basis.  The Company estimated the SSP of the ide-cel license after considering potential future cash flows under the license. The Company then discounted these probability-weighted cash flows to their present value. The Company estimated the SSP of each of the ide-cel research and development services and ide-cel manufacturing services to be provided based on the Company’s estimated cost of providing the services plus an applicable profit margin commensurate with observable market data for similar services.
(2) This represents the portion of the $200.0 million up-front payment received under the Amended Ide-cel CCPS and Amended bb21217 License Agreement which was allocated to ide-cel.
(3) Estimated variable consideration represents the estimated reimbursement from BMS for the manufacture of vectors and associated payload through development.

Allocation of
transaction
price to
performance
obligations
Transaction price unsatisfied as of March 31, 2021
Ide-cel research and development services
$40,912 $ 
Ide-cel license and manufacturing services
347,017  
$387,929 $ 
17

Table of Contents
Ide-cel research and development services
The Company satisfied this performance obligation as the research and development services were performed. The Company determined that the period of performance of the research and development services was three years through projected initial phase 1 clinical study substantial completion, or through May 2018.  The research and development performance obligation was satisfied prior to the May 2020 amendments and, as a result, the accounting for this previously satisfied performance obligation was not affected by the modification. The Company recognized no revenue related to ide-cel research and development services for the three months ended March 31, 2021 and 2020.
Ide-cel license and manufacturing services
The Company accounts for its vector manufacturing services for development in the U.S. and BMS’s U.S. development efforts within the scope of ASC 808, Collaborative Arrangements ("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 Company recognizes revenue for its U.S. manufacturing services by analogy to Topic 606.  The portion of BMS’s U.S. development costs that the Company is responsible for are recognized as a reduction to its collaborative arrangement revenues, or, if in excess of such revenues in a given quarter, the excess is recorded as research and development expense.  
The Company recognizes revenue associated with the combined performance obligation using the proportional performance method, as the Company will satisfy this performance obligation as the manufacturing services are performed through development. In using this method, the Company estimated its development plan for ide-cel, including expected demand from BMS, and the costs associated with the manufacture of vectors and associated payload for incorporation into ide-cel. On a quarterly basis, the Company determines the proportion of effort incurred as a percentage of total effort it expects to expend.  This ratio is applied to the transaction price, which includes variable consideration, allocated to the combined performance obligation consisting of the ide-cel license and manufacturing services. Management has applied significant judgment in the process of developing its budget estimates and any changes to these estimates will be recognized in the period in which they change as a cumulative catch-up.
The following table summarizes the net collaborative arrangement revenue recognized or expense incurred for the joint ide-cel development efforts in the U.S. under ASC 808 related to the combined performance obligation for the license and vector manufacturing of ide-cel in the U.S. for the three months ended March 31, 2021, and 2020 (in thousands):
For the three months ended March 31,
20212020
ASC 808 ide-cel research and development expense - U.S. (1)
$(16,825)$(5,080)
(1)    As noted above, the calculation of collaborative arrangement revenue or research and development expense to be recognized for joint ide-cel development efforts in the U.S. is performed on a quarterly basis.  The calculation is independent of previous activity, which 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.
Revenue related to the combined unit of accounting for the ex-U.S. license and vector manufacturing services is accounted for in accordance with Topic 606. The following table summarizes the revenue recognized related to the combined unit of accounting for the ide-cel ex-U.S. license and vector manufacturing services for the three months ended March 31, 2021, and 2020 (in thousands):
For the three months ended March 31,
20212020
ASC 606 ide-cel license and manufacturing revenue -
ex-U.S.
$5,104 $13,970 
As of March 31, 2021, the Company has satisfied its performance obligation related to ide-cel license and manufacturing services and thus, the aggregate amount of the transaction price allocated to the combined performance obligation that is unsatisfied, or partially unsatisfied, is $0.0 million. As of March 31, 2021 and December 31, 2020, the Company had $0.0 million and $0.8 million, respectively, of deferred revenue associated with the combined performance obligation consisting of the ide-cel license and manufacturing services.
18

Table of Contents
bb21217 transaction price
The following tables summarize the total transaction price, the allocation of the total transaction price to the identified performance obligations under the arrangement (including those performance obligations that were completed as of the May 2020 contract modification date), and the amount of the transaction price unsatisfied as of March 31, 2021 (in thousands):
bb21217 transaction price as of March 31, 2021
Up-front non-refundable payment received prior to May 2020 contract modification (1)$15,000 
Allocated portion of the up-front non-refundable payment received in connection with the Amended Ide-cel CCPS and bb21217 License Agreement (2)
15,971 
Estimated variable consideration (3)1,803 
$32,774 

(1) Composed of the up-front non-refundable payment received under the bb21217 License Agreement. This consideration was allocated to the performance obligations under the bb21217 License Agreement based on a relative SSP basis.  The Company estimated the SSP of the bb21217 license after considering potential future cash flows under the license. The Company then discounted these probability-weighted cash flows to their present value. The Company estimated the SSP of each of the bb21217 research and development services and bb21217 manufacturing services to be provided based on the Company’s estimated cost of providing the services plus an applicable profit margin commensurate with observable market data for similar services.
(2) This represents the portion of the $200.0 million up-front payment received under the Amended Ide-cel CCPS and Amended bb21217 License Agreement which was allocated to bb21217.
(3) Estimated variable consideration represents the estimated reimbursement from BMS for the manufacture of vectors and associated payload through development.


Allocation of transaction
price to performance
obligations
Transaction price unsatisfied as of March 31, 2021
bb21217 research and development services
$5,444 $ 
bb21217 license and manufacturing services
27,330 27,330 
$32,774 $27,330 
All of the remaining development, regulatory, and commercial milestones under the Amended bb21217 License Agreement are related to U.S. development, regulatory and commercialization activities and are fully constrained and are therefore excluded from the transaction price. As part of its evaluation of the constraint, the Company considered numerous factors, including the fact that achievement of the milestones is outside the control of the Company and contingent upon the future success of its clinical trials, the licensee’s efforts, or the receipt of regulatory approval. Any consideration related to U.S. sales-based milestones (including royalties) will be recognized when the related sales occur as these amounts have been determined to relate predominantly to the license granted to BMS and therefore are recognized at the later of when the performance obligation is satisfied, or the related sales occur.
The Company re-evaluates the transaction price, including its estimated variable consideration included in the transaction price and all constrained amounts, each reporting period and as uncertain events are resolved or other changes in circumstances occur.
bb21217 research and development services
The Company satisfied this performance obligation as the research and development services were performed.  The Company determined that the period of performance of the research and development services was two years through projected substantial completion of the initial phase 1 clinical study, or through September 2019.  The research and development performance obligation was satisfied prior to the May 2020 amendments, and as a result, the accounting for this previously satisfied performance obligation was not affected by the modification.
19

Table of Contents
The agreement to expand the bb21217 phase 1 trial that occurred in 2019 was previously treated as a separate contract for accounting purposes, because the trial expansion was for the addition of a promised good or service that is distinct and the associated consideration reflected the standalone selling price of the additional promised good or service. This contract was not affected by the May 2020 amendments and, accordingly, the accounting for this agreement was not impacted by the May 2020 amendments. The transaction price associated with these additional patients consists of variable consideration and is based upon an agreed-upon amount per patient which will be recognized as revenue as the patients are treated. The Company began fulfilling the performance obligation in the fourth quarter of 2019 and it was satisfied in the fourth quarter of 2020. In connection with treating additional patients in the phase 1 trial, the Company recognized revenue of $0.0 million and $2.4 million for the three months ended March 31, 2021 and 2020, respectively.
bb21217 license and manufacturing services
The Company will satisfy its performance obligation related to the manufacture of vectors and associated payload for incorporation into bb21217 through development as the bb21217 manufacturing services are performed. As of March 31, 2021, the manufacturing services for bb21217 had not yet commenced.  Therefore, no amounts have been recognized for the combined performance obligation in the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2021 and 2020.
The aggregate amount of the transaction price allocated to the combined performance obligation, which consists of the bb21217 license and manufacturing services, is $27.3 million.  The Company does not expect that recognition will begin in the next twelve months and has therefore classified deferred revenue associated with the combined performance obligation as deferred revenue, net of current portion on its condensed consolidated balance sheets. The Company had $25.8 million of remaining deferred revenue as of March 31, 2021 and as of December 31, 2020, associated with the combined performance obligation consisting of the bb21217 license and manufacturing services.
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, 2021 (in thousands):

Balance at December 31,
2020
Additions
Deductions
Balance at
March 31, 2021
Receivables
$400 $ $(400)$ 
Contract liabilities:
Deferred revenue
$26,582 $ $(820)$25,762 
The decrease in the receivables balance for the three months ended March 31, 2021 is driven by amounts collected from BMS in the period.
The decrease in deferred revenue during the three months ended March 31, 2021 is driven by the release of the remaining $0.8 million of deferred revenue associated with the combined performance obligation consisting of the ide-cel license and manufacturing services.
Regeneron
Regeneron Collaboration Agreement
In August 2018, the Company 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. 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
20

Table of Contents
cell receptors directed against tumor-specific proteins and peptides and the Company will contribute its field-leading expertise in gene therapy.
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.
Regeneron Share Purchase Agreement
A Share Purchase Agreement (“SPA”) was entered into by the parties in August 2018.  In August 2018, the closing date of the transaction, the Company issued Regeneron 0.4 million shares of the Company’s common stock, subject to certain restrictions, for $238.10 per share, or $100.0 million in the aggregate.  The purchase price represents $63.0 million worth of common stock plus a $37.0 million premium, which represents a collaboration research advancement, or credit to be applied to Regeneron’s initial 50 percent funding obligation for collaboration research, after which the collaborators will continue to fund ongoing research equally. The collaboration research advancement only applies to pre-IND research activities and is not refundable or creditable against post-IND research activities for any programs where Regeneron exercises their opt-in rights.
Accounting analysis – Regeneron
At the commencement of the arrangement, two units of accounting were identified, which are the issuance of 0.4 million shares of the Company’s common stock and joint research activities during the five-year research collaboration term. The Company determined the total transaction price to be $100.0 million, which comprises $54.5 million attributed to the equity sold to Regeneron and $45.5 million attributed to the joint research activities. In determining the fair value of the common stock at closing, the Company considered the closing price of the common stock on the closing date of the transaction and included a lack of marketability discount because Regeneron received shares subject to certain restrictions.
The Company analyzed the joint research activities to assess whether they fall within the scope of ASC 808, and will reassess this throughout the life of the arrangement based on changes in the roles and responsibilities of the parties. Based on the terms of the arrangement as outlined above, for the collaboration research performed prior to submission of an IND application for a potential gene therapy product, both parties are deemed to be active participants in the collaboration. Both parties are performing research and development activities and will share equally in these costs through IND. Additionally, Regeneron and the Company are exposed to significant risks and rewards dependent on the commercial success of any product candidates that may result from the collaboration.  As such, the collaboration arrangement is deemed to be within the scope of ASC 808.
The $45.5 million attributed to the joint research activities includes the $37.0 million creditable against amounts owed to the Company by Regeneron. The collaboration research advancement will be reduced over time for amounts due to the Company by Regeneron as a result of the parties agreeing to share in the costs of collaboration research equally. The remainder of the amount attributed to the joint research activities will be recognized over the five-year research collaboration term.
21

Table of Contents
Consistent with its collaboration accounting policy, the Company will recognize collaborative arrangement revenue or research and development expense related to the joint research activities in future periods depending on the amounts incurred by each party in a given reporting period.  That is, if the Company’s research costs incurred exceed those research costs incurred by Regeneron in a given quarter, the Company will record collaborative arrangement revenue and reduce the original $37.0 million advance by the amount due from Regeneron until such advancement is fully utilized, after which the Company would record an amount due from Regeneron.  If Regeneron’s research costs incurred exceed those research costs incurred by the Company in a given quarter, the Company will record research and development expense and record a liability for the amount due to Regeneron. As of March 31, 2021 and December 31, 2020, the Company has $29.3 million and $30.8 million, respectively, of the amount attributed to the joint research activities remaining to be recognized, which is classified as collaboration research advancement, current portion and collaboration research advancement, net of current portion on the condensed consolidated balance sheets.
The Company recognized $1.5 million and $2.3 million of collaborative arrangement revenue from the Regeneron Collaboration Agreement during the three months ended March 31, 2021 and 2020, respectively.
11. Royalty and other revenue
The Company has out-licensed intellectual property to various third parties. Under the terms of these agreements, the Company may be entitled to royalties and milestone payments.
In April 2017, the Company entered into a worldwide license agreement with Novartis, which is further described in the Company’s Annual Report on Form 10-K filed with the SEC on February 23, 2021. Beginning in the fourth quarter of 2017, the Company began recognizing royalty revenue from sales of tisagenlecleucel under the agreement. This license agreement was terminated effective March 2021, at which point in time Novartis was no longer required to pay the Company royalty or other payments on net sales of tisagenlecleucel or any future products. Royalty revenue recognized from sales of tisagenlecleucel is included within royalty and other revenue on the condensed consolidated statement of operations and comprehensive loss.
In May 2020, the Company entered into a non-exclusive license agreement with Juno Therapeutics, Inc. (“Juno”), a wholly-owned subsidiary of BMS, related to lentiviral vector technology to develop and commercialize CD-19-directed CAR T cell therapies. Upon regulatory approval of lisocabtagene maraleucel during the first quarter of 2021, the Company received a $2.5 million milestone payment from Juno, which is included within royalty and other revenue.
The Company may also be obligated to pay third-party licensors as a result of revenue recognized under out-license agreements, which is included within cost of royalty and other revenue on the condensed consolidated statement of operations and comprehensive loss.
During the first quarter of 2021, the Company recognized an immaterial amount of product revenue related to the sale of ZYNTEGLO in the European Union and the related cost of goods sold, which is included within royalty and other revenue and cost of royalty and other revenue, respectively.
12. Stock-based compensation
In January 2021 and 2020, the number of shares of common stock available for issuance under the 2013 Stock Option and Incentive Plan (“2013 Plan”) was increased by approximately 2.7 million and 2.2 million shares, respectively, as a result of the automatic increase provision of the 2013 Plan. As of March 31, 2021, the total number of shares of common stock available for issuance under the 2013 Plan was approximately 3.5 million.
Stock-based compensation expense
The Company recognized stock-based compensation expense totaling $42.5 million and $36.3 million for the three months ended March 31, 2021 and 2020, respectively. Stock-based compensation expense by award type included within the condensed consolidated statements of operations and comprehensive loss was as follows (in thousands):
22

Table of Contents
For the three months ended March 31,

20212020
Stock options
$20,659 $24,440 
Restricted stock units
14,733 11,853 
Employee stock purchase plan and other7,082  
$42,474 $36,293 
Stock-based compensation expense by classification included within the condensed consolidated statements of operations and comprehensive loss was as follows (in thousands): 
For the three months ended March 31,
20212020
Research and development$19,868 $16,269 
Selling, general and administrative22,606 20,024 
$42,474 $36,293 
Stock-based compensation of $0.3 million and less than $0.1 million was capitalized into inventory for the three months ended March 31, 2021 and 2020, respectively. During the three months ended March 31, 2021, capitalized stock-based compensation of less than $0.1 million was recognized within cost of royalty and other revenue when the related product was sold. As of March 31, 2021, the Company had approximately $252.4 million of unrecognized stock-based compensation expense, which is expected to be recognized over a weighted-average period of approximately 2.2 years.
Unrestricted stock awards
During the first quarter of 2021, the Company granted 0.4 million unrestricted stock awards to employees as part of its 2020 annual incentive program. In addition, the Company implemented a retention program designed to incentivize and retain employees through the separation of its severe genetic disease and oncology programs, which is intended to occur by the end of 2021. Under the retention program, employees are entitled to a one-time bonus payment, consisting of both a cash payment and unrestricted stock awards, with the condition that the employee remains employed at the end of 2021. For the three months ended March 31, 2021, the Company recognized $13.3 million in expense related to this program, which includes $6.7 million in stock compensation expense related to the anticipated grants of stock.
Stock option activity
The following table summarizes the stock option activity under the Company’s equity award plans:
Shares
(in thousands)
Weighted-
average
exercise price
per share
Outstanding at December 31, 20206,262 $105.02 
Granted
671 $29.17 
Exercised
(207)$5.88 
Canceled, forfeited, or expired
(268)$110.62 
Outstanding at March 31, 20216,458 $100.08 
Exercisable at March 31, 20213,829 $111.17 
Vested and expected to vest at March 31, 20216,458 $100.08 
During the three months ended March 31, 2021, 0.2 million stock options were exercised, resulting in total proceeds to the Company of $1.2 million.
Restricted stock unit activity
The following table summarizes the restricted stock unit activity under the Company’s equity award plans:
23

Table of Contents
Shares
(in thousands)
Weighted-
average
grant date
fair value
Unvested balance at December 31, 20201,495 $