20-F

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

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

For the fiscal year ended December 31, 2022

OR

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

for the transition period from ______ to ______

OR

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

Date of event requiring this shell company report

Commission file number 001-39431

Freeline Therapeutics Holdings plc

(Exact name of Registrant as specified in its charter)

England and Wales

(Jurisdiction of incorporation)

Sycamore House

Gunnels Wood Road

Stevenage, Hertfordshire SG1 2BP

United Kingdom

(Address of principal executive offices)

Chip McCorkle

Assistant General Counsel, Corporate and Securities, and Company Secretary

Freeline Therapeutics Holdings plc

Sycamore House

Gunnels Wood Road

Stevenage, Hertfordshire SG1 2BP

United Kingdom

+44 (0)1438 906870

Email: general.counsel@freeline.life

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered, pursuant to Section 12(b) of the Act

Title of each class	Trading Symbol	Name of each exchange on which registered
American Depositary Shares, each representing one ordinary share, nominal value £0.00001 per share	FRLN	The Nasdaq Capital Market
Ordinary shares, nominal value £0.00001 per share*		The Nasdaq Capital Market*

* Not for trading, but only in connection with the registration of the American Depositary Shares.

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

Ordinary shares, nominal value £0.00001 per share: 65,113,575 as of December 31, 2022

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☒

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 and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

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

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

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, 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. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☒ International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ Other ☐

If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

INDEX

PART I
		Page
ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	6
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	6
ITEM 3.	KEY INFORMATION	6
	A. [Reserved]	6
	B. Capitalization and indebtedness	6
	C. Reasons for the offer and use of proceeds	6
	D. Risk factors	6
ITEM 4.	INFORMATION ON THE COMPANY	86
	A. History and development of the company	86
	B. Business overview	87
	C. Organizational structure	137
	D. Property, plants and equipment	137
ITEM 4A.	UNRESOLVED STAFF COMMENTS	137
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	138
	A. Operating results	138
	B. Liquidity and capital resources	148
	C. Research and development, patents and licenses, etc.	151
	D. Trend information	151
	E. Critical Accounting Estimates	151
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	153
	A. Directors and senior management	153
	B. Compensation	157
	C. Board practices	166
	D. Employees	167
	E. Share ownership	168
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	168
	A. Major shareholders	168
	B. Related party transactions	170
	C. Interests of experts and counsel	171
ITEM 8.	FINANCIAL INFORMATION	171
	A. Consolidated Statements and Other Financial Information	171
	B. Significant Changes	172
ITEM 9.	THE OFFER AND LISTING	172
	A. Offer and listing details	172
	B. Plan of distribution	172
	C. Markets	172
	D. Selling shareholders	172
	E. Dilution	172
	F. Expense of the issue	172

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ITEM 10.	ADDITIONAL INFORMATION	172
	A. Share capital	172
	B. Memorandum and articles of association	172
	C. Material contracts	173
	D. Exchange controls	173
	E. Taxation	173
	F. Dividends and paying agents	181
	G. Statement by experts	181
	H. Documents on display	181
	I. Subsidiary information	181
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	181
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	182
	A. Debt Securities	182
	B. Warrants and Rights	182
	C. Other Securities	182
	D. American Depositary Shares	182
PART II
ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	184
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	184
	A. Material modifications to instruments	184
	B. Material modifications to rights	184
	C. Withdrawal or substitution of assets	184
	D. Change in trustees or paying agents	184
	E. Use of proceeds	184
ITEM 15.	CONTROLS AND PROCEDURES	184
	A. Disclosure Controls and Procedures	184
	B. Management's Annual Report on Internal Control over Financial Reporting	184
	C. Attestation Report of the Registered Public Accounting Firm	185
	D. Changes in Internal Control over Financial Reporting	185
ITEM 16	[RESERVED]	185
	A. Audit Committee Financial Expert	185
	B. Code of Ethics	185
	C. Principal Accountant Fees and Services	185
	D. Exemptions from the Listing Standards for Audit Committees	186
	E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers	186
	F. Change in Registrant’s Certifying Accountant	186
	G. Corporate Governance	186
	H. Mine Safety Disclosure	187
	I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	187
PART III
ITEM 17.	FINANCIAL STATEMENTS	187
ITEM 18.	FINANCIAL STATEMENTS	187
ITEM 19.	EXHIBITS	188
Index to Consolidated Financial Statements		F-1

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GENERAL INFORMATION

All references in this Annual Report on Form 20-F, or Annual Report, to “Freeline,” the “company,” “we,” “us” and “our” refer to Freeline Therapeutics Holdings plc and its consolidated subsidiaries, except where the context otherwise requires.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that involve substantial risks and uncertainties. The forward-looking statements are contained principally in Part I, Item 4.B “Business Overview,” Part I, Item 3.D. “Risk Factors,” and Part I, Item 5. “Operating and Financial Review and Prospects,” but are also contained elsewhere in this Annual Report. Forward-looking statements are any statements other than statements of historic fact. In some cases, you can identify forward-looking statements by the words “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” and “ongoing,” or the negative of these terms, or other comparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. The forward-looking statements contained in this Annual Report are based upon information available to us as of the date of this Annual Report and, while we believe we have a reasonable basis for each forward-looking statement contained this Annual Report, we caution you that these statements are based on a combination of facts and factors currently known by us and our expectations of the future, about which we cannot be certain. Forward-looking statements include statements about:

•the development of our product candidates, including statements regarding the timing of initiation, enrollment, continuation, completion and the outcome of preclinical studies or clinical trials and related preparatory work, the period during which interim data from, or the final results of, the studies or trials will become available and our research and development programs;

•our ability to advance our product candidates into, and successfully complete, clinical trials;

•our ability to obtain and maintain regulatory approval of our product candidates in the indications for which we plan to develop them, and any related restrictions, limitations or warnings in the label of an approved drug or therapy;

•our estimates regarding future expenses, the period for which we expect that our current cash and cash equivalents will be sufficient to fund operations and our needs for additional funding and the accuracy thereof;

•our ability to license additional intellectual property relating to our product candidates from third parties and to comply with our existing license agreements;

•our plans to research, develop, manufacture and commercialize our product candidates;

•the timing of our regulatory filings for our product candidates, along with regulatory developments in the United States, European Union and other foreign countries;

•the size and growth potential of the markets for our product candidates, if approved, and the rate and degree of market acceptance of our product candidates, including pricing and reimbursement that may be agreed with payors;

•our ability to raise additional capital;

•our commercialization, marketing and manufacturing strategy and manufacturing capabilities;

•the impact of changes in economic, capital market and political conditions, including fluctuations in commodity prices, inflation, interest rates and foreign currency exchange rates, disruptions in global supply chains and labor markets, geopolitical risks and global hostilities, including Russia’s invasion of Ukraine;

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•the impact of COVID-19, including variant strains of COVID-19, on the initiation or completion of preclinical studies or clinical trials and the supply of our product candidates;

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

•our ability to attract and retain qualified employees and key personnel;

•our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;

•the scalability and commercial viability of our manufacturing methods and processes;

•the success of competing therapies that are or may become available;

•our ability to realize the anticipated benefits of any acquisitions, joint ventures or divestitures;

•the timing and outcome of our dispute with Brammer Bio MA, LLC; and

•whether we are classified as a passive foreign investment company, or PFIC, for current and future periods.

You should refer to Item 3.D. “Key Information—Risk Factors” for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this Annual Report will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Annual Report.

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PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

3.A. [Reserved]

3.B. Capitalization and indebtedness.

Not applicable.

3.C. Reasons for the offer and use of proceeds.

Not applicable.

3.D. Risk factors.

Our business faces significant risks. This section of the Annual Report highlights some of the risks that may affect our future operating results. You should carefully consider the risks described below, as well as in our consolidated financial statements and the related notes included elsewhere in this Annual Report and in our other SEC filings. The occurrence of any of the events or developments described below could harm our business, financial condition, results of operations and/or growth prospects. This Annual Report also contains forward-looking statements that involve risks and uncertainties. Our results could materially differ from those anticipated in these forward-looking statements, as a result of certain factors including the risks described below and elsewhere in this Annual Report and our other SEC filings. See “Cautionary Statement Regarding Forward-Looking Statements” above.

Risk Factor Summary

The following summarizes some, but not all, of the risks facing our business. Please carefully consider all of the information discussed in Item 3.D. “Key Information—Risk Factors” in this Annual Report for a more thorough description of these and other risks.

Risks Related to Our Financial Position and Need for Additional Capital

•We are a clinical stage gene therapy company and have incurred significant net losses since inception and have never generated revenue from product sales. We expect to incur net losses for the foreseeable future and may never achieve or maintain profitability.

•We will need substantial additional funding to complete the development, obtain regulatory approval and commence commercialization of our product candidates, which may not be available on acceptable terms, if at all.

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

Risks Related to the Discovery, Development and Regulatory Approval of Our Product Candidates

•Our gene therapy product candidates are based on a novel technology, which makes it difficult to predict the timing and costs of development and of subsequently obtaining regulatory approval. Very few adeno-associated virus-based, or AAV-based, in vivo gene therapy products have been approved by the U.S. Food and Drug Administration, or the FDA, the U.K. Medicines and Healthcare products Regulatory Agency, or the MHRA, or the European Commission to date.

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•Our FLT201 product candidate is in clinical development. Clinical trials are difficult to design and implement, and they involve a lengthy and expensive process with uncertain outcomes. We may encounter substantial delays in completing, or ultimately be unable to complete, the development of our current and future product candidates.

•Increased regulatory scrutiny of chemistry, manufacturing and controls, or CMC, for gene therapies could result in delays in our development or commercialization programs or otherwise adversely affect our business.

•The COVID-19 pandemic has resulted, and may continue to result, in disruptions to our clinical trials, manufacturing and other business operations, which could have a material adverse effect on our business, financial condition, operations and prospects.

•If we fail to demonstrate safety and efficacy of our product candidates to the satisfaction of applicable regulatory authorities, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates.

•Our product candidates and the process for administering our product candidates may cause serious adverse, undesirable or unacceptable side effects or have other properties that could delay or prevent their regulatory approval, limit their commercial potential or result in significant negative consequences following any potential marketing approval.

Risks Related to Our Reliance on Third Parties

•We rely, and expect to continue to rely, on third parties to conduct our preclinical studies and clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our product candidates and our business could be substantially harmed.

•We rely, and expect to continue to rely, on third parties to conduct our product manufacturing and testing for the foreseeable future, and these third parties may not perform satisfactorily.

•We are dependent on a limited number of suppliers and, in some instances, a sole supplier, for some of our components and materials used in our product candidates. If these suppliers do not or are unable to supply us with necessary components within the needed timeframe, then we may experience delays in the development of our product candidates.

•We are currently involved in an arbitration with Brammer Bio MA, LLC relating to our Dedicated Manufacturing and Commercial Supply Agreement.

Risks Related to Commercialization of Our Product Candidates

•We face significant competition in an environment of rapid technological change and the possibility that our competitors may achieve regulatory approval before us or develop therapies that are more advanced or effective than ours, which may adversely affect our financial condition and our ability to successfully market or commercialize our product candidates.

•The market opportunities for our product candidates may be smaller than we anticipate and the commercial success of our product candidates will depend upon their degree of market acceptance by the medical community.

•If we are unable to successfully obtain regulatory approval for companion diagnostic tests for our drug candidates, we may not realize the full commercial potential of these drug candidates.

Risks Related to Our Intellectual Property

•It is difficult and costly to protect our proprietary rights and technology, and we may not be able to ensure their protection.

•We heavily depend on intellectual property licensed from third parties, and our licensors may not always act in our best interest. If we fail to comply with our obligations under our intellectual property licenses, if the licenses are terminated, or if disputes regarding these licenses arise, we could lose significant rights that are important to our business.

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•We do not yet own or license any issued U.S. composition of matter patents covering the transgene component of our product candidate FLT201, and we cannot be certain that any of our pending patent applications will result in issued patent claims covering such aspects of FLT201.

•Certain of our in-licensed patents are, and may be, subject to a reservation of rights by one or more third parties that may limit our ability to exclude third parties from commercializing products similar to ours.

•If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

•Third-party claims of intellectual property infringement may prevent or delay our product discovery and development efforts.

Risks Related to Government Regulation

•Even if we complete the necessary clinical trials, we cannot predict when, or if, we will obtain regulatory approval to commercialize our product candidates and the approval may be for a narrower indication than we seek.

•Delays in obtaining regulatory approval of our manufacturing process or disruptions in our manufacturing process may delay or disrupt our product development and commercialization efforts.

General Risk Factors

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

•We have not maintained compliance with the minimum bid price requirement of $1.00 per share for continued listing on the Nasdaq. If we continue to fail to meet this requirement and Nasdaq determines to delist our ADSs, the delisting would adversely affect the market liquidity of our ADSs and the market price of our ADSs could decrease.

Risks Related to Our Financial Position and Need for Additional Capital

We are a clinical stage gene therapy company and have incurred significant net losses since inception. We expect to incur net losses for the foreseeable future and may never achieve or maintain profitability.

We are a clinical stage gene therapy company with a limited operating history. Since our inception in 2015, we have incurred significant net losses. Our net losses were $89.0 million, $140.4 million, and $96.3 million for the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022, we had an accumulated deficit of $445.4 million. We have financed our operations primarily through private placements of preferred shares, a substantial portion of which were issued to Syncona Limited, or Syncona, a leading healthcare investment company focused on founding, building and funding global leaders in life sciences, and more recently through our initial public offering, or IPO, of American Depositary Shares, each representing one of our ordinary shares, or ADSs, in August 2020 and our registered direct offering of ADSs in March 2022 described below.

To date, we have devoted substantially all our efforts to research and development of our current and deprioritized product candidates, as well as building out our management team and clinical manufacturing infrastructure. We do not currently have any approved products and have never generated any revenue from product sales. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future as we continue our research and development efforts and seek to obtain regulatory approval and commercialization of our product candidates, and we do not know if or when we will become profitable. These net losses will adversely impact our shareholders’ equity and net assets and may fluctuate significantly from quarter to quarter and year to year. We anticipate that our expenses will continue to be significant and in some cases may increase substantially if, and as, we:

•continue research and development of our FLT201 gene therapy product candidate, including our ongoing Phase 1/2 GALILEO-1 dose-finding clinical trial to evaluate the safety, tolerability and efficacy of FLT201 for the treatment of Gaucher disease Type 1, which we refer to as our Phase 1/2 GALILEO-1 clinical trial of FLT201;

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•continue our MARVEL-2 long-term clinical study to continue monitoring safety and efficacy in patients treated with our deprioritized product candidate FLT190 in our Phase 1/2 MARVEL-1 clinical trial and our long-term follow-up self-sponsored study to continue monitoring Factor IX, or FIX, activity and safety in patients treated with our deprioritized product candidate FLT180a in our Phase 1/2 clinical trials;

•initiate clinical trials and preclinical studies for any additional product candidates that we may pursue in the future and further develop our pipeline of gene therapy product candidates;

•invest in our gene therapy platform;

•prepare our biologics license application, or BLA, and marketing authorization application, or MAA, for each of our systemic gene therapy product candidates and otherwise seek regulatory approval for any product candidates that successfully complete clinical trials and any companion diagnostics for use with such product candidates;

•manufacture our product candidates in accordance with current good manufacturing practices, or cGMP, for clinical trials or potential commercial sales;

•establish and validate contracted commercial-scale cGMP manufacturing facilities and scale up the suspension manufacturing platform process;

•develop, maintain, expand, protect and enforce our intellectual property portfolio;

•secure, maintain or obtain freedom to operate for any of our owned or licensed technologies and product candidates;

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

•add clinical, scientific, operational, financial and management information systems and personnel, including personnel to support our product candidates and platform development and potential future commercialization efforts;

•expand our operations in the United States and the United Kingdom;

•expand our operations or partner with local entities outside of the United States and the United Kingdom;

•incur additional legal, accounting and other expenses associated with operating as a public company;

•incur additional setbacks or delays to the initiation or completion of preclinical studies, product development and/or clinical trials;

•incur any disruption or delays to the supply of our product candidates; and

•establish a sales, marketing and distribution infrastructure to commercialize any product candidate for which we may obtain marketing approval.

We may never succeed in any or all of these activities and, even if we do, we may never generate revenues that are significant or large enough to achieve profitability. Even if one or more of the product candidates that we develop is approved for commercial sale, we anticipate incurring significant costs associated with commercializing any approved product candidate. Our expenses could increase beyond our current expectations if we are required by the FDA, the European Medicines Agency, or the EMA, the MHRA, or other regulatory agencies in regions for which we have targeted commercialization, to perform clinical trials or studies beyond those that we currently anticipate.

If we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable could decrease the value of our ADSs and could impair our ability to raise capital, maintain our research and development efforts, expand our business or continue our operations. A decline in the value of our ADSs also could cause you to lose all or part of your investment.

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We will need substantial additional funding to complete the development, obtain regulatory approval and commence commercialization of our product candidates, which may not be available on acceptable terms, if at all. Failure to obtain additional funding when required may force us to delay, limit or terminate our product development efforts or other operations.

In our audited consolidated financial statements for the year ended December 31, 2022, included elsewhere in this Annual Report, we note that there is substantial doubt about our ability to continue as a going concern. In order to continue operating as a going concern, we will need to raise additional capital. We will need to obtain this additional funding through private and public equity offerings, debt financings, government or other third-party funding, strategic collaborations or licensing arrangements. Additional financing may not be available when we need it or may not be available on terms that are favorable to us. Adverse conditions in the industry or the domestic and global financial markets, including due to interest rate increases, could increase our costs for additional financing. If we are unable to raise the requisite funds on a timely basis, we will be required to reduce spending and potentially delay, limit, reduce or terminate our product research and development efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves, any of which could harm our business and potentially cause us to discontinue operations.

As of December 31, 2022, we had approximately $47.3 million in unrestricted cash and cash equivalents after translating our cash and cash equivalents denominated in pounds sterling into U.S. dollars at a rate of $1.210 to £1.00, and our cash and cash equivalents denominated in Euro into U.S. dollars at a rate of $1.072 to €1.00, in each case, the exchange rate quoted by Xignite, Inc. on December 31, 2022. In February 2023, we received gross proceeds of approximately $25.0 million, subject to purchase price adjustments, from the sale of our German subsidiary, Freeline Therapeutics GmbH, and certain intellectual property rights pertaining to the business of Freeline Therapeutics GmbH, to Ascend Gene and Cell Therapies Ltd., or Ascend.

We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the research and development of, initiate further clinical trials of and seek marketing approval for our product candidates. In addition, if we obtain marketing approval for our product candidates, we expect to incur significant expenses related to product sales, medical affairs, marketing, manufacturing and distribution. Furthermore, we expect to continue to incur additional costs associated with operating as a public company. Our future capital requirements will depend on many factors, including:

•the scope, progress, results and costs of drug discovery, laboratory testing, preclinical and clinical development for our current and future product candidates, as well as further development of our gene therapy platform;

•our ability to enroll clinical trials in a timely manner and to quickly resolve any delays or clinical holds that may be imposed on our development programs, including as a result of the COVID-19 pandemic;

•whether we elect to invest in and develop technology with the potential for further discovery and innovation, prioritize, delay or modify certain clinical programs, or implement any other strategic, scientific or operational changes;

•the costs, timing and outcome of our dispute with Brammer, which could have a material adverse effect on our results of operations and financial condition if we are not successful;

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

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

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

•the extent to which we acquire technologies;

•the costs, timing and outcome of potential future commercialization activities, including manufacturing, marketing, sales and distribution for any product candidates for which we receive marketing approval;

•the sales price and availability of adequate third-party coverage and reimbursement for our product candidates, if and when approved;

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•the costs of operating as a public company; and

•the cost of using contract manufacturers.

Even if we are able to obtain additional funding to continue operating as a going concern in the near term, developing product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our product revenues, if any, will be derived from or based on sales of product candidates that may not be commercially available for many years, if at all. Accordingly, we will need to continue to rely on substantial additional financing to achieve our long-term business objectives. Adequate additional financing may not be available to us on acceptable terms, if at all.

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

Since our inception, we have devoted substantially all of our resources to developing our product candidates, developing our manufacturing platform processes and other platform components, building our intellectual property portfolio and providing general and administrative support for these operations. We have not yet demonstrated our ability to successfully complete Phase 3 clinical trials or other pivotal clinical trials, obtain regulatory approvals, consistently manufacture a commercial-scale product or arrange for a third party to do so on our behalf or conduct sales and marketing activities necessary for successful product commercialization. In addition, given our limited operating history, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors in achieving our business objectives. Additionally, we expect our financial condition and operating results to continue to fluctuate significantly from quarter to quarter and year to year due to a variety of factors, many of which are beyond our control, such as delays and disruptions at clinical sites. Consequently, any predictions you make about our future success or viability may not be as accurate as they could be if we had a longer operating history or more experience developing product candidates.

We have never generated revenue from product sales and do not expect to do so for the next several years, if ever.

Our ability to generate revenue from product sales and achieve profitability depends on our ability, alone or with collaborative partners, to successfully complete the development of, and obtain the regulatory approvals necessary to commercialize, our product candidates. We do not anticipate generating revenues from product sales for the next several years, if ever. Our ability to generate future revenues from product sales depends heavily on our, or our collaborators’, ability to successfully:

•complete research and preclinical and clinical development of our product candidates;

•seek and obtain regulatory and marketing approvals for any of our product candidates for which we successfully complete clinical trials;

•launch and commercialize any of our product candidates for which we obtain regulatory and marketing approval by establishing a sales force, marketing, and distribution infrastructure or, alternatively, collaborating with a commercialization partner;

•obtain pricing and reimbursement by government and third-party payors for any of our product candidates for which we obtain regulatory and marketing approval;

•develop, maintain, and enhance a sustainable, scalable, reproducible and transferable manufacturing process for the product candidates we have or may develop at a competitive cost of goods;

•establish and maintain supply and manufacturing relationships with third parties that can provide products and services adequate in amount, quality and cost to support clinical development and the market demand for any of our product candidates for which we obtain regulatory and marketing approval;

•obtain market acceptance of any product candidates we may develop as viable treatment options;

•address competing technological and market developments;

•implement internal systems and infrastructure, as needed;

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

•maintain, protect, expand, and enforce our portfolio of intellectual property rights, including patents, trade secrets, and know-how;

•avoid and defend against third-party interference, infringement, misappropriation or other violation claims; and

•attract, hire, and retain qualified personnel.

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

Substantially all of our cash and cash equivalents is held at banks in amounts that exceed the insurance coverage offered by the Financial Services Compensation Scheme, or the FSCS, and in the future substantial amounts of our cash and cash equivalents may be held at banks in amounts that exceed the insurance coverage offered by the FSCS or the Federal Deposit Insurance Corporation, or the FDIC, the loss of which would have a severe negative affect on our operations and liquidity.

As of March 31, 2023, substantially all of our cash and cash equivalents is held in accounts at banks in the United Kingdom with insurance coverage offered by the FSCS. The FSCS is the United Kingdom's statutory deposit insurance and investors compensation scheme for customers of authorized financial services firms. The amounts held in each of the accounts exceed the FSCS insurance limit of £85,000. As is currently the case, in the future, we may maintain our cash and cash equivalents at financial institutions in amounts that exceed the FSCS insurance limit. In the future, we also may maintain our cash and cash equivalents at banks with insurance coverage offered by the FDIC in amounts that exceed the FDIC insurance limit of $250,000. In the event of a failure of any of these financial institutions where we currently maintain, or may maintain in the future, our cash and cash equivalents, we may incur a loss to the extent such loss exceeds the FSCS or the FDIC insurance limitations, as applicable, which could have a material adverse effect upon our liquidity, financial condition and our results of operations. In addition, the current situation related to financial institutions could in the future lead to further rules and regulations for public companies, banks, financial institutions and other participants in the United States, United Kingdom and global capital markets, and complying with the requirements of any such rules or regulations may be burdensome. Even if not adopted, evaluating and responding to any such proposed rules or regulations could result in increased costs and require significant attention from management.

Risks Related to the Discovery, Development and Regulatory Approval of Our Product Candidates

Our gene therapy product candidates are based on a novel technology, which makes it difficult to predict the timing and costs of development and of subsequently obtaining regulatory approval. Very few adeno-associated virus-based, or AAV-based, in vivo gene therapy products have been approved by the FDA, the MHRA or the European Commission to date.

We have concentrated our research and development efforts on FLT201 for the treatment of Gaucher disease Type 1 and our deprioritized product candidates, FLT190 for the treatment of Fabry disease and FLT180a for the treatment of hemophilia B. Because our product candidates use a gene therapy technology for which there is little clinical trial experience, there is an increased risk that the FDA, MHRA, the European Medicines Agency, or the EMA (on behalf of the European Commission) or other regulatory authorities may not consider the endpoints of our clinical trials to be sufficient for marketing approval. The product specifications and the clinical trial requirements of the FDA, MHRA, EMA and other regulatory authorities and the criteria these regulators use to determine the safety and efficacy of a product candidate vary substantially according to the type, complexity, novelty and intended use and market of such product candidate. The regulatory approval process for novel product candidates such as ours is unclear and may be lengthier and more expensive than the process for other, better-known or more extensively studied product candidates. For example, the FDA generally requires multiple well-controlled clinical trials to provide the evidence

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of effectiveness necessary to support a BLA, although FDA guidance provides that reliance on a single pivotal trial may be appropriate if the trial has demonstrated a clinically meaningful and statistically very persuasive effect on mortality, severe or irreversible morbidity or prevention of a disease with a potential serious outcome, and where confirmation of the result in a second trial would be practically or ethically impossible.

Regulatory requirements governing gene and cell therapy products have changed frequently and may continue to change in the future. The FDA has established the Office of Cellular, Tissue and Gene Therapies, now known as the Office of Tissues and Advanced Therapies, within its Center for Biologics Evaluation and Research, or CBER, to consolidate the review of gene therapy and related products, and has established the Cellular, Tissue and Gene Therapies Advisory Committee, or CTGTAC, to advise the CBER in its review. For example, in September 2021, the CTGTAC held a two-day meeting to discuss the toxicity risks of AAV vector-based gene therapy products and make recommendations on, among other things, vector integration and oncogenicity risks, non-clinical and clinical findings of neurotoxicity, and hepatotoxicity and thrombotic microangiopathy issues. In addition, the FDA, EMA and the National Institutes of Health, or NIH, have each expressed interest in further regulating biotechnology, including gene therapy and genetic testing, and the FDA is required to hold a public workshop within three years to discuss best practices on generating scientific data to facilitate the development of certain human cell-, tissue-, and cellular-based medical products under Section 3205 of the Consolidated Appropriations Act, 2023. Agencies at both the federal and state level in the United States, as well as U.S. congressional committees and other governments and governing agencies, have also expressed interest in further regulating the biotechnology industry. Such action may delay or prevent commercialization of some or all of our product candidates.

These regulatory review committees and advisory groups, and the new guidelines they promulgate, may lengthen the regulatory review process, require us to perform additional preclinical studies or clinical trials, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of our current or future product candidates or lead to significant post-approval limitations or restrictions. As we advance our product candidates, we will be required to consult with these regulatory and advisory groups and comply with applicable guidelines and guidance. If we fail to do so, we may be required to delay or discontinue development of our product candidates. These additional processes may result in a review and approval process that is longer than we otherwise would have expected. Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval necessary to bring a potential product to market could decrease our ability to generate sufficient product revenue, and our business, financial condition, results of operations and prospects would be harmed. Even if our product candidates are approved, we expect that the FDA will require us to submit follow-up data regarding our clinical trial subjects for a number of years after approval. In January 2020, the FDA released a final guidance with recommendations for long-term follow-up studies of patients following human gene therapy administration due to the increased risk of undesirable and unpredictable outcomes with gene therapies that may present as delayed adverse events. If this follow-up data shows negative long-term safety or efficacy outcomes for these patients, the FDA may revoke its approval or change the label of our products in a manner that could have an adverse impact on our business.

In addition, adverse developments in clinical trials of gene therapy products conducted by others may cause the FDA or other oversight bodies to change the requirements for approval of our product candidates. Similarly, the MHRA, the EMA or the European Commission may issue new guidelines concerning the development and marketing authorization for gene therapy products and require that we comply with these new guidelines. Although numerous companies are currently advancing gene therapy products through clinical trials, to our knowledge, only a very few AAV-based in vivo gene therapy products have received marketing authorization from the FDA, the European Commission or the MHRA to date.

As a result of these factors, it is difficult to determine how long it will take or how much it will cost to obtain regulatory approvals for our product candidates in the United States, European Union or United Kingdom and how long it will take to commercialize our product candidates. Additionally, approvals by the MHRA or the European Commission may not be indicative of what the FDA may require for approval, and vice versa.

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Our FLT201 product candidate is in clinical development. Clinical trials are difficult to design and implement, and they involve a lengthy and expensive process with uncertain outcomes. We may encounter substantial delays in completing, or ultimately be unable to complete, the development of our current and future product candidates.

Before obtaining marketing approval from regulatory authorities for the sale of our product candidates, we must conduct extensive clinical trials to demonstrate the safety and efficacy of the product candidates. Clinical testing is expensive, time-consuming and uncertain as to outcome. To date, we have not completed any clinical trials required for the approval of any of our product candidates, other than the Phase 1/2 B-AMAZE clinical trial of FLT180a for hemophilia B (which we are no longer developing). We are advancing FLT201 for the treatment of Gaucher disease Type 1 in our ongoing Phase 1/2 GALILEO-1 clinical trial. We cannot guarantee that any clinical trials will be conducted as planned or completed on schedule, if at all. A failure of one or more clinical trials can occur at any stage of testing. In addition, our drug development programs contemplate the development of companion diagnostics, which are assays or tests to identify an appropriate patient population. Companion diagnostics are subject to regulation as medical devices and must themselves be cleared or approved for marketing by the FDA or certain other foreign regulatory agencies, as well as given a Conformite Europeenne, or CE, or UK Conformity Assessment, or UKCA, mark in the European Union or United Kingdom, as applicable, before we may commercialize our product candidates.

Events that may prevent successful or timely completion of clinical development include:

•delays or failures in reaching a consensus with the FDA, MHRA, EMA or other regulatory authorities on our clinical trial design, preclinical data requirements, or requirements for CMC manufacturing and product quality, our interpretation and the reliability of data from clinical trials, changes in the requirements for regulatory approval even after a regulatory authority has reviewed and commented on the design for our clinical trials;

•delays or failures in reaching agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites;

•delays in obtaining genetically modified organism, or GMO, approvals in applicable regions;

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

•delays in recruiting suitable patients to participate in our clinical trials;

•additional delays to clinical trials or to the supply of our or our collaborators’ candidates, including, for example, the delays we experienced in our Phase 1/2 MARVEL-1 clinical trial of FLT190 due to COVID-19;

•delays in successful development, validation and regulatory approval of companion diagnostics for use with our product candidates;

•imposition of a clinical hold by regulatory authorities as a result of a serious adverse event in our or other companies’ gene therapy programs or after an inspection of our clinical trial operations or clinical trial sites;

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

•failure to perform in accordance with good clinical practice, or GCP, or applicable regulatory guidelines in Europe and other international markets;

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

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

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

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

•occurrence of serious adverse events associated with a product candidate that are viewed to outweigh its potential benefits, and which could result in increased scrutiny of our gene therapy trials by the FDA, EMA, MHRA or other similar regulatory authorities, including the delay or cessation of our trials;

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•failure of our close monitoring program and immune management regimen to detect and control loss of expression;

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

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

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

We anticipate expanding our ongoing and future clinical trials to new trial sites as we continue to enroll patients in our ongoing trials and commence future trials. However, there can be no assurance that we will successfully open new clinical trial sites and obtain any required approvals for such trial sites on a timely basis, or at all. Any failure to successfully open new clinical trial sites on a timely basis could delay or prevent the successful completion of our clinical trials. Any inability to successfully complete preclinical and clinical development could result in additional costs to us or impair our ability to generate revenues from product sales, regulatory and commercialization milestones and royalties. In addition, if we make manufacturing or formulation changes to our product candidates, we may need to conduct additional studies to bridge our modified product candidates to earlier versions. Clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do, which could impair our ability to successfully commercialize our product candidates and may harm our business, financial condition, results of operations and prospects. See “—Our gene therapy approach utilizes vectors derived from viruses, which may be perceived as unsafe or may result in unforeseen adverse events. Negative public opinion and increased regulatory scrutiny of gene therapy may damage public perception of the safety of our product candidates and adversely affect our ability to conduct our business or obtain regulatory approvals for our product candidates.”

Increased regulatory scrutiny of chemistry, manufacturing and controls for gene therapies could result in delays in our development or commercialization programs or otherwise adversely affect our business.

Gene therapies are novel, complex and difficult to manufacture. Regulatory agencies, and in particular the FDA and EMA, have demonstrated increased caution in their regulation of gene therapy treatments and the regulatory framework continues to develop, particularly in the European Union. Additionally, safety, ethical and legal concerns about gene therapy and genetic testing may result in additional regulations or restrictions on the development and commercialization of our product candidates that are difficult to predict. The increased regulatory scrutiny of gene therapy products by the FDA, EMA, MHRA or other regulatory authorities for gene therapies may result in us being required to conduct additional preclinical studies or clinical trials with respect to any of our product candidates, which may result in delays and increased costs in the development or commercialization of our product candidates and ultimately could lead to the failure to obtain approval for any gene therapy product. The occurrence of any of these events could adversely affect our business, financial condition, results of operations and prospects.

For example, we received feedback from the FDA relating to the characterization and comparability of the investigational drug product used in our Phase 1/2 B-AMAZE clinical trial of FLT180a for the treatment of hemophilia B that was produced at a smaller scale by Children’s GMP at St. Jude, as compared to our subsequent investigational drug product that was produced at a commercial scale at Brammer. In response to that feedback, we modified the clinical development plan for our FLT180a program to conduct our Phase 1/2 B-LIEVE dose confirmation trial to confirm the dose and immune management regimen of our FLT180a investigational drug product instead of in the Phase 2b part of our previously planned Phase 2b/3 pivotal trial.

Additionally, we and our former subsidiary have developed a new suspension manufacturing platform process for programs with higher dosing requirements. Regulatory authorities will require both analytical and clinical comparability to be performed as part of the switch to suspension technology. We plan to seek guidance from regulatory authorities with respect to appropriate comparability requirements.

There can be no assurance that we will be able to demonstrate the requisite analytical and clinical comparability as part of the switch to suspension technology or that the FDA, MHRA, EMA or other regulatory authorities will not require us in the future to conduct additional or lengthier clinical trials with respect to our clinical programs. The relevant regulatory authorities may also request that we obtain different or conflicting data to address their feedback.

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Any of the foregoing could result in delay, suspension or termination of ongoing or future clinical trials, increased development costs, and delays in obtaining marketing approval. Any such delays in clinical trials or marketing approvals could also shorten any periods during which we may have the exclusive right to commercialize our product candidates, if approved. Additionally, several of our competitors are developing gene therapy or other treatments in these disease areas that are further advanced than ours, and any such delays could further increase our competitors’ lead in bringing their products to market before we do, which could impair our ability to successfully commercialize our product candidates and may harm our business and results of operations. Any failure or inability on our part to address feedback from our regulators in a timely and cost-effective manner also could have a material adverse effect on the development and commercialization of any or all of our product candidates. Moreover, any such failure or inability to address FDA, MHRA, EMA or other regulatory authority feedback could require changes to our manufacturing processes. If we were to implement any further changes to our current manufacturing processes or the formulation of any of our product candidates, the FDA, MHRA, EMA and other regulatory authorities could require us to complete additional studies to demonstrate comparability of the modified product candidates to earlier versions. As a result, any such changes to our manufacturing processes would likely delay clinical trials and marketing approvals, result in increased costs for some period of time, and could otherwise harm our business, financial condition, results of operations and prospects.

We are heavily dependent on the success of our gene therapy platform and in particular our AAVS3 capsid. If we are unable to successfully develop and commercialize one of our AAVS3-based product candidates or experience significant delays in doing so, our business may be harmed.

We are heavily dependent on the success of our gene therapy platform and in particular our AAVS3 capsid. Our modular, liver-directed AAV gene therapy platform is designed to address many of the limitations commonly seen in AAV gene therapies, including insufficient efficacy, protein expression levels below the normal range, and limited durability. We aim to address these limitations through our enhanced product design underpinned by AAVS3, our rationally designed capsid with heightened efficiency in transducing hepatocytes, as well as our proprietary promoters and our expression cassettes, which seek to optimize each element of the transgene. To date, we have invested substantially all of our efforts and financial resources to identify, acquire intellectual property for, and develop our platform technology and our programs, including conducting preclinical studies and early-stage clinical trials, and providing general and administrative support for these operations. Our commercial prospects will be heavily dependent on the AAVS3-based product candidates we have identified and developed using our platform. If we are unable to successfully develop and commercialize one of our AAVS3-based product candidates or experience significant delays in doing so, and in particular if such failure or delay is perceived to have been caused by our platform or AAVS3 capsid, our business and reputation may be harmed.

The COVID-19 pandemic has resulted, and may continue to result, in disruptions to our clinical trials, manufacturing and other business operations, which could have a material adverse effect on our business, financial condition, operations and prospects.

If a pandemic, epidemic or outbreak of an infectious disease occurs in the United States, United Kingdom, European Union or worldwide, our business may be adversely affected. The COVID-19 pandemic has presented a substantial public health and economic challenge around the world. Our business operations have been impacted to varying degrees. In addition, the responses to COVID-19 by healthcare providers and regulatory agencies have caused disruptions, including interruptions in our preclinical and clinical trial activities, as well as delays and other disruptions in our manufacturing and supply chain, which we also expect may continue in future quarters.

For example, we have experienced delays in enrollment in our clinical trials, including our Phase 1/2 MARVEL-1 clinical trial of FLT190 for the treatment of Fabry disease, due to the COVID-19 pandemic. Our ongoing Phase 1/2 GALILEO-1 clinical trial of FLT201 for the treatment of Gaucher disease Type 1 and our MARVEL-2 long-term clinical study of FLT190 also could be delayed due to government orders and site policies on account of the pandemic. Additionally, some patients in our current or future clinical trials may be unwilling or unable to travel to study sites, enroll in our trials or be unable to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services. Any or all of these events would delay our ability to conduct preclinical studies, commence or complete clinical trials or release clinical trial results, including the completion of post-marketing requirements and commitments, make the ongoing collection of data for patients enrolled in studies more difficult or intermittent and could delay our ability to obtain regulatory approval and commercialize our product candidates.

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Furthermore, COVID-19, including variant strains of COVID-19, could affect our employees or the employees of research sites and service providers on whom we rely as well as those of companies with which we do business, including our suppliers and contract manufacturing organizations, or CMOs, thereby disrupting our business operations. Some of our CMOs provide COVID-19-related supplies and some of our CROs and contract laboratories provide COVID-19 clinical trial support, testing and vaccine testing. As a result, we have experienced delayed lead times in both the production of some of the materials we require for our clinical testing and for access to testing from our CROs. See “—We rely, and expect to continue to rely, on third parties to conduct our preclinical studies and clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our product candidates and our business could be substantially harmed.” Continued or sustained delays due to COVID-19, including variant strains of COVID-19, and the responses to it could result in significant delays in our manufacturing, clinical and research operations. We have implemented remote working policies for those employees who can perform their work remotely. Quarantines and travel restrictions imposed by governments in the jurisdictions in which we and the companies with which we do business operate could materially impact the ability of employees who cannot perform their work remotely to access preclinical and clinical sites, laboratories, manufacturing sites and offices.

If we fail to demonstrate safety and efficacy of our product candidates to the satisfaction of applicable regulatory authorities, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates.

Before obtaining marketing approval from regulatory authorities for the sale of any product candidates that we may identify and develop, we must complete preclinical development and then conduct extensive clinical trials to demonstrate the safety and efficacy in humans of any such product candidates. Clinical testing is expensive, difficult to design and implement, can take many years to complete, and is uncertain as to outcome. A failure of one or more clinical trials can occur at any stage of testing. The outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial, such as the interim results for our Phase 1/2 MARVEL-1 clinical trial of FLT190 for the treatment of Fabry disease, do not necessarily predict final results. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses. Many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their product candidates.

If the results of our ongoing Phase 1/2 GALILEO-1 clinical trial of FLT201 or future clinical trials of our other product candidates do not demonstrate the efficacy of our product candidates, or if there are safety concerns or serious adverse events associated with our product candidates, we may:

•be delayed in obtaining marketing approval of our product candidates and clearance, CE/UKCA making or approval of any companion diagnostics from applicable regulatory authorities, if at all;

•obtain approval for indications or patient populations that are narrower than intended or desired;

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

•be subject to additional post-marketing testing requirements;

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

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

•have regulatory authorities suspend and/or revoke their approval of the product or impose restrictions on its distribution in the form of a modified risk evaluation and mitigation strategy, or REMS, or other post-marketing obligations;

•be subject to the addition of labeling statements, such as warnings or contraindications;

•be sued; or

•experience damage to our reputation.

Our development costs will increase if we experience delays in testing or marketing approvals. We do not know whether any of our preclinical studies or clinical trials will begin as planned, will need to be restructured or will

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be completed on schedule, or at all. Significant preclinical study or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates.

Success in preclinical studies or clinical trials may not be indicative of results in future clinical trials of the same or other product candidates.

Results from previous preclinical studies or clinical trials are not necessarily predictive of future clinical trial results, and interim results of a clinical trial are not necessarily indicative of final results. Our product candidates may fail to show the desired safety and efficacy in clinical development despite positive results in preclinical studies or having successfully advanced through initial clinical trials. We have not conducted any Phase 3 clinical trials of our product candidates.

Success in preclinical testing and early clinical trials does not ensure that later clinical trials will generate the same results or otherwise provide adequate data to demonstrate the efficacy and safety of a product candidate. Frequently, product candidates that have shown promising results in early clinical trials have subsequently suffered significant setbacks in later clinical trials. To date, our clinical trials have involved small patient populations and because of the small sample size, the interim results of these clinical trials may be subject to substantial variability and may not be indicative of either future interim or final results. In addition, the design of a clinical trial can determine whether its results will support approval of a product, and flaws in the design of a clinical trial may not become apparent until the clinical trial is well advanced. There is a high failure rate for drugs and biologic products proceeding through clinical trials. Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials even after achieving promising results in preclinical testing and earlier-stage clinical trials. Data obtained from preclinical and clinical activities are subject to varying interpretations, which may delay, limit or prevent regulatory approval. In addition, we may experience regulatory delays or rejections as a result of many factors, including due to changes in regulatory policy during the period of our product candidate development. Any such delays could negatively impact our business, financial condition, results of operations and prospects.

Additionally, some of our trials may be open-label studies, where both the patient and investigator know whether the patient is receiving the investigational product candidate or either an existing approved drug or placebo. Most typically, open-label clinical trials test only the investigational product candidate and sometimes do so at different dose levels. Open-label clinical trials are subject to various limitations that may exaggerate any therapeutic effect as patients in open-label clinical trials are aware when they are receiving treatment. In addition, open-label clinical trials may be subject to an “investigator bias” where those assessing and reviewing the physiological outcomes of the clinical trials are aware of which patients have received treatment and may interpret the information of the treated group more favorably given this knowledge. Therefore, it is possible that positive results observed in open-label trials, such as those we have conducted, may not accurately reflect the efficacy or safety profile of our product candidates.

Furthermore, while we believe that success in the preclinical and clinical development of our product candidates will help advance the development timelines for future product candidates, there can be no assurance that we will be able to do so. Promising results for the use of our proprietary capsid immune management regimen and close monitoring program to develop a product candidate for the treatment of Gaucher disease Type 1 do not guarantee that our gene therapy platform will be effective in generating gene therapy candidates for the treatment of other diseases. Even if we are successful in developing our product candidates, we may not be able to replicate those results for the treatment of other diseases with our gene therapy product candidates.

We may find it difficult to enroll patients in our clinical trials, which could delay or prevent us from proceeding with clinical trials of our product candidates.

Identifying and qualifying patients to participate in clinical trials of our product candidates is critical to our success. The timing of our clinical trials depends on our ability to recruit patients to participate, as well as completion of required follow-up periods. If patients are unwilling to enroll in our gene therapy clinical trials because of the impact of the COVID-19 pandemic and restrictions on travel or healthcare institution policies, negative publicity from adverse events related to the biotechnology or gene therapy fields, competitive clinical trials for similar patient populations, clinical trials in products employing AAV vectors, or for other reasons, the timeline for recruiting

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patients, conducting studies and obtaining regulatory approval of our product candidates may be delayed. These delays could result in increased costs, delays in advancing our product candidates, delays in testing the effectiveness of our product candidates or termination of clinical trials altogether.

Our FLT201 product candidate is being developed to treat a rare condition, which is generally defined as having a patient population of fewer than 200,000 individuals in the United States and less than one in 2,000 individuals in the European Union and United Kingdom. For example, the genetic prevalence of Gaucher disease Type 1 is estimated to be approximately 1.225 in 100,000 live births globally and one in 860 live births in Israel, implying a total population of approximately 18,000 Gaucher disease Type 1 patients in the United States, the five major European markets (United Kingdom, Germany, France, Italy and Spain) and Israel. Further, under current technology, AAV-based gene therapies can only be administered once to any given patient. As a result, if a patient has been treated with an AAV-based gene therapy by a competitor, that patient will no longer be eligible to participate in our clinical trials, which could cause delays in our patient enrollment by further limiting the size of our eligible patient population. In addition, patients may be unwilling to enroll until a product candidate has been more broadly tested given the therapy can only be administered once. Finally, patients may not have a low enough level of pre-existing neutralizing antibodies to our AAVS3 capsid to likely benefit from treatment and enroll in our clinical trials. We may not be able to initiate or continue clinical trials if we cannot enroll a sufficient number of eligible patients to participate in the clinical trials required by the FDA, MHRA, EMA or other regulatory authorities. As a result, we may not be able to identify, recruit and enroll a sufficient number of patients, or those with required or desired characteristics, to complete our clinical trials in a timely manner.

Patient enrollment can be affected by many factors, including:

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

•eligibility and exclusion criteria for our clinical trials;

•perceived risks and benefits of our product candidates or gene therapy treatment in general, including that patients can currently only be dosed with an AAV once in their lifetime;

•severity of the disease under investigation;

•the impacts of the COVID-19 pandemic, including the impact of the administration of COVID-19 vaccines on our ability to dose patients in our clinical trials;

•availability of other treatments;

•alternative clinical trials;

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

•ability to obtain and maintain patient consent;

•patient dropouts prior to completion of clinical trials;

•patient referral practices of physicians; and

•ability to monitor patients adequately during and after treatment.

Our ability to successfully initiate, enroll and complete clinical trials in any foreign country is subject to numerous risks unique to conducting business in foreign countries, including:

•difficulty in establishing or managing relationships with CROs and institutions;

•different regulatory and ethical standards for the conduct of clinical trials;

•absence in some countries of established groups with sufficient regulatory expertise for review of gene therapy protocols;

•inability to locate qualified local consultants, physicians and partners; and

•the potential burden of complying with a variety of foreign laws, medical standards and regulatory requirements, including the regulation of pharmaceutical and biotechnology products and treatment.

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If we have difficulty enrolling a sufficient number of patients or finding additional clinical trial sites to conduct our clinical trials as planned, we may need to delay, limit or terminate ongoing or planned clinical trials, any of which could have an adverse effect on our business, financial condition, results of operations and prospects. In addition, it is possible that the COVID-19 pandemic may have an impact on the workforce of the third parties and CROs on which we rely, which could adversely impact our ability to conduct preclinical studies and clinical trials of our product candidates on expected timeframes or to complete such studies and trials.

Clinical trials of our product candidates have been conducted at sites outside the United States, and the FDA may not accept data from trials conducted in such locations.

To date, almost all of the clinical trials conducted on our product candidates have been conducted in the United Kingdom and Europe. Data from outside of the United States may be used to support an application for an investigational new drug, or IND, or for market approval provided the conditions for doing so are met; specifically, studies outside the United States must have been conducted under GCP, in accordance with applicable U.S. federal regulations. Additionally, for marketing approval based solely on data from outside the United States, the clinical trial must comply with federal regulations that stipulate the data are applicable to the U.S. population and U.S. medical practice, are performed by qualified investigators and result in data that is able to be validated by the FDA. Failure to meet these criteria would result in denial of approval in the United States based on submission of data solely from outside the United States, which would be costly and time-consuming and would delay or potentially halt the development and commercial pathway within the United States.

In addition, in order to commence a clinical trial in the United States, we are required to seek FDA acceptance of an IND for each of our product candidates. While we have an active IND for FLT201 for the treatment of Gaucher disease Type 1, we have focused our Phase 1/2 GALILEO-1 clinical trial activities initially in Europe, Israel and South America. We cannot provide assurance that any clinical trial approvals we submit or have submitted will be accepted or maintained by regulatory authorities. We may also be required to conduct additional preclinical testing prior to submitting additional clinical trial approvals for any of our product candidates, and the results of any such testing may not be positive. Consequently, we may be unable to successfully and efficiently execute and complete necessary clinical trials in a way that leads to a BLA submission and approval of our product candidates. We may require more time and incur greater costs than our competitors and may not succeed in obtaining regulatory approvals of product candidates that we develop. Failure to commence or complete, or delays in, our planned clinical trials could prevent us from or delay us in commercializing our product candidates.

Our product candidates and the process for administering our product candidates may cause serious adverse, undesirable or unacceptable side effects or have other properties that could delay or prevent their regulatory approval, limit their commercial potential or result in significant negative consequences following any potential marketing approval.

Undesirable side effects that may be caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA, MHRA, European Commission or other comparable foreign regulatory authorities. During the conduct of clinical trials, patients may report changes in their health, including illnesses, injuries and discomforts, to their study doctor. Often, it is not possible to determine whether or not these conditions are related to the product candidate being studied. Various illnesses, injuries and discomforts have been reported from time to time during clinical trials of our product candidates. Regulatory authorities may draw different conclusions or require additional testing to confirm causality.

In addition, as we test our product candidates in larger, longer and more extensive clinical programs, or as use of these product candidates becomes more widespread if they receive regulatory approval, it is possible that illnesses, injuries, discomforts and other adverse events that were observed in earlier trials, as well as conditions that did not occur or went undetected in previous trials, will be reported by patients. Many times, side effects are only detectable after investigational products are tested in large-scale, Phase 3 clinical trials or, in some cases, after they are made available to patients on a commercial basis after approval. If additional clinical experience indicates that our product candidates cause serious or life-threatening side effects, the development of our product candidates may fail or be delayed, or, if the product candidate has received regulatory approval, such approval may be restricted, suspended and/or revoked, which would harm our business, prospects, results of operations and financial condition.

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There have been several significant adverse side effects in gene therapy treatments in the past. While new recombinant vectors have been developed to reduce these side effects, gene therapy is still a relatively new approach to disease treatment and additional adverse side effects could develop. There also is the potential risk of delayed and longer-term adverse events following exposure to gene therapy products due to persistent biologic activity of the genetic material or other components of products used to carry the genetic material. Another potential risk of viral vector-based gene therapy is that foreign DNA or other genetic material could be inserted in chromosome locations, possibly causing harmful mutations that trigger rapid cell growth or even cancer. In December 2020, the FDA imposed a clinical hold on the Phase 3 pivotal trial of the hemophilia B gene therapy program of one of our competitors, uniQure N.V., or uniQure, following the submission of a safety report relating to a possibly related serious adverse event associated with a preliminary diagnosis of hepatocellular carcinoma, or HCC, a form of liver cancer, in one of the trial participants who had been dosed with uniQure’s AAV-based gene therapy product. In April 2021, uniQure announced that the FDA removed the clinical hold after determining that uniQure satisfactorily addressed all issues identified by the FDA. UniQure concluded that its product was very unlikely to have contributed to the HCC in this patient. The FDA approved the product in November 2022 (Hemgenix®, BLA 125772), and the label bears a warning that “the integration of liver-targeting AAV vector DNA into the genome may carry the theoretical risk of hepatocellular carcinoma development,” which may impact other AAV gene therapy treatments, including ours.

Other possible adverse side effects that could occur from treatment with gene therapy products include an immunologic reaction early after administration that, while not necessarily adverse to the patient’s health, could substantially limit the effectiveness of the treatment. In many clinical trials involving AAV vectors for gene therapy, including ours, some patients experienced what is thought to be the development of a T-cell response, whereby after the vector is within the target cell, the cellular immune response system triggers the removal of transduced cells by activated T-cells. This immune response, which is indicated by an asymptomatic increase in alanine aminotransferase, or ALT, levels, could result following gene transfer. Additionally, other potential adverse events may occur in our clinical trials, including myocarditis as a result of dosing with FLT190 in Fabry disease patients, who may have underlying cardiac disease, including pre-existing myocarditis, and other potential adverse events. Any such adverse events could also occur in any clinical trials we may conduct in the future for any of our other product candidates.

If we are unable to modulate or avoid one or more of the adverse effects described above or any other adverse effects, we may decide or be required to halt or delay further clinical development of our product candidates. In addition to any potential side effects caused by our product candidates themselves, the process of administering them or related procedures could also result in adverse side effects. If any such adverse events occur, our clinical trials could be suspended or terminated.

As of August 26, 2022, we observed two SAEs considered related to FLT190 in the first patient treated in our Phase 1/2 MARVEL-1 clinical trial, namely an increase in ALT levels and a grade 2 myocarditis marked by mild chest pain, a change in electrocardiogram and a transient elevation in troponin-T levels. Each of these SAEs was observed eight weeks after the FLT190 infusion. As of August 26, 2022, there were no observed adverse events higher than Grade 1 (mild) in the second patient treated in our FLT190 clinical trial other than a common cold reported as moderate in severity. However, on routine weekly monitoring (per protocol), an incidental finding of changes in cardiac markers, troponin-T and electrocardiogram was observed, although the patient was asymptomatic. After evaluation, these findings were determined to be consistent with mild and transient myocarditis.

While we have attempted to address the serious adverse events in our FLT190 clinical trial through adjusting dose levels, evolving our prophylactic immune management regime using oral prednisolone and tacrolimus to control immune response, and enhancing our close monitoring program, as well as implementing additional safety measures, or in some cases those serious adverse events resolved without additional treatment, there is no assurance that we will be able to demonstrate to the FDA, MHRA, EMA or other regulatory authorities that we have adequately addressed those serious adverse events. Similarly, we may observe other adverse events or serious adverse events in our ongoing clinical trials, or in any other clinical trials that we may conduct in the future. If we are unable to demonstrate that such adverse events and serious adverse events have been adequately addressed or that they were caused by the administration process or related procedures, the FDA, MHRA, EMA, the European Commission or other regulatory authorities could order us to cease further development of, or deny approval of, our product candidates.

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Even if we are able to demonstrate that any serious adverse events are not product-related or have otherwise been adequately addressed, such occurrences could affect patient recruitment or the ability of enrolled patients to complete the clinical trial. Moreover, if we elect or are required to delay, suspend or terminate any clinical trial of any of our product candidates, the commercial prospects of such product candidate may be harmed and our ability to generate product revenues from such product candidate may be delayed or eliminated. Any of these occurrences may harm our ability to develop other product candidates, and may harm our business, financial condition, results of operations and prospects.

Additionally, if we or others later identify undesirable side effects caused by any of our product candidates, several potentially significant negative consequences could result, including:

•regulatory authorities may suspend, vary and/or revoke approvals of such product candidate;

•regulatory authorities may require additional warnings on the label or a REMS or other post-market obligation;

•we may be required to change the way a product candidate is administered or conduct additional clinical trials;

•we could be sued and held liable for harm caused to patients; and

•our reputation may suffer.

Any of these events could prevent us from achieving or maintaining market acceptance of our product candidates.

Gene therapies are novel, complex and difficult to manufacture. We have a limited manufacturing history and could experience production problems that result in delays in our development or commercialization programs or otherwise adversely affect our business.

Our product candidates require processing steps that are more complex than those required for most chemical pharmaceuticals. Moreover, unlike chemical pharmaceuticals, the physical and chemical properties of a biologic such as our modified virus generally cannot be fully characterized. As a result, assays of the finished product may not be sufficient to ensure that the product will perform in the intended manner. Accordingly, we employ multiple steps to control our manufacturing processes to assure that our product candidates are made strictly and consistently in compliance with applicable regulatory protocols. Problems with the manufacturing processes, including even minor deviations from the normal processes, could result in product defects or manufacturing failures that result in lot failures, product recalls, product liability claims or insufficient inventory. See “—Increased regulatory scrutiny of chemistry, manufacturing and controls for gene therapies could result in delays in our development or commercialization programs or otherwise adversely affect our business.”

In addition, the FDA, MHRA, EMA and other regulatory authorities may require us to submit samples of any lot of any approved product together with the protocols showing the results of applicable tests at any time. Under some circumstances, the FDA, MHRA, EMA or other regulatory authorities may require that we not distribute a lot until the agency authorizes its release. Slight deviations in the manufacturing processes, including those affecting quality attributes and stability, may result in unacceptable changes in the product that could result in lot failures or product recalls. Lot failures or product recalls could cause us to delay product launches or clinical trials, which could be costly to us and otherwise harm our business, financial condition, results of operations and prospects.

We have a limited history of manufacturing our product candidates. The manufacturing process we use to produce FLT201 is complex and there are no assurances that we will be able to produce sufficient quantities of FLT201 or any other product candidates we may seek to develop, or that we will be able to produce FLT201 or any other product candidates we may seek to develop, at either the anticipated or a competitive cost or otherwise on acceptable terms, due to several factors, including equipment malfunctions, facility contamination, raw material shortages or contamination, natural disasters, disruption in utility services, human error, higher costs resulting from inflation, COVID-19, disruptions in the operations of our suppliers, or changes to the manufacturing processes or requirements due to feedback from regulators or otherwise. Our history of manufacturing our product candidates using the new suspension manufacturing platform process is particularly limited. We have demonstrated the scalability of the new

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suspension manufacturing platform process up to 200L with one of our product candidates and intend to further scale up to 500L and greater, if needed, but there are no assurances that we will be able to do so without sacrificing vector quality or potency. Even if we are successful, we have not yet selected a CMO partner, and there are no assurances that we will be able to transfer the technology to the chosen CMO at sufficient scale or at a competitive cost. We plan to continue to use one or more qualified CMOs for the supply of product for our clinical trials, one or more qualified CROs for product release assays and our former subsidiary Freeline Therapeutics GmbH (now Ascend GmbH) for analytical and process development capabilities. As a result, the supply of product for our clinical trials is reliant upon the performance of these outsourced organizations and on the service and raw material suppliers that they rely on. Many of the raw materials that are used in our manufacturing processes are also used in COVID-19 vaccine production or COVID-19 testing. COVID-19 vaccine manufacturing and testing have been prioritized in response to the global COVID-19 pandemic and, as a result, have resulted in supply shortages and delays that have negatively impacted our manufacturing plans. See “—The COVID-19 pandemic has resulted, and may continue to result, in disruptions to our clinical trials, manufacturing and other business operations, which could have a material adverse effect on our business, financial condition, operations and prospects.” We expect these supply shortages and delays to continue for at least as long as the production, testing and distribution of COVID-19 vaccines and tests continue to be prioritized by national governments and the biopharmaceutical manufacturing and supply chain. See “—Risks Related to Our Reliance on Third Parties—We rely, and expect to continue to rely, on third parties to conduct our product manufacturing and testing for the foreseeable future, and these third parties may not perform satisfactorily.” Any failure to produce clinical or commercial materials at sufficient scale or otherwise meet demand to support the initiation of our clinical trials or a commercial launch of our product candidates, and any inability to produce such clinical or commercial materials at either the anticipated or a competitive cost or otherwise on acceptable terms, could delay or prevent the development of our product candidates and would have a negative impact on our business, financial condition and results of operations.

Any contamination in our manufacturing processes, shortages of raw materials or failure of any of our key suppliers to deliver necessary components could result in delays in our clinical development or marketing schedules.

Given the nature of biologics manufacturing, there is a risk of contamination. Any contamination could adversely affect our ability to produce product candidates on schedule, as well as result in the need to recall released product, and could, therefore, harm our results of operations and cause reputational damage. Some of the raw materials required in our manufacturing processes are derived from biologic sources. Such raw materials are difficult to procure and may be subject to contamination or recall. A material shortage, contamination, recall or restriction on the use of biologically derived substances in the manufacture of our product candidates, could adversely impact or disrupt the commercial manufacturing or the production of clinical material and, if any of our product candidates are approved, commercial manufacturing of these approved products. Any of these factors could adversely affect our development timelines and our business, financial condition, results of operations and prospects.

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

The success of our business depends upon our ability to identify, develop and commercialize a pipeline of gene therapy treatments for well-known monogenic recessive diseases, such as Gaucher disease, as well as more novel gene therapy targets. Research programs to identify new product candidates require substantial technical, financial and human resources. Although our product candidates are currently in clinical development, we may fail to identify other potential product candidates for clinical development for several reasons. For example, our research may be unsuccessful in identifying additional potential product candidates, or our potential product candidates may be shown to have harmful side effects, may be commercially impracticable to manufacture or may have other characteristics that may make the products unmarketable or unlikely to receive marketing approval.

Additionally, because we have limited resources, we may forego or delay pursuit of opportunities with certain programs or product candidates or for indications that later prove to have greater commercial potential. Our spending on current and future research and development programs may not yield any commercially viable products. If we do not accurately evaluate the commercial potential for a particular product candidate, we may relinquish valuable rights to that product candidate through strategic collaboration, licensing or other arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate. Alternatively, we may allocate internal resources to a product candidate in a therapeutic area in which it would have been more advantageous to enter into a partnering arrangement.

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

Failure to successfully validate, develop and obtain regulatory clearance or approval for companion diagnostics for our product candidates could harm our drug development strategy and operational results.

Any product candidates we develop may require use of a companion diagnostic to identify patients who are likely to benefit from our gene therapy product candidates. For example, we have developed a proprietary, cell-based transduction inhibition assay, or TIA, to assess patients for pre-existing neutralizing antibodies to our AAVS3 capsid, and for which we plan to continue to develop and seek regulatory approval in parallel with our programs. If safe and effective use of any of the product candidates we may develop depends on a companion diagnostic, we may not receive marketing approval, or marketing approval may be delayed, if we are unable to or are delayed in developing, identifying, or obtaining regulatory approval, CE/UKCA marking or clearance for the companion diagnostic product for use with our product candidate during clinical development. The clearance, CE/UKCA marking or approval of a companion diagnostic as part of the product label will also limit the use of the product candidate to patients who have met the screening criteria tested for by the companion diagnostic.

Companion diagnostics are subject to regulation by the FDA and comparable foreign regulatory authorities as medical devices and require separate clearance, CE/UKCA marking or approval prior to their use in some clinical trials and commercialization. We may encounter difficulties in developing and obtaining clearance, CE/UKCA marking or approval for these companion diagnostics. Any delay or failure by us or third-party collaborators to develop or obtain regulatory clearance, CE/UKCA marking or approval of a companion diagnostic, and the scope of any such approval could delay or prevent approval of our related product candidates. The regulatory environment for companion diagnostics in the European Union substantially changed in May 2022 when the IVD Regulation started to apply (although transitional provisions apply). Under the new IVD Regulation, a specific definition of companion diagnostics has now been included, and these devices will have to undergo conformity assessment by a notified body before being placed on the EU market. Before it can issue a certificate of conformity, the notified body will have to seek a scientific opinion from the EMA or the relevant national competent authority on the suitability of the companion diagnostic to the medicinal product concerned. The United Kingdom is currently consulting on similar requirements applicable in the United Kingdom post-Brexit. Finally, identifying a manufacturer of the companion diagnostic and entering into an agreement with the manufacturer could also delay the development of our product candidates. As a result of these factors, we may be unable to successfully develop and realize the commercial potential of any product candidates we may identify and develop which would negatively impact our business, financial condition, results of operations and prospects.

Risks Related to Our Reliance on Third Parties

We rely, and expect to continue to rely, on third parties to conduct our preclinical studies and clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our product candidates and our business could be substantially harmed.

We have relied upon and plan to continue to rely upon third parties, including independent clinical investigators and third-party CROs, to conduct some of our preclinical studies and our clinical trials in accordance with applicable regulatory requirements and to monitor and manage data for our ongoing preclinical and clinical programs. We rely on these parties for execution of our preclinical studies and clinical trials, and control only certain aspects of their activities. Nevertheless, we are responsible for ensuring that each of our preclinical studies and clinical trials is conducted in accordance with the applicable protocol and legal, regulatory and scientific standards, and our reliance on these third parties does not relieve us of our regulatory responsibilities. We, our third-party contractors involved in our pre-clinical studies and clinical trials and our CROs are required to comply with good laboratory practices, or GLP, or GCP requirements, which are regulations and guidelines enforced by the FDA, the MHRA, the Competent Authorities of the Member States of the European Economic Area, or EEA, and comparable foreign regulatory authorities for all of our product candidates in clinical development. Regulatory authorities enforce these GCP requirements through periodic inspections of trial sponsors, principal investigators and clinical trial sites, some

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of which may be coordinated or shared between regulatory authorities in different jurisdictions. If we fail to exercise adequate oversight over any of our CROs or if we or any of our CROs fail to comply with applicable GCP requirements, the clinical data generated in our clinical trials may be deemed unreliable and the FDA, MHRA, EMA/European Commission or other regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. We cannot assure you that upon a regulatory inspection of us or our CROs or other third parties performing services in connection with our clinical trials, such regulatory authority will determine that any of our clinical trials complies with GCP regulations. In addition, our clinical trials must be conducted with product produced under applicable cGMP regulations. Our failure to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process.

Further, these investigators and CROs are not our employees and we will not be able to control, other than by contract, the amount of resources, including time, which they devote to our product candidates and clinical trials. If independent investigators or CROs fail to devote sufficient resources to the development of our product candidates, or if their performance is substandard, it may delay or compromise the prospects for approval and commercialization of our product candidates. In addition, the use of third-party service providers requires us to disclose our proprietary information to these parties, which could increase the risk that this information will be misappropriated.

Our existing and future CROs have or may have the right to terminate their agreements with us in the event of an uncured material breach. In addition, some of our CROs have an ability to terminate their respective agreements with us if it can be reasonably demonstrated that the safety of the patients participating in our clinical trials warrants such termination, if we make a general assignment for the benefit of our creditors or if we are liquidated.

If any of our relationships with these third-party CROs terminate, we may not be able to enter into arrangements with alternative CROs in a timely manner or at all, or to do so on commercially reasonable terms. If CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they cannot perform their contractual duties or obligations due to the impacts of COVID-19 on their operations or at the sites they are overseeing, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates. Consequently, our results of operations and commercial prospects would be harmed, our costs could increase and our ability to generate revenues could be delayed.

Switching or engaging additional CROs involves additional cost and requires our management’s time and focus. In addition, there is a natural transition period when a new CRO commences work. As a result, delays could occur, which could materially impact our ability to meet our desired clinical development timelines. Though we carefully manage our relationships with our contracted laboratories and CROs, there can be no assurance that we will not encounter challenges or delays in the future or that these delays or challenges will not have a material adverse impact on our business, financial condition and results of operations.

In addition, investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive compensation in connection with such arm’s length services, and may have other financial interests in our company. We are required to collect and provide financial disclosure notifications or certifications for our clinical investigators to the FDA, MHRA and EMA and other regulatory bodies and ethics committees. If the FDA, MHRA, EMA or other regulatory bodies or ethics committees conclude that a financial relationship between a clinical investigator and us has created a conflict of interest or otherwise affected interpretation of the trial, the FDA, MHRA, EMA or other regulatory body may question the continuation of the clinical trials, the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized. This could result in a delay in approval, or rejection, of our marketing applications by the FDA, MHRA, or EMA and may ultimately lead to the denial of marketing approval of our current and future product candidates.

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Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor or other third party will discover our trade secrets or that our trade secrets will be misappropriated or disclosed.

We have engaged CMOs and CROs to manufacture our product candidates and to perform quality testing, and because we collaborate with various organizations and academic institutions for the advancement of our gene therapy platform, we must, at times, share our proprietary technology and confidential information, including trade secrets. Recently, in February 2023, we sold our German subsidiary, Freeline Therapeutics GmbH, to Ascend, a newly established specialist biopharma CMO, and entered into a transition services agreement with Ascend, pursuant to which our former subsidiary will provide certain services in the area of development and manufacturing to us. Some of our former subsidiary’s approximately 55 employees had access to our trade secrets before the closing of the sale and may continue to have access thereafter in connection with the transition services agreement. We seek to protect our proprietary technology, in part, by entering into confidentiality agreements and, if applicable, material transfer agreements, collaborative research agreements, master service agreements, consulting agreements and other similar agreements with our collaborators, advisors, employees, consultants and contractors (including CMOs and CROs) prior to beginning research or disclosing any proprietary information. These agreements typically limit the rights of the third parties to use or disclose our confidential information, including our trade secrets. Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors or other third parties, are inadvertently incorporated into the technology of others or are disclosed or used in violation of these agreements. Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor’s or other third party’s discovery of our proprietary technology and confidential information or other unauthorized use or disclosure of such technology or information would impair our competitive position and may have an adverse effect on our business, financial condition, results of operations and prospects. For more information on risks relating to our reliance on trade secrets, see “—Risks Related to Our Intellectual Property.”

We are currently involved in an arbitration with Brammer Bio MA, LLC relating to our Dedicated Manufacturing and Commercial Supply Agreement.

On October 3, 2022, our subsidiary Freeline Therapeutics Limited, or Limited, filed a demand for arbitration before the American Arbitration Association in New York against Brammer Bio MA, LLC, or Brammer, pursuant to the Dedicated Manufacturing and Commercial Supply Agreement, or the DMCSA, dated June 30, 2020, by and between Limited and Brammer. The demand seeks damages for Brammer’s alleged breaches of its obligations to Limited, as communicated in Limited’s July 15, 2022 termination notice to Brammer and also seeks a declaratory judgment that Brammer materially breached the DMCSA and related agreements and that, as a result of those material breaches, Limited had the right to terminate the DMCSA. On December 5, 2022, Brammer filed an answer to Limited’s demand for arbitration and a counterclaim against Limited. The counterclaim seeks significant damages for Freeline’s alleged repudiation and breach of its obligations to Brammer. It also seeks a declaratory judgment that Freeline’s alleged repudiation and purported termination constituted a material breach of the DMCSA and that Brammer is entitled to damages and any other relief set forth in the DMCSA or deemed just by the American Arbitration Association. On January 18, 2023, Limited filed an answer to Brammer’s counterclaim. The final hearing in this matter has been scheduled for November 6 to 9, 2023.

As a result of these matters, we will be required to devote substantial financial resources to conduct the arbitration. Arbitration and any potential litigation are expensive and time-consuming and may divert management’s attention and resources. Additionally, the outcome of arbitration or any potential litigation is inherently uncertain. Limited is confident in the merits of its claims against Brammer and intends to vigorously defend against Brammer’s counterclaims. However, any arbitration or litigation has inherent risk, and an adverse determination could have a material adverse effect on our business, financial condition, operations and prospects and may impact our ability to continue operating as a going concern. See "—We will need substantial additional funding to complete the development, obtain regulatory approval and commence commercialization of our product candidates, which may not be available on acceptable terms, if at all. Failure to obtain additional funding when required may force us to delay, limit or terminate our product development efforts or other operations."

We rely, and expect to continue to rely, on third parties to conduct our product manufacturing and testing for the foreseeable future, and these third parties may not perform satisfactorily.

We currently rely on CMOs for the manufacturing of clinical batches and CROs to test them, and intend to continue to rely on third parties to manufacture our preclinical study and clinical trial product supplies. Supply requirements for our ongoing clinical trials have been, and supply requirements for our future clinical trials will be,

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manufactured by cGMP compliant third-party manufacturers. We are currently evaluating potential CMO partners for clinical manufacturing of future Phase 3 investigational drug product. Full service CMOs provide services to a number of other companies, and as a result, may experience competing customer demands. For example, we were party to a development and manufacturing services agreement and a dedicated manufacturing and commercial supply agreement with Brammer (part of Thermo Fisher Scientific), pursuant to which we manufactured FLT180a and FLT201 for our clinical trials. In July 2022, we terminated the dedicated manufacturing and commercial supply agreement as a result of alleged material breaches by Brammer. See “—Legal Proceedings” below. We also are party to a transition services agreement with Ascend, a newly established specialist biopharma CMO, pursuant to which our former subsidiary will provide certain services in the area of development and manufacturing to us. We have service agreements with a number of CROs that provide analytical testing to support manufacturing and product release. These CROs provide services to multiple clients and as a result may experience competing customer demands, including those related to COVID-19 testing and COVID-19 vaccine testing.

If these third-party manufacturers and service providers do not successfully carry out their contractual obligations, meet expected deadlines or have sufficient capacity with respect to producing our product candidates as a result of competing demands on their manufacturing capacity or as a result of impacts of COVID-19, or manufacture our product candidates in accordance with regulatory requirements or if there are disagreements between us and these third-party manufacturers, we will not be able to supply the material needed in order to complete preclinical studies required to support future IND submissions or clinical trial applications and the future clinical trials required for regulatory approval of FLT201 or any other product candidates we may develop, or we may be delayed in completing these studies and trials. In such instances, we may need to enter into an appropriate replacement third-party relationship, which may not be readily available or available on acceptable terms, which would cause additional delay or increased expense prior to the approval of FLT201 or any of our other product candidates we may develop and would thereby have a negative impact on our business, financial condition, results of operations and prospects.

Under certain circumstances, our current CMOs and CROs are entitled to terminate their engagements with us. If we need to enter into alternative arrangements, it could delay our development activities. Our reliance on our CMOs and CROs for certain manufacturing and testing activities will reduce our control over these activities but will not relieve us of our responsibility to ensure compliance with all required regulations.

In addition to our current CMOs and CROs, we may rely on additional third parties to manufacture components of our product candidates in the future and to perform quality testing, and reliance on these third parties entails risks to which we would not be subject if we manufactured the product candidates ourselves, including:

•reduced control over certain aspects of manufacturing and testing activities;

•termination or nonrenewal of manufacturing and service agreements with third parties in a manner or at a time that is costly or damaging to us; and

•disruptions to the operations of our third-party manufacturers and service providers caused by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or service provider.

Any of these events could lead to clinical trial delays or failure to obtain regulatory approval or impact our ability to successfully commercialize any of our product candidates. Some of these events could be the basis for FDA, MHRA, EMA or other regulatory authority action, including injunction, recall, seizure or total or partial suspension of product manufacture.

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

The failure of any third-party manufacturing facility we rely on for commercial supply to comply with applicable regulations could significantly and adversely affect supplies of our products and product candidates.

The preparation of therapeutics for clinical trials or commercial sale is subject to extensive regulation. Components of a finished therapeutic product approved for commercial sale or used in clinical trials must be manufactured in accordance with cGMP requirements. These regulations govern manufacturing processes and procedures, including record keeping, and the implementation and operation of quality systems to control and assure the quality of investigational products and products approved for sale. Poor control of production processes can lead to the introduction of outside agents or other contaminants, or to inadvertent changes in the properties or stability of a product candidate that may not be detectable in final product testing. We must supply all necessary documentation

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in support of a BLA, MAA or other marketing authorization application on a timely basis and must adhere to the FDA’s, EMA’s or MHRA’s or other relevant authority's cGMP requirements, which are enforced through inspection programs. Any third-party facilities we utilize for commercial supply and the associated quality systems must pass an inspection for compliance with the applicable regulations as a condition of regulatory approval. In addition, the regulatory authorities may, at any time, audit or inspect the third-party manufacturing facility or the associated quality systems for compliance with the regulations applicable to the activities being conducted. If these facilities do not pass a plant inspection, the BLA or MAA will not be approved.

If our CMOs cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA, MHRA, EMA or other regulatory authorities, we will not be able to secure and/or maintain regulatory approval for their manufacturing facilities. If our CROs cannot successfully execute our tests in compliance with the strict regulatory requirements of the FDA, MHRA, EMA or other regulatory authorities, we will not be able to secure and/or maintain regulatory approval for their testing facilities. In addition, we have no direct control over the ability of our CMOs or CROs to maintain adequate quality control, quality assurance and qualified personnel. Furthermore, all of our CMOs and CROs are engaged with other companies to supply and/or manufacture materials or products for such companies, which expose our CMOs and CROs to regulatory risks for the production of such materials and products. As a result, failure to meet the regulatory requirements for the production of those materials and products may adversely affect the regulatory clearance of our CMOs’ and CROs’ facilities. Our failure, or the failure of third parties, to comply with applicable regulations could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or revocation of approvals, seizures or recalls of product candidates or products, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our products and product candidates.

We are dependent on a limited number of suppliers and, in some instances, a sole supplier, for some of our components and equipment necessary for the production of our product candidates. If these suppliers do not or are unable to supply us with necessary components and equipment within the needed timeframe, then we may experience delays in the development of our product candidates.

We currently depend on a limited number of suppliers and, in some instances, a sole supplier, for some of the components and equipment necessary for the production of our viral vectors and drug product. In particular, we are dependent on Aldevron LLC for plasmids, and on Pall Corporation for iCELLis® bioreactors and components used in the adherent cGMP production process. Additionally, the supply of fetal bovine serum, an important raw material for the current adherent production process, is limited in some cases due to the small number of source countries and the rigid screening protocols involved in supplying it. We may not be able to enter into longer-term supply agreements to assure supply of these components and equipment. Moreover, we cannot be sure that these suppliers will remain in business, or that they will not be purchased by one of our competitors or another company that is not interested in continuing to produce these materials for our intended purpose. Our use of a sole or a limited number of suppliers of raw materials, components and finished goods exposes us to several risks, including disruptions in supply, price increases, late deliveries and an inability to meet customer demand. There are, in general, relatively few alternative sources of supply for these components, and in some cases, no alternatives. These vendors may be unable or unwilling to meet our future demands for our clinical trials or commercial sale. Establishing additional or replacement suppliers for these components could take a substantial amount of time and it may be difficult to establish replacement suppliers who meet regulatory requirements. Any disruption in supply from any supplier or manufacturing location, including those in China, could lead to supply delays or interruptions that would damage our business, financial condition, results of operations and prospects. Many of these components and raw materials are used in the manufacture of COVID-19 vaccine and are therefore currently subject to significant demand with associated increase in lead times for supply. This creates an increased risk of supply shortage and potential delays in our ability to manufacture our viral vectors and product candidates

If we are required to switch to a replacement supplier, the manufacture and delivery of our viral vectors and product candidates could be interrupted for an extended period, adversely affecting our business. Establishing additional or replacement suppliers may not be accomplished quickly. If we are able to find a replacement supplier, the replacement supplier would need to be qualified and may require additional regulatory authority approval, which could result in further delay. For example, the FDA, MHRA or EMA or other relevant authority could require additional supplemental data, manufacturing data and comparability data up to and including clinical trial data if we rely upon a new supplier. There may also be restrictions on our ability to utilize data obtained from clinical trials using the initial suppliers. While we seek to maintain adequate inventory of the components and materials used in our

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product candidates, any interruption or delay in the supply of components or materials, or our inability to obtain components or materials from alternate sources at acceptable prices in a timely manner, could impair our ability to conduct our clinical trials and, if our product candidates are approved, to meet the demand of our customers and cause them to cancel orders.

In addition, as part of the FDA’s approval of our product candidates, the FDA must review and approve the individual components of our production process, which includes raw materials, the manufacturing processes and facilities of our suppliers. Some of our current suppliers have not undergone this process nor have they had any components included in any product approved by the FDA.

Our reliance on these suppliers subjects us to a number of risks that could harm our reputation, business, financial condition and prospects, including, among other things:

•the interruption of supply resulting from modifications to or discontinuation of a supplier’s operations;

•delays in product shipments resulting from uncorrected defects, reliability issues, or a supplier’s variation in a component;

•delays in performance due to COVID-19;

•a lack of long-term supply arrangements for key components with our suppliers;

•the inability to obtain adequate supply in a timely manner, or to obtain adequate supply on commercially reasonable terms;

•difficulty and cost associated with locating and qualifying alternative suppliers for our components in a timely manner;

•production delays related to the evaluation and testing of products from alternative suppliers, and corresponding regulatory qualifications;

•production delays due to delays of CROs performing testing required by the CMO to progress manufacturing or release finished products;

•a delay in delivery due to our suppliers prioritizing other customer orders over ours, for instance in relation to COVID-19 vaccine supply and/or testing;

•damage to our reputation caused by defective components produced by our suppliers;

•increased cost of our warranty program due to product repair or replacement based upon defects in components produced by our suppliers;

•fluctuation in delivery by our suppliers due to changes in demand from us or their other customers; and

•an inability to obtain or delay in obtaining supply due to global supply chain disruptions or general economic disruptions, including as a result of geopolitical events, global pandemics or natural disasters.

If any of these risks materialize, costs could significantly increase and our ability to conduct our clinical trials and, if our product candidates are approved, to meet demand for our products could be adversely impacted.

Risks Related to Commercialization of Our Product Candidates

We currently have no marketing or sales force. If we are unable to establish effective sales and marketing capabilities or enter into agreements with third parties to market and sell our product candidates that may be approved, we may not be successful in commercializing our product candidates if and when approved, and we may be unable to generate any product revenue.

If our ongoing and planned clinical trials are successful and one of our product candidates is approved for commercialization, we may seek to commercialize it in the United States, the United Kingdom and Europe directly with a relatively small, specialized sales force given the orphan indication. However, we currently do not have an established marketing or sales team for the marketing, sale and distribution of any of our product candidates. In order to commercialize one of our product candidates, if approved, we must build, on a territory-by-territory basis,

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marketing, sales, distribution, managerial and other non-technical capabilities or make arrangements with third parties to perform these services, and we may not be successful in doing so. Our overall success will also depend on our ability to attract and retain subject matter experts in market access who can successfully execute on our pricing and reimbursement strategies.

There are risks involved with both establishing our own sales and marketing capabilities and entering into arrangements with third parties to perform these services. For example, recruiting and training a sales force is expensive and time-consuming and could delay any product launch. If the commercial launch of a product candidate for which we recruit a sales force and establish marketing capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercialization expenses. This may be costly and our investment would be lost if we cannot retain or reallocate our sales and marketing personnel.

Factors that may inhibit our efforts to commercialize our product candidates on our own include:

•our inability to recruit, train and retain adequate numbers of effective sales and marketing personnel;

•the inability of sales personnel to obtain access to physicians and educate them on the potential benefits of our product candidates so that adequate numbers of physicians decide to prescribe any future product that we may develop; and

•unforeseen costs and expenses associated with creating an independent sales and marketing organization.

If we enter into arrangements with third parties to perform sales, marketing and distribution services, our product revenue or the profitability to us from these revenue streams is likely to be lower than if we were to market and sell any product candidates that we develop ourselves. In addition, we may not be successful in entering into arrangements with third parties to sell and market our product candidates or may be unable to do so on terms that are favorable to us. We likely will have little control over such third parties and any of them may fail to devote the necessary resources and attention to sell and market our product candidates effectively. In addition, we can be held responsible for any legal or regulatory non-compliance by such third parties in selling or marketing our product candidates. If we do not establish sales and marketing capabilities successfully, either on our own or in collaboration with third parties, we may not be successful in commercializing our product candidates.

Our efforts to educate the medical community and third-party payors on the benefits of our product candidates may require significant resources given the low incidence and prevalence of Gaucher disease and may never be successful. Such efforts may require more resources than are typically required due to the complexity and uniqueness of our product candidates and the indications we are targeting. Even if our product candidates are approved, if we are unable to successfully market our products, we will not be able to generate significant revenues from such products, if approved.

We face significant competition in an environment of rapid technological change and the possibility that our competitors may achieve regulatory approval before us or develop therapies that are more advanced or effective than ours, which may adversely affect our financial condition and our ability to successfully market or commercialize our product candidates.

The biotechnology and pharmaceutical industries, including the gene therapy field, are characterized by rapidly changing technologies, significant competition and a strong emphasis on intellectual property. We face substantial competition from many different sources, including large and specialty pharmaceutical and biotechnology companies, academic research institutions, government agencies and public and private research institutions.

New developments, including the development of other pharmaceutical technologies and methods of treating disease, occur in the pharmaceutical and life sciences industries at a rapid pace. Developments by competitors may render our product candidates obsolete or noncompetitive. We anticipate that we will face intense and increasing competition as new treatments enter the market and advanced technologies become available.

We are aware of a number of companies focused on developing gene therapies in various indications, including, but not limited to, AVROBIO, Inc., or AVROBIO, 4D Molecular Therapeutics, Inc., or 4D Molecular, Pfizer Inc., or Pfizer, Prevail Therapeutics Inc., or Prevail (a wholly owned subsidiary of Eli Lilly and Company, or

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Lilly), Sangamo Therapeutics, Inc., or Sangamo, and uniQure N.V., or uniQure, as well as several companies addressing other methods for modifying genes and regulating gene expression.

Many of our potential competitors, alone or with their strategic partners, have substantially greater financial, technical and other resources, such as larger research and development, clinical, marketing and manufacturing organizations. Some of our competitors, alone or with their strategic partners, have longer standing relationships with key stakeholders, such as prescribing clinicians and patient organizations, in the Gaucher disease community, which may put them at an advantage when marketing a gene therapy product. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated among a smaller number of competitors. Our commercial opportunity could be reduced or eliminated if competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any product candidate that we may develop. Competitors also may obtain FDA, MHRA, European Commission or other regulatory approval for their products more rapidly or earlier than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. Under current technology, AAV-based gene therapies can only be administered once to any given patient. As a result, if a patient has been treated with an AAV-based gene therapy by a competitor, that patient will no longer be eligible to be treated with an AAV-based gene therapy by us. Additionally, technologies developed by our competitors may render our product candidates uneconomical or obsolete, and we may not be successful in marketing our product candidates.

In addition, as a result of the expiration or successful challenge of our patent rights, we could face more litigation with respect to the validity and/or scope of patents relating to our competitors’ products. The availability of our competitors’ products could limit the demand, and the price we are able to charge, for any product candidate that we may develop and commercialize.

The market opportunities for our product candidates may be smaller than we anticipate.

We have focused our primary research and development efforts on treatments for rare diseases. Our understanding of both the number of people who have these diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment with our product candidates, is based on estimates. These estimates may prove to be incorrect and new studies may reduce the estimated incidence or prevalence of these diseases. The number of patients in the United States, the European Union and elsewhere may turn out to be lower than expected, may not be otherwise amenable to treatment with our product candidates or patients may become increasingly difficult to identify and access, all of which would adversely affect our business, financial condition, results of operations and prospects.

Further, there are several factors that could contribute to making the actual number of patients who receive our potential products, if and when approved, less than the potentially addressable market. These include the lack of widespread availability of, and limited reimbursement for, new therapies in many underdeveloped markets. Further, the severity of the progression of a disease up to the time of treatment will likely diminish the total potential therapeutic benefit conferred by a gene therapy due to irreversible organ or tissue damage. Additionally, some patients may be treated with one of our competitors’ AAV-based gene therapies first, which under current technology would make them ineligible to be treated with an AAV-based gene therapy by us. Lastly, certain patients’ immune systems might prohibit the successful delivery of certain gene therapy products to the target tissue, thereby limiting the treatment outcomes. Many individuals develop a humoral, or antibody-based, immune response due to infection with wild-type AAV during their lifetime. This infection, which is typically asymptomatic, often results in persistent titers of anti-AAV antibodies sufficient to neutralize any subsequent introduction of AAV serotypes. Such pre-existing neutralizing antibodies have been shown to adversely affect the gene transfer efficiency of AAV vectors. Based on preclinical studies, we believe approximately 50% of the population have antibodies to AAVS3 that prevent AAVS3-based gene therapies from working effectively.

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

Ethical, social and legal concerns about gene therapy could result in additional regulations restricting or prohibiting our product candidates, if and when approved. Even with the requisite approvals from the FDA, MHRA, European Commission and other regulatory authorities internationally, the commercial success of our product candidates will depend, in part, on the acceptance of physicians, patients and third-party payors of gene therapy products in general, and our product candidates in particular, as medically necessary, cost-effective and safe. Any product that we commercialize may not gain acceptance by physicians, patients, third-party payors and others in the medical community. If these products do not achieve an adequate level of acceptance, we may not generate significant product revenue and may not become profitable. The degree of market acceptance of gene therapy products and, in particular, our product candidates, if approved for commercial sale, will depend on several factors, including:

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

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

•the need for a prophylactic immune management regimen after vector infusion may be seen as a risk to the patients or a disadvantage compared to our competitors’ products that may require less immune management and this may discourage physicians from prescribing our products;

•the availability of some or all of the drug product used in the prophylactic immune management regimen in certain markets;

•the availability and cost of treatment relative to alternative treatments, including the costs associated with administration and monitoring;

•the availability of necessary infrastructure and skilled staff within national healthcare systems;

•a patient awareness of, and willingness to seek, diagnosis as appropriate and indicated;

•the willingness of physicians to prescribe, and the target patient population to try, new therapies;

•the prevalence and severity of any side effects;

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

•the timing of market introduction of competitive products;

•patient willingness to undergo invasive medical procedures;

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

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

•favorable third-party payor coverage and adequate reimbursement.

Even if a potential product displays a favorable efficacy and safety profile in preclinical studies and clinical trials, market acceptance of the product will not be fully known until some time after it is launched.

If we are unable to successfully validate, develop and obtain regulatory clearance or approval for companion diagnostic tests for our drug candidates that are required or experience significant delays in doing so, we may not realize the full commercial potential of these drug candidates.

In connection with the clinical development of our drug candidates for certain indications, we are developing companion diagnostic tests to identify patient subsets within a disease category who may derive selective and meaningful benefit from our drug candidates. For example, we have developed a proprietary, cell-based TIA to assess patients for pre-existing neutralizing antibodies to our AAVS3 capsid, which we plan to continue to develop and for which we plan to seek regulatory approval in parallel with our programs. Companion diagnostics, such as TIA, would be used during our clinical trials and ultimately are intended for use with our commercial products, if approved by the FDA or other regulatory authorities. To be successful, we will need to address a number of scientific, technical, regulatory and logistical challenges. The FDA and other regulatory agencies regulate in vitro companion diagnostics as medical devices and, under that regulatory framework, will require the test to be analytically validated and used for patient selection in the clinical trial, which we expect will require separate regulatory clearance, CE/UKCA marking or approval prior to commercialization if not already cleared or approved.

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It may be necessary to resolve issues such as selectivity/specificity, analytical validation, reproducibility, or clinical validation of companion diagnostics during the development and regulatory approval processes. Moreover, even if data from preclinical studies and early clinical trials appear to support development of a companion diagnostic for a product candidate, data generated in later clinical trials may fail to support the analytical and clinical validation of the companion diagnostic. We may encounter difficulties in developing, obtaining regulatory clearance, CE/UKCA marking or approval for, manufacturing and commercializing companion diagnostics similar to those we face with respect to our therapeutic candidates themselves, including issues with achieving regulatory clearance or approval, production of sufficient quantities at commercial scale and with appropriate quality standards, and in gaining market acceptance. If we are unable to successfully develop companion diagnostics for these therapeutic drug candidates, or experience delays in doing so, the development of these therapeutic drug candidates may be adversely affected, these therapeutic drug candidates may not obtain marketing approval, and we may not realize the full commercial potential of any of these therapeutics that obtain marketing approval. As a result, our business, results of operations and financial condition and prospects could be materially harmed.

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

In the United States and some other countries, patients who are prescribed treatments for their conditions and providers performing the prescribed services generally rely on third-party payors, such as Medicare, Medicaid, TRICARE, the Veterans Administration, managed care organizations, private health insurers, and other organizations, to reimburse all or part of the associated healthcare costs. We expect the cost of a single administration of gene therapy products, such as those we are developing, to be substantial, when and if they achieve regulatory approval. We expect that coverage and adequate reimbursement by government and private payors will be essential for most patients to be able to afford these treatments. Accordingly, sales of our product candidates will depend substantially, both domestically and abroad, on the extent to which the costs of our product candidates will be reimbursed by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or will be reimbursed by government authorities, private health coverage insurers and other third-party payors.

Within the European Union and in the United Kingdom, newly approved products must usually undergo reimbursement assessment for the purposes of inclusion in national health systems. In some countries this process may result in delays and substantial discounts. Reimbursement frequently involves assessment of cost-effectiveness, which is challenging in relation to gene therapy products, because of initial costs, which are usually high, lack of data confirming long-term benefit and limited experience with novel pricing arrangements.

Coverage and reimbursement by a third-party payor may depend upon several factors, including the third-party payor’s determination that use of a product is:

•a covered benefit under its health plan;

•safe, effective and medically necessary;

•appropriate for the specific patient;

•cost-effective; and

•neither experimental nor investigational.

There is significant uncertainty related to third-party coverage and reimbursement of newly approved products. Government authorities and other third-party payors decide which drugs and treatments they will cover and the amount of reimbursement. In the United States, the principal decisions about reimbursement for new medicines are typically made by the U.S. Centers for Medicare and Medicaid Services, or CMS, an agency within the Department of Health and Human Services, or HHS. In certain circumstances, CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare and private payors tend to follow CMS to a substantial degree. However, no uniform policy of coverage and reimbursement exists among third-party payors. Therefore, coverage and reimbursement for products can differ significantly from payor to payor. One payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage, and adequate reimbursement.

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Obtaining coverage and reimbursement for a product from third-party payors is a time-consuming and costly process that could require us to provide to the payor supporting scientific, clinical and cost-effectiveness data. In addition to the costs required to obtain FDA or other comparable regulatory approvals, a company may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity. Companies may also need to provide discounts to purchasers, private health plans or government healthcare programs. Nonetheless, product candidates may not be considered medically necessary or cost effective. We also may not be able to provide data sufficient to gain acceptance with respect to coverage and reimbursement. If coverage and reimbursement are not available, or are available only at limited levels, we may not be able to successfully commercialize our product candidates. Even if coverage is provided, the approved reimbursement amount may not be adequate to realize a sufficient return on our investment.

Currently, at least one gene therapy product is reimbursed under the Medicare program, but it is still difficult to predict what CMS will decide with respect to coverage and reimbursement for fundamentally novel products such as ours, as there is no body of established practices and precedents for these types of products. Effective July 1, 2022, a Medicaid Drug Rebate Program rule increases flexibility regarding the manner in which manufacturers may offer value-based discounting arrangements, including permitting manufacturers to calculate “multiple Best Prices” for such arrangements.

Moreover, reimbursement agencies in the United Kingdom or European Union may be more conservative than the CMS. For example, several pharmaceutical products have been approved for reimbursement in the United States and have not been approved for reimbursement in the United Kingdom and certain EU Member States. It is difficult to predict what third-party payors will decide with respect to the coverage and reimbursement for our product candidates.

The containment of healthcare costs has become a priority of federal, state and foreign governments, and the prices of drugs have been a focus in this effort. The U.S. government, U.S. state legislatures, and foreign governments have shown significant interest in implementing cost-containment programs to limit the growth of government-paid healthcare costs, including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs. For example, in the United States, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or the PPACA, contains provisions that may reduce the profitability of products, including, for example, increased rebates for products sold to Medicaid programs, extension of Medicaid rebates to Medicaid managed care plans, mandatory discounts for certain Medicare Part D beneficiaries and annual fees based on pharmaceutical companies’ share of sales to federal healthcare programs. Further, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several recent congressional inquiries and proposed federal and state legislation designed to, among other things, bring more transparency to product pricing, contain the cost of drugs, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products. For example, in August 2022, Congress passed the Inflation Reduction Act, or IRA, which permits CMS to negotiate prices for certain high-expenditure Medicare Part B or Part D drugs. The IRA also requires manufacturers to pay a rebate to CMS if the price of a Medicare Part B or Part D increases faster than the rate of inflation, relative to a benchmark price. See “—Healthcare legislative reform measures may have a negative impact on our business and results of operations.”

In certain countries, medicines may be subject to extensive government price controls and other market regulations, and increasing emphasis on cost-containment initiatives in the European Union, the United Kingdom, Canada, the United States and other countries may put pricing pressure on us. For example, when gene therapy products are approved in the European Union, it can take some time for them to be widely commercially available, if at all. In many countries, the prices of medicinal products are subject to varying price control mechanisms as part of national health systems. Certain countries allow companies to fix their own prices for medicinal products, but monitor and control company profits. Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for our product candidates.

Additionally, in countries where the pricing of gene therapy products is subject to governmental control, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product. In addition, there can be considerable pressure by governments and other stakeholders on prices and reimbursement levels, including as part of cost containment measures. Political, economic and regulatory developments may further complicate pricing negotiations, and pricing negotiations may continue after reimbursement

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has been obtained. Reference pricing used by various EU Member States and parallel distribution, or arbitrage between low-priced and high-priced member states, can further reduce prices. To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our product candidates to other available therapies. If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be harmed.

Moreover, increasing efforts by government and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for new products approved and, as a result, they may not cover or provide adequate payment for our product candidates. Payors increasingly are considering new metrics as the basis for reimbursement rates, such as average sales price, average manufacturer price and actual acquisition cost. The existing data for reimbursement based on some of these metrics is relatively limited, although certain states have begun to survey acquisition cost data for the purpose of setting Medicaid reimbursement rates, and CMS has begun making pharmacy National Average Drug Acquisition Cost publicly available on at least a monthly basis. Therefore, it may be difficult to project the impact of these evolving reimbursement metrics on the willingness of payors to cover product candidates that we or our partners are able to commercialize. Additionally, payors have employed the use of accumulator adjustment programs that do not consider amounts paid by pharmaceutical copay assistance programs as counting towards a patient’s deductible or other out-of-pocket costs. Under a 2020 rule promulgated by CMS that would have taken effect January 1, 2023, such accumulator adjustment (or similar) programs could have affected the amount of rebates owed by manufacturers under the Medicaid Drug Rebate Program or could have affected the ability to offer various forms of patient support, including copay assistance. However, in May 2022, the U.S. District Court for the District of Columbia invalidated the rule, holding that the rule was inconsistent with the Medicaid statute (and CMS did not appeal the decision). Additionally, certain states have passed laws prohibiting third-party payors from utilizing accumulator programs. During prior Congressional sessions, policymakers have introduced legislation that would prohibit third-party payors from using accumulator programs, and similar legislation has been introduced in the current 118th Congressional session. We expect to experience pricing pressures in connection with the sale of any of our product candidates due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative changes. The downward pressure on healthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become intense. As a result, increasingly high barriers are being erected to the entry of new products such as ours.

Due to the generally limited addressable market for our target orphan indications and the potential for our product candidates to offer therapeutic benefit in a single administration, we face uncertainty related to pricing and reimbursement for these product candidates.

The relatively small market size for orphan indications and the potential for long-term therapeutic benefit from a single administration present particular challenges to pricing review and negotiation for our product candidates for which we may obtain marketing authorization. The patient populations for our product candidates targeted at orphan disease, including Gaucher disease, are relatively small. If we are unable to obtain adequate levels of reimbursement relative to the small market size in our target orphan indications, our ability to support our development and commercial infrastructure and to successfully market and sell our product candidates for which we may obtain marketing approval will be adversely affected.

We also anticipate that many or all of our gene therapy product candidates may provide long-term, and potentially curative benefit with a single administration. This is a different paradigm than that of other pharmaceutical therapies, which often require an extended course of treatment or frequent administration. As a result, governments and other payors may be reluctant to provide the significant level of reimbursement that we seek at the time of administration of our gene therapies or may seek to tie reimbursement to clinical evidence of continuing therapeutic benefit over time. In addition, in light of the anticipated cost of these therapies, governments and other payors may be particularly restrictive in making coverage decisions. These factors could limit our commercial success, extend our time to profitability and harm our business.

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Our gene therapy approach utilizes vectors derived from viruses, which may be perceived as unsafe or may result in unforeseen adverse events. Negative public opinion and increased regulatory scrutiny of gene therapy may damage public perception of the safety of our product candidates and adversely affect our ability to conduct our business or obtain regulatory approvals for our product candidates.

Gene therapy remains a novel technology, with only a limited number of gene therapy products approved to date. Public perception may be influenced by claims that gene therapy is unsafe, and gene therapy may not gain the acceptance of the public or the medical community. In particular, our success will depend upon physicians who specialize in the treatment of genetic diseases targeted by our product candidates, prescribing treatments that involve the use of our product candidates in lieu of, or in addition to, existing treatments with which they are familiar and for which greater clinical data may be available. More restrictive government regulations or negative public opinion would have an adverse effect on our business, financial condition, results of operations and prospects and may delay or impair the development and commercialization of our product candidates or demand for any products we may develop. Serious adverse events in our clinical trials, or other clinical trials involving gene therapy products or our competitors’ products, even if not ultimately attributable to the relevant product candidates, and the resulting publicity, could result in increased government regulation, unfavorable public perception, potential regulatory delays in the testing or approval of our product candidates, stricter labeling requirements for those product candidates that are approved and a decrease in demand for any such product candidates.

Risks Related to Our Intellectual Property

Our success depends in part on our ability to obtain and protect our intellectual property and to maintain patent protection for our current product candidates, any future product candidates we may develop and our technology. It is difficult and costly to protect our proprietary rights and technology, and we may not be able to ensure their protection.

Our commercial success will depend in large part on us and our licensors obtaining and maintaining patent, trademark, trade secret and other intellectual property protection, as appropriate, of our proprietary technologies, such as our proprietary capsid, gene therapy platform, and product candidates, which include FLT201 and other programs, their respective components, formulations, therapies, methods used to manufacture them and methods of treatment, as well as successfully defending our owned and licensed patents against third-party challenges. Our current patent portfolio contains a limited number of patent families, some of which are in-licensed from third parties. Our ability to stop unauthorized third parties from making, using, selling, offering to sell or importing products similar or identical to our product candidates is dependent upon the extent to which we and our licensors have rights under valid and enforceable patents or trade secrets that cover these activities. If we are unable to secure and maintain patent protection for any product or technology we develop, or if the scope of the patent protection secured is not sufficiently broad, subject to any regulatory exclusivity such as orphan drug designation, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to commercialize any product candidates we may develop may be adversely affected.

The patenting process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. In addition, we may not pursue or obtain patent protection in all relevant markets. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. We may not be able to obtain or maintain patent applications and patents due to the subject matter claimed in such patent applications and patents being in the public domain. In some cases, the work of certain academic researchers in the gene therapy field has entered the public domain, which may preclude our ability to obtain patent protection for certain inventions relating to such work. Although we enter into nondisclosure and confidentiality agreements with parties who have access to confidential or patentable aspects of our research and development output, such as our employees, corporate collaborators, outside scientific collaborators, contract manufacturers, consultants, advisors and other third parties, any of these parties may breach these agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to seek patent protection. Consequently, we would not be able to prevent any third party from using any technology that is in the public domain to compete with our product candidates. Moreover, in some circumstances, we may not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the patents, covering technology that we license from or license to third parties, and are reliant on our licensors or licensees to do so.

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The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and has, in recent years, been the subject of much litigation. As a result, the issuance, scope, validity, enforceability and commercial value of any patent rights are highly uncertain. Our owned and licensed pending and future patent applications may not result in issued patents which protect our technology or product candidates, effectively prevent others from commercializing competitive technologies and product candidates, or otherwise provide any competitive advantage. In fact, patent applications may not issue as patents at all. Even if patent applications we license or own currently or in the future issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors or other third parties from competing with us, or otherwise provide us with any competitive advantage. Any patents that we hold or in-license may be challenged, narrowed, circumvented, or invalidated by third parties. Consequently, we do not know whether any of our platform advances and product candidates will be protectable or remain protected by valid and enforceable patents. In addition, our existing patents and any future patents we obtain may not be sufficiently broad to prevent others from using our technology or from developing competing products and technologies, and the coverage claimed in a patent application can be significantly reduced before the patent is issued and its scope can be reinterpreted after issuance. Any failure to obtain, maintain or defend our patents and other intellectual property could have a material adverse effect on our business, financial conditions, results of operations and prospects.

We cannot be certain that we are the first to invent the inventions covered by pending patent applications and, if we are not, we may be subject to priority or entitlement disputes. We may be required to disclaim part or all of the term of certain patents or all of the term of certain patent applications. There may be prior art of which we are not aware that may affect the validity or enforceability of a patent claim. There also may be prior art of which we are aware, but which we do not believe affects the validity or enforceability of a claim, which may, nonetheless, ultimately be found to affect the validity or enforceability of a claim. Since patent applications in the United States and other countries are confidential for a period of time after filing, at any moment in time, we cannot be certain that we were in the past or will be in the future the first to file any patent application related to our product candidates. For example, some patent applications in the United States may be maintained in secrecy until the patents are issued. Further, publications in the scientific literature often lag behind actual discoveries. Consequently, we cannot be certain that others have not filed patent applications for technology covered by our owned and in-licensed issued patents or our pending applications, or that we or, if applicable, a licensor were the first to invent or first to file an application for the technology.

The degree of future protection for our proprietary rights is uncertain because legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep our competitive advantage. For example:

•others may be able to make or use capsids, nucleic acids (such as codon optimized nucleic acids), and vectors that are similar to the biological compositions of our product candidates but that are not covered by the claims of our patents;

•no patent protection may be available with regard to formulation or method of use;

•we or our licensors may fail to meet obligations to the U.S. government regarding any patents and patent applications funded by U.S. government grants, leading to the loss of patent rights;

•we or our licensors, as the case may be, might not have been the first to file patent applications for certain inventions;

•others may independently develop similar or alternative technologies or duplicate any of our technologies;

•it is possible that our pending patent applications will not result in issued patents;

•it is possible that there are prior public disclosures that could invalidate our or our licensors’ patents, as the case may be, or parts of our or their patents;

•it is possible that others may circumvent our owned or in-licensed patents;

•it is possible that there are unpublished applications or patent applications maintained in secrecy that may later issue with claims covering our products or technology similar to ours;

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•the laws of other countries may not protect our or our licensors’, as the case may be, proprietary rights to the same extent as the laws of the United States;

•the claims of our owned or in-licensed issued patents or patent applications, if and when issued, may not cover our product candidates;

•our owned or in-licensed issued patents may not provide us with any competitive advantages, may be narrowed in scope, or be held invalid or unenforceable as a result of legal challenges by third parties;

•the inventors of our owned or in-licensed patents or patent applications may become involved with competitors, develop products or processes that design around our patents, or become hostile to us or the patents or patent applications on which they are named as inventors;

•it is possible that our owned or in-licensed patents or patent applications omit individual(s) that should be listed as inventor(s) or include individual(s) that should not be listed as inventor(s), which may cause these patents or patents issuing from these patent applications to be held invalid or unenforceable;

•we have engaged in scientific collaborations in the past and will continue to do so in the future and our collaborators may develop adjacent or competing products that are outside the scope of our patents;

•we may not develop additional proprietary technologies for which we can obtain patent protection;

•it is possible that product candidates or technologies we develop may be covered by third parties’ patents or other exclusive rights; or

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

Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.

We heavily depend on intellectual property licensed from third parties, and our licensors may not always act in our best interest. If we fail to comply with our obligations under our intellectual property licenses, if the licenses are terminated, or if disputes regarding these licenses arise, we could lose significant rights that are important to our business.

We are dependent on patents, know-how and proprietary technology licensed from others. As a result, any termination of these licenses could result in the loss of significant rights and could harm our ability to commercialize our product candidates.

For example, we are a party to license agreements with University College London Business, or UCLB, pursuant to which we in-license key patents and patent applications for our proprietary capsid used in FLT201 and possible future product candidates and other technology used in our deprioritized FLT190 product candidate. Our current license agreements impose, and future agreements may impose, various diligence, commercialization, milestone payment, royalty, insurance and other obligations on us and require us to meet development timelines, or to exercise commercially reasonable efforts to develop and commercialize licensed products, in order to maintain the licenses. If we fail to comply with these obligations, our licensors may have the right to terminate our license, in which event we would not be able to develop or market products containing our proprietary capsid, including FLT201, or any other technologies or product candidates covered by the intellectual property licensed under these agreements. For example, our primary license agreement with UCLB imposes various due diligence, development and commercialization obligations, milestone payments, royalties and other obligations on us, including, for example, an obligation to use commercially reasonable efforts to develop, exploit and market products directed to hemophilia B and Fabry disease.

Certain of our licenses, including certain licenses with UCLB (other than our primary license agreement with UCLB), may not provide us with exclusive rights to use the licensed intellectual property and technology, or may not provide us with exclusive rights to use such intellectual property and technology in all relevant fields of use and in all territories in which we may wish to develop or commercialize our technology and product candidates in the future. In addition, the intellectual property portfolio licensed to us by our licensors, including certain intellectual property licensed by UCLB, at least in some respects, may be used by such licensors or licensed to third parties, and such third parties may have certain enforcement rights with respect to such intellectual property. Thus, patents licensed to us could be put at risk of being invalidated or interpreted narrowly in litigation filed by or against our licensors or another licensee or in administrative proceedings brought by or against our licensors or another licensee in response to such litigation or for other reasons. As a result, we may not be able to prevent competitors or other third parties from developing and commercializing competitive products, including in territories covered by our licenses.

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In addition, we may need to obtain additional licenses from our existing licensors and others to advance our research or allow commercialization of product candidates we may develop. It is possible that we may be unable to obtain any additional licenses at a reasonable cost or on reasonable terms, if at all. In either event, we may be required to expend significant time and resources to redesign our technology, product candidates, or the methods for manufacturing them or to develop or license replacement technology, all of which may not be feasible on a technical or commercial basis. If we are unable to do so, we may be unable to develop or commercialize the affected technology or product candidates. Even if we are able to obtain such additional licenses, they may be non-exclusive thereby giving our competitors and other third parties access to the same technology licensed to us.

If we or our licensors fail to adequately protect our licensed intellectual property, our ability to commercialize our product candidates and technology could suffer. While we generally control the maintenance, prosecution and litigation of our exclusively in-licensed patents and patent applications from UCLB, in some circumstances we may not have the right to control the maintenance, prosecution, preparation, filing, enforcement, defense and litigation of patents and patent applications that we license from other third parties, including, but not limited to, certain patents and patent applications that are non-exclusively in-licensed from UCLB. For example, St. Jude retains control of such activities for the patent family we have licensed from them. We thus cannot be certain that activities such as the maintenance and prosecution by our licensors have been or will be conducted consistent with our best interests or in compliance with applicable laws and regulations, or will result in valid and enforceable patents and other intellectual property rights. It is possible that our licensors’ infringement proceedings or defense activities may be less vigorous than had we conducted them ourselves or may not be conducted in accordance with our best interests. If our licensors fail to maintain such patents or patent applications, or lose rights to those patents or patent applications, the rights we have licensed may be reduced or eliminated, and our right to develop and commercialize any of our product candidates that are the subject of such licensed rights and our right to exclude third parties from commercializing competing products could be adversely affected. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.

In spite of our efforts, our current and future licensors might conclude that we have materially breached our obligations under our license agreements and might therefore terminate such license agreements, thereby removing or limiting our ability to develop and commercialize products and technology covered by these license agreements. Disputes may also arise between us and our licensors regarding intellectual property subject to a license agreement, including:

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

•our financial and other obligations under the license agreements;

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

•our right to sublicense patent and other rights to third parties under collaborative development relationships;

•our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our product candidates and what activities satisfy those diligence obligations;

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

•the priority of invention of patented technology.

If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected technology or product candidates. As a result, any termination of or disputes over our intellectual property licenses could result in the loss of our ability to develop and commercialize our FLT201 product candidate, or we could lose other significant rights, experience significant delays in the development and commercialization of our product candidates, or incur liability for damages, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects. In addition, we may seek to obtain additional licenses from our licensors and, in connection with obtaining such licenses, we may agree to amend our existing licenses in a manner that may be more favorable to the licensors, including by agreeing to terms that could enable third parties, including

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our competitors, to receive licenses to a portion of the intellectual property that is subject to our existing licenses and to compete with our product candidates.

For example, some of our future agreements with certain of our third-party research partners may provide that improvements developed in the course of our relationship may be owned solely by either us or our third-party research partner. If we determine that rights to such improvements owned solely by a third-party research partner or other third party with whom we collaborate are necessary to commercialize our therapeutic candidates or maintain our competitive advantage, we may need to obtain a license from such third party in order to use the improvements and continue developing, manufacturing or marketing our drug candidates. We may not be able to obtain such a license on an exclusive basis, on commercially reasonable terms, or at all, which could prevent us from commercializing our product candidates or allow our competitors or others the chance to access technology that is important to our business.

If our licenses are terminated, or if the underlying patents fail to provide the intended exclusivity, competitors or other third parties would have the freedom to seek regulatory approval of, and to market, products identical or competitive to ours and we may be required to cease our development and commercialization of certain of our product candidates. Moreover, if disputes over intellectual property that we license prevent or impair our ability to maintain other licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates. In addition, certain of these license agreements may not be assignable by us without the consent of the respective licensor, which may have an adverse effect on our ability to engage in certain transactions. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.

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

In addition, a third party may in the future bring claims that our performance under our license agreements, including our sponsoring of clinical trials, interferes with such third party’s rights under its agreement with one of our licensors. If any such claim were successful, it may adversely affect our rights and ability to advance our product candidates as clinical candidates or subject us to liability for monetary damages, any of which would have an adverse effect on our business, financial condition, results of operations and prospects.

We are generally also subject to all of the same risks with respect to protection of intellectual property that we license as we are for intellectual property that we own, which are described below. If we or our licensors fail to adequately protect this intellectual property, our ability to commercialize products could suffer.

We do not yet own or license any issued U.S. composition of matter patents covering the transgene component of our product candidate FLT201, and we cannot be certain that any of our pending patent applications will result in issued patent claims covering such aspects of FLT201.

Composition of matter patents on the active pharmaceutical ingredient, or API, in prescription drug products are generally considered to be the strongest form of intellectual property protection for drug products because those types of patents provide protection without regard to any particular method of use or manufacture or formulation of the API used. We currently license one issued composition of matter U.S. patent that relates to our proprietary capsid, which is present in our FLT201 product candidate. However, we do not own or in-license any issued composition of matter patents in the United States or any other jurisdiction with respect to the transgene component of our FLT201 product candidate. We further do not own any U.S. or foreign issued patents covering our FLT201 product candidate. We are pursuing claims in our pending owned or licensed patent applications that cover the transgene component of our FLT201 product candidate. We have received an allowance for a European patent application that covers FLT201. However, there can be no assurance that any patent applications will issue as granted patents. We cannot be certain that claims in any future patents issuing from our pending owned or licensed patent applications or our future owned or licensed patent applications will cover our current or future product candidates.

Method-of-use patents protect the use of a product for the specified method and formulation patents cover formulations of the API. These types of patents do not prevent a competitor or other third party from developing or marketing an identical product for an indication that is outside the scope of the patented method or from developing a

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different formulation that is outside the scope of the patented formulation. Moreover, with respect to method-of-use patents, even if competitors or other third parties do not actively promote their product for our targeted indications or uses for which we may obtain patents, physicians may recommend that patients use these products off-label, or patients may do so themselves. Although off-label use may infringe or contribute to the infringement of method-of-use patents, the practice is common, and this type of infringement is difficult to prevent or prosecute. In addition, there are numerous publications and other prior art that may be relevant to our owned and in-licensed formulation and method-of-use patents and patent applications and may be used to challenge the validity of these owned or in-licensed patents and patent applications in litigation or other intellectual property-related proceedings. If these types of challenges are successful, our owned and in-licensed patents and patent applications may be narrowed or found to be invalid and we may lose valuable intellectual property rights. Any of the foregoing could have a material adverse effect on our business, financial conditions, prospects and results of operations.

The strength of patents in the biotechnology and pharmaceutical field involves complex legal and scientific questions and can be uncertain. The patent applications that we own or in-license may fail to result in issued patents with claims that cover our product candidates or uses thereof in the United States or in other countries. Even if patents do successfully issue, the issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability and third parties may challenge the validity, enforceability or scope of our owned and licensed patents in courts or patent offices in the United States and abroad, which may result in those patents being narrowed, invalidated or held unenforceable. Furthermore, even if they are unchallenged, our owned and licensed patents and pending patent applications, if issued, may not adequately protect our intellectual property or prevent competitors or others from designing around our patent claims to circumvent our owned or licensed patents by developing similar or alternative technologies or therapeutics in a non-infringing manner. If the breadth or strength of protection provided by the patents and patent applications we own or license with respect to our product candidates is not sufficient to impede such competition or is otherwise threatened, it could dissuade companies from collaborating with us to develop, and threaten our ability to commercialize, our product candidates. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.

Certain of our in-licensed patents are, and our future owned and in-licensed patents may be, subject to a reservation of rights by one or more third parties, including government march-in rights, that may limit our ability to exclude third parties from commercializing products similar or identical to ours.

Our owned and in-licensed patents may be subject to a reservation of rights by one or more third parties. For example, the U.S. government has certain rights, including march-in rights, to patent rights and technology funded by the U.S. government. When new technologies are developed with government funding, in order to secure ownership of such patent rights, the recipient of such funding is required to comply with certain government regulations, including timely disclosing the inventions claimed in such patent rights to the U.S. government and timely electing title to such inventions. Additionally, the U.S. government generally obtains certain rights in any resulting patents, including a non-exclusive license authorizing the government to use the invention or to have others use the invention on its behalf. If the government decides to exercise these rights, it is not required to engage us as its contractor in connection with doing so. These rights may permit the U.S. government to disclose our confidential information to third parties and to exercise march-in rights to use or allow third parties to use our licensed technology. The U.S. government can exercise its march-in rights if it determines that action is necessary because we fail to achieve practical application of the government-funded technology, because action is necessary to alleviate health or safety needs, to meet requirements of federal regulations, or to give preference to U.S. industry. In addition, our rights in such inventions may be subject to certain requirements to manufacture products embodying such inventions in the United States. Any exercise by the government of any of the foregoing rights could have a material adverse effect on our business, financial condition, results of operations and prospects.

If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

In addition to patent protection, we rely heavily upon know-how and trade secret protection, as well as non-disclosure agreements and invention assignment agreements with our employees, consultants and third parties, to protect our confidential and proprietary information, especially where we do not believe patent protection is appropriate or obtainable. For example, some elements of manufacturing processes, proprietary assays, analytics techniques and processes, knowledge gained through clinical experience such as approaches to dosing/administration and management of patients, as well as computational-biological algorithms, and related processes and software, are based on unpatented trade secrets and know-how that are not publicly disclosed. It is our policy to require our

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employees, consultants, outside scientific collaborators, sponsored researchers and other advisors to execute confidentiality agreements upon the commencement of employment or consulting relationships with us. These agreements provide that all confidential information concerning our business or financial affairs developed or made known to the individual or entity during the course of the party’s relationship with us is to be kept confidential and not disclosed to third parties, except in certain specified circumstances. In the case of employees, the agreements provide that all inventions conceived by the individual during the course of employment, and which relate to or are reasonably capable of being used in our current or planned business or research and development, are our exclusive property. However, we cannot guarantee that we have entered into such agreements with each party that may have or has had access to our trade secrets or proprietary technology and processes. Additionally, we may not be able to prevent the unauthorized disclosure or use of our technical know-how or other trade secrets by the parties to these agreements. Monitoring unauthorized uses and disclosures is difficult and we do not know whether the steps we have taken to protect our proprietary technologies will be effective. If any of the collaborators, scientific advisors, employees and consultants who are parties to these agreements breach or violate the terms of any of these agreements, we may not have adequate remedies for any such breach or violation. As a result, we could lose our trade secrets and third parties could use our trade secrets to compete with our product candidates and technology.

In addition to contractual measures, we try to protect the integrity and confidential nature of our proprietary information through other appropriate precautions, such as maintaining physical security of our premises and electronic security of our information technology systems; however, such systems and security measures may be breached, and we may not have adequate remedies for any breach. These measures may not, for example, in the case of misappropriation of a trade secret by an employee or third party with authorized access, provide adequate protection for our proprietary information. Our security measures may not prevent an employee or consultant from misappropriating our trade secrets and providing them to a competitor or other third party, and any recourse we might take against this type of misconduct may not provide an adequate remedy to protect our interests fully. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret can be difficult, expensive, and time-consuming, and the outcome is unpredictable.

In addition, our trade secrets may otherwise become known or be independently developed by competitors or other third parties in a manner that could prevent us from receiving legal recourse. Competitors or third parties could purchase our product candidates and attempt to replicate some or all of the competitive advantages we derive from our development efforts, design around our protected technology, develop their own competitive technologies that fall outside the scope of our intellectual property rights or independently develop our technologies without reference to our trade secrets. If any of our confidential or proprietary information, such as our trade secrets, were to be lawfully obtained or independently developed by a competitor or other third party, we would have no right to prevent them, or those to whom they communicate such trade secrets, from using that technology or information to compete with us and our competitive position could be harmed. If our trade secrets are not adequately protected so as to protect our market against competitors’ products, our business, financial condition, results of operations and prospects could be materially and adversely affected.

In addition, trade secrets can be difficult to protect and some courts inside and outside the United States are sometimes less willing or unwilling to protect trade secrets. If we choose to go to court to stop a third party from using any of our trade secrets, we may incur substantial costs. Even if we are successful, these types of lawsuits may consume our time and other resources. As a result, we may not be able to meaningfully protect our trade secrets. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.

Third-party claims of intellectual property infringement may prevent or delay our product discovery and development efforts.

Our commercial success depends in part on our ability and the ability of future collaborators to develop, manufacture, market and sell our product candidates and use our proprietary technologies without infringing, misappropriating or otherwise violating the intellectual property rights of third parties. There is a substantial amount of litigation involving patents and other intellectual property rights in the biotechnology and pharmaceutical industries, as well as administrative proceedings for challenging patents, including interference, derivation, inter partes review, post-grant review, and reexamination proceedings before the United States Patent and Trademark Office, or the USPTO, or oppositions and other comparable proceedings in foreign jurisdictions. We may be exposed to, or threatened with, future litigation by third parties having patent or other intellectual property rights alleging that our

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product candidates, manufacturing methods, formulations, administration methods and/or proprietary technologies infringe, misappropriate or otherwise violate their intellectual property rights.

Numerous issued patents and pending patent applications that are owned by third parties exist in the fields in which we are developing our product candidates including patents and patent applications relating to, among other things, nucleic acids encoding GCase, engineered variants of such enzymes and AAV vectors comprising such nucleic acids, as well as AAV capsid proteins, AAV formulations and administration and immunosuppression regimens, and AAV manufacturing and analytical methods. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may give rise to claims of infringement of the patent rights of others. Moreover, it is not always clear to industry participants, including us, the claim scope that may issue from pending patent applications owned by third parties or which patents cover various types of drugs, products or their methods of use or manufacture. Thus, because of the large number of patents issued and patent applications filed in our fields, there may be a risk that third parties, including our competitors, may allege they have patent rights encompassing our product candidates, technologies or methods and that we are employing their proprietary technology without authorization.

If third parties, including our competitors, believe that one or more of our product candidates infringe their patents, including if and when our product candidates are approved by the FDA or other regulatory authorities outside of the United States, such third parties may, to the extent such patents are in force at that time, seek to enforce their patents against us by filing a patent infringement lawsuit against us. For example, we are aware of several patents and pending patent applications owned and/or controlled by one of our competitors, uniQure, which include issued claims directed to liver-specific transcriptional regulatory elements and expression cassettes and vectors containing the same, and methods of using such vectors for gene therapy. We are also aware that certain of these patents may have been exclusively licensed to CSL Behring by uniQure. We are also aware of several patents and pending patent applications owned and/or controlled by Children’s Hospital of Philadelphia, which include pending or issued claims directed to certain AAV formulations. We are additionally aware of third-party owned pending applications and issued patents wherein the claims are directed to methods for determining anti-AAV neutralizing antibody titres.

If uniQure, Children’s Hospital of Philadelphia or other third parties or any of their respective licensees (including CSL Behring) were to assert these patents against us, we believe we would have defenses against any such assertion; however there can be no assurance that any such defenses will be successful. If any third party, including uniQure, Children’s Hospital of Philadelphia or any of their respective licensees (including CSL Behring) were to assert these or any other patents against us and we are unable to successfully defend against any such assertion, we may be required, including by court order, to cease the development and commercialization of the infringing product candidate or technology, which may include ceasing the development and commercialization of FLT201 and/or our companion diagnostic assays, depending on the patents that are asserted. We could also be required to pay damages, which could be significant, including treble damages and attorneys’ fees if we are found to have willfully infringed such patents. We could also be required to obtain a license to such patents in order to continue the development and commercialization of the infringing product candidate or technology, however, such a license may not be available on commercially reasonable terms or at all, including because certain of these patents are held by or may be licensed to our competitors. Even if such license were available, it may require substantial payments and it may only be available on a non-exclusive basis, in which case third parties, including our competitors, could use the same licensed intellectual property to compete with us. Furthermore, even in the absence of litigation, we may need to obtain licenses from third parties to necessary or useful third-party intellectual property to advance our research or allow commercialization of our product candidates and we may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. In that event, we would be unable to further develop and commercialize our product candidates.

We may choose to challenge, including in connection with any allegation of patent infringement by a third party, the patentability, validity or enforceability of any third-party patent that we believe may have applicability in our field, including the above-mentioned uniQure and Children’s Hospital of Philadelphia patents, and any other third-party patent that may be asserted against us. Such challenges may be brought either in court or by requesting that the USPTO, European Patent Office, or EPO, or other foreign patent offices review the patent claims, such as in an ex-parte re-examination, inter partes review, post-grant review proceeding or opposition proceeding. Third parties may also challenge such patents. However, there can be no assurance that any such challenge by us or any third party will

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be successful. Even if such proceedings are successful, these proceedings are expensive and may consume our time or other resources, or distract our management and technical personnel, and the costs of these opposition proceedings could be substantial. If a favorable result in court, at the USPTO, EPO or other patent office is not obtained, we may be exposed to patent litigation by a third party, including uniQure, Children’s Hospital of Philadelphia and/or any of their respective licensees (including CSL Behring), alleging that their patent rights are infringed by our product candidates or proprietary technologies. We may not have sufficient financial or other resources to adequately conduct these types of litigation or proceedings. There can be no assurance that our defenses of non-infringement, invalidity or unenforceability will succeed. In this regard, patents issued in the United States by law enjoy a presumption of validity that can be rebutted only with evidence that is “clear and convincing,” a heightened standard of proof.

If any third-party patents, including those described above, are held by a court of competent jurisdiction to be valid and enforceable and to cover any of our product candidates or technology, including the manufacturing process of our product candidates, constructs or molecules used in or formed during the manufacturing process, or any final product itself, we may face a number of issues, including:

•substantial damages for infringement and, if the court finds that the infringement was willful, we could be ordered to pay treble damages plus the third-party patent owner’s attorneys’ fees;

•a court prohibiting us from developing, manufacturing, marketing, selling or otherwise commercializing our product candidates, or from using our proprietary technologies, unless the applicable third party licenses its rights to us, which may not be available on commercially reasonable terms or at all;

•if a license is available from the applicable third party, we may have to pay substantial royalties, upfront fees and other amounts, and/or grant cross-licenses under our intellectual property rights, and the license granted to us may be non-exclusive, thereby giving other third parties, including our competitors, access to the same technologies licensed to us; and

•the requirement that we redesign our product candidates or processes so they do not infringe the applicable third-party patents, which may not be possible or may require substantial monetary expenditures and time.

Some third parties, including our competitors, may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources. There could be public announcements of the results of hearings, motions, or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Any of the foregoing, or any uncertainties resulting from the initiation and continuation of any litigation, could have a material adverse effect on our ability to raise the funds necessary to continue our operations or could otherwise have a material adverse effect on our business, financial condition, results of operations and prospects. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar adverse effect on our business, financial condition, results of operations and prospects.

Third parties may assert that our employees, advisors or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets of their current or former employers or make claims asserting ownership of what we regard as our own intellectual property.

As is common in the biotechnology and pharmaceutical industries, certain of our employees, consultants, contractors or advisors are currently, or were previously, employed at universities or other biopharmaceutical or pharmaceutical companies, including our competitors or potential competitors, as well as our academic partners. Although no misappropriation or improper disclosure claims against us are currently pending, and although we try to ensure that our employees, advisors, contractors and consultants do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees, advisors, contractors or consultants have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual’s current or former employer or other third parties. We may then have to engage in litigation to defend against these claims. If we fail in defending any claims of this nature, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. An inability to incorporate such technologies or features would harm our business and may prevent us from successfully commercializing our product candidates or at all. Any such litigation or the threat thereof may adversely affect our ability to hire employees or contract with advisors, contractors and consultants. A loss of key personnel or their work product could hamper or prevent our ability to commercialize our product candidates, which would have a material adverse effect on our business, results of operations, financial condition and prospects. Even if we are successful in defending against these

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types of claims, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and, if securities analysts or investors perceive these results to be negative, that perception could have a substantial adverse effect on the price of our common stock. This type of litigation or proceeding could substantially increase our operating losses and reduce our resources available for development activities. Some of our competitors may be able to sustain the costs of this type of litigation or proceedings more effectively than we can because of their substantially greater financial resources. Uncertainties resulting from the initiation and continuation of intellectual property litigation or other intellectual property related proceedings could adversely affect our ability to compete in the marketplace.

In addition, while it is our policy to require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that we regard as our own. Moreover, even when we obtain agreements assigning intellectual property to us, the assignment of intellectual property rights may not be self-executing or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property. Furthermore, individuals executing agreements with us may have pre-existing or competing obligations to a third party, such as an academic institution, and thus an agreement with us may be ineffective in perfecting ownership of inventions developed by that individual. Disputes about the ownership of intellectual property that we may own may have a material adverse effect on our business, financial condition, results of operations and prospects.

Furthermore, we or our licensors may in the future be subject to claims by former employees, consultants or other third parties asserting an ownership right in our owned or licensed patents or patent applications. An adverse determination in any such submission or proceeding may result in loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar technology and therapeutics, without payment to us, or could limit the duration of the patent protection covering our technology and product candidates. Such challenges may also result in our inability to develop, manufacture or commercialize our product candidates without infringing third-party patent rights. Any of the foregoing could have a material adverse effect on our business, financial condition, prospects and results of operations.

We may not be successful in obtaining or maintaining necessary rights to product components and processes for our development pipeline through acquisitions and in-licenses.

Presently, we rely on intellectual property rights through licenses from third parties to develop, manufacture and commercialize our FLT201 product candidate and potential product candidates currently under research and development. Additionally, we are developing companion diagnostic tests, such as our proprietary, cell-based TIA that may be required by the FDA or comparable foreign regulatory authorities to be used with our product candidates, which test or tests may be covered by intellectual property rights held by others. Because the commercialization of our technologies and product candidates may require the use of additional intellectual property rights held by third parties, the growth of our business likely will depend, in part, on our ability to acquire or license these intellectual property rights. Our product candidates may also require specific formulations to work effectively and efficiently and these rights may be held by others.

We may be unable to acquire or in-license any compositions, methods of use, processes or other third-party intellectual property rights from third parties that we identify as necessary or important to our business operations. In addition, even if we are able to obtain necessary or important licenses, we may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, which would harm our business. Were that to happen, we may need to cease use of the product candidates and technologies covered by those third-party intellectual property rights and may need to seek to develop alternative approaches that do not infringe, misappropriate or violate those intellectual property rights, which may entail additional costs and development delays if we are able to develop such alternatives, or which may not be feasible. Even if we are able to obtain a license, it may be non-exclusive, which means that our competitors may also receive access to the same technologies licensed to us. The licensing and acquisition of third-party intellectual property rights is a competitive area, and companies that may be more established, or have greater resources than we do, may also be pursuing strategies to license or acquire third-party intellectual property rights that we may consider necessary or attractive in order to commercialize our product candidates. More established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development

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and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. There can be no assurance that we will be able to successfully complete these types of negotiations and ultimately acquire the rights to the intellectual property surrounding the product candidates that we may seek to develop or market. We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment.

If we are unable to successfully obtain rights to required third-party intellectual property or maintain the existing intellectual property rights we have licensed, we may be required to expend significant time and resources to redesign our product candidates, or to develop or license replacement technology, all of which may not be feasible on a technical or commercial basis, and we may have to abandon development of our product candidates, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

We may be involved in intellectual property related litigations and other proceedings to defend against third party infringement claims and to protect or enforce our patents or the patents of our licensors, which could be expensive, time-consuming and unsuccessful.

Litigation or other legal proceedings relating to intellectual property claims, with or without merit, are unpredictable and generally expensive and time-consuming. Competitors or other third parties may infringe our patents or the patents of our licensors. To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming. In addition, our patents or the patents of our licensing partners also may in the future become involved in inventorship, priority, or validity disputes. In an infringement proceeding or any other inventorship, priority or validity dispute, a court or patent office may decide that one or more of our patents is not valid or is unenforceable, may interpret the claims of our patents narrowly, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated, held unenforceable, or interpreted narrowly and could put our patent applications at risk of not issuing. Furthermore, third parties may assert that our product candidates or technologies infringe, misappropriate or otherwise violate their intellectual property rights. Defense of these types of claims, regardless of their merit and regardless of whether we are successful, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business.

We or our licensors, as the case may be, may not be able to detect infringement against our owned or in-licensed patents, which may be especially difficult for manufacturing processes or formulation patents. Even if we or our licensors detect infringement by a third party of our owned or in-licensed patents, we or our licensors, as the case may be, may choose not to pursue litigation against or settlement with the third party. If we or our licensors later sue such third party for patent infringement, the third party may have certain legal defenses available to it that otherwise would not be available but for the delay between when the infringement was first detected and when the suit was brought. These legal defenses may make it impossible for us or our licensors to enforce our owned or in-licensed patents, as the case may be, against that third party.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigations and proceedings, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, that perception could have a substantial adverse effect on the price of our common stock. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.

Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for noncompliance with these requirements.

Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on any issued patent are due to be paid to the USPTO and various government patent agencies outside of the United States in several stages over the lifetime of the patent. Such governmental patent agencies also require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process and following the issuance of a patent. In some cases, we are dependent on our licensors to take the necessary action to comply with these requirements with respect to our licensed intellectual property. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete

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loss of patent rights in the relevant jurisdiction. Noncompliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. Were a noncompliance event to occur, and if the noncompliance event were to lead to loss of rights, our competitors might be able to enter the market with products and technology identical or similar to ours, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Issued patents covering our product candidates could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad.

Our owned and licensed patents and patent applications may be subject to priority, validity, inventorship and enforceability disputes. If we or one of our licensors initiate legal proceedings against a third party to enforce a patent covering one of our product candidates, the defendant could counterclaim that the patent covering our product candidate, as applicable, is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace, and there are numerous grounds upon which a third party can assert invalidity or unenforceability of a patent. Grounds for a validity challenge could include an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, lack of written description, non-enablement or failure to claim patent-eligible subject matter. Grounds for an unenforceability assertion could include an allegation that someone connected with prosecution of the patent withheld information material to patentability from the USPTO, or made a misleading statement, during prosecution. Third parties may also raise similar claims before administrative bodies, even outside the context of litigation. For example, we may be subject to a third-party submission of prior art to the USPTO challenging the validity of one or more claims of our owned or licensed patents. Such submissions may also be made prior to a patent’s issuance, precluding the granting of a patent. These types of mechanisms also include re-examination, post-grant review, inter partes review, interference proceedings, derivation proceedings and equivalent proceedings in other jurisdictions (e.g., opposition proceedings). These types of proceedings could result in revocation or amendment to our patents such that they no longer cover our product candidates or technologies. The outcome for any particular patent following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we, our patent counsel and the patent examiner were unaware during prosecution. If a third party were to prevail on a legal assertion of invalidity and/or unenforceability, or if we are otherwise unable to adequately protect our rights, we would lose at least part, and perhaps all, of the patent protection for our product candidates, which could allow third parties to commercialize identical or similar products to ours without payment to us. Such challenges also may result in substantial cost and require significant time from our scientists and management, even if the eventual outcome is favorable to us. A loss of patent protection for our product candidates could have a material adverse impact on our ability to commercialize or license our technology and product candidates and on our business, financial condition, prospects and results of operations.

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

As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biopharmaceutical industry involve both technological and legal complexity, and is therefore costly, time-consuming and inherently uncertain. Changes in either the patent laws or interpretation of the patent laws in the United States could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents. Assuming that other requirements for patentability are met, prior to March 2013, in the United States, the first to invent the claimed invention was entitled to the patent, while outside the United States, the first to file a patent application was entitled to the patent. After March 2013, under the Leahy-Smith America Invents Act, or the America Invents Act, enacted in September 2011, the United States transitioned to a first inventor to file system in which, assuming that other requirements for patentability are met, the first inventor to file a patent application is entitled to the patent on an invention regardless of whether a third party was the first to invent the claimed invention. The America Invents Act also includes a number of significant changes that affect the way patent applications are prosecuted and also may affect patent litigation. These changes include allowing third-party submission of prior art to the USPTO during patent prosecution and additional procedures to challenge the validity of a patent by USPTO administered post-grant proceedings, including post-grant review, inter partes review and derivation proceedings. The America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

The patent positions of companies engaged in the development and commercialization of biologics and pharmaceuticals are particularly uncertain. U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. In addition to

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increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by the U.S. Congress, the federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that may have a material adverse effect on our ability to obtain new patents and to defend and enforce our existing patents and patents that we might obtain in the future. We cannot predict how future decisions by the courts, the U.S. Congress or the USPTO may impact the value of our patents. Any of the foregoing, including any similar adverse changes in the patent laws of other jurisdictions, could also have a material adverse effect on our business, financial condition, prospects and results of operations.

No earlier than June 1, 2023, European patent applications will soon have the possibility, upon grant of a patent, of becoming Unitary Patents, or UP, which will be subject to the jurisdiction of the Unitary Patent Court, or UPC, and will be enforceable and revokable across the UPC jurisdiction of participating countries in a single action. The UPC will have jurisdiction over not only UPs but also over European patents that are validated in a UPC-participating country, unless these are opted-out during the initial period when the possibility to opt out exists. This will be the most significant change in European patent practice in forty years. As the UPC is a new court system, there is no precedent for the court, increasing the uncertainty of any litigation before it.

We may not be able to protect our intellectual property rights throughout the world.

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

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

Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent. If we or any of our licensors is forced to grant a license to third parties with respect to any patents relevant to our business, our business, financial condition, results of operations and prospects could be materially and adversely affected.

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Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time.

Patents have a limited lifespan. In most countries, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest national filing date. Various extensions may be available, but the life of a patent, and the protection it affords, is limited. Even if patents covering our product candidates are obtained, once the patent life has expired, we may be open to competition from competitive products. Given the amount of time required for the development, testing and regulatory review of new product candidates, it is possible that patents protecting our product candidates might expire before or shortly after we commercialize those candidates. Further, if we encounter delays in our clinical trials, the period of time during which we could market our product candidates under patent protection would be reduced. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

If we do not obtain patent term extension for any product candidates we may develop, our business may be materially harmed.

Depending upon the timing, duration and specifics of any FDA marketing approval of any product candidates we may develop, one or more U.S. patents that we license or may own in the future may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent extension term of up to five years as compensation for patent term lost during the FDA regulatory review process. A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent per product may be extended and only those claims covering the approved drug, a method for using it, or a method for manufacturing it may be extended. However, even if we were to seek a patent term extension, it may not be granted because of, for example, the failure to exercise due diligence during the testing phase or regulatory review process, the failure to apply within applicable deadlines, the failure to apply prior to expiration of relevant patents, or the failure to otherwise satisfy applicable requirements. Moreover, the applicable time period or the scope of patent protection afforded under an extension request could be less than we request. In addition, to the extent we wish to pursue patent term extension based on a patent that we in-license from a third party, we would need the cooperation of that third party. If we are unable to obtain patent term extension or if the term of any requested extension is less than we request, our competitors may obtain approval of competing products following our patent expiration, be able to enter the market sooner, and our revenue could be reduced, and our business, financial condition, prospects and results of operations could be materially harmed.

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

As of February 28, 2023, we have three registered trademarks relating to the Freeline name and stylized word in the United States, and corresponding trademark registrations have been obtained in some other jurisdictions. However, our pending and future trademark applications in the United States and other jurisdictions may not be allowed or may subsequently be opposed. Once filed and registered, our trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks. As a means to enforce our trademark rights and prevent infringement, we may be required to file trademark claims against third parties or initiate trademark opposition proceedings. This can be expensive and time-consuming, particularly for a company of our size. We may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition among potential partners or customers in our markets of interest. At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement claims brought by owners of other registered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively, and our business may be adversely affected. Our efforts to enforce or protect our proprietary rights related to trademarks, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.

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Risks Related to Government Regulation

Even if we complete the necessary clinical trials, we cannot predict when, or if, we will obtain regulatory approval to commercialize our product candidates and the approval may be for a narrower indication than we seek.

We cannot commercialize a product candidate until the appropriate regulatory authorities have reviewed and approved the product candidate. The FDA must review and approve any new pharmaceutical or biological product before it can be marketed and sold in the United States. The FDA regulatory review and approval process, which includes evaluation of preclinical studies and clinical trials of a product candidate and proposed labeling, as well as the evaluation of the manufacturing process and manufacturers’ facilities, is lengthy, expensive and uncertain. To obtain approval, we must, among other things, demonstrate with substantial evidence from well-controlled clinical trials that the product candidate is both safe and effective for each indication where approval is sought. Even if our product candidates meet the FDA’s safety and efficacy endpoints in clinical trials, the FDA may not complete their review processes in a timely manner, or we may not be able to obtain regulatory approval. The FDA has substantial discretion in the review and approval process and may refuse to file our application for substantive review or may determine after review of our data that our application is insufficient to allow approval of our product candidates. The FDA may require that we conduct additional preclinical studies, clinical trials or manufacturing validation studies and submit that data before it will reconsider our application. Additional delays may result if an FDA Advisory Committee or other regulatory authority recommends non-approval or restrictions on approval. In addition, we may experience delays or rejections based upon additional government regulation from future legislation or administrative action, or changes in regulatory authority policy during the period of product development, clinical trials and the review process. For example, recently, in part due to questions raised by the process underlying the approval of the Alzheimer’s disease drug Aduhelm®, government authorities and other stakeholders have been scrutinizing the accelerated approval pathway, with some stakeholders advocating for reforms. Even prior to the Aduhelm approval, the FDA has held Oncologic Drugs Advisory Committee meetings to discuss accelerated approvals for which confirmatory trials have not verified clinical benefit. Such scrutiny, among other factors, has resulted in voluntary withdrawals of certain products and indications approved on an accelerated basis. Moreover, spurred by the Aduhelm controversy, the HHS Office of Inspector General has initiated, and partially completed, an assessment of how the FDA implements the accelerated approval pathway. In addition, Section 3210 of the Consolidated Appropriations Act, 2023, revised the accelerated approval pathway. Although this legislation did not change the standard for accelerated approval, it, among other things, requires the FDA to specify the conditions for required post-marketing trials, permits the FDA to require such trials to be underway prior to, or within a specific period after, approval, requires sponsors to provide reports on post-marketing trial progress no later than 180 days after approval and every 180 days thereafter until such trials are completed, makes the failure to conduct required post-marketing trials with due diligence and the failure to submit the required reports prohibited acts, and details procedures the FDA must follow to withdraw an accelerated approval on an expedited basis. At this time, it is not clear what, if any, impact these developments may have on our business, financial condition, results of operations or prospects. A similar review may occur in the United Kingdom and European Union, where similar uncertainties exist.

The FDA, MHRA, European Commission or other regulatory authorities also may approve a product candidate for more limited indications than requested or may impose significant limitations in the form of narrow indications, warnings or a REMS/risk minimization measure. These regulatory authorities may require precautions or contraindications with respect to conditions of use or may grant approval subject to the performance of costly post-marketing studies or clinical trials. In addition, the FDA, MHRA, European Commission or other regulatory authorities may not approve the labeling claims that are necessary or desirable for the successful commercialization of our product candidates. Any of the foregoing scenarios could harm the commercial prospects for our product candidates and negatively impact our business, financial condition, results of operations and prospects.

Delays in obtaining regulatory approval of our manufacturing process and any facility we may eventually establish or disruptions in our manufacturing process may delay or disrupt our product development and commercialization efforts.

Before we can begin to commercially manufacture our product candidates, whether in a third-party facility or our own facility, if established, we must obtain regulatory approval from the FDA for our manufacturing process and any such facility. A manufacturing authorization must also be obtained from the appropriate regulatory authorities in the United Kingdom and Member States of the European Union. In addition, we or a third-party manufacturer must typically pass a pre-approval inspection of the manufacturing facility by the FDA or other relevant authorities before our product candidates can obtain marketing approval. In order to obtain approval, we will need to ensure that all of our processes, methods and equipment are compliant with cGMP, and perform extensive audits of vendors, contract

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laboratories and suppliers. If any of our vendors, contract laboratories or suppliers are found to be noncompliant with cGMP, we may experience delays or disruptions in manufacturing while we work with these third parties to remedy the violation or to identify suitable replacement vendors. The cGMP requirements govern quality control of the manufacturing process and documentation policies and procedures. In complying with cGMP, we will be obligated to expend time, money and effort in production, recordkeeping and quality control to assure that our product meets applicable specifications and other requirements. If we fail to comply with these requirements, we would be subject to possible regulatory action and may not be permitted to sell any product candidate that we may develop.

If we or our third-party manufacturers fail to comply with applicable cGMP regulations, the FDA, MHRA, EMA, European Commission and other regulatory authorities can impose regulatory sanctions including, among other things, refusal to approve a pending application for a new product candidate or suspension, variation or revocation of a pre-existing approval. Such an occurrence may cause our business, financial condition, results of operations and prospects to be harmed.

Additionally, if the supply from our third-party manufacturers is interrupted, there could be a significant disruption in commercial supply of our product candidates. We do not currently have a backup manufacturer of our product candidate supply for clinical trials or commercial sale. An alternative manufacturer would need to be qualified through a supplement to its regulatory filing, which could result in further delays. The regulatory authorities also may require additional clinical trials if a new manufacturer is relied upon for commercial production. Switching manufacturers may involve substantial costs and could result in a delay in our desired clinical and commercial timelines.

If our competitors are able to obtain orphan drug exclusivity for products that constitute the same drug and treat the same indications as our product candidates, we may not be able to have competing products approved by applicable regulatory authorities for a significant period of time. In addition, even if we obtain orphan drug exclusivity for any of our product candidates, such exclusivity may not protect us from competition.

Regulatory authorities in some jurisdictions, including the United States and the European Union, may designate products for relatively small patient populations as orphan drugs before their authorization. In contrast, the orphan drug regime in the United Kingdom does not include a step of designating a product candidate as an orphan drug prior to the authorization process; this is instead assessed on authorization and the criteria are similar to those in the European Union. Under the Orphan Drug Act of 1983, the FDA may designate a product candidate as an orphan drug if it is intended to treat a rare disease or condition, which is generally defined as having a patient population of fewer than 200,000 individuals in the United States, or a patient population greater than 200,000 in the United States where there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States. In the European Union, the European Commission, based on the scientific assessment by the EMA’s Committee for Orphan Medicinal Products, grants orphan drug designation to promote the development of products that are intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting not more than five in 10,000 persons in the European Union. Additionally, orphan designation is granted for products intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition and when, without incentives, it is unlikely that sales of the drug in the European Union would be sufficient to justify the necessary investment in developing the drug or biologic product. In any event, orphan designation may be granted in the European Union only if there are either no satisfactory method of diagnosis, prevention or treatment of the condition concerned, or, if such a method exists, the medicinal product in question is likely to be of significant benefit to the patients affected by the condition.

Although we have received orphan drug designation for each of our product candidates from the FDA in the United States and from the European Commission in the European Union, the designation of a product candidate as an orphan product does not guarantee that any regulatory agency will accelerate regulatory review of, or ultimately approve, that product candidate, nor does it limit the ability of any regulatory agency to grant orphan drug designation to product candidates of other companies that treat the same indications as our product candidates prior to our product candidates receiving marketing approval and orphan exclusivity. For example, we are aware that Prevail Therapeutics was also granted orphan product designation for its product candidate for the treatment of Gaucher disease. As a result, there can be no assurance that FLT201 will receive marketing approval or orphan exclusivity for the applicable period. Moreover, a recent Eleventh Circuit decision in Catalyst Pharmaceuticals, Inc. vs. FDA regarding interpretation of

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the Orphan Drug Act exclusivity provisions as applied to drugs approved for orphan indications narrower than the drug’s orphan designation has the potential to significantly broaden the scope of orphan drug exclusivity for such products. The FDA has indicated that it will not apply Catalyst in other circumstances, but the agency may thus remain open to suit in other similar scenarios.

Generally, if a product candidate with an orphan drug designation receives the first marketing approval for the indication for which it has such designation, the product is entitled to a period of marketing exclusivity, which precludes the FDA or the European Commission of EU Member State from approving another marketing application for a product that constitutes the same or similar drug treating the same indication for that marketing exclusivity period, except in limited circumstances. Similarly, in the United Kingdom, if a product receives the first marketing approval in an indication and obtains orphan drug status on authorization (based on similar criteria as designation in the European Union), MHRA is precluded from approving another marketing application for a product that constitutes the same or similar drug treating the same indication for that marketing exclusivity period, except in limited circumstances. If another sponsor receives such approval for a similar product or in a similar indication before we do (regardless of our orphan drug designation), we may be precluded from receiving marketing approval for our product candidates for the applicable exclusivity period. The applicable period is seven years in the United States and ten years in the European Union and United Kingdom (although the regime is currently being reviewed in the European Union which may lead to changes to this exclusivity period). The exclusivity period in the European Union and United Kingdom can be reduced to six years if a product no longer meets the criteria for orphan drug designation or if the product is sufficiently profitable so that market exclusivity is no longer justified. Orphan drug exclusivity may be revoked if any regulatory agency determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the product to meet the needs of patients with the rare disease or condition. The most common approach to overcoming orphan exclusivity is to prove clinical superiority of the second-to-market therapy to the currently approved first-to-market product, and we may not be able to prove this to the extent necessary to overcome the exclusivity granted to the first-to-market-therapy.

Likewise, even if we obtain orphan drug exclusivity for a product candidate, that exclusivity may not effectively protect the product candidate from competition because different drugs can be approved for the same condition. In the United States, even after an orphan drug is approved, the FDA may subsequently approve another drug for the same condition if the FDA concludes that the latter drug is not the same drug or is clinically superior in that it is shown to be safer in a substantial portion of the target populations, more effective or otherwise makes a major contribution to patient care. In the European Union and United Kingdom, marketing authorization may be granted to a similar medicinal product for the same orphan indication if:

•the second applicant can establish in its application that its medicinal product, although similar to the orphan medicinal product already authorized, is safer, more effective or otherwise clinically superior;

•the holder of the marketing authorization for the original orphan medicinal product consents to a second orphan medicinal product application; or

•the holder of the marketing authorization for the original orphan medicinal product cannot supply sufficient quantities of orphan medicinal product.

We may seek priority review designation for one or more of our product candidates, but we might not receive such designation, and even if we do, such designation may not lead to a faster regulatory review or approval process.

If the FDA determines that a product candidate offers a treatment for a serious condition and, if approved, the product would provide a significant improvement in safety or effectiveness, the FDA may designate the product candidate for priority review. Sponsors may also obtain a priority review voucher upon approval of a BLA for certain qualifying diseases and conditions that can be applied to a subsequent BLA submission. A priority review designation means that the goal for the FDA to review an application is six months after the FDA accepts the application for filing, rather than the standard review period of ten months after acceptance for filing. We may request priority review for our product candidates. The FDA has broad discretion with respect to whether or not to grant priority review status to a product candidate, so even if we believe a particular product candidate is eligible for such designation or status, in particular if such product candidate has received a Breakthrough Therapy designation or regenerative medicine advanced therapy, or RMAT, designation, the FDA may decide not to grant it. Moreover, a priority review designation does not result in expedited development and does not necessarily result in expedited regulatory review or approval process or necessarily confer any advantage with respect to approval compared to conventional FDA procedures. Receiving priority review from the FDA does not guarantee approval within the six-month review cycle or at all.

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Even if we obtain regulatory approval for a product candidate, our product candidates will remain subject to regulatory oversight.

Even if we obtain regulatory approval for our product candidates, they will be subject to ongoing regulatory requirements for manufacturing, distribution, labeling, packaging, storage, advertising, promotion, sampling, recordkeeping and submission of safety and other post-market information. Any regulatory approvals that we receive for our product candidates may also be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the quality, safety and efficacy of the product. For example, in the United States, the holder of an approved BLA is obligated to monitor and report adverse events and any failure of a product to meet the specifications in the BLA. FDA guidance advises that patients treated with some types of gene therapy undergo follow-up observations for potential adverse events for as long as 15 years. The holder of an approved BLA also must submit new or supplemental applications and obtain FDA approval for certain changes to the approved product, product labeling or manufacturing process. In addition, the holder of a BLA must comply with the FDA’s advertising and promotion requirements, such as those related to the prohibition on promoting products for uses or in patient populations that are not described in the product’s approved labeling, known as “off-label use.” Advertising and promotional materials must comply with FDA rules and are subject to FDA review, in addition to other potentially applicable federal and state laws.

In addition, product manufacturers and their facilities are subject to payment of user fees and continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP requirements and adherence to commitments made in the BLA or foreign marketing application. If we, or a regulatory authority, discover previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured or if a regulatory authority disagrees with the promotion, marketing or labeling of that product, a regulatory authority may impose restrictions relative to that product, the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing.

If we fail to comply with applicable regulatory requirements following approval of our product candidates, a regulatory or enforcement authority may:

•issue a warning letter asserting that we are in violation of the law;

•seek an injunction or impose administrative, civil or criminal penalties or monetary fines;

•suspend and/or revoke regulatory approval;

•suspend any ongoing clinical trials;

•refuse to approve a pending BLA or comparable foreign marketing application (or any supplements thereto) submitted by us or our strategic partners;

•restrict the marketing or manufacturing of the product;

•seize or detain the product or otherwise require the withdrawal of the product from the market;

•refuse to permit the import or export of the product; or

•refuse to allow us to enter into supply contracts, including government contracts.

Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity. The occurrence of any event or penalty described above may inhibit our ability to commercialize our product candidates and adversely affect our business, financial condition, results of operations and prospects.

In addition, the FDA’s policies, and those of the MHRA, EMA and other regulatory authorities may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain

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regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability, which would negatively impact our business, financial condition, results of operations and prospects.

For instance, in response to the COVID-19 pandemic, in March 2020 the FDA announced its intention to postpone most inspections of foreign manufacturing facilities and products while local, national and international conditions warrant. In July 2020, the FDA announced its goal of restarting domestic on-site inspections during the week of July 20 but the ability to sustain such activities will depend on data about the virus’ trajectory in a given state and locality and the rules and guidelines that are put in place by state and local governments. The FDA has developed a rating system to assist in determining when and where it is safest to conduct prioritized domestic inspections. More recently, in April 2021, the FDA issued guidance describing how it will request and conduct voluntary remote interactive evaluations of manufacturing and outsourcing facilities as well as facilities involved in non-clinical and clinical research. However, in December 2021, the FDA put certain inspections on temporary hold, which it extended for several additional weeks in January 2022 due to the spread of the Omicron COVID-19 variant. The FDA resumed such inspections on February 7, 2022. More recently, the FDA has continued to monitor and implement changes to its inspectional activities to ensure the safety of its employees and those of the firms it regulates as it adapts to the evolving COVID-19 pandemic and has also indicated that it intends to utilize remote regulatory assessments and other alternative tools beyond the COVID-19 pandemic. In addition, during the COVID-19 pandemic, shifting of FDA staff resources to COVID-19 related reviews has the potential to impact review timelines for marketing applications for non-COVID-19 products. Regulatory authorities outside the U.S. may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic and may experience delays in their regulatory activities.

In addition, on March 27, 2020, Congress enacted the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act. Among other provisions, the CARES Act made a number of changes to the United States Federal Food, Drug, and Cosmetic Act, or FDCA, aimed at preventing drug shortages. The recently enacted Consolidated Appropriations Act, 2023, also contains a number of provisions intended to resolve issues relating to medical product shortages. Similarly, the FDA has issued a number of guidance documents describing the agency’s expectations for how drug manufacturers should comply with various FDA requirements during the pandemic, including with respect to conducting clinical trials, distributing drug samples, and reporting post-marketing adverse events. As the pandemic subsides, the determination that a public health emergency exists issued by the HHS Administration for Strategic Preparedness and Response under Section 319 of the Public Health Service Act, or PHSA, will end, thereby resulting in the FDA ceasing such policies and us assuming a greater compliance burden. Moreover, as a result of the COVID-19 pandemic, there has been increasing political and regulatory scrutiny of foreign-sourced drugs and foreign drug supply chains, resulting in proposed and enacted legislative and executive actions, including Executive Orders, to incentivize or compel drug manufacturing operations to relocate to the United States. Such actions may have an adverse impact on our business and operations.

Even if we obtain and maintain approval for our product candidates in a major pharmaceutical market such as the United States, we may never obtain approval for our product candidates in other major markets.

In order to market any products in a country or territory, we must establish and comply with numerous and varying regulatory requirements of such countries or territories regarding safety and efficacy. Clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not mean that regulatory approval will be obtained in any other country. Approval procedures vary among countries and can involve additional product testing and validation and additional administrative review periods. Seeking regulatory approvals in all major markets could result in significant delays, difficulties and costs for us and may require additional preclinical studies or clinical trials, which would be costly and time-consuming. Regulatory requirements can vary widely from country to country and could delay or prevent the introduction of our product candidates in those countries. Satisfying these and other regulatory requirements is costly, time-consuming, uncertain and subject to unanticipated delays. In addition, our failure to obtain regulatory approval in any country may delay or have negative effects on the process for regulatory approval in other countries. We currently do not have any product candidates approved for sale in any jurisdiction, whether in the United States, Europe or any other international markets, and we do not have experience in obtaining regulatory approval in international markets. If we fail to comply with regulatory requirements in international markets or to obtain and maintain required approvals, our target market will be reduced and our ability to realize the full market potential of our product candidates will be compromised.

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The withdrawal of the United Kingdom from the European Union, commonly referred to as “Brexit,” may adversely impact our ability to obtain regulatory approvals of our product candidates in the European Union, or the United Kingdom, result in restrictions or imposition of taxes and duties for importing our product candidates into the European Union or the United Kingdom, and may require us to incur additional expenses in order to develop, manufacture and commercialize our product candidates in the European Union or the United Kingdom.

The United Kingdom is a major market for pharmaceutical products. Following the result of a referendum in 2016, the United Kingdom left the European Union on January 31, 2020, commonly referred to as Brexit. Pursuant to the formal withdrawal arrangements agreed to by the United Kingdom and the European Union, the United Kingdom entered into a transition period until December 31, 2020, or the Transition Period, during which the United Kingdom remained within the European Union single market and customs union and European Union rules continued to apply in the United Kingdom. In December 2020, the United Kingdom and European Union signed a trade and cooperation agreement, or the TCA, which became provisionally effective on January 1, 2021 and entered into force on May 1, 2021. The TCA covers general objectives and a framework for the relationship between the United Kingdom and the European Union, including with respect to trade, transport, visas, judicial matters, law enforcement and security matters. Significant political and economic uncertainty remains about the application and interpretation of the TCA and how Brexit will impact the life sciences industry in Europe, including our company, such as with respect to ongoing or future clinical trials. Brexit related matters may take several years to be clarified and resolved.

In addition, as a result of Brexit, the EMA, formerly situated in London, relocated to Amsterdam in March 2019. The relocation, coupled with the impact of the COVID-19 pandemic and discussions about the ongoing relationship with the United Kingdom, continues to interrupt current administrative routines and occupy resources, which may generally adversely affect our dealings with the EMA. Further, because a significant proportion of the regulatory framework in the United Kingdom applicable to our business and our product candidates is derived from European Union directives and regulations, Brexit has had, and will continue to have, a material impact on the regulatory regime with respect to the development, manufacture, importation, approval and commercialization of our product candidates in the United Kingdom. For example, Great Britain is no longer covered by the centralized procedure for obtaining European Union-wide marketing authorization from the European Commission (although Northern Ireland remains part of the procedure) and a separate marketing authorization will be required to market our product candidates in Great Britain (although the United Kingdom has agreed to take decisions of the European Commission into account when considering authorization of products in Great Britain). The United Kingdom is also conducting a number of consultations on the regulation of medicinal products (and other products) in the United Kingdom post-Brexit, and on the extent to which UK law that is derived from EU law will continue to apply in the United Kingdom. As a result, we cannot predict the practical impact that Brexit will have on (i) the marketing of pharmaceutical products, (ii) the process to obtain regulatory approval in the United Kingdom for product candidates and the relationship with the European system and authorizations, or (iii) the operation of the award of protections and exclusivities that are part of the United Kingdom and European Union legal framework (for instance Regulatory Data Protection, Supplementary Protection Certificates, Pediatric Extensions or Orphan exclusivity). Any delay in obtaining, or an inability to obtain, any marketing approvals, as a result of Brexit or otherwise, would prevent us from commercializing our product candidates in the United Kingdom or the European Union and restrict our ability to generate revenue and achieve and sustain profitability.

There has been disruption to imports and exports due in part to Brexit and the change in administration in crossing the border into and out of the United Kingdom. Continued or sustained delays in delivery of any materials necessary for our clinical supply on a timely basis, or at all, due to Brexit or otherwise could result in significant delays in our manufacturing, clinical and research operations.

In addition, we may be required to pay taxes or duties or be subjected to other hurdles or costs in connection with the importation of our product candidates into the European Union or the United Kingdom, or we may incur expenses in establishing a manufacturing facility in the European Union in order to circumvent such hurdles. If any of these outcomes occur, we may be forced to restrict or delay efforts to seek regulatory approval in the United Kingdom or the European Union for our product candidates, or incur significant additional expenses to operate our business, which could significantly and materially harm or delay our ability to generate revenues or achieve profitability of our business.

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As a result of Brexit or other geopolitical events, other European countries may seek to conduct referenda with respect to their continuing membership with the European Union. Given these possibilities and others we may not anticipate, as well as the absence of comparable precedent, we continue to assess what financial, regulatory and legal implications the withdrawal of the United Kingdom from the European Union will have and how such withdrawal will affect us, and the full extent to which our business could be adversely affected.

We may seek a conditional marketing authorization in Europe for some or all of our current product candidates, but we may not be able to obtain or maintain such designation.

As part of its marketing authorization process, the European Commission may grant marketing authorizations for certain categories of medicinal products on the basis of less complete data than is normally required, when doing so may meet unmet medical needs of patients and serve the interest of public health. In such cases, it is possible for the EMA’s Committee for Medicinal Products for Human Use, or CHMP, to recommend the granting of a marketing authorization, subject to certain specific obligations to be reviewed annually, which is referred to as a conditional marketing authorization. This may apply to medicinal products for human use that are approved by the European Commission, including those that aim at the treatment, the prevention, or the medical diagnosis of seriously debilitating or life-threatening diseases and this includes those designated as orphan medicinal products.

A conditional marketing authorization may be granted when the European Commission, on the basis of the scientific opinion of the CHMP, finds that, although comprehensive clinical data referring to the safety and efficacy of the medicinal product have not been supplied, all the following requirements are met:

•the risk-benefit balance of the medicinal product is positive;

•it is likely that the applicant will be in a position to provide the comprehensive clinical data;

•unmet medical needs will be fulfilled; and

•the benefit to public health of the immediate availability on the market of the medicinal product concerned outweighs the risk inherent in the fact that additional data is still required.

The granting of a conditional marketing authorization is restricted to situations in which only the clinical part of the application is not yet fully complete. Incomplete preclinical or quality data may only be accepted if duly justified and only in the case of a product intended to be used in emergency situations in response to public health threats. Conditional marketing authorizations are valid for one year, on a renewable basis. The holder will be required to complete ongoing trials or to conduct new trials with a view to confirming that the benefit-risk balance is positive. In addition, specific obligations may be imposed in relation to the collection of pharmacovigilance data.

Granting a conditional marketing authorization allows medicines to reach patients with unmet medical needs earlier than might otherwise be the case and will ensure that additional data on a product is generated, submitted, assessed and acted upon. Although we may seek a conditional marketing authorization for one or more of our product candidates, the European Commission, on the basis of the scientific opinion of the EMA’s CHMP may ultimately not agree that the requirements for such conditional marketing authorization have been satisfied and hence delay the commercialization of our product candidates. A similar process is available in the United Kingdom, and similar risks arise.

Healthcare legislative reform measures may have a negative impact on our business and results of operations.

In the United States and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell any product candidates for which we obtain marketing approval.

In the United States, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, or the MMA, changed the way Medicare covers and pays for pharmaceutical products. The MMA expanded Medicare coverage for outpatient drug purchases by adding a new Medicare Part D program and introduced a new reimbursement methodology based on average sales prices for Medicare Part B physician-administered drugs. In addition, the MMA authorized Medicare Part D prescription drug plans to limit the number of drugs that will be covered in any therapeutic class in their formularies. The MMA’s cost reduction initiatives and other provisions could

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decrease the coverage and price that we receive for any approved products. While the MMA applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates. Therefore, any reduction in reimbursement that results from the MMA may result in a similar reduction in payments from private payors. Similar regulations or reimbursement policies may be enacted in international markets which could similarly impact our business.

In March 2010, the PPACA was passed, which has substantially changed the way healthcare is financed by both the government and private insurers, and significantly impacts the U.S. pharmaceutical industry. The PPACA, among other things: (i) addresses a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; (ii) increases the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extends the rebate program to individuals enrolled in Medicaid managed care organizations; (iii) establishes annual fees and taxes on manufacturers of certain branded prescription drugs; (iv) expands the availability of lower pricing under the 340B drug pricing program by adding new entities to the program; and (v) establishes a Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% (increased to 70% pursuant to the Bipartisan Budget Act of 2018, effective as of January 1, 2019) point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D. Under the IRA, the coverage gap discount program will be eliminated, effective January 1, 2025. Additionally, in the United States, the Biologics Price Competition and Innovation Act of 2009 created an abbreviated approval pathway for biologic products that are demonstrated to be “highly similar” (biosimilar) or “interchangeable” with an FDA-approved biologic product. This new pathway could allow competitors to reference data from biologic products already approved after twelve years from the time of approval. This could expose us to potential competition by lower-cost biosimilars even if we commercialize a product candidate faster than our competitors. Moreover, the creation of this abbreviated approval pathway does not preclude or delay a third party from pursuing approval of a competitive product candidate via the traditional approval pathway based on their own clinical trial data. In addition, Section 3206 of the Consolidated Appropriations Act, 2023, permits multiple interchangeable biological products to share a period of first interchangeable exclusivity if approved on the same day.

Additional changes that may affect our business include those governing enrollment in federal healthcare programs, reimbursement changes, rules regarding prescription drug benefits under the health insurance exchanges and fraud and abuse and enforcement. For example, in order for our products to be eligible for payment under Medicare Part B and Medicaid, if and when approved, we will be required to enter into a Medicaid Drug Rebate Agreement, a 340B Pharmaceutical Pricing Agreement, and agreements with the Department of Veterans Affairs related to Federal Supply Schedule pricing. These programs have various requirements, including calculation and submission of pricing data pursuant to complex statutory, regulatory, and sub-regulatory guidance. The guidance governing such calculations is not always clear. Specifically related to the Medicaid Drug Rebate Program, on February 1, 2016, CMS issued a Final Rule implementing the Medicaid Drug Rebate provisions of the PPACA. To comply with these requirements, manufacturers are permitted to adopt reasonable assumptions where law, regulation, and guidance do not address specific participation issues, which in turn may impact the level of rebates owed under the program. Additionally, CMS issued a rule on December 21, 2020 that also significantly alters a number of Medicaid Drug Rebate Program requirements. Compliance with the various requirements of these pricing programs can require significant investments in personnel, systems, and resources. Failure to calculate prices properly, report timely, or offer required discounts or rebates could subject us to substantial penalties or dispute resolution mechanisms.

In addition, several drug manufacturers have commenced litigation, which remains ongoing, challenging the legality of contract pharmacy arrangements under the 340B Drug Discount Program, which may affect the way in which manufacturers are required to extend the 340B Drug Discount Program prices to covered entities, including through contract pharmacies. There are also ongoing challenges regarding the implementation of the 340B Drug Discount Program Administrative Dispute Resolution Process, which is in part intended to resolve claims by covered entities that they have been overcharged for covered outpatient drugs by manufacturers. In particular, while a final rule issued in December 2020 implementing a 340B Administrative Dispute Resolution Process was preliminarily enjoined by a court with respect to the plaintiff in that matter, the Health Resources and Services Administration, or HRSA, has initiated dispute resolution proceedings against other manufacturers. Additionally, in November 2022, HRSA issued a new proposed rule titled “340B Drug Pricing Program; Administrative Dispute Resolution,” which is intended to address “policy and operational challenges” with the current rule. The modification of existing

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administrative dispute resolution processes, or the adoption of new rules governing the resolution of such disputes, may have a material adverse impact on our revenue should we participate in the 340B Drug Discount Program after receiving approval for our product candidates.

Continued implementation of the PPACA and the passage of additional laws and regulations may result in the expansion of new programs such as Medicare payment for performance initiatives, and may impact existing government healthcare programs, such as by improving the physician quality reporting system and feedback program. For each state that does not choose to expand its Medicaid program, there likely will be fewer insured patients overall, which could impact the sales, business and financial condition of manufacturers of branded prescription drugs. Where patients receive insurance coverage under any of the new options made available through the PPACA, manufacturers may be required to pay Medicaid rebates on that resulting drug utilization. The U.S. federal government also has announced delays in the implementation of key provisions of the PPACA. The implications of these delays for our business and financial condition, if any, are not yet clear.

Since its enactment, some of the provisions of the PPACA have yet to be fully implemented, while certain provisions have been subject to judicial, congressional, and executive challenges. As a result, there have been delays in the implementation of, and action taken to repeal or replace, certain aspects of the PPACA. The Trump Administration took executive actions to undermine or delay the implementation of the PPACA, but these were rescinded by the Biden Administration. Further, on June 14, 2018, the U.S. Court of Appeals for the Federal Circuit ruled that the federal government was not required to pay to third-party payors more than $12 billion in PPACA risk corridor payments that they argued were owed to them. This decision was appealed to the U.S. Supreme Court, which on April 27, 2020, reversed the U.S. Court of Appeals for the Federal Circuit’s decision and remanded the case to the U.S. Court of Federal Claims, concluding the government has an obligation to pay these risk corridor payments under the relevant formula. It is not clear what effect this result will have on our business, but we will continue to monitor any developments. While Congress has not passed comprehensive repeal legislation to date, it has enacted laws that modify certain provisions of the PPACA, such as the Tax Cuts and Jobs Act of 2017, or TCJA, which decreased, effective January 1, 2019, the tax-based shared responsibility payment imposed by the PPACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year, commonly referred to as the “individual mandate,” to $0. On December 14, 2018, a federal district court in Texas ruled the individual mandate is a critical and inseverable feature of the PPACA, and therefore, because it was repealed as part of the TCJA, the remaining provisions of the PPACA are invalid as well. The prior Trump Administration and CMS both stated that the ruling had no immediate effect, and on December 18, 2019, the Fifth Circuit of the U.S. Court of Appeals held that the individual mandate is unconstitutional, and remanded the case to the lower court to reconsider its earlier invalidation of the full PPACA. An appeal was taken to the United States Supreme Court, which heard oral arguments in the case on November 10, 2020. The United States Supreme Court dismissed this challenge to the PPACA on June 17, 2021. Additionally, there is ongoing litigation regarding the constitutionality of the PPACA’s preventive services mandate. Although the PPACA remains in effect, it is unclear at this time what effect further changes to the PPACA would have on our business. Litigation and legislation related to aspects of the PPACA may continue, with unpredictable and uncertain results.

Other legislative changes have been proposed and adopted in the United States since the PPACA was enacted. On January 22, 2018, President Trump signed a continuing resolution on appropriations for fiscal year 2018 that delayed the implementation of certain PPACA-mandated fees, including the so called “Cadillac” tax on certain high cost employer-sponsored insurance plans, the annual fee imposed on certain health insurance providers based on market share, and the medical device excise tax on nonexempt medical devices. However, on December 20, 2019, President Trump signed into law the Further Consolidated Appropriations Act (H.R. 1865), which repeals the Cadillac tax, the health insurance provider tax, and the medical device excise tax. It is impossible to determine whether similar taxes could be instated in the future. The Bipartisan Budget Act of 2018, also amended the PPACA, effective January 1, 2019, by increasing the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and closing the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole.” In 2022, Congress passed the IRA, which significantly changes the Medicare Part D benefit structure. Effective in 2025, the IRA eliminates the coverage gap phase and the coverage gap discount program. The law establishes a new manufacturer discount program, which generally will require manufacturers of applicable drugs to provide a 10% discount during the initial phase and a 20% discount during the catastrophic phase of the Part D benefit. The IRA also establishes a $2,000 cap on beneficiary out-of-pocket costs. On January 2, 2013, the American Taxpayer Relief Act

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of 2012, or ATRA, was signed into law, which, among other things, reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. Under the Statutory Pay-As-You-Go Act of 2010 (Statutory PAYGO), the White House Office of Management and Budget is required to issue a sequestration order (capped at 4% for Medicare payments) if the five or ten-year PAYGO scorecard shows a net cost at the end of a Congressional session. The American Rescue Plan Act of 2021 was expected to trigger a Statutory PAYGO sequestration order at the end of the 2021 Congressional session. However, subsequent legislation has delayed a Statutory PAYGO sequestration order until after 2024. Additionally, in August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs. This includes aggregate reductions of Medicare payments to providers up to 2% per fiscal year, and, due to subsequent legislative amendments, will remain in effect through the first six months of 2032 unless additional Congressional action is taken. However, the Medicare sequester reductions under the Budget Control Act were suspended from May 1, 2020 through March 31, 2022 due to the COVID-19 pandemic. There was a 1% reduction through the end of June 2022, after which the cuts returned to 2%.

Moreover, CMS published a final rule permitting further collections and payments to and from certain PPACA qualified health plans and health insurance issuers under the PPACA risk adjustment program in response to the outcome of federal district court litigation regarding the method CMS uses to determine this risk adjustment. In addition, CMS published a final rule that gives states greater flexibility, starting in 2020, in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the PPACA for plans sold through such marketplaces. In November 2022, CMS published a request for information on potential changes to the essential health benefit requirements, including regarding how state benchmark plans describe essential health benefits. Other legislative changes have been proposed and adopted in the United States since the PPACA was enacted.

There has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices. Specifically, there have been several recent U.S. Congressional inquiries and proposed federal and state legislation and regulatory actions designed to, among other things, bring more transparency to drug pricing (including, for example, by requiring drug manufacturers to disclose planned drug price increases and the rationales for such increases), implement data collection and reporting under Section 204 of Title II of Division BB of the Consolidated Appropriations Act, 2021, which requires, among other things, health plans and issuers to disclose rebates, fees, and other remuneration provided by drug manufacturers related to certain pharmaceutical products, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and revise rules associated with the calculation of Medicaid Average Manufacturer Price and Best Price, including the removal of the current statutory 100% of Average Manufacturer Price per-unit cap on Medicaid rebate liability effective as of January 1, 2024 under the American Rescue Plan Act of 2021, which may significantly affect the amount of rebates paid on prescription drugs under Medicaid and the prices that are required to be charged to covered entities under the 340B Drug Discount Program when we commercialize products. On September 24, 2020, HHS and FDA implemented a final rule allowing for the commercial importation of certain prescription drugs from Canada through FDA-authorized, time-limited programs. Further, on November 20, 2020, HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law. The Biden Administration subsequently delayed the implementation of this portion of the rule from January 1, 2022 to January 1, 2023 in response to ongoing litigation. The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers. The implementation of the remainder of the rule was delayed until January 1, 2023, as a result of pending litigation. Subsequent legislation has further delayed implementation until January 1, 2032. On November 20, 2020, CMS issued an interim final rule implementing former President Trump’s Most Favored Nation executive order, which would tie Medicare Part B payments for certain physician-administered drugs to the lowest price paid in other economically advanced countries, effective January 1, 2021. On December 28, 2020, the United States District Court in Northern California issued a nationwide preliminary injunction against implementation of the interim final rule. Although HHS withdrew this interim final rule as a result, HHS may consider similar actions in the future, which may affect future medicines. In July 2021, President Biden issued an executive order pertaining to drug pricing, which

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expressed support for legislation allowing direct negotiation in Medicare Part D and inflationary rebates, and directed various executive branch agencies to take actions to lower drug prices and promote generic competition, including directing the FDA to support and work with states and Indian Tribes to develop importation plans to import prescription drugs from Canada. The executive order required the Secretary of Health and Human Services to develop a comprehensive plan for addressing drug prices. The plan was released on September 9, 2021, and it includes support for legislative and administrative actions that would improve affordability, access, competition, and foster scientific innovation. In August 2022, Congress passed the Inflation Reduction Act, which includes drug pricing reforms that would, among other things, (i) allow the federal government to negotiate prices for some high-cost drugs covered under Medicare Parts B and D, (ii) introduce inflationary rebates on certain Medicare Part B and Medicare Part D drugs to support limits on drug price increases in Medicare, and (iii) redesign the structure of the Part D benefit. Congress or the Administration may take further actions to control drug prices. In October 2022, President Biden issued an Executive Order that directs CMS’s Center for Medicare and Medicaid Innovation to consider new healthcare payment and delivery models that would lower drug costs and promote access to innovative therapies for Medicare and Medicaid beneficiaries. On February 14, 2023, HHS issued a report to the White House outlining three CMMI models that the Secretary has selected for testing: (i) Medicare High-Value Drug List Model, under which Part D plans would offer a Medicare-defined standard list of 150 generic drugs for a $2 maximum copayment; (2) Cell & Gene Therapy Access Model, under which CMS would coordinate multi-state Medicaid outcomes-based agreements with manufacturers of cell and gene therapies; and (3) Accelerating Clinical Evidence Model, which would adjust Medicare Part B payment amounts for drugs approved under the accelerated approval pathway. The report also directs CMMI to evaluate potential models in other areas, including accelerating biosimilar adoption, price transparency, and access to cell and gene therapy in Medicare fee-for-service. The recent budget proposal issued by President Biden would also expand the applicability of the IRA negotiation provisions to additional drugs, among other proposals.

Further, on May 30, 2018, the Right to Try Act, was signed into law. The law, among other things, provides a federal framework for certain patients to access certain investigational new drug products that have completed a Phase 1 clinical trial and that are undergoing investigation for FDA approval. Under certain circumstances, eligible patients can seek treatment without enrolling in clinical trials and without obtaining FDA permission under the FDA expanded access program. There is no obligation for a pharmaceutical manufacturer to make its drug products available to eligible patients as a result of the Right to Try Act.

At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. For example, some states have passed legislation establishing Prescription Drug Affordability Boards, which in certain circumstances may have the authority to establish upper payment limits for prescription drugs. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs. These measures could reduce the ultimate demand for our product candidates, once approved, or put pressure on our product pricing.

Our ability to generate revenue from product candidates could be adversely affected by changes in healthcare spending and policy in the United States and abroad. In the United States, the European Union and other potentially significant markets for our product candidates, government authorities and third-party payors are increasingly attempting to limit or regulate the price of medicinal products and services, particularly for new and innovative products and therapies, which has resulted in lower average selling prices and delays to reimbursement coverage. Furthermore, the increased emphasis on managed healthcare in the United States and on country and regional pricing and reimbursement controls in the European Union will put additional pressure on product pricing, reimbursement and usage, which may adversely affect our future product sales and results of operations. These pressures can arise from rules and practices of managed care groups, judicial decisions and governmental laws and regulations related to Medicare, Medicaid and healthcare reform, pharmaceutical reimbursement policies and pricing in general.

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There have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal and state levels directed at broadening the availability of healthcare and containing or lowering the cost of healthcare. We cannot predict the initiatives that may be adopted in the future. The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare and/or impose price controls may adversely affect:

•the demand for our product candidates, if we obtain regulatory approval;

•our ability to set a price that we believe is fair for our product candidates;

•our ability to generate revenue and achieve or maintain profitability;

•the level of taxes that we are required to pay; and

•the availability of capital.

We expect that the PPACA, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our product candidates.

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

We are subject to the U.K. Bribery Act, the U.S. Foreign Corrupt Practices Act and other anti-corruption laws, as well as export control laws, import and customs laws, trade and economic sanctions laws and other laws governing our operations.

Our operations are subject to anti-corruption laws, including the U.K. Bribery Act 2010, or the Bribery Act, the U.S. Foreign Corrupt Practices Act of 1977, as amended, or the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. §201, the U.S. Travel Act, and other anti-corruption laws that apply in countries where we do business. The Bribery Act, the FCPA and these other laws generally prohibit us and our employees and intermediaries from authorizing, promising, offering, or providing, directly or indirectly, improper or prohibited payments, or anything else of value, to government officials or other persons to obtain or retain business or gain some other business advantage. Under the Bribery Act, we may also be liable for failing to prevent a person associated with us from committing a bribery offense. We and our commercial partners operate in a number of jurisdictions that pose a high risk of potential Bribery Act or FCPA violations, and we participate in collaborations and relationships with third parties whose corrupt or illegal activities could potentially subject us to liability under the Bribery Act, FCPA or local anti-corruption laws, even if we do not explicitly authorize or have actual knowledge of such activities. In addition, we cannot predict the nature, scope or effect of future regulatory requirements to which our international operations might be subject or the manner in which existing laws might be administered or interpreted.

We are also subject to other laws and regulations governing our international operations, including regulations administered by the governments of the United Kingdom and the United States, and authorities in the European Union, including applicable export control regulations, economic sanctions and embargoes on certain countries and persons, anti-money laundering laws, import and customs requirements and currency exchange regulations, collectively referred to as the Trade Control laws.

There is no assurance that we will be completely effective in ensuring our compliance with all applicable anti-corruption laws, including the Bribery Act, the FCPA or other legal requirements, including Trade Control laws. If we are not in compliance with the Bribery Act, the FCPA and other anti-corruption laws or Trade Control laws, we may be subject to criminal and civil penalties, disgorgement and other sanctions and remedial measures, and legal expenses, which could have an adverse impact on our business, financial condition, results of operations prospects and liquidity. Likewise, any investigation of any potential violations of the Bribery Act, the FCPA, other anti-corruption laws or Trade Control laws by the United Kingdom, United States or other authorities could also have an adverse impact on our reputation, our business, results of operations and financial condition and prospects.

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

Healthcare providers, physicians and third-party payors in the United States and elsewhere play a primary role in the recommendation and prescription of pharmaceutical products. Arrangements with third-party payors and customers can expose pharmaceutical manufacturers to broadly applicable fraud and abuse and other healthcare laws and regulations, including in the United States, without limitation, the federal Anti-Kickback Statute and the federal False Claims Act, or FCA, which may constrain the business or financial arrangements and relationships through which such companies sell, market and distribute biopharmaceutical products. In particular, the research of our product candidates, as well as the promotion, sales and marketing of healthcare items and services, as well as certain business arrangements in the healthcare industry, are subject to extensive laws designed to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may constrain a wide range of pricing, discounting, marketing and promotion, structuring and commissions, certain customer incentive programs and other business arrangements generally. Clinical trial activities, including arrangements with clinical trial investigators and sites and the use of information obtained in the course of patient recruitment for clinical trials, are also subject to these laws. The applicable federal, state and foreign healthcare laws and regulations laws that may affect our ability to operate include, but are not limited to:

•the federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind, in return for either the referral of an individual, or the purchase, lease, order, or recommendation or arrangement for the purchase, lease, order, or recommendation of a good, facility, item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs. This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand, and prescribers, purchasers and formulary managers on the other. The PPACA amended the intent requirement of the federal Anti-Kickback Statute, such that a person or entity does not need to have actual knowledge of this statute or specific intent to violate it. In addition, a claim submitted for payment to any federal health care program that includes items or services that were made as a result of a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA. There are a number of statutory exceptions and regulatory safe harbors protecting common activities from prosecution (e.g., discounts, personal services);

•federal civil and criminal false claims laws, including the FCA, and civil monetary penalty laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment or approval from Medicare, Medicaid or other government payors that are false, fictitious or fraudulent; knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim or an obligation to pay or transmit money or property to the federal government; or knowingly concealing or knowingly and improperly avoiding or decreasing or concealing an obligation to pay money to the federal government. A claim that includes items or services resulting from a violation of the federal Anti-Kickback Statute or certain marketing practices, including off-label promotion, may implicate the FCA. Manufacturers can be held liable under the FCA even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims. The FCA also permits a private individual acting as a “whistleblower” to bring qui tam actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery;

•the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes, including the Health Care Fraud Statute, that prohibits, among other things, a person from knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false or fraudulent statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating the Health Care Fraud Statute without actual knowledge of the statute or specific intent to violate it;

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•the Administrative Simplification provisions of HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their implementing regulations, which impose certain requirements relating to the privacy and security of individually identifiable health information without appropriate authorization by “covered entities”, such as health plans, healthcare clearinghouses and healthcare providers, and by their respective business associates, which are independent contractors or agents of covered entities that perform certain functions or activities that involve the creation, use, receipt, maintenance or disclosure of individually identifiable health information. Violations of the HIPAA rules are punishable by both civil monetary penalties and criminal penalties directly applicable to business associates, and not only HHS may enforce the rules, but state attorneys general have authority to file civil actions for damages or injunctions in federal courts to enforce the rules on behalf of citizens of their states, and can seek attorneys’ fees and costs associated with pursuing such actions;

•federal transparency laws, including the federal Physician Payment Sunshine Act and its implementing regulations, that require certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the CMS information related to: (i) payments or other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician providers (such as physician assistants and nurse practitioners), and teaching hospitals and (ii) ownership and investment interests held by physicians and their immediate family members;

•federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; and

•analogous state and foreign laws and regulations and guidance, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by third-party payors, including private insurers, and may be broader in scope than their federal equivalents; state and foreign laws that require biopharmaceutical companies to comply with the biopharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state and foreign laws that require drug manufacturers to report and publicly disclose information related to payments and other transfers of value to physicians and other healthcare providers, marketing expenditures or drug pricing; state and local laws that require the registration of biopharmaceutical sales representatives or pre-approval of payments and other transfers of value to physicians and other healthcare providers; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs. Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant criminal, civil and administrative sanctions including monetary penalties, damages, fines, disgorgement, reputational harm, individual imprisonment, and exclusion from participation in government funded healthcare programs, such as Medicare and Medicaid, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of noncompliance with these laws, reputational harm, and we may be required to curtail or restructure our operations, any of which could adversely affect our ability to operate our business and our results of operations. Further, if any of the physicians or other healthcare providers or entities with whom we expect to do business is found to be not in compliance with applicable laws, they may be subject to significant criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs. Any action for violation of these laws, even if successfully defended, could cause a biopharmaceutical manufacturer to incur significant legal expenses and divert management’s attention from the operation of the business. Prohibitions or restrictions on sales or withdrawal of future marketed products could materially affect business in an adverse way.

The provision of benefits or advantages to healthcare professionals to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or use of medicinal products is also prohibited in the United Kingdom and European Union. The provision of benefits or advantages to physicians is governed by the national anti-bribery laws of the United Kingdom and EU Member States and industry codes of practice. Infringement of these laws

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

The risk of our being found in violation of these laws is increased by the fact that many of them have not been fully interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. The shifting compliance environment and the need to build and maintain robust and expandable systems to comply with multiple jurisdictions with different compliance and/or reporting requirements increases the possibility that a biotechnology company may run afoul of one or more of the requirements.

Our internal information technology systems, or those of our third-party vendors, contractors, or consultants, may fail or suffer security breaches, loss, theft or leakage of data, and other disruptions, which could result in a material disruption to our services, compromise sensitive information related to our business, or prevent us from accessing critical information, potentially exposing us to liability or otherwise adversely affecting our business.

We are increasingly dependent upon information technology systems, infrastructure, and data to operate our business. In the ordinary course of business, we collect, store, and transmit confidential information (including but not limited to intellectual property, proprietary business information, and personal data). It is critical that we do so in a secure manner to maintain the confidentiality and integrity of such confidential information. We also have outsourced elements of our operations to third parties, and as a result we manage a number of third-party vendors, service providers, and other contractors and consultants who have access to our confidential information.

Despite the implementation of technical and organizational security measures, given the size and complexity of our internal information technology systems and those of our third-party vendors and other contractors and consultants, and the increasing amounts of confidential information that they maintain, such information technology systems are potentially vulnerable to breakdown or other damage or interruption from service interruptions, system malfunction, natural disasters, terrorism, war, and telecommunication and electrical failures. Such information technology systems are additionally vulnerable to security breaches from inadvertent or intentional actions by our employees, third-party vendors, service providers, contractors, consultants, business partners, and/or other third parties, or from cyberattacks by malicious third parties (including the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering, and other means to affect service reliability and threaten the confidentiality, integrity, and availability of information). Any of the foregoing may compromise our system infrastructure, or that of our third-party vendors and other contractors and consultants or lead to data leakage. The risk of a security breach or disruption, particularly through cyberattacks or cyber intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity, and sophistication of attempted attacks and intrusions from around the world have increased. We may not be able to anticipate all types of security threats, and we may not be able to implement measures that would be effective to prevent all such security threats. The techniques used by cyber criminals change frequently, may not be recognized until launched, and can originate from a wide variety of sources, including outside groups such as external service providers, organized crime affiliates, terrorist organizations, or hostile foreign governments or agencies. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or those of our third-party vendors and other contractors and consultants, or inappropriate disclosure of confidential or proprietary information, we could incur liability and reputational damage and the further development and commercialization of our product candidates could be delayed. We could be subject to enforcement actions by the competent authorities in the United States, the EU Member States, the United Kingdom and elsewhere if the confidentiality and/or security of personal data are compromised (see “—We are subject to a variety of stringent privacy and data laws, information security laws, regulations, policies and contractual obligations related to data privacy and security and our failure to comply with them, or changes in, such laws, regulations, policies and contractual obligations could adversely affect our business.”). The costs related to significant security breaches or disruptions could be material and exceed the limits of the cybersecurity insurance we maintain against such risks. If the information technology systems of our third-party vendors, service providers and other contractors and consultants become subject to disruptions or security breaches,

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we may have insufficient recourse against such third parties and we may have to expend significant resources to mitigate the impact of such an event, and to develop and implement protections to prevent future events of this nature from occurring.

We cannot assure you that our cybersecurity efforts and our investment in information technology will prevent significant breakdowns, data leakages, breaches in our systems or those of our third-party vendors, service providers and other contractors and consultants, or other cyber incidents that could have a material adverse effect upon our reputation, business, operations, compliance with the applicable data protection and/or privacy legislation, financial condition or prospects. For example, if such an event were to occur and cause interruptions in our operations, or those of our third-party vendors, service providers and other contractors and consultants, it could result in a material disruption or delay of the development of our product candidates. Furthermore, significant disruptions of our internal information technology systems or those of our third-party vendors, service providers and other contractors and consultants, or security breaches could result in the loss, misappropriation, and/or unauthorized access, use, or disclosure of, or the prevention of access to, confidential information (including trade secrets or other intellectual property, proprietary business information, and personal data), which could result in financial, legal, regulatory, business, enforcement and reputational harm to us. For example, any such event that leads to unauthorized access, use, or disclosure of personal data, including personal data regarding our employees or patients, could harm our reputation directly, compel us to comply with federal and/or state breach notification laws and foreign law equivalents, subject us to mandatory corrective action, and otherwise subject us to liability and/or regulatory investigation/enforcement under laws and regulations that protect the privacy and security of personal data, which could result in significant legal, regulatory and financial exposure and reputational damages that could potentially have a material adverse effect on our business, financial condition, results of operations and prospects.

We are subject to a variety of stringent privacy and data protection laws, information security laws, regulations, policies and contractual obligations related to data privacy and security and our failure to comply with them, or changes in, such laws, regulations, policies and contractual obligations could adversely affect our business.

We maintain a large quantity of sensitive information, including confidential business and personal data, and are subject to privacy and data protection laws and regulations that apply to the collection, transmission, storage and use of personally identifying information, which among other things, impose certain requirements relating to the privacy, security and transmission of personal data. The legislative and regulatory landscape for privacy and data protection continues to evolve in jurisdictions worldwide, and there has been an increasing focus on privacy and data protection issues with the potential to affect our business. Failure to comply with any of these laws and regulations could result in enforcement action being taken against us, including fines, imprisonment of company officials and public censure, claims for damages by affected individuals, damage to our reputation and loss of goodwill, any of which could have a material adverse effect on our business, financial condition, results of operations or prospects.

In the United States, there are numerous federal and state privacy and data security laws and regulations governing the collection, use, disclosure, protection and security of personal data, including federal and state health information privacy laws, federal and state security breach notification laws, and federal and state consumer protection laws. Each of these laws is subject to varying interpretations and constantly evolving. In particular, regulations promulgated pursuant to HIPAA, establish privacy and security standards that limit the use and disclosure of individually identifiable health information, or protected health information, and require the implementation of administrative, physical and technological safeguards to protect the privacy of protected health information and ensure the confidentiality, integrity and availability of electronic protected health information. While we are not currently subject to HIPAA, we may in the future be required to comply with HIPAA or similar regulations, which may increase our compliance costs and exposure to potential liability.

If we are unable to properly protect the privacy and security of protected health information, we could be found to have breached our contracts. Further, if we fail to comply with applicable privacy laws, we can suffer financial liability and reputational harm. In addition, responses to enforcement activity can consume significant internal resources. Furthermore, state attorneys general are authorized under certain statutes to bring civil actions seeking either injunctions or damages in response to violations that threaten the privacy of state residents. We cannot be sure how these regulations will be interpreted, enforced or applied to our operations. In addition to the risks associated with enforcement activities and potential contractual liabilities, our ongoing efforts to comply with evolving laws and regulations at the federal and state level may be costly and require ongoing modifications to our policies, procedures and systems.

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Data privacy remains an evolving landscape at both the domestic and international level, with new laws and regulations being proposed or coming into effect. For example, in June 2018 the State of California enacted the California Consumer Privacy Act of 2018, or CCPA, which went into effect on January 1, 2020 and requires companies that process information on California residents to make new disclosures to consumers about their data collection, use and sharing practices, allow consumers to opt out of certain data sharing with third parties and provide a new cause of action for data breaches. In November 2020, the CCPA was amended pursuant to the adoption of a ballot initiative titled the California Privacy Rights Act, or CPRA, which became fully effective on January 1, 2023. The CPRA amendments to the CCPA expanded California residents’ rights with respect to certain sensitive personal data and also created a new state agency vested with authority to implement and enforce the CCPA. Although the CCPA has limited application to the personal information we handle, we do have privacy compliance obligations under the CCPA, which imposes resource requirements on our business and creates risks for potential fines and, in limited circumstances, class actions.

In addition, on May 25, 2018, the European Union’s General Data Protection Regulation (EU) 2016/679, or the GDPR, became applicable, replacing data protection laws issued by each EU member state based on the Directive 95/46/EC, or the Directive. Unlike the Directive, which needed to be transposed at a national level, the GDPR text is directly applicable in each EU member state, resulting in a more uniform application of data privacy laws across the European Union. The GDPR governs the collection, use, disclosure, transfer or other processing of personal data. Following the United Kingdom's exit from the European Union, the GDPR continues to apply in the United Kingdom.

Among other things, the GDPR imposes requirements regarding the security of personal data and mandatory personal data breach notifications, imposes strict rules on the lawful bases on which personal data can be processed, expands the definition of personal data (e.g., to explicitly include pseudonymized personal data which is crucial for the conduct of clinical trials), sets out even stricter rules for the processing of sensitive personal data (including health and genetic data) and requires changes to informed consent forms or documentation, as well as more detailed notices for clinical trial subjects, investigators and other individuals. The GDPR imposes onerous accountability obligations requiring data controllers and processors to maintain a record of their data processing activities and policies documenting compliance. It requires data controllers to implement more stringent operational requirements for processors and controllers of personal data, including, for example, mandatory and detailed data processing agreements with data processors, transparent and expanded disclosure to data subjects (in a concise, intelligible and easily accessible form) about how their personal data is to be used, imposes limitations on retention of personal data, increases requirements pertaining to health data and pseudonymized (i.e., key-coded) data, and sets higher standards for data controllers to demonstrate that they have obtained valid consent for certain data processing activities, while establishing rights for individuals with respect to their personal data, including rights of access and deletion in certain circumstances. In addition, the GDPR increases the scrutiny of transfers of personal data from clinical trial sites located in the United Kingdom and EEA to the United States and other jurisdictions that the European Commission or the UK Information Commissioner's Office does not recognize as having in place “adequate” data protection laws. The GDPR also imposes strict rules on the transfer (or export) of personal data to countries outside the EEA, and the United Kingdom, including the United States. For example, in 2016, the European Union and United States agreed to a transfer framework for data transferred from the European Union to the United States, called the EU-U.S. Privacy Shield, but the Privacy Shield was invalidated in July 2020 by the Court of Justice of the European Union, or CJEU. While the CJEU confirmed the validity of the European Commission’s standard contractual clauses, which are another mechanism for the transfer of personal data outside the EEA, the CJEU held that these clauses are not sufficient in themselves in the case of transfers of personal data to the U.S. and the data exporter in the EEA and data importer outside the EEA must adopt additional safeguards to ensure compliance with the GDPR when transferring personal data to the U.S. In June 2021, the European Commission adopted a new version of the standard contractual clauses which are intended to address the aforementioned concerns identified by the CJEU, however it remains to be seen whether these standard contractual clauses will remain available or be subject to judicial challenge by privacy rights activists who maintain they fail to adequately protect personal data transferred outside of the EEA. On December 13, 2022, following the signature of a US Executive Order by President Biden on October 7, 2022, the European Commission issued a draft adequacy decision which, if adopted and not successfully challenged in court, is intended to address the concerns expressed by CJEU in their 2016 ruling and allow transfer of personal data from the EEA to companies in the US which commit to comply with the EU-U.S. Data Privacy Framework. At this time it is unclear if the adequacy decision will be adopted at EU level and whether the anticipated legal challenges against this decision would be successful. It is not yet clear whether a similar arrangement will be adopted for transfers between the United Kingdom and United States.

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The GDPR imposes substantial fines for breaches and violations (the greater of €20 million or 4% of global turnover), and also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies and obtain compensation for damages resulting from violations of the GDPR. In June 2021, the CJEU issued a ruling that expanded the scope of the “one stop shop” under the GDPR. According to the ruling, the competent authorities of EU member states may, under certain strict conditions, bring claims to their national courts against a company for breaches of the GDPR, including unlawful cross-border processing activities, even such company does not have an establishment in the EU member state in question and the competent authority bringing the claim is not the lead supervisory authority. The GDPR provides that EU member states may introduce further conditions, including limitations, to make their own further laws and regulations limiting the processing of genetic, biometric, or health data, which could limit our ability to collect, use and share European Union personal data, or could cause our compliance costs to increase, ultimately having an adverse impact on our business, financial condition, results of operations or prospects. We are required to implement measures and ongoing compliance strategies to comply with the terms of the GDPR and applicable national data protection and privacy laws, which may create additional costs and expenses for our business. In addition, we may have indemnification obligations in respect of, or be required to pay the expenses relating to, any litigation or action as a result of any purported breach of the GDPR.

The United Kingdom’s vote in favor of exiting the European Union, often referred to as Brexit, and ongoing developments in the United Kingdom have created uncertainty with regard to data protection regulation in the United Kingdom. As of January 1, 2021, and the expiry of transitional arrangements agreed to between the United Kingdom and European Union, data processing in the United Kingdom is governed by a United Kingdom version of the GDPR (together with the Data Protection Act 2018), exposing us to two parallel GDPR regimes, each of which potentially authorizes similar fines and potentially divergent enforcement actions for certain violations. Pursuant to the Trade and Cooperation Agreement, which went into effect on January 1, 2021, the United Kingdom and EU agreed to a specified period during which the United Kingdom will be treated like an EU member state in relation to processing and transfers of personal data for four months from January 1, 2021. This period was extended by two further months. At the end of June 2021, the European Commission made an “adequacy finding” in respect of the United Kingdom, thus allowing the continued free flow of personal data from the EEA to the United Kingdom. The duration of this “adequacy filing” is, however, limited to a period of four years which could be renewed only following a new comprehensive review of the “adequacy” of the United Kingdom’s data protection legislation. To this end, the European Commission will continuously monitor the evolutions of the legal framework in the United Kingdom and may suspend, repeal or amend it “adequacy finding” at any time, subject to certain conditions. If the initial “adequacy finding” is suspended, repealed or not renewed after the initial four years period, the United Kingdom will become a “third country” under the GDPR and transfers of data from the EEA to the United Kingdom will require a “transfer mechanism,” such as the aforementioned standard contractual clauses. It is anticipated that there will be increasing scope for divergence in application, interpretation and enforcement of the data protection laws as between the United Kingdom and EEA moving forward. In addition, as of January 1, 2021, the United Kingdom’s independent data protection regulator, the Information Commissioner’s Office, or the ICO, cannot be our “lead supervisory authority” in respect of any “cross border processing” for the purposes of the GDPR. In the event that we are unable to, and/or do not, designate a lead supervisory authority in an EEA member state, we would not be able to benefit from the GDPR’s “one stop shop” mechanism. Amongst other things, this would mean that, in the event of a violation of the GDPR affecting data subjects across the United Kingdom and the EEA, we could be investigated by, and ultimately fined by the ICO and the supervisory authority in each and every EEA member state where data subjects have been affected by such violation. This risk is further emphasized by the CJEU ruling of June 2021 discussed above. Other countries have also passed or are considering passing laws requiring local data residency and/or restricting the international transfer of data.

Compliance with these and any other applicable privacy and data security laws and regulations is a rigorous and time-intensive process, and we may be required to put in place additional mechanisms ensuring compliance with the new data protection rules. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our practices and our efforts to comply with the evolving data protection rules may be unsuccessful. If we fail to comply with any such laws or regulations, we may face significant government-imposed fines and penalties or orders requiring that we change our practices, claims for damages or other liabilities, regulatory investigations and enforcement action, litigation and significant costs for remediation, any of which could adversely affect our business, financial condition, results of operations and prospects. Even if we are not determined to have violated these laws, government investigations into these issues typically require the expenditure of significant resources and generate negative publicity, which could harm our business, financial condition, results of operations or prospects.

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If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur substantial costs that could have a material adverse effect on the success of our business.

We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the generation, handling, use, storage, treatment, manufacture, transportation and disposal of, and exposure to, hazardous materials and wastes, as well as laws and regulations relating to occupational health and safety. Our operations involve the use of hazardous and flammable materials, including chemicals and biologic materials. Our operations also produce hazardous waste products. We generally contract with third parties for the disposal of these materials and wastes and/or make use of waste disposal infrastructure at our leased facilities. We cannot completely eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties. We do not carry specific biological or hazardous waste insurance coverage, and our property, casualty and general liability insurance policies specifically exclude coverage for damages and fines arising from biological or hazardous waste exposure or contamination. Accordingly, in the event of contamination or injury, we could be held liable for damages or be penalized with fines in an amount exceeding our resources, and our clinical trials or regulatory approvals could be suspended.

Although we maintain workers’ compensation insurance for certain costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials or other work-related injuries, this insurance may not provide adequate coverage against potential liabilities. We do not maintain insurance for toxic tort claims that may be asserted against us in connection with our storage or disposal of biologic, chemical or hazardous materials.

In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations, which have tended to become more stringent over time. These current or future laws and regulations may impair our research, development or production efforts. Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions or liabilities, which could adversely affect our business, financial condition, results of operations and prospects.

Risks Related to Our Employee Matters, Managing Our Growth and Other Risks Relating to Our Business Operations

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

We are highly dependent on the members of our executive team and other key employees, the loss of whose services may adversely impact the achievement of our objectives and operations. While we have entered into employment agreements with certain of our executive officers, any of them could leave our employment at any time. The failure to find suitable replacements on a timely basis, transfer knowledge and effect a smooth transition with respect to any future departures may impede the achievement of our research, development and commercialization objectives and could have a material adverse effect on our business, financial condition, results of operations and prospects. We face significant competition for executives with the qualifications and experience we seek and there can be no assurance as to if or when we would be able to fill any open positions with suitable replacements.

Our future success depends on our ability to build an effective executive leadership team and organization and our ability to retain key employees, consultants and advisors and attract, retain and motivate qualified personnel, including scientific and technical personnel. There currently is a shortage of skilled individuals with substantial gene therapy experience, which is likely to continue. As a result, competition for skilled personnel, including in gene therapy research and vector manufacturing, is intense and the turnover rate can be high. We may not be able to attract and retain personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies and academic institutions for individuals with similar skill sets. In addition, failure to succeed in preclinical studies or clinical trials or applications for marketing approval may make it more challenging to recruit and retain qualified personnel. Furthermore, we implemented workforce reductions in November 2021 and October 2022 and proposed an additional one in March 2023, which can have an adverse impact on employee morale. The market price of our ADSs has also experienced significant downward pressure, resulting in "underwater" or "out-of-the-money" share options for many of our employees, thereby limiting the desired retentive effect that our equity incentive program is designed to achieve. The inability to recruit and retain certain executives, key employees, consultants or advisors, may impede the progress of our research, development and commercialization objectives and have an adverse effect on our business, financial condition, results of operations and prospects.

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We conduct our operations at our facilities in Stevenage (United Kingdom) and New York (United States). The United Kingdom and United States are headquarters to many other biopharmaceutical companies and many academic and research institutions. Competition for skilled personnel in our market is intense and may limit our ability to hire and retain highly qualified personnel on acceptable terms or at all. Changes to U.K. or U.S. immigration and work authorization laws and regulations, including those that restrain the flow of scientific and professional talent, can be significantly affected by political forces and levels of economic activity. Our business may be materially adversely affected if legislative or administrative changes to immigration or visa laws and regulations impair our hiring processes and goals or projects involving personnel who are not U.K. or U.S. citizens.

In addition, COVID-19, including variant strains of COVID-19, could affect our employees or the employees of companies with which we do business, including our suppliers and CMOs, thereby disrupting our business operations. Quarantines and travel restrictions imposed by governments in the jurisdictions in which we and the companies with which we do business operate could materially impact the ability of employees to access preclinical and clinical sites, laboratories, manufacturing sites and offices. As a result, we may experience limitations in employee resources and productivity in our laboratory operations. Our increased reliance on personnel working remotely from time to time may negatively impact productivity or disrupt, delay or otherwise adversely impact our business. In addition, this could increase our cybersecurity risk, create data accessibility concerns, and make us more susceptible to communication disruptions, any of which could adversely impact our business operations or delay necessary interactions with regulators, research or clinical trial sites, manufacturing sites and our third-party contractors.

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

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

•identifying, recruiting, integrating, retaining and motivating additional employees;

•managing our internal development efforts effectively, including the clinical and FDA review process for our product candidates, while complying with our contractual obligations to contractors and other third parties; and

•improving our operational, financial and management controls, and reporting systems and procedures.

Our future financial performance and our ability to commercialize our product candidates will depend, in part, on our ability to effectively manage any future growth, and our management may also have to divert a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities. We may be unable to successfully implement these tasks on a larger scale and, accordingly, may not achieve our research, development and growth goals.

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

We are exposed to the risk of fraud or other misconduct by our employees, principal investigators, consultants and commercial partners. Misconduct by these parties could include intentional failures to comply with FDA, MHRA or EMA regulations or the regulations applicable in other jurisdictions, provide accurate information to the FDA, MHRA, EMA and other regulatory authorities, comply with healthcare fraud and abuse laws and regulations in the United States and abroad, report financial information or data accurately or disclose unauthorized activities to us. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission,

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customer incentive programs and other business arrangements. Such misconduct also could involve the improper use of information obtained in the course of clinical trials or interactions with the FDA, MHRA, EMA or other regulatory authorities, which could result in regulatory sanctions and cause serious harm to our reputation.

We have adopted a code of business conduct and ethics applicable to all of our employees, but it is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent these activities may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from government investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, financial condition, results of operations and prospects, including the imposition of significant criminal, civil and administrative sanctions, such as monetary penalties, damages, fines, disgorgement, individual imprisonment, and exclusion from participation in government funded healthcare programs, such as Medicare and Medicaid, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, reputational harm, and we may be required to curtail or restructure our operations.

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

We face an inherent risk of product liability as a result of the clinical testing of our product candidates and will face an even greater risk if we commercialize any products. For example, we may be sued if our product candidates cause or are perceived to cause injury or are found to be otherwise unsuitable during clinical testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties. Claims could also be asserted under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates that receive marketing approvals, if any. Even successful defenses would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:

•decreased demand for any product that we may develop;

•loss of revenue;

•substantial monetary awards to trial participants or patients;

•initiation of investigations by regulators;

•significant time and costs to defend the related litigation;

•a diversion of management’s time and our resources;

•withdrawal of clinical trial participants;

•recalls, withdrawals or labeling, marketing or promotional restrictions of our product candidates that receive marketing approvals, if any;

•the inability to commercialize any products that we may develop;

•exhaustion of any available insurance and our capital resources;

•injury to our reputation and significant negative media attention; or

•a decline in our ADS price.

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

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As a company based outside of the United States, our business is subject to economic, political, regulatory and other risks associated with international operations.

As a company based in the United Kingdom, our business is subject to risks associated with conducting business outside of the United States. Many of our suppliers and clinical trial relationships are located outside the United States. Accordingly, our future results could be harmed by a variety of factors, including:

•economic weakness, including inflation, or political instability in particular non-U.S. economies and markets, including Russia’s invasion of Ukraine;

•differing and changing regulatory requirements for product approvals;

•differing jurisdictions could present different issues for securing, maintaining or obtaining freedom to operate in such jurisdictions;

•potentially reduced protection for intellectual property rights;

•difficulties in compliance with different, complex and changing laws, regulations and court systems of multiple jurisdictions and compliance with a wide variety of foreign laws, treaties and regulations;

•changes in non-U.S. regulations and customs, tariffs and trade barriers;

•changes in non-U.S. currency exchange rates of the pound sterling, U.S. dollar, euro and currency controls;

•changes in a specific country’s or region’s political or economic environment, including the implications of the withdrawal of the United Kingdom from the European Union;

•trade protection measures, import or export licensing requirements or other restrictive actions by governments;

•differing reimbursement regimes and price controls in certain non-U.S. markets;

•negative consequences from changes in tax laws;

•compliance with tax, employment, immigration and labor laws for employees living or traveling abroad, including, for example, the variable tax treatment in different jurisdictions of options granted under our share option schemes or equity incentive plans;

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

•litigation or administrative actions resulting from claims against us by current or former employees or consultants individually or as part of class actions, including claims of wrongful terminations, discrimination, misclassification or other violations of labor law or other alleged conduct;

•difficulties associated with staffing and managing international operations, including differing labor relations;

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

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

Exchange rate fluctuations may materially affect our results of operations and financial condition.

Owing to the international scope of our operations, fluctuations in exchange rates, particularly between the pound sterling and the U.S. dollar, may adversely affect us. Although we are based in the United Kingdom, we source research and development, manufacturing, consulting and other services from the United States and the European Union. Further, potential future revenue may be derived from abroad, particularly from the United States. As a result, our business and the price of our ADSs may be affected by fluctuations in foreign exchange rates not only between the pound sterling and the U.S. dollar, but also the euro, which may have a significant impact on our results of operations and cash flows from period to period. Currently, we do not have any exchange rate hedging arrangements in place.

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We or the third parties upon whom we depend may be adversely affected by disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.

Any disaster, such as flood, fire, explosion, earthquake, extreme weather condition, pandemic, including the current COVID-19 pandemic, power shortage, telecommunication failure or other man-made or natural disasters could severely disrupt our operations, and those of our CROs, CMOs and other contractors and consultants, and have a material adverse effect on our business, results of operations, financial condition and prospects. If a natural disaster, power outage or other event occurred that damaged critical infrastructure, such as the manufacturing facilities of our third-party contract manufacturers, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time. We rely on third-party manufacturers to produce our product candidates. Our ability to obtain clinical supplies of our product candidates could be disrupted if the operations of these suppliers are affected by a man-made or natural disaster or other business interruption. The disaster recovery and business continuity plans we have in place currently are limited and are unlikely to prove adequate in the event of a serious disaster or similar event. We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Risks Related to Ownership of Our Securities

Raising additional capital may cause dilution to our existing shareholders, restrict our operations or cause us to relinquish valuable rights.

We may seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and alliances and licensing arrangements. We have an Open Market Sale AgreementSM, or Sales Agreement, with Jefferies LLC, or Jefferies, to sell up to $75.0 million worth of our ADSs, from time to time, through an “at the market” equity offering program under which Jefferies will act as sales agent. We have also entered into a purchase agreement, or the Purchase Agreement, with Lincoln Park Capital Fund, LLC, or Lincoln Park, under which we may sell to Lincoln Park, at our discretion, up to $35.0 million of our ADSs over a 36-month period, subject to certain daily limits, applicable prices, and conditions. As of April 4, 2023, $71.2 million worth of ADSs remained available for sale under our “at the market” equity offering program and $35.0 million remained available for sale under the Purchase Agreement. To the extent that we raise additional capital through our “at the market” equity offering program, the Purchase Agreement or other sales of equity, convertible debt securities or other equity-based derivative securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as holder of ADSs. Any indebtedness we incur would result in increased fixed payment obligations and could involve restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. Any debt or additional equity financing that we raise may contain terms that are not favorable to us or our shareholders. Furthermore, the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our ADSs to decline and existing shareholders may not agree with our financing plans or the terms of such financings. If we raise additional funds through strategic partnerships, collaborations, alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our intellectual property, technologies, future revenue streams, research programs or our product candidates, or grant licenses on terms unfavorable to us. In addition, we could also be required to seek funds through arrangements with collaborators or others at an earlier stage than otherwise would be desirable.

The price of our ADSs has been and may continue to be volatile and may fluctuate due to factors beyond our control.

The trading price of our ADSs has fluctuated and is likely to continue to fluctuate significantly. From December 17, 2020 to March 15, 2023, the closing price of our ADSs ranged from a high of $18.30 to a low of $0.43 per ADS. The market price of our ADSs depends on a number of factors, some of which are beyond our control, including limited trading volume. In addition to the factors discussed in this Item 3.D “Risk Factors” section and elsewhere in this Annual Report, these factors include:

•the commencement, enrollment or results of our ongoing and future clinical trials;

•the loss of any of our key scientific or management personnel;

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•announcements of the failure to obtain regulatory approvals or receipt of warning letters from the FDA, MHRA, EMA or other regulatory agency;

•announcements of undesirable restricted labeling indications or patient populations, or changes or delays in regulatory review processes;

•announcements of innovations or new products by us or our competitors;

•adverse actions taken by regulatory agencies with respect to our clinical trials, manufacturing supply chain or sales and marketing activities;

•changes or developments in laws or regulations applicable to our product candidates;

•any adverse changes to our relationship with licensors, collaborators, manufacturers or suppliers;

•the failure of our clinical trials;

•unanticipated safety concerns;

•the failure to obtain new collaboration partners;

•announcements concerning our competitors or the pharmaceutical industry in general;

•the achievement of expected product sales and profitability;

•the failure to obtain reimbursements for our product candidates or price reductions;

•manufacture, supply or distribution shortages;

•actual or anticipated fluctuations in our operating results;

•our cash position;

•changes in financial estimates or recommendations by securities analysts;

•potential acquisitions;

•the trading volume of our ADSs on The Nasdaq Capital Market, or Nasdaq;

•sales of our ADSs by us, our executive officers and directors or our shareholders in the future;

•general economic, political, and market conditions and overall fluctuations in the financial markets in the United States or the United Kingdom; and

•changes in accounting principles.

In addition, the stock market in general, and Nasdaq and biopharmaceutical companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors may negatively affect the market price of our ADSs, regardless of our actual operating performance. Further, a decline in the financial markets and related factors beyond our control may cause the price of our ADSs to decline rapidly and unexpectedly.

If we fail to satisfy the continued listing requirements of Nasdaq, such as the corporate governance requirements or the minimum closing bid price requirement, Nasdaq may take steps to delist our ADSs. Such a delisting would likely have a negative effect on the price of our ADSs and would impair a holder's ability to sell or purchase our ADSs when they wish to do so. In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our ADSs to become listed again, stabilize the market price or improve the liquidity of our ADSs, prevent our ADSs from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with the listing requirements of Nasdaq.

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We have not maintained compliance with the minimum bid price requirement of $1.00 per share for continued listing on the Nasdaq. If we continue to fail to meet this requirement and Nasdaq determines to delist our ADSs, the delisting would adversely affect the market liquidity of our ADSs and the market price of our ADSs could decrease.

Our ADSs are listed on the Nasdaq. In order to maintain our listing, we must meet minimum financial and other requirements, including the minimum bid price requirement of $1.00 per share for continued listing, as set forth in Nasdaq Listing Rule 5450(a)(1). On May 31, 2022, we received a letter from the Nasdaq indicating that, based upon the closing bid price of our ADSs for the prior 30 consecutive business days, the Company is not currently in compliance with the $1.00 minimum bid price requirement. The notice indicated that, consistent with Nasdaq Listing Rule 5810(c)(3)(A), we had 180 days, or until November 28, 2022, to regain compliance with the minimum bid price requirement. On November 29, 2022, we announced that we received approval from the Nasdaq Stock Market LLC to transfer the listing of our ADSs from The Nasdaq Global Select Market to The Nasdaq Capital Market. In connection with the transfer to the Nasdaq Capital Market, Nasdaq granted us an additional 180-day period (or until May 29, 2023) to regain compliance with the requirement that the bid price of our ADSs meet or exceed $1.00 per ADS for at least ten consecutive business days.

There can be no assurance that we will meet the minimum bid price requirement or any other requirement in the future. The failure to maintain our listing on the Nasdaq would have an adverse effect on the market price and liquidity of our ADSs. Without a Nasdaq listing, shareholders may have a difficult time getting a quote for the sale or purchase of our ADSs, the sale or purchase of our ADSs would likely be made more difficult, and the trading volume and liquidity of our ADSs could decline. Delisting from the Nasdaq could also result in negative publicity and could make it more difficult for us to raise additional capital.

The significant share ownership position of our principal shareholders may limit your ability to influence corporate matters.

As of February 1, 2023, our shareholders who owned more than 5% of our outstanding ordinary shares, including entities affiliated with Syncona, in the aggregate, beneficially owned ordinary shares representing approximately 80.7% of our outstanding share capital. In particular, entities affiliated with Syncona, in the aggregate, beneficially owned ordinary shares representing approximately 58.1% of our outstanding share capital as of February 1, 2023.

As a result, if these shareholders, and particularly shareholders affiliated with Syncona, were to choose to act together, they would be able to control all matters submitted to our shareholders for approval, as well as our management and affairs. For example, these persons, if they choose to act together, would control the election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets. This concentration of ownership control may:

•delay, defer or prevent a change in control;

•entrench our management and the board of directors; or

•impede a merger, consolidation, takeover or other business combination involving us that other shareholders may desire.

The interests of our shareholders who own more than 5% of our ordinary shares, including shareholders associated with Syncona, may not in all cases be aligned with the interests of holders of our ordinary shares. In addition, such shareholders and their affiliates may have an interest in pursuing acquisitions, divestitures and other transactions that, in their judgment, could enhance their investment in us, even though such transactions might involve risks to you. Any of these consequences could adversely affect the market price of our ADSs.

Substantial future sales of our ADSs in the public market, or the perception that these sales could occur, could cause the price of the ADSs to decline.

Additional sales of our ADSs, or the perception that these sales could occur, could cause the market price of the ADSs to decline. As of February 1, 2023, we had 65,162,173 ordinary shares outstanding, and shareholders beneficially owning 5% or more of our outstanding share capital and our directors and management team collectively

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beneficially owned 53,735,174 ordinary shares, or approximately 82.5% of our total outstanding shares. Such shares, as well as shares held by our employees and others are eligible for sale in the public market to the extent permitted by Rule 144 and Rule 701 under the Securities Act. Further issuance by us of additional ADSs or sales by our large shareholders or members of our management team of ADSs in the public market, or the market perception that such sales may occur, could adversely affect the market price of our ADSs and our ability to raise capital through an issue of equity securities in the future. The rights of our shareholders may differ from the rights typically offered to shareholders of a U.S. corporation.

We are incorporated under English law. The rights of holders of ordinary shares and, therefore, certain of the rights of holders of ADSs, are governed by English law, including the provisions of the U.K. Companies Act 2006, or the Companies Act, and by our Articles of Association. These rights differ in certain respects from the rights of shareholders in typical U.S. corporations.

You may not receive distributions on our ordinary shares represented by the ADSs or any value for them if it is illegal or impractical to make them available to holders of ADSs.

The depositary for the ADSs has agreed to pay to you the cash dividends or other distributions it or the custodian receives on our ordinary shares or other deposited securities after deducting its fees and expenses. You will receive these distributions in proportion to the number of our ordinary shares your ADSs represent. However, in accordance with the limitations set forth in the deposit agreement, it may be unlawful or impractical to make a distribution available to holders of ADSs. We have no obligation to take any other action to permit distribution on the ADSs, ordinary shares, rights or anything else to holders of the ADSs. This means that you may not receive the distributions we make on our ordinary shares or any value from them if it is unlawful or impractical to make them available to you. These restrictions may have an adverse effect on the value of your ADSs.

Because we do not anticipate paying any cash dividends on our ADSs in the foreseeable future, capital appreciation, if any, will be your sole source of gains and you may never receive a return on your investment.

Under current English law, a company’s accumulated realized profits, to the extent they have not been previously utilized by distribution or capitalization, must exceed its accumulated realized losses, to the extent that they have not been previously written off in a reduction or reorganization of capital duly made, before dividends can be paid. Therefore, we must have distributable profits before issuing a dividend. In addition, as a public limited liability company in England, we are only able to make a distribution if the amount of our net assets is not less than the aggregate of our called-up share capital and undistributable reserves and if, and to the extent that, the distribution does not reduce the amount of those assets to less than that aggregate.

We have not paid dividends in the past on our ordinary shares. We intend to retain earnings, if any, for use in our business and do not anticipate paying any cash dividends in the foreseeable future. As a result, capital appreciation, if any, on our ADSs will be your sole source of gains for the foreseeable future.

Your right to participate in any future rights offerings may be limited, which may cause dilution to your holdings.

We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we cannot make rights available to you in the United States unless we register the rights and the securities to which the rights relate under the Securities Act or an exemption from the registration requirements is available. Also, under the deposit agreement, the depositary bank will not make rights available to you unless either both the rights and any related securities are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act. We are under no obligation to file a registration statement with respect to any such rights or securities or to endeavor to cause such a registration statement to be declared effective. Moreover, we may not be able to establish an exemption from registration under the Securities Act. If the depositary does not distribute the rights, it may, under the deposit agreement, either sell them, if possible, or allow them to lapse. Accordingly, you may be unable to participate in our rights offerings and may experience dilution in your holdings.

If securities or industry analysts do not publish research reports about our business, or if they issue an adverse opinion about our business, the price of our ADSs and trading volume could decline.

The trading market for our ADSs is influenced by the research and reports that industry or securities analysts publish about us or our business. We have research coverage by five covering analysts as of March 1, 2023. Equity research analysts may elect not to provide research coverage of our ADSs, and such lack of research coverage may

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adversely affect the market price of our ADSs. Even if we have equity research analyst coverage, we will not have any control over the analysts or the content and opinions included in their reports. The price of our ADSs could decline if one or more equity research analysts downgrade our ADSs or issue other unfavorable commentary or research about us. If one or more equity research analysts ceases coverage of us or fails to publish reports on us regularly, demand for our ADSs could decrease, which in turn could cause the trading price or trading volume of our ADSs to decline.

If we engage in future acquisitions or strategic partnerships, this may increase our capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities and subject us to other risks.

We intend to continue to evaluate various acquisitions and strategic partnerships, including licensing or acquiring complementary drugs, intellectual property rights, technologies or businesses. Any potential acquisition or strategic partnership may entail numerous risks, including:

•increased operating expenses and cash requirements;

•the assumption of additional indebtedness or contingent liabilities;

•assimilation of operations, intellectual property and drugs of an acquired company, including difficulties associated with integrating new personnel;

•the diversion of our management’s attention from our existing drug programs and initiatives in pursuing such a strategic partnership, merger or acquisition;

•retention of key employees, the loss of key personnel and uncertainties in our ability to maintain key business relationships;

•risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing drugs or drug candidates and regulatory approvals; and

•our inability to generate revenue from acquired technology and/or drugs sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.

As a foreign private issuer, we are exempt from a number of rules under the U.S. securities laws and are permitted to file less information with the SEC than U.S. public companies.

We are a “foreign private issuer,” as defined in the SEC rules and regulations and, consequently, we are not subject to all of the disclosure requirements applicable to companies organized within the United States. For example, we are exempt from certain rules under the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act, that regulate disclosure obligations and procedural requirements related to the solicitation of proxies, consents or authorizations applicable to a security registered under the Exchange Act. In addition, our officers and directors are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and related rules with respect to their purchases and sales of our securities. Moreover, we are not required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. public companies. Accordingly, there may be less publicly available information concerning our company than there is for U.S. public companies.

As a foreign private issuer, we will file an Annual Report on Form 20-F within four months of the close of each fiscal year ended December 31 and reports on Form 6-K relating to certain material events promptly after we publicly announce these events. However, because of the above exemptions for foreign private issuers, our shareholders will not be afforded the same protections or information generally available to investors holding shares in public companies organized in the United States.

While we are a foreign private issuer, we are not subject to certain Nasdaq corporate governance rules applicable to public companies organized in the United States.

We are entitled to rely on a provision in Nasdaq’s corporate governance rules that allows us to follow English corporate law with regard to certain aspects of corporate governance. This allows us to follow certain corporate governance practices that differ in significant respects from the corporate governance requirements applicable to domestic issuers listed on Nasdaq.

We are not subject to Nasdaq Listing Rule 5605(b)(2) because English law does not require that independent directors regularly have scheduled meetings at which only independent directors are present. Similarly, we have

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adopted a remuneration committee, but English law does not require that we adopt a remuneration committee or that such committee be fully independent. As a result, our practice varies from the requirements of Nasdaq Listing Rule 5605(d), which sets forth certain requirements as to the responsibilities, composition and independence of compensation committees. English law requires that we disclose information regarding compensation of our directors for services as a director of an undertaking that is our subsidiary undertaking and as a director of any other undertaking of which a director is appointed by virtue of our nomination (directly or indirectly) but not other third-party compensation of our directors or director nominees. As a result, our practice varies from the third-party compensation disclosure requirements of Nasdaq Listing Rule 5250(b)(3). Additionally, we are not subject to Nasdaq Listing Rule 5605(e) because, under English law, director nominees are not required to be selected or recommended for selection by either a majority of the independent directors or a nominations committee comprised solely of independent directors.

Furthermore, English law does not have a regulatory regime for the solicitation of proxies applicable to us, thus our practice varies from the requirement of Nasdaq Listing Rule 5620(b), which sets forth certain requirements regarding the solicitation of proxies. In addition, we have opted out of shareholder approval requirements for the issuance of securities in connection with certain events such as the acquisition of stock or assets of another company, the establishment of or amendments to equity-based compensation plans for employees, a change of control of us and certain private placements. To this extent, our practice will vary from the requirements of Nasdaq Listing Rule 5635, which generally requires an issuer to obtain shareholder approval for the issuance of securities in connection with such events. In addition, while we have adopted a code of business conduct and ethics, English law does not require us to publicly disclose waivers from this code that have been approved by our board within four business days. We expect to report any such waivers in the subsequent Annual Report on Form 20-F. As a result, our practice varies from the requirements for domestic issuers pursuant to Nasdaq Listing Rule 5610.

In accordance with our Nasdaq listing, our audit committee is required to comply with the provisions of Section 301 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and Rule 10A-3 of the Exchange Act, both of which are also applicable to Nasdaq listed U.S. companies. Because we are a foreign private issuer, however, our audit committee is not subject to additional requirements applicable to Nasdaq listed U.S. companies, including an affirmative determination that all members of the audit committee are “independent,” using more stringent criteria than those applicable to us as a foreign private issuer, subject to certain phase-in requirements permitted by Rule 10A-3 of the Exchange Act.

We may lose our foreign private issuer status which would then require us to comply with the Exchange Act’s domestic reporting regime and cause us to incur significant legal, accounting and other expenses.

As a foreign private issuer, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act applicable to U.S. domestic issuers. We may no longer be a foreign private issuer as early as June 30, 2023, which would require us to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act applicable to U.S. domestic issuers as of January 1, 2024. In order to maintain our current status as a foreign private issuer, either (a) a majority of our securities must be either directly or indirectly owned of record by nonresidents of the United States or (b)(i) a majority of our executive officers or directors cannot be U.S. citizens or residents, (ii) more than 50% of our assets must be located outside the United States and (iii) our business must be administered principally outside the United States. If we lose our status as a foreign private issuer, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance with various SEC and Nasdaq rules. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the cost we would incur as a foreign private issuer. As a result, we expect that a loss of foreign private issuer status would increase our legal and financial compliance costs and is likely to make some activities highly time-consuming and costly. We also expect that if we were required to comply with the rules and regulations applicable to U.S. domestic issuers, it would make it more difficult and expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These rules and regulations could also make it more difficult for us to attract and retain qualified members of our board of directors.

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We are an emerging growth company within the meaning of the Securities Act and will take advantage of certain reduced reporting requirements.

We are an “emerging growth company,” or EGC, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. We will remain an EGC until the earliest of: (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (ii) the last day of the fiscal year following the fifth anniversary of the date of the completion of our initial public offering; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC, which means the first day of the year following the first year in which the market value of our ADSs that are held by non-affiliates exceeds $700 million as of June 30. For so long as we remain an EGC, we are permitted and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include:

•the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting;

•the “say on pay” provisions (requiring a nonbinding shareholder vote to approve compensation of certain executive officers) and the “say on golden parachute” provisions (requiring a nonbinding shareholder vote to approve golden parachute arrangements for certain executive officers in connection with mergers and certain other business combinations) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, and some of the disclosure requirements of the Dodd-Frank Act relating to compensation of our executive officers; and

•the requirement to provide detailed compensation discussion and analysis in proxy statements and reports filed under the Exchange Act and instead provide a reduced level of disclosure concerning executive compensation.

We may choose to take advantage of some, but not all, of the available exemptions. In particular, we have not included all of the executive compensation information that would be required if we were not an EGC. We cannot predict whether investors will find our ADSs less attractive if we rely on certain or all of these exemptions. If some investors find our ADSs less attractive as a result, there may be a less active trading market for our ADSs and our ADS price may be more volatile.

In addition, the JOBS Act provides that an EGC may take advantage of an extended transition period for complying with new or revised accounting standards. This allows an EGC to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. As a result, the information that we provide our security holders may be different from the information you might get from other public companies. We cannot predict if investors will find our ADSs less attractive because we may rely on these exemptions.

If we fail to maintain proper internal controls, our ability to produce accurate financial statements or comply with applicable regulations could be impaired. As a result, shareholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our ADSs.

Section 404(a) of the Sarbanes-Oxley Act, or Section 404(a), requires that management assess and report annually on the effectiveness of our internal control over financial reporting and identify any material weaknesses in our internal control over financial reporting. Although Section 404(b) of the Sarbanes-Oxley Act, or Section 404(b), requires our independent registered public accounting firm to issue an annual report that addresses the effectiveness of our internal control over financial reporting, we have opted to rely on the exemptions provided in the JOBS Act, and consequently will not be required to comply with SEC rules that implement Section 404(b) until such time as we are no longer an EGC.

Based on our Section 404(a) assessment, our management concluded that, as of December 31, 2022, our internal control over financial reporting was effective. However, we previously identified a material weakness in our internal control over financial reporting for the fiscal year ended December 31, 2020. Although we were not yet subject

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to the certification or attestation requirements of Section 404, in connection with the preparation of our consolidated financial statements for December 31, 2019 and 2018, we identified deficiencies that we concluded represented material weaknesses in our internal control over financial reporting, which were attributable to our lack of sufficient financial reporting and accounting personnel, and the review and approval of manual journal entries and the related supporting journal entry calculations. We remediated the material weakness as of December 31, 2021, but there can be no assurance that in the future, additional material weaknesses will not exist or otherwise be discovered.

If we fail to meet the demands that are placed upon us as a public company, including the requirements of the Sarbanes-Oxley Act, we may be unable to accurately report our financial results, or report them within the time frames required by law or Nasdaq. Failure to comply with Section 404 could also potentially subject us to sanctions or investigations by the SEC or other regulatory authorities. If other material weaknesses or other deficiencies occur, our ability to accurately and timely report our financial position could be impaired, which could result in late filings of our required reports under the Exchange Act, restatements of our consolidated financial statements, a decline in the price of our ADSs, suspension or delisting of our ADSs from Nasdaq, and could adversely affect our reputation, results of operations, financial condition and prospects.

Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

We are subject to certain reporting requirements of the Exchange Act. Our disclosure controls and procedures are designed to reasonably assure that information required to be disclosed by us in reports we file or submit under the Exchange Act is accumulated and communicated to management, recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements or insufficient disclosures due to error or fraud may occur and not be detected.

We will incur significant increased costs as a result of operating as a company whose ADSs are publicly traded in the United States, and our management will be required to devote substantial time to new compliance initiatives.

As a U.S. public company, and particularly after we no longer qualify as an EGC, we will incur significant legal, accounting and other expenses that we did not incur previously. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of Nasdaq and other applicable securities rules and regulations impose various requirements on non-U.S. reporting public companies, including the establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our senior management and other personnel have devoted, and will need to continue to devote, a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance, which in turn could make it more difficult for us to attract and retain qualified senior management personnel or members for our board of directors.

However, these rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

Pursuant to Section 404, we are required to furnish a report by our senior management on our internal control over financial reporting. However, while we remain an EGC, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To prepare for eventual compliance with Section 404, once we no longer qualify as an EGC, we will be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to

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improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our management’s conclusion that, as of December 31, 2022, our internal control over financial reporting was effective, there is a risk that we will not be able to conclude that our internal control over financial reporting is effective as required by Section 404 in the future. If we identify one or more material weaknesses, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

Our Articles of Association provide that the courts of England and Wales will be the exclusive forum for the resolution of all shareholder complaints other than complaints asserting a cause of action arising under the Securities Act and the Exchange Act, and that the U.S. federal district courts are the exclusive forum for the resolution of any shareholder complaint asserting a cause of action arising under the Securities Act and the Exchange Act.

Our Articles of Association provide that the courts of England and Wales will be the exclusive forum for resolving all shareholder complaints other than shareholder complaints asserting a cause of action arising under the Securities Act and the Exchange Act, and that the U.S. federal district courts will be the exclusive forum for resolving any shareholder complaint asserting a cause of action arising under the Securities Act and the Exchange Act. This choice of forum provision may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits. The enforceability of similar exclusive forum provisions (including exclusive federal forum provisions for actions, suits or proceedings asserting a cause of action arising under the Securities Act) in other companies’ organizational documents has been challenged in legal proceedings, and there is uncertainty as to whether courts would enforce the exclusive forum provisions in our articles of association. Additionally, our shareholders cannot waive compliance with the federal securities laws and the rules and regulations thereunder. If a court were to find either choice of forum provision contained in our Articles of Association to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our results of operations and financial condition.

Claims of U.S. civil liabilities may not be enforceable against us.

We are incorporated and have our registered office in, and are currently existing under the laws of, England and Wales. In addition, certain members of our board of directors and senior management are nonresidents of the United States, and all or a substantial portion of our assets and the assets of such persons are located outside the United States. As a result, it may not be possible to serve process on such persons or us in the United States or to enforce judgments obtained in U.S. courts against them or us based on civil liability provisions of the securities laws of the United States. As a result, it may not be possible for investors to effect service of process within the United States upon such persons or to enforce judgments obtained in U.S. courts against them or us, including judgments predicated upon the civil liability provisions of the U.S. federal securities laws.

The United States and the United Kingdom do not currently have a treaty providing for recognition and enforcement of judgments (other than arbitration awards) in civil and commercial matters. Consequently, a final judgment for payment given by a court in the United States, whether or not predicated solely upon U.S. securities laws, would not automatically be recognized or enforceable in the United Kingdom. In addition, uncertainty exists as to whether English courts would entertain original actions brought in the United Kingdom against us or our directors or senior management predicated upon the securities laws of the United States or any state in the United States. Any final and conclusive monetary judgment for a definite sum obtained against us in U.S. courts would be treated by English courts as a cause of action in itself and sued upon as a debt at common law so that no retrial of the issues would be necessary, provided that certain requirements are met. Whether these requirements are met in respect of a judgment based upon the civil liability provisions of the U.S. securities laws, including whether the award of monetary damages under such laws would constitute a penalty is an issue subject to determination by the court making such decision. If an English court gives judgment for the sum payable under a U.S. judgment, the English judgment will be enforceable by methods generally available for this purpose. These methods generally permit the English court discretion to prescribe the manner of enforcement.

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As a result, U.S. investors may not be able to enforce against us or our senior management, board of directors or certain experts named herein who are residents of the United Kingdom or countries other than the United States any judgments obtained in U.S. courts in civil and commercial matters, including judgments under the U.S. federal securities laws.

Because we believe we have been and may continue to be a “passive foreign investment company,” or a PFIC, a U.S. shareholder may be subject to adverse U.S. federal income tax consequences.

Under the Internal Revenue Code of 1986, as amended, or the Code, we will be a PFIC for any taxable year in which either (i) 75% or more of our gross income consists of “passive income,” or (ii) 50% or more of the average quarterly value of our assets consists of assets that produce, or are held for the production of, “passive income.” For purposes of the above calculations, we will be treated as if we hold our proportionate share of the assets of, and receive directly our proportionate share of the income of, any other corporation in which we directly or indirectly own at least 25%, by value, of the shares of such corporation. Passive income includes, among other things, dividends, interest, certain non-active rents and royalties, net gains from the sale or exchange of property producing such income and net foreign currency gains. For this purpose, cash and assets readily convertible into cash are categorized as passive assets, and our goodwill and other unbooked intangibles are taken into account. The determination of whether we are a PFIC is a fact-intensive determination that must be made on an annual basis applying principles and methodologies that are in some circumstances unclear. Whether we were a PFIC in 2022 or will be a PFIC in any future taxable year is uncertain because, among other things, (i) we currently own a substantial amount of passive assets, including cash, (ii) the valuation of our assets that generate non passive income for PFIC purposes, including our intangible assets, is uncertain and may depend in part on the market price of our ADSs or ordinary shares from time to time, which may fluctuate substantially, (iii) in one or more years, our revenue may consist in whole or substantial part of grants received from governmental entities, the treatment of which as gross income that is not passive income is uncertain, and (iv) the composition of our income may vary substantially over time. We believe that we were a PFIC for our 2022 taxable year and may continue to be a PFIC in the future. However, there can be no assurance that we were or were not a PFIC for our 2022 taxable year or will or will not be a PFIC for any future taxable year, and our U.S. counsel expresses no opinion with respect to our PFIC status for our 2022 taxable year, or with respect to our expectations regarding our PFIC status in any future taxable year.

If we are a PFIC for any taxable year during which a U.S. person (within the meaning of the Code) holds our ordinary shares or ADSs, we would continue to be treated as a PFIC with respect to that U.S. person for such taxable year and, unless the U.S. person makes certain elections, for future years even if we cease to be a PFIC. Such a U.S. person may be subject to adverse U.S. federal income tax consequences, including (i) the treatment of all or a portion of any gain on the disposition of our ordinary shares or ADSs as ordinary income (and therefore ineligible for the preferential rates that apply to capital gains with respect to non-corporate U.S. persons), (ii) the application of a deferred interest charge on such gain and the receipt of certain dividends on our ordinary shares or ADSs and (iii) required compliance with certain reporting requirements. We expect to provide the information that would enable investors to make a qualified electing fund, or QEF, election, should we be classified as a PFIC. The annual PFIC Information Statement for our 2022 taxable year is available on the “Investors” section of our website at http://freeline.life.

For further information regarding the U.S. federal income tax considerations relevant to our potential status as a PFIC, please see the section entitled “10.E. Taxation—U.S. Federal Income Tax Considerations for U.S. Holders—Passive Foreign Investment Company, or PFIC, Rules” in our Annual Report.

Because we believe we are currently a controlled foreign corporation for U.S. federal income tax purposes, there could be adverse U.S. federal income tax consequences to certain U.S. holders who own, directly, indirectly or by attribution, ten percent or more of our ADSs or ordinary shares.

Each “Ten Percent Shareholder” (as defined below) in a non-U.S. corporation that is classified as a “controlled foreign corporation,” or a CFC, for U.S. federal income tax purposes generally is required to include in income for U.S. federal tax purposes such Ten Percent Shareholder’s pro rata share of the CFC’s “Subpart F income,” investment of earnings in U.S. property, and “global intangible low-taxed income,” even if the CFC has made no distributions to its shareholders. Subpart F income generally includes dividends, interest, certain non-active rents and royalties, gains from the sale of securities and income from certain transactions with related parties, and “global

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intangible low-taxed income” generally consists of net income of the CFC, other than Subpart F income and certain other types of income, in excess of certain thresholds. In addition, a Ten Percent Shareholder that realizes gain from the sale or exchange of shares in a CFC may be required to classify a portion of such gain as dividend income rather than capital gain. A non-U.S. corporation generally will be classified as a CFC for U.S. federal income tax purposes if Ten Percent Shareholders own, directly, indirectly or constructively (through attribution), more than 50% of either the total combined voting power of all classes of stock of such corporation entitled to vote or of the total value of the stock of such corporation. A “Ten Percent Shareholder” is a United States person (as defined by the Code) who owns, directly, indirectly or constructively (through attribution), 10% or more of the total combined voting power of all classes of stock entitled to vote of such corporation or 10% or more of the total value of the stock of such corporation. The determination of CFC status and Ten Percent Shareholder status is complex and includes attribution rules, the application of which is not entirely certain. In addition, the Tax Cuts and Jobs Act of 2017, or TCJA, repealed Section 958(b)(4) of the Code, which prohibited “downward attribution” from non-United States persons to United States persons for purposes of determining CFC status.

As a result of (i) the ownership of 50% or more of our stock by Syncona, which we understand also owns 50% or more, directly or indirectly, of one or more U.S. corporations, and (ii) the repeal of Section 958(b)(4) of the Code, we believe that we are and each of our non-U.S. subsidiaries that is a corporation for U.S. federal income tax purposes is currently a CFC, and, depending on the future ownership of our stock by Syncona or other shareholders, may continue to be a CFC in the future. Consequently, any Ten Percent Shareholder of our stock may be required to include in income for U.S. federal tax purposes such Ten Percent Shareholder’s pro rata share of our Subpart F income, investment of earnings in U.S. property, and global intangible low-taxed income, even if we have made no distributions to our shareholders, and may be required to classify a portion of any gain realized from the sale or exchange of our shares as dividend income rather than capital gain. While our status as a CFC will generally not have any U.S. federal income tax consequences for U.S. Holders (as defined below under “Income Tax Considerations—U.S. Federal Income Tax Considerations for U.S. Holders”) of our ADSs or ordinary shares who are not Ten Percent Shareholders, U.S. Holders of ADSs or ordinary shares should consult their own tax advisors with respect to the potential adverse tax consequences of becoming a Ten Percent Shareholder in a CFC. If we are classified as both a CFC and a PFIC (as discussed below), we generally will not be treated as a PFIC with respect to those U.S. Holders that meet the definition of a Ten Percent Shareholder during the period in which we are a CFC.

We may be unable to use net operating loss and tax credit carryforwards and certain built-in losses to reduce future tax payments or benefit from favorable U.K. tax legislation.

As a U.K. resident trading entity, we are subject to U.K. corporate taxation. Due to the nature of our business, we have generated losses since inception. As of December 31, 2022, we had cumulative carryforward losses of $310.8 million. Subject to any relevant restrictions, we expect these to be available to carry forward and offset against future operating profits. As a company that carries out extensive research and development activities, we seek to benefit from the U.K. research and development tax credit cash rebate regimes. The amount of benefits received depends on whether we qualify for a tax credit either as a Small and Medium Enterprise, or the SME, or under the Research and Development Expenditure Credit, or the RDEC, program. The RDEC program provides a lower tax credit than the SME program. Under the RDEC scheme, we are able to surrender some of our trading losses that arise from qualifying research and development activities for a cash rebate of up to 10.53% (or, from April 2023, 15%) of such qualifying research and development expenditure. Qualifying expenditures largely comprise employment costs for research staff, consumables and certain internal overhead costs incurred as part of research projects for which we do not receive income. Based on criteria established by HM Revenue & Customs, or HMRC, we expect a portion of expenditures being carried out in relation to our pipeline research and development, clinical trials management and manufacturing development activities to be eligible for the RDEC regime for the year ended December 31, 2022. We will assess whether it is possible to qualify under the more favorable SME regime for future accounting periods, but we may not qualify.

We may benefit in the future from the United Kingdom’s “patent box” regime, which allows certain profits attributable to revenues from patented products to be taxed at an effective rate of 10%. We are the exclusive licensee or owner of several patent applications which, if issued, would cover our product candidates, and accordingly, future upfront fees, milestone fees, product revenues and royalties could be taxed at this tax rate. When taken in combination with the enhanced relief available on our research and development expenditures, we expect a long-term lower rate of corporation tax to apply to us. If, however, there are unexpected adverse changes to the U.K. research and development

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tax credit regime or the “patent box” regime, or for any reason we are unable to qualify for such advantageous tax legislation, or we are unable to use net operating loss and tax credit carryforwards and certain built-in losses to reduce future tax payments then our business, results of operations and financial condition may be adversely affected.

Shareholder protections found in provisions under the U.K. City Code on Takeovers and Mergers, or the Takeover Code, no longer apply because our place of management and control is now considered to be outside the United Kingdom.

Following changes to our board of directors on March 30, 2023, our place of central management and control is no longer in the United Kingdom. Accordingly, we are no longer subject to the Takeover Code and, as a result, our shareholders are no longer entitled to the benefit of certain takeover offer protections provided under the Takeover Code. The Takeover Code provides a framework within which takeovers of companies are regulated and conducted. In particular, we are no longer subject to the rules regarding mandatory takeover bids. The following is a brief summary of some of the most important rules of the Takeover Code:

•When a person, (a) acquires, whether by a series of transactions over a period of time or not, interests in shares carrying 30% or more of the voting rights of a company when taken together with shares in which persons acting in concert with that person are interested (which percentage is treated by the Takeover Code as the level at which effective control is obtained), or (b) acquires an interest in any other shares which increases the percentage of shares carrying voting rights in which he is interested when they are already interested in shares which carry not less than 30% of the voting rights but do not hold shares carrying more than 50% of such voting rights, they must make a cash offer to all other shareholders at the highest price paid by them or any person acting in concert with them in the twelve months before the offer was announced.

•When interests in shares carrying 10% or more of the voting rights of a class have been acquired for cash by an offeror (i.e., a bidder) and any person acting in concert with it in the offer period (i.e. before the shares subject to the offer have been acquired) and the previous twelve months, the offer must be in cash or include a cash alternative for all shareholders of that class at the highest price paid by the offeror or any person acting in concert with it in the relevant period. Further, if an offeror or any person acting in concert with it acquires for cash any interest in shares during the offer period, the offer must be in cash or a cash alternative must be made available at a price at least equal to the highest price paid for such shares.

•If the offeror or any person acting in concert with it acquires an interest in shares in an offeree company (i.e., a target) at a price higher than the value of the offer, the offer must be increased to not less than the highest price paid for the interest in shares so acquired.

•The offeree company must appoint a competent independent adviser whose advice on the financial terms of the offer must be made known to all the shareholders, together with the opinion of the board of directors of the offeree company.

•Favorable deals for selected shareholders are not permitted, except in certain circumstances where independent shareholder approval is given and the arrangements are regarded as fair and reasonable in the opinion of the financial adviser to the offeree.

•All shareholders must be given the same information.

•Those issuing takeover circulars must include statements taking responsibility for the contents thereof.

•Profit forecasts, quantified financial benefits statements and asset valuations must be made to specified standards and must be reported on by professional advisers.

•Misleading, inaccurate or unsubstantiated statements made in documents or to the media must be publicly corrected immediately.

•Actions during the course of an offer by the offeree company, which might frustrate the offer are generally prohibited unless shareholders approve these plans. Frustrating actions would include, for example, lengthening the notice period for directors under their service contract or agreeing to sell off material parts of the target group.

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•Stringent requirements are laid down for the disclosure of dealings in relevant securities during an offer, including the prompt disclosure of positions and dealings in relevant securities by the parties to an offer and any person who is interested (directly or indirectly) in 1% or more of any class of relevant securities.

•Employees of both the offeror and the offeree company and the trustees of the offeree company’s pension scheme must be informed about an offer. In addition, the offeree company’s employee representatives and pension scheme trustees have the right to have a separate opinion on the effects of the offer on employment appended to the offeree board of directors’ circular or published on a website.

We could be subject to securities class action litigation.

In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities. This risk is especially relevant for us because we and other pharmaceutical companies have experienced significant securities price volatility in recent years. If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business.

You may not have the same voting rights as the holders of our ordinary shares and may not receive voting materials in time to be able to exercise your right to vote.

Holders of the ADSs do not have the same rights as our shareholders and in accordance with the provisions of the deposit agreement, will not be able to exercise voting rights attaching to the ordinary shares evidenced by the ADSs on an individual basis. Under the terms of the deposit agreement, holders of the ADSs may instruct the depositary to vote the ordinary shares underlying their ADSs. Otherwise, holders of ADSs will not be able to exercise their right to vote unless they withdraw the ordinary shares underlying their ADSs to vote them in person or by proxy in accordance with applicable laws and regulations and our Articles of Association. Even so, ADS holders may not know about a meeting far enough in advance to withdraw those ordinary shares. If we ask for the instructions of holders of the ADSs, the depositary, upon timely notice from us, will notify ADS holders of the upcoming vote and arrange to deliver our voting materials to them. Upon our request, the depositary will mail to holders a shareholder meeting notice that contains, among other things, a statement as to the manner in which voting instructions may be given. We cannot guarantee that ADS holders will receive the voting materials in time to ensure that they can instruct the depositary to vote the ordinary shares underlying their ADSs. A shareholder is only entitled to participate in, and vote at, the meeting of shareholders, provided that it holds our ordinary shares as of the record date set for such meeting and otherwise complies with our Articles of Association. In addition, the depositary’s liability to ADS holders for failing to execute voting instructions or for the manner of executing voting instructions is limited by the deposit agreement. As a result, holders of ADSs may not be able to exercise their right to give voting instructions or to vote in person or by proxy and they may not have any recourse against the depositary or us if the ordinary shares underlying their ADSs are not voted as they have requested or if such shares cannot be voted.

Holders of ADSs are not treated as holders of our ordinary shares.

Holders of ADSs are not treated as holders of our ordinary shares, unless they withdraw the ordinary shares underlying their ADSs in accordance with the deposit agreement and applicable laws and regulations. The depositary is the holder of the ordinary shares underlying the ADSs. Holders of ADSs therefore do not have any rights as holders of our ordinary shares, other than the rights that they have pursuant to the deposit agreement.

Holders of ADSs may be subject to limitations on the transfer of their ADSs and the withdrawal of the underlying ordinary shares.

ADSs are transferable on the books of the depositary. However, the depositary may close its books at any time or from time to time when it deems expedient in connection with the performance of its duties. The depositary may refuse to deliver, transfer or register transfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary think it is advisable to do so because of any requirement of law, government or governmental body, or under any provision of the deposit agreement, or for any other reason, subject to the right of ADS holders to cancel their ADSs and withdraw the underlying ordinary shares. Temporary delays in the cancellation of your ADSs and withdrawal of the underlying ordinary shares may arise because the depositary has closed its transfer books or we have closed our transfer books, the transfer of ordinary shares is blocked to permit voting at a shareholders’ meeting or we are paying a dividend on our ordinary shares. In addition, ADS holders may

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not be able to cancel their ADSs and withdraw the underlying ordinary shares when they owe money for fees, taxes and similar charges and when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to ADSs or to the withdrawal of ordinary shares or other deposited securities. See Item 12.D. “Description of Securities Other than Equity Securities—American Depositary Shares.”

We are entitled to amend the deposit agreement and to change the rights of ADS holders under the terms of such agreement, or to terminate the deposit agreement, without the prior consent of the ADS holders.

We are entitled to amend the deposit agreement and to change the rights of the ADS holders under the terms of such agreement, without the prior consent of the ADS holders. We and the depositary may agree to amend the deposit agreement in any way we decide is necessary or advantageous to us or to the depositary. Amendments may reflect, among other things, operational changes in the ADS program, legal developments affecting ADSs or changes in the terms of our business relationship with the depositary. In the event that the terms of an amendment are materially disadvantageous to ADS holders, ADS holders will only receive 30 days’ advance notice of the amendment, and no prior consent of the ADS holders is required under the deposit agreement. Furthermore, we may decide to direct the depositary to terminate the ADS facility at any time for any reason. For example, terminations may occur when we decide to list our ordinary shares on a non-U.S. securities exchange and determine not to continue to sponsor an ADS facility or when we become the subject of a takeover or a going-private transaction. If the ADS facility will terminate, ADS holders will receive at least 30 days’ prior notice, but no prior consent is required from them. Under the circumstances that we decide to make an amendment to the deposit agreement that is disadvantageous to ADS holders or terminate the deposit agreement, the ADS holders may choose to sell their ADSs or surrender their ADSs and become direct holders of the underlying ordinary shares, but will have no right to any compensation whatsoever.

ADS holders may not be entitled to a jury trial with respect to claims arising under the deposit agreement, which could result in less favorable outcomes to the plaintiff(s) in any such action.

The deposit agreement governing the ADSs representing our ordinary shares provides that, to the fullest extent permitted by law, holders and beneficial owners of ADSs irrevocably waive the right to a jury trial of any claim they may have against us or the depositary arising out of or relating to the ADSs or the deposit agreement.

If this jury trial waiver provision is not permitted by applicable law, an action could proceed under the terms of the deposit agreement with a jury trial. If we or the depositary opposed a jury trial demand based on the waiver, the court would determine whether the waiver was enforceable based on the facts and circumstances of that case in accordance with the applicable state and federal law. To our knowledge, the enforceability of a contractual pre-dispute jury trial waiver in connection with claims arising under the federal securities laws has not been finally adjudicated by the United States Supreme Court. However, we believe that a contractual pre-dispute jury trial waiver provision is generally enforceable, including under the laws of the State of New York, which govern the deposit agreement, by a federal or state court in the City of New York, which has non-exclusive jurisdiction over matters arising under the deposit agreement. In determining whether to enforce a contractual pre-dispute jury trial waiver provision, courts will generally consider whether a party knowingly, intelligently and voluntarily waived the right to a jury trial. We believe that this is the case with respect to the deposit agreement and the ADSs. It is advisable that you consult legal counsel regarding the jury waiver provision before entering into the deposit agreement.

If you or any other holders or beneficial owners of ADSs bring a claim against us or the depositary in connection with matters arising under the deposit agreement or the ADSs, including claims under federal securities laws, you or such other holder or beneficial owner may not be entitled to a jury trial with respect to such claims, which may have the effect of limiting and discouraging lawsuits against us and/or the depositary. If a lawsuit is brought against us and/or the depositary under the deposit agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have had, including results that could be less favorable to the plaintiff(s) in any such action, depending on, among other things, the nature of the claims, the judge or justice hearing such claims, and the venue of the hearing.

No condition, stipulation or provision of the deposit agreement or ADSs serves as a waiver by any holder or beneficial owner of ADSs or by us or the depositary of compliance with any substantive provision of the U.S. federal securities laws and the rules and regulations promulgated thereunder.

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As an English public limited company, certain capital structure decisions will require shareholder approval, which may limit our flexibility to manage our capital structure.

English law provides that a board of directors may only allot shares (or rights to subscribe for or convertible into shares) with the prior authorization of shareholders, such authorization stating the aggregate nominal amount of shares that it covers and being valid for a maximum period of five years, each as specified in the articles of association or relevant shareholder resolution. We have obtained authority from our shareholders to allot additional shares for a period ending June 27, 2027, which authorization will need to be renewed upon expiration (i.e., at least every five years) but may be sought more frequently for additional five-year terms (or any shorter period).

English law also generally provides shareholders with preemptive rights when new shares are issued for cash. However, it is possible for the articles of association, or for shareholders to pass a special resolution at a general meeting, being a resolution passed by at least 75% of the votes cast, to disapply preemptive rights. Such a disapplication of preemptive rights may be for a maximum period of up to five years from the date of adoption of the articles of association, if the disapplication is contained in the articles of association, or from the date of the shareholder special resolution, if the disapplication is by shareholder special resolution but not longer than the duration of the authority to allot shares to which the disapplication relates. In either case, this disapplication would need to be renewed by our shareholders upon its expiration (i.e., at least every five years). We have obtained authority from our shareholders to allot additional shares for a period ending June 27, 2027, which disapplication will need to be renewed upon expiration (i.e., at least every five years), but may be sought more frequently for additional five-year terms (or any shorter period).

English law also generally prohibits a public company from repurchasing its own shares without the prior approval of shareholders by ordinary resolution, being a resolution passed by a simple majority of votes cast, and other formalities. Such approval may be for a maximum period of up to five years.

ITEM 4. INFORMATION ON THE COMPANY

4.A. History and development of the company.

Freeline Therapeutics Limited was incorporated under the laws of England and Wales in March 2015. In connection with our IPO, (i) Freeline Therapeutics Holdings Limited was incorporated under the laws of England and Wales in April 2020 as a private limited company with nominal assets and liabilities and the shareholders of Freeline Therapeutics Limited exchanged each of the shares held by them in Freeline Therapeutics Limited for the same number and class of newly issued shares of Freeline Therapeutics Holdings Limited pursuant to a share exchange agreement and, as a result, Freeline Therapeutics Holdings Limited became the sole shareholder of Freeline Therapeutics Limited, (ii) we incorporated Freeline Holdings (UK) Limited, a new wholly owned subsidiary that later became the direct holding company of Freeline Therapeutics Limited and (iii) we re-registered as a public limited company and changed our name to Freeline Therapeutics Holdings plc in July 2020. On August 11, 2020, the different classes of our issued share capital were converted into a single class of ordinary shares and various classes of deferred shares, and we completed our IPO on the Nasdaq Global Select Market. Our ADSs are traded on the Nasdaq Capital Market under the symbol FRLN. Our ordinary shares are not listed.

Our registered office is located at Sycamore House, Gunnels Wood Road, Stevenage, Hertfordshire, SG1 2BP, United Kingdom and our telephone number is +44 (0)1438 906870. Our website address is www.freeline.life. The information contained on or accessible through our website is not incorporated by reference into this Annual Report, and you should not consider any information contained on, or that can be accessed through, our website as part of this Annual Report. We have included our website address as an inactive textual reference only. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, such as our company, at www.sec.gov.

Our agent for service of process in the United States is Freeline Therapeutics, Inc. c/o CT Corporation, Corporation Trust Center, 1209 Orange Street Wilmington, DE 19808.

Our actual capital expenditures for the years ended December 31, 2022, 2021 and 2020 amounted to $7.0 million, $4.3 million and $2.4 million, respectively. These capital expenditures primarily consisted of purchases of

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property and equipment, which largely consisted of operating and lab equipment to be used in new lab spaces in both the United Kingdom and Germany. We expect our capital expenditures to decrease in the near term as we have purchased the property and equipment to be used in our new office and lab space in the United Kingdom. We anticipate our capital expenditures in 2023 will be financed from our existing cash and cash equivalents.

4.B. Business Overview

We are a clinical-stage biotechnology company with the ambition of developing transformative adeno-associated virus, or AAV, vector-mediated gene therapies. We are dedicated to improving patient lives through innovative, potential one-time treatments for chronic debilitating diseases. We use our proprietary, rationally designed AAV vector and capsid along with novel promoters and transgenes to deliver a functional copy of a therapeutic gene into human liver cells, thereby expressing a persistent functional level of the missing or dysfunctional protein into the patient’s bloodstream. Our pipeline includes a program in the clinic for Gaucher disease, deprioritized product candidates in Fabry disease and hemophilia B and research programs targeting novel applications for gene therapy, for which we have, through owned and in-licensed intellectual property rights, development and worldwide commercial rights.

Our differentiated platform uses our proprietary, rationally designed AAV capsid, which we refer to as AAVS3. We have optimized our capsid to preferentially deliver a therapeutic gene of interest to the human liver, and thereby cause the expression of the necessary protein to address a targeted disease. AAVS3 was developed at University College London, or UCL, by a team led by our founder, Prof. Amit Nathwani. In preclinical settings, the AAVS3 capsid has been observed to have significantly higher transduction efficiency in human liver cells as compared to wild-type AAV serotypes used in many other gene therapy programs, including AAV5, AAV6, AAV8 and others. We are able to further enhance the potency of our AAVS3 vector platform through the manufacturing processes and analytic methods we developed and optimized with employees of our former German subsidiary, Freeline Therapeutics GmbH. We believe the combination of our proprietary capsid and our rights and access to these chemistry, manufacturing and controls, or CMC, processes and methods allows us to produce gene therapy product candidates that have the potential to drive higher levels of protein expression than comparable programs have demonstrated in the clinic to date.

We and our former subsidiary invested a significant amount of time and resources in developing optimized assays and CMC processes that we believe help us to produce high quality product candidates. We have a scaled manufacturing process which we believe has the ability to consistently and efficiently produce gene therapy product candidates at commercial scale and competitive cost. As a result of the differentiated potency of our platform, we believe we are able to administer our product candidates at lower doses for a given level of protein expression, with potential benefits in safety and cost of goods. This advantage also gives us the opportunity to address conditions that are not currently amenable to first-generation gene therapy because of the high levels of protein expression required to treat such diseases.

Gaucher disease is currently primarily managed with enzyme replacement therapies, or ERTs. These current methods of treatment do not provide sustained normalization of protein levels and, as a result, require burdensome lifelong recurrent intravenous, or IV, infusions. We believe that our gene therapy product candidate FLT201, which is designed to deliver persistent functional protein levels, has the potential over time to generate improved clinical outcomes for patients with Gaucher disease. If achieved, this would provide clear differentiation from existing therapies as well as from other gene therapies currently in development for this indication. Our gene therapy product candidates (including our deprioritized candidates FLT190 and FLT180a) target the liver in order to cause the production of proteins that are released in the bloodstream at levels sufficient to have a therapeutic benefit. Since we use our proprietary AAVS3 capsid in each of these product candidates, we believe that the modularity of our platform will allow the development of each product candidate to inform the next one, and that our clinical program for Gaucher disease Type 1 will therefore benefit from the experience we gained in developing FLT190 and FLT180a.

We are developing our product candidate FLT201 for the treatment of Gaucher disease Type 1. Based on data from our studies in in vitro and in vivo animal models, as well as the results from our clinical trials of FLT180a and FLT190, we believe that this product candidate has the potential to provide sustained normal protein levels following a one-off treatment for Gaucher disease Type 1 patients. We have developed a proprietary more stable variant of glucosylceramidase beta, or GBA, the missing protein in Gaucher disease, which has a more than 20-fold longer half-life within the cell than the wild-type GBA protein typically administered to Gaucher patients as ERT. In our animal studies against a wild-type GBA construct, FLT201 has demonstrated that the more stable variant of GBA

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achieves higher uptake into the organs and tissues most affected by Gaucher disease, including the spleen, liver, lung and bone. FLT201 has received orphan drug designation from the FDA and the European Commission. All of our product candidates to date, including FLT201, use our AAVS3 capsid and our advanced CMC platform, which enabled us to move this candidate from the research stage to preliminary lead candidate identification within 18 months. We initiated the Phase 1/2 GALILEO-1 dose-finding clinical trial for this program in December 2021 and expect to report initial safety and biomarker data from the first cohort in the third quarter of 2023.

In March 2023, we assessed our strategic priorities based on our current financial position and the capital needs associated with advancing two clinical-stage programs in parallel. Following the assessment, we decided to pause development of our product candidate FLT190 for the treatment of Fabry disease despite encouraging data to date to focus our resources on the development of FLT201, which we believe has the potential to be a first- and best-in-class gene therapy for Gaucher disease type 1. We expect to close our Phase 1/2 MARVEL-1 clinical trial, enroll all three patients who received FLT190 in MARVEL-1 in our separate MARVEL-2 long-term clinical study and stop all non-essential spending on FLT190 in order to redirect those resources to FLT201. In July 2019, we began recruiting patients for our Phase 1/2 MARVEL-1 dose-finding clinical trial to evaluate the safety and efficacy of FLT190 for the treatment of Fabry disease, which we refer to as our Phase 1/2 MARVEL-1 clinical trial. The first three patients in this trial were dosed in August 2019, June 2021 and September 2022, respectively. Preliminary data from our Phase 1/2 MARVEL-1 clinical trial demonstrated that a single administration of a low dose of FLT190 was generally well-tolerated and led to a three to four-fold increase over baseline in plasma α-Gal A activity. In the first patient dosed, this increase was achieved by week four and was sustained through the data cutoff at week 20. The first patient dosed continued to show stable elevated α-Gal A expression at 0.8 nmol/hr/mL at 36 months post treatment which is approximately a 3-fold increase compared to the patient’s baseline level. The second patient dosed experienced a sustained increase in plasma α-Gal A expression to near normal levels, from 0.0 nmol/hr/mL at baseline to an average of 3.4 nmol/hr/mL from weeks six to 24, and has maintained stable levels up to one year after treatment. FLT190 has received orphan drug designation from the FDA and the European Commission.

We benefit from the experience we gained in developing FLT180a, our deprioritized gene therapy candidate for people with hemophilia B, in two Phase 1/2 clinical trials. In 2020, we completed our Phase 1/2 B-AMAZE clinical trial of FLT180a. In December 2021, we initiated our Phase 1/2 B-LIEVE dose confirmation clinical trial to confirm the dose and immune management regimen. In July 2022, we presented safety and initial efficacy data from the first dose cohort in the B-LIEVE trial at the International Society on Thrombosis and Haemostasis, or ISTH, Congress held in London, United Kingdom, and the New England Journal of Medicine published positive long-term follow-up data for up to 3.5 years from the B-AMAZE trial. Following a previously announced review of strategic options for FLT180a in November 2022 we decided to prioritize the development of our other product candidates and not invest in further development of FLT180a without a partner.

From our founding in 2015, we invested in our CMC capability and operations, and believe we and our former subsidiary have developed processes that can efficiently provide high product quality. On February 8, 2023 we closed the sale of Freeline Therapeutics GmbH to Ascend Gene and Cell Therapies Ltd., or Ascend, a specialist biopharma CMO with operations in the United Kingdom and the United States, extending our cash runway through key data readouts and enhancing our ability to achieve our near- and long-term goals. At closing we assigned certain patents and know-how related to chemistry, manufacturing and controls capabilities and technologies, including these manufacturing platform processes, and other intellectual property rights to Ascend. Ascend granted us a non-exclusive, royalty-free, perpetual, irrevocable, worldwide license back of the assigned rights necessary to develop or commercialize our current product candidates. We also agreed to utilize, and Ascend agreed to make exclusively available to Freeline, no fewer than 15 full-time employee equivalents, or FTEs, per annum to provide certain services in the area of development and manufacturing to us for a guarantee period of 18 months. These agreements allow us to maintain rights to use these manufacturing platform processes to develop and commercialize our current product candidates and flexible access to the analytical and process development capabilities and dedicated personnel of our former subsidiary.

Our founder and senior executives are leaders in gene therapy, rare diseases and AAV biology, and we are affiliated with leading scientific and medical institutions in the field of gene therapy for rare diseases, including UCL and The Royal Free Hospital, or the RFH. Our founder and Clinical and Scientific Adviser, Prof. Amit Nathwani, is a senior faculty member and clinical investigator at UCL and director of the hemophilia center at the RFH. He developed the first successful liver-directed AAV gene therapy for hemophilia B, which led to two New England Journal of Medicine publications (published in 2011 and 2014) and has produced sustained and durable FIX levels in

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patients that have lasted over nine years. Prof. Nathwani’s research team at UCL developed our proprietary AAVS3 capsid, as well as other critical elements of our gene therapy platform. Our CEO, Michael J. Parini, has extensive experience as a public company biotechnology executive through serving as Executive Vice President and Chief Administrative, Legal and Business Development Officer of Vertex Pharmaceuticals, Inc. and in multiple leadership roles within Pfizer Inc.’s global legal team, including Senior Vice President and Associate General Counsel. Our international team of employees has relevant expertise from prior experience in gene therapy and rare disease companies, academic research laboratories, global CROs, and professional services organizations. With operations in key biotechnology centers in the United States and the United Kingdom, we believe we have access to the global talent pool necessary to continue to grow and develop our organization.

Background on Gene Therapy

Gene therapies are a transformative class of medicines targeting diseases driven by underlying genetic mutations typically in one specific gene. By using viral vectors, gene therapies deliver a functional copy of the defective gene into a patient’s cells, systemically or to a targeted organ. By introducing recombinant DNA with a functional copy of the gene into a patient’s cells, gene therapies overcome the effects of the defective, disease-causing gene and modulate protein production and cellular function to provide a therapeutic and clinical benefit. Through a single administration, gene therapies hold the promise of achieving a one-time treatment in chronic or life-threatening diseases, improving the clinical outcome of patients beyond the current standard of care.

Multiple gene therapies have been approved for commercial sale over the last several years, demonstrating the potential of this class of medicines to address a number of rare monogenic diseases with considerable unmet need. These approved gene therapies include Strimvelis by GlaxoSmithKline plc, or GSK, a product now owned by Orchard Therapeutics plc, Zolgensma by AveXis Inc. (a wholly-owned subsidiary of Novartis International AG, or Novartis), Luxturna by Spark Therapeutics, Inc., or Spark Therapeutics (a wholly-owned subsidiary of Roche), Zynteglo by bluebird bio, Inc., Libmeldy by Orchard Therapeutics, Roctavian by BioMarin Pharmaceutical Inc., or BioMarin, and Hemgenix by uniQure N.V. (licensed to CSL Behring). In addition, dozens of sponsors are currently developing genetic medicines for a variety of conditions using different mechanisms of action, including lentiviral ex vivo gene therapy, which delivers DNA ex vivo to cells extracted from and then reinfused into the patient, in vivo AAV-based gene therapy, which delivers DNA encoding for the gene of interest in vivo to various target organs, and non-viral gene therapy platforms using clinically validated lipid nanoparticles to deliver covalently closed-ended DNA constructs.

Liver-Directed AAV Gene Therapy

AAV-based gene therapies leverage the properties of AAV, a non-enveloped, non-pathogenic virus, to deliver DNA to target cells. Typically, the vectors are designed to deliver this DNA in a non-integrating manner into the nucleus of the cell. However, this DNA can also be systems-designed (such as CRISPR-Cas) to integrate the target DNA into the chromosome. A key element in typical AAV vectors are promoters, which enable and control transcription of the gene with which they are associated. A second key component of AAV-based gene therapies are viral capsids. Differences in the vector capsid, or the protein coat of the virus that surrounds the DNA being delivered, are responsible for the serological classification of vectors and for their tendency to functionally transduce different types of tissue, such as liver, heart or muscle. Clinical studies in a variety of indications have demonstrated the safety and efficacy of AAV capsids lacking any viral genes and containing DNA sequences of interest for various therapeutic applications. In contrast to viral vectors that are “insertional,” such as lentiviral vectors, or gene editing approaches, which make permanent changes to the genetic code of a cell by modifying its DNA, AAV vectors are typically non-integrating vectors, which deliver stable extra-chromosomal copies of DNA that form a free-floating loop in the cell’s nucleus to mediate long-term gene expression. This is believed to minimize (though not eliminate) the potential risks associated with modifying a patient’s genome and simplifies formulation for delivery.

The liver is a vital organ that plays an important role in human metabolism and other key physiological functions. The liver also possesses anatomic properties that make it an attractive target for AAV-based gene therapy. This organ is the protein engine of the body, producing and secreting proteins such as plasma proteins, carrier proteins, hormones, prohormones and apolipoprotein into the bloodstream. Hepatocytes, the most common type of liver cell, synthesize and metabolize a large number of these proteins, including intracellular and secreted proteins responsible for a diverse range of critical functions in the body. Due to its dual blood supply, an adult human liver receives nearly

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25% of the cardiac output of blood, filtering approximately one liter of blood per minute, and accounts for 10% to 15% of the blood volume at any given moment. This means that systemic administration of gene therapy leads to rapid accumulation of high levels of vector particles within the liver.

Challenges of Current Liver-Directed AAV Gene Therapies

There are multiple challenges associated with developing a liver-directed AAV gene therapy, including but not limited to efficient targeting of, and functional expression in, hepatocytes, the relatively high doses of vector required for a therapeutic response, maintaining the persistence of protein expression over many years and managing the immune response to the vector.

AAVs are subject to immune surveillance and can initiate an inflammatory immune response, including a transient asymptomatic increase in ALT levels, thought to be the result of a T-cell mediated immune reaction against hepatocytes transduced with AAV product. If not addressed promptly with steroids or other immune management treatments, this cellular immune response can induce hepatocyte cell death, and therefore loss of transgene expression.

Additionally, the seroprevalence of antibodies against the AAV capsid may render some patients ineligible for gene therapy. Many individuals develop a humoral, or antibody-based, immune response due to infection with wild-type AAV during their lifetime. This infection, which is typically asymptomatic, often results in persistent titers of anti-AAV antibodies sufficient to neutralize any subsequent introduction of AAV serotypes. Such pre-existing neutralizing antibodies have been shown to adversely affect the gene transfer efficiency of AAV vectors and, as a result, enrollment into gene therapy clinical studies is often restricted to subjects that have low or no pre-existing neutralizing antibodies.

Our Platform

Our modular, liver-directed AAV gene therapy platform is designed to address many of the limitations commonly seen in AAV gene therapies, including insufficient efficacy, protein expression levels below the normal range, and limited durability. We aim to address these limitations through our enhanced product design underpinned by AAVS3, our rationally designed capsid with heightened efficiency in transducing hepatocytes, as well as our proprietary promoters and our expression cassettes, which seek to optimize each element of the transgene.

Our platform is built around an in vivo AAV-based approach which we believe has considerable advantages over ex vivo approaches in similar diseases. Unlike ex vivo gene therapies, which often require highly burdensome delivery, our AAV therapies only require an hour-long infusion. Unlike ex vivo gene therapies, which require multiple interventions and extensive preconditioning similar to that required for a bone marrow transplant, a simple blood test before treatment is all that is required with AAV-based therapies to ensure that the patient’s immune system is likely to accept the AAV vector. To maximize the potential benefit of our therapy, we administer a prophylactic immune management regimen of oral prednisolone and oral tacrolimus, which are both broadly-used agents used to modulate the immune system in a variety of clinical settings. These agents are administered during the highest risk period of immune response to the AAVS3 capsid, combined with close monitoring. Our founder, Prof. Nathwani, was the first to demonstrate that the prophylactic administration of steroids successfully preserved transduced liver cells from immune response. We have further built on his insights in our work on prophylaxis, where we have successfully used this combination of steroids and tacrolimus to dampen the immune response, and to control elevation of ALT levels, preserving gene expression.

We believe that our liver-directed AAV gene therapy platform has the potential to develop innovative, one-time treatments. In addition, the functional transduction efficiency of our AAVS3 vector observed to date in our hemophilia B and Fabry disease human studies suggests our gene therapy platform may be able to address indications that require high levels of protein expression to achieve a therapeutic benefit. As a result, we believe our platform has the potential to expand the current reach of gene therapy and develop one-time treatments for indications beyond the well-known monogenic diseases targeted by many current gene therapy clinical programs. There are three main elements of our gene therapy platform: (i) our capsid and promoter, (ii) our research tools and protein engineering capabilities and (iii) the manufacturing platform processes we developed and optimized with employees of our former German subsidiary, Freeline Therapeutics GmbH.

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Capsid and Promoter

Our proprietary, rationally designed capsid, AAVS3, forms the backbone of our gene therapy platform. AAVS3 was developed in the lab of Prof. Nathwani through modification of native serotypes with the aim of improving upon the ability of existing gene therapies to functionally transduce human hepatocytes. From extensive research as well as direct clinical experience from his pioneering use of AAV8 gene therapy for hemophilia B, Prof. Nathwani and his research team at UCL identified gene sequences demonstrating human liver tropism, or affinity. Using these sequences, Prof. Nathwani’s research team generated new capsid candidates by swapping the domains of the capsid variants of interest to produce novel capsid candidates. Screening in human liver cell lines identified the swaps that produced improved functional gene transfer compared to naturally occurring serotypes, such as AAV8. Ultimately, Prof. Nathwani’s research team selected the AAVS3 capsid from several candidates through multiplexed sequential screening in mice xenografted with human liver tissue. All of our promoters, including FRE1, which is used in FLT190, are designed to be liver-selective.

Preclinical studies demonstrate our AAVS3 capsid transduced more hepatocytes compared to some serotypes used in AAV gene therapy trials (e.g. AAV5, AAV8, AAV-rh10), as seen from in vitro experiments of transduction efficiency. In these experiments, normal primary human hepatocytes from multiple donors were used to assess the transduction efficiency of AAVS3 compared with a range of naturally occurring serotypes.

As illustrated in the left-hand chart below, functional transduction of primary human hepatocytes with AAVS3 pseudotyped vectors containing the green fluorescent protein, or GFP, biomarker is significantly higher as compared with untreated control subjects, or UnT ctrl, AAV8, AAV5 and AAVrh10 vectors. In vivo studies in the human xenograft mouse model showed that the percentage of human hepatocytes expressing GFP following AAVS3 transduction was nearly six-fold higher and statistically significant (p<0.05) as compared to AAV8, as illustrated in the chart on the right-hand side below. We determined statistical significance based on a widely used, conventional statistical method that establishes the p-value of clinical results. The p-value is a measure of comparability between the observed outcomes and the hypothesis that there is no treatment effect attributable to the product candidate; the p-value represents the likelihood that the observed outcome occurred by chance alone. Typically, a p-value of 0.05 or less represents statistical significance.

 

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Finally, biodistribution data in non-human primates, or NHPs, demonstrates that AAVS3 has the highest affinity to the liver as compared to other organs in NHPs, as illustrated in the following chart. The relatively high affinity indicated in the lymph nodes, or LNs, and the spleen is an expected consequence of systemic administration and clearance of the vector. The use of a liver-selective promoter in combination with AAVS3 substantially restricts therapeutic gene expression to the liver.

 

We believe the expression capability of our platform will allow us to address diseases that require relatively high protein expression levels such as Gaucher disease in a way that may not be possible to achieve through simple dose escalation with wild-type AAV capsids. In addition, for a given level of required expression, we believe the potency of our product candidates allows for administration at a lower dose, which we believe can enhance tolerability.

Research Tools and Protein Engineering Capabilities

Our vector design efforts range well beyond capsid engineering. Expression cassettes utilized in our product candidates are tailor-made to meet each defined clinical need, taking into account vector quality, tissue targeting, protein stability and specific activity requirements. Our vector design team uses our extensive in-house research and analytic capabilities, as well as protein engineering approaches, to generate libraries of codon optimized sequences and novel promoters and enhancers. These can be combined to produce expression cassette candidates that drive the necessary protein levels and optimized protein activity and can be efficiently manufactured. Importantly, the promoter-enhancer combinations cover a broad range of sizes that enable us to determine an expression cassette length that is within the carrying capacity of an AAVS3 capsid and that also optimizes both potency and quality of the vector. For certain diseases, the amount of therapeutic protein required extends beyond what can be achieved through genetic engineering. To address this limitation, we employed protein engineering approaches, including a rational and in silico design, to generate gain of function, or GoF, protein variants that, among other things, improve the effective activity of the wild-type protein. For example, in our Gaucher disease program, compared to wild-type, we have achieved 10-fold higher half-life in murine serum with 20-fold higher half-life at lysosomal pH, resulting in 20-fold higher plasma activity in vivo, based on our published research to date on our FLT200 program (the predecessor to our FLT201 program).

We have also scaled our assay development and screening activities to support testing and shortlisting of candidate libraries emerging from the vector design and protein engineering activities so that subsequent rounds of design can be performed on a timely basis. In addition to routine cell-based screening assays, our research team has developed screening assays for transfer to GCP laboratories for validation and clinical deployment, various assays for deployment in IND- and CTA-enabling studies, and high-throughput antigen and activity assays. These assays utilize liquid handling systems and miniaturized assay formats that are critical for screening patients for antibodies to our AAVS3 capsid, as well as monitoring the enzymes and proteins that are generated as a result of our gene therapies.

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On the translational side of research, we conduct experiments in-house as well as through a global network of leading academic investigators and CROs. We perform in vivo expression experiments in preclinical studies of our product candidates and, as required on a program-by-program basis, functional models to demonstrate safety and efficacy in diseases such as LSDs and new disease targets. In addition to animal model studies, we also use empirically validated and newly developed computational or statistical models to predict and study efficacy, pharmacokinetic and pharmacodynamic profiles to ensure that our lead candidates are optimized before advancing into clinical trials. The diverse experience, background and geographical locations among our collaborators and partners gives us operating flexibility to help develop our projects, including IND- and CTA-enabling studies, using effective tools and methodologies. These are the capabilities that enabled us to develop a novel and proprietary initial product candidate for Gaucher disease within 18 months of initiating the research stage, and which we believe will allow us to develop innovative product candidates for systemic diseases that are not currently addressed by gene therapy.

Manufacturing

Our rights and access to the manufacturing platform processes and related analytics developed and optimized with employees of our former German subsidiary, Freeline Therapeutics GmbH, contribute to the potency and the safety profile of our product candidates. From the founding of our company, we invested in people, time and resources to build CMC expertise and create end-to-end manufacturing processes. The processes are made possible through a set of key capabilities at Freeline Therapeutics GmbH (now Ascend GmbH), ranging from biological starting material optimization and process development to analytical capabilities. The CMC processes, product characterization and manufacturing capabilities benefit from the modularity of the platform processes, where our capsid and production plasmids are leveraged across indications. Each new program is primarily differentiated by the specific transgene for each indication. Due to this modularity, we have effectively leveraged the knowledge gained from our existing programs to optimize the development of each new program, allowing us to advance three programs from research stage to clinical trials within six years of our founding.

The higher potency of our capsid translates directly into lower dose requirements for a given level of expression, and therefore into a smaller number of manufacturing batches required to supply the clinical and, if approved, eventually the commercial, needs of our programs. To date we have manufactured all of our product candidates using a split-packaging plasmid system in an adherent mammalian HEK293T cell line cultured in the iCELLis® bioreactor. This has, in our view, the potential to provide higher quality product candidates than adherent mammalian HEK293 cell lines or insect cell suspension systems by packaging less unwanted host-cell DNA into the capsids and allowing better control of the so-called “full/empty ratio.” We and our former subsidiary also developed a next generation suspension manufacturing platform process for programs with higher dosing requirements. We established the adherent manufacturing platform in two locations in two countries at a CMO, Thermo Fisher Scientific (Brammer and Henogen) but terminated our agreement with Brammer in July 2022 as a result of alleged material breaches by Brammer. See “—Legal Proceedings” below. We are planning to transfer the manufacturing platform processes to CMOs in order to create a working platform of commercial scale and quality. We continue to assess advances in these technologies as they develop and retain flexibility in our development plans to give us the ability to manufacture our products on a platform that is appropriate for each program.

FLT201 for the Treatment of Gaucher Disease Type 1

We are developing our liver-directed gene therapy product candidate, FLT201, for the treatment of Gaucher disease Type 1. In 2019, we selected the candidate with the best efficacy profile among a group of different constructs we examined, and we initiated the Phase 1/2 GALILEO-1 dose-finding clinical trial for this program in December 2021.

Gaucher Disease Overview

Gaucher disease is a rare autosomal recessive condition in which a mutation in the GBA1 gene leads to reduced glucocerebrosidase, or GCase, activity. This causes a failure of metabolism of glycosphingolipids in lysosomes within cells and the build-up of glucocerebroside, or GL-1. This is particularly seen in macrophages, which are transformed into Gaucher cells by the build-up and accumulation in the spleen, liver, bone marrow and, in some forms, also the central nervous system, or CNS. Gaucher disease can be subdivided into Type 1 (somatic, non-neurological), Type 2 (acute, infantile neuronopathic) and Type 3 (chronic neuronopathic). Approximately 90% of patients affected by Gaucher disease in western countries have Gaucher disease Type 1, which manifests as multiple

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morbidities including enlargement of the spleen and liver, low red blood cells, or anemia, low platelet count, or thrombocytopenia, and bone abnormalities including bone pain and fractures. Bruising, risk of bleeding and fatigue are common due to the thrombocytopenia and anemia. The prevalence of Gaucher disease Type 1 is estimated to be approximately 1.225 in 100,000 live births globally and one in 860 live births in Israel, implying a total population of approximately 18,000 Gaucher disease Type 1 patients in the United States, the five major European markets (United Kingdom, Germany, France, Italy and Spain) and Israel.

Limitations of Current Therapies

There are currently no curative treatments for Gaucher disease. Currently, two different therapeutic approaches for the treatment of Gaucher disease Type 1 are used: ERT and substrate reduction therapy, or SRT. Intravenously administered ERT is targeted to macrophages and increases the breakdown of the accumulated glycolipids, which has proven to be effective in the treatment of the visceral and hematological complications of the disease. Decreases in splenic and hepatic size and improvement in cytopenias are usually apparent after six months of treatment.

Although ERT can have significant benefits for patients with Gaucher disease, the treatment can impose a significant burden on them. The infusions usually are administered biweekly and take several hours to prepare and administer (even if performed at home). Another key challenge in the development and delivery of ERT is the stability of the enzyme. The half-life at physiological pH is approximately ten minutes, which limits the amount of enzyme that can have a therapeutic impact and leaves the patient with undetectable amounts of ERT within hours of receiving their treatment. Therefore, biweekly infusions of ERT are needed over a patient’s lifetime.

ERT is a relatively effective treatment for the somatic manifestations of Gaucher disease with improvements in organomegaly and cytopenias. However, the effect on somatic disease outside the reticuloendothelial system, such as skeletal and pulmonary disease, has been less robust. Nearly half of patients who experience bone pain prior to treatment continue to experience bone pain after 10 or more years on ERT, and one study suggests that as many as 68% of patients are affected by lung dysfunction despite ongoing treatment.

SRT reduces the amount of glucosylceramide by inhibiting its synthesis. As an oral alternative to ERT, its user friendliness makes this class of treatment attractive to some patients. The first SRT, miglustat, is approved for Gaucher disease Type 1 patients with mild to moderate disease manifestations for whom ERT is unsuitable. However, side effects and concerns about effectiveness have limited its use. Eliglustat, a second-generation SRT with an improved risk/benefit profile, has been approved as a first-line therapy. SRT is not approved for use in children. In addition, both ERTs and SRTs for Gaucher disease impose significant costs on the healthcare system.

Although ERTs represent a very important advancement in the treatment of patients with Gaucher disease Type 1, we believe that gene therapy offers the potential for a one-time treatment for Gaucher disease. In addition to our program, there is an AAV gene therapy using an AAV9 capsid and a different gene therapy modality that uses a lentiviral ex vivo gene therapy under clinical development for this indication. This delivers DNA ex vivo to cells extracted from and then reinfused into the patient via hematopoietic stem cell transplantation. We believe another liver-directed AAV gene therapy and a non-viral gene therapy using lipid nanoparticles to deliver covalently closed-ended DNA constructs are in preclinical development.

Our Solution: FLT201 for Gaucher Disease Type 1

We are developing FLT201 for the treatment of Gaucher disease Type 1. Like FLT190, FLT201 leverages AAVS3, our proprietary high-potency adeno-associated virus capsid. To further enhance the potency of our candidate, our protein engineering group developed GCasevar85, a proprietary GCase variant which, compared to wild-type GCase, has a greater than 20-fold increase in half-life in lysosomal pH and a six- to 10-fold increase in half-life in serum, resulting in a 20-fold increase in potency of the vector.

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Preclinical Development of FLT201

In a platform presentation at the WORLDSymposiumTM in February 2021, we shared data which demonstrated preclinical proof-of-concept for the potential of the program to provide one-time treatments in patients with Gaucher disease Type 1. Included in these data were a demonstration of GCase expression, cellular uptake, tissue penetration, enzymatic activity, and clearance of disease-causing substrate, glucosylsphingosine, or lyso-Gb1.

The preclinical development program for FLT201 has consisted of a GLP-compliant 13-week toxicology study in mice and a study in NHPs. For purposes of the mouse studies, we utilized vectors pseudotyped with AAV8 rather than our AAVS3 capsid because AAVS3 is poor at transducing murine cells. In wild-type mice, FLT201 resulted in robust GCase expression in the liver and sustained GCase secretion into the plasma, with enhanced and sustained GCase uptake observed in key tissues involved in Gaucher disease including spleen, bone marrow and lung, as compared with velaglucerase alfa, a standard-of-care ERT for Gaucher disease. The data demonstrate that GCasevar85 secreted from the liver was taken up by macrophages in the spleen and trafficked to lysosomes. In GBA-deficient mice, restoration of GCase activity after FLT201 injection was observed in difficult-to-reach tissues as shown by decreased levels of disease-causing substrate, lyso-Gb1, increased concentrations of plasma GCase and reduced activated macrophages and inflammation in the lung. In addition, dose-dependent reductions of lyso-Gb1 were observed in all tissues analyzed including bone marrow and lung. In vitro studies demonstrated that GCasevar 85 was taken up by human peripheral blood mononuclear cells, or PBMCs, and macrophages at levels comparable to those seen with ERT. FLT201 treatment in rhesus macaques was well-tolerated with rapid and robust increases in plasma GCase levels which have been sustained for at least 24 months post dose. Evaluation of liver and spleen tissues at six months demonstrated uptake of GCase from the plasma into the Kupffer cells of the liver and macrophages of the spleen, including its red pulp and more abundantly within its germinal centers. There were no treatment-related adverse findings in the mice or in NHP studies including during the post-dose observational period up to 24 months in animals retained for long-term study. Considered in totality, we believe that these data indicate FLT201 was well-tolerated and may be able to deliver sustained GCase expression and uptake in difficult-to-reach tissues, such as bone marrow and lung, as evidenced by the substrate clearance.

Clinical Development of FLT201

We currently have ongoing our Phase 1/2 GALILEO-1 dose-finding trial of FLT201 and have planned a long-term follow-up study of FLT201, in which we will conduct follow-up on patients from our Phase 1/2 GALILEO-1 dose-finding trial for a period of at least five years following dosing in the trial. FLT201 has received orphan drug designation from the FDA and the European Commission.

Subject to agreement with regulatory authorities, we plan to initiate a Phase 3 clinical trial in patients previously treated with ERT or SRT, whom we refer to as PTPs, once sufficient data is collected in Part 1 of the Phase 1/2 GALILEO-1 dose-finding trial. The sample size will be informed by data from Part 1 of the trial. A Phase 3 trial in PUPs is also being considered.

Phase 1/2 GALILEO-1 Clinical Trial: First-in-human, Dose-finding Study

Our Phase 1/2 GALILEO-1 clinical trial is an open-label, safety, tolerability and efficacy study of a novel AAV vector, FLT201, in patients with Gaucher disease Type 1.

We are conducting our Phase 1/2 GALILEO-1 dose-finding trial in two parts. In Part 1 of the clinical trial, we aim to determine the level of GCase expression achieved with ascending doses of FLT201. We will enroll approximately twelve PTPs. Part 2 of the clinical trial will focus on the biological activity of a dose selected for further development following Part 1 and will enroll approximately six PUPs who have not previously received ERT or SRT. The main objective of the trial is to evaluate the safety of FLT201. The trial will also evaluate, among other things, changes from baseline in plasma and leukocyte GCase activity, Lyso-Gb1 levels in plasma, efficacy endpoints (including hemoglobin and platelet levels) as well as immune response to the treatment. While we have an active IND for FLT201 for the treatment of Gaucher disease Type 1, we currently are planning to conduct our Phase 1/2 GALILEO-1 dose-finding trial initially in Europe, Israel and South America.

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We are planning to test up to four doses in Part 1 of the clinical trial, namely 4.5e11, 1.3e12, 3.9e12 and 1.1e13 vg/kg, with a four-week stagger between dosing patients. The DMC may recommend a higher or lower dose depending on emerging safety, tolerability, pharmacokinetic, pharmacodynamic and efficacy data, and depending on dose response in the initial cohorts, we may not ultimately need to escalate to the higher doses. We are working with approximately 15 clinical trial sites across seven countries, with seven sites now fully enabled to dose patients and another three sites expected to become fully enabled in the next month. We expect to report initial data, including assessments of safety and enzyme activity, from the first cohort in the third quarter of 2023. The initial goal of the program is to achieve in patients a supraphysiological level of plasma GCase activity, which, based on our preclinical data, we believe could lead to the potential mitigation of the effects of Gaucher disease Type 1 beyond that currently provided by ERT and SRT. The following graphic illustrates our dosing approach with respect to FLT201, with at least two and up to three patients in each cohort.

 

Based on findings in Part 1, we anticipate selecting a dose for a Phase 3 clinical trial in PTPs and Part 2 of the Phase 1/2 GALILEO-1 clinical trial. For Part 2, a first cohort of approximately three PUPs will be enrolled at the selected dose level with a second cohort of approximately three PUPs enrolled at the same or different dose level depending on emerging data. The efficacy of FLT201 will be assessed based on the change, relative to baseline, over a period of nine months (approximately six months at plateau levels of GCase) in a number of relevant parameters, including GCase levels, Lyso-Gb1 and other biomarker clearance, GCase immune response and quality of life assessment.

FLT190 for the Treatment of Fabry Disease

In March 2023, following an assessment of our strategic priorities based on our current financial position and the capital needs associated with advancing two clinical-stage programs in parallel, we decided to focus our resources on the development of FLT201 and pause development of our product candidate FLT190 for the treatment of Fabry disease. We expect to close our Phase 1/2 MARVEL-1 clinical trial, enroll all three patients who received FLT190 in MARVEL-1 in our separate MARVEL-2 long-term clinical study and stop all non-essential spending on FLT190 in order to redirect those resources to FLT201.

Our Phase 1/2 MARVEL-1 clinical trial is a dose-escalation clinical trial to evaluate the safety and efficacy of FLT190 in patients with Fabry disease. We dosed our first patient in the Phase 1/2 MARVEL-1 clinical trial in the third quarter of 2019, our second patient in the second quarter of 2021 and our third patient in the third quarter of 2022.

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Fabry Disease Overview

Fabry disease is a rare, X-linked disease characterized by a congenital error of glycosphingolipid metabolism caused by mutations in the GLA gene that encodes the α-Gal A enzyme, responsible for the breakdown of glycosphingolipids. Deficiency of α-Gal A results in the accumulation of glycosphingolipids, such as Gb3 and its deacetylated form globotriaosylsphingosine, or Lyso-Gb3, that are associated with the pathophysiology of the disease.

There are many genetic mutations underlying Fabry disease. The disease can be divided into two categories: classic phenotype, the most severe form of the disease, and a late-onset form of the disease, which is characterized by a more variable disease course, in which patients may be less severely affected. Disease manifestations may be limited to a single organ such as the kidneys or the heart.

Fabry disease is associated with major disability, organ failure and premature death, generally before the age of 60 years. Late-onset variants present later in life with organ dysfunction which can be as severe as in the classic form of the disease, but without the classical symptoms of pain, sweating abnormalities, corneal verticillata and angiokeratoma.

Fabry disease is also a pan-ethnic disorder, meaning that it occurs in all racial and ethnic populations, and it affects both males and females. Women have a more variable clinical presentation than men due to X-chromosome inactivation, and presentations in women can develop about a decade later than in males and range from asymptomatic to severe. The prevalence of Fabry disease is estimated to be approximately one in 50,000 live births, implying a total population of approximately 16,000 Fabry patients in the United States, the five major European markets (United Kingdom, Germany, France, Italy and Spain) and Japan. However, newborn screening initiatives have suggested an even higher prevalence of the disease (one in 3,100 male newborns found by a study conducted in Italy).

Limitations of Current Therapies

Fabry disease is primarily treated with periodic infusions of ERT consisting of recombinant α-Gal A over the patient’s lifetime. Currently no curative therapies exist, and alternatives to ERT for patients with Fabry disease are limited. The most commonly prescribed ERTs for Fabry disease are agalsidase beta (Fabrazyme, marketed by Sanofi Genzyme), and agalsidase alpha (Replagal, marketed by Takeda). Periodic infusion of ERT can cost hundreds of thousands of dollars on an annual basis, placing a significant burden on patients and healthcare systems. A non-ERT drug migalastat (Galafold), an oral chaperone therapy marketed by Amicus Therapeutics Inc., or Amicus, was approved by the European Commission in May 2016 and by the FDA in September 2018. Amicus reports that 35% to 50% of the gene mutations associated with Fabry disease are amenable to treatment with migalastat.

Although ERT provides therapeutic benefit and can reduce Gb3 substrate levels and extend a patient’s life expectancy, ERT requires regular and frequent infusions throughout a patient’s life. Patients prescribed ERT generally receive an infusion every other week. However, because of their suboptimal pharmacokinetics and very short half-life of a few hours, ERTs only temporarily increase plasma enzyme levels, which can result in inconsistent delivery of the needed enzyme to the affected cells. As a result, patients with Fabry disease who are prescribed ERT may continue to have damaging substrate accumulation and disease progression, including ongoing decline in renal function, potentially resulting in renal failure, cardiovascular disease and ongoing debilitating pain including periods of severe pain crisis. Some physicians anecdotally report that patients can have recurrence of symptoms as the therapeutic effect of ERT wanes between biweekly treatments. In addition, because ERTs are not curative and only slow, but do not halt, the progression of disease, patients can deteriorate and the healthcare system incurs significant costs associated with recurring medical interventions. Furthermore, studies have shown that approximately 40% of male patients with the classic Fabry disease phenotype can develop anti-α-Gal A antibodies also known as anti-drug antibodies, possibly reducing the effect of the ERT taken.

Our Solution: FLT190 for Fabry disease

In March 2023, we decided to pause development of our product candidate FLT190 for the treatment of Fabry disease. Nonetheless, we believe FLT190 has the potential to provide sustained levels of functional α-Gal A at a lower vector dose than other gene therapy programs for this indication. To our knowledge, there are two other gene therapy programs for this indication currently in the clinic, including an AAV liver-directed gene therapy using an AAV6 capsid and another AAV gene therapy with a capsid directed to the liver and tissues affected by the disease, including the heart. We believe one other AAV gene therapy and a program based on allogeneic human cells genetically modified to secrete hGLA are in preclinical development. A lentiviral-based gene therapy program in clinical development for the disease was deprioritized by its sponsor in January 2022.

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Preclinical Development of FLT190

The preclinical development program for FLT190 consisted of in vitro and in vivo pharmacodynamic studies in α-Gal A-knockout, or GLAko, mice and single-dose GLP-compliant 13- and 26-week toxicology/biodistribution studies in NHPs followed by an ongoing long-term tolerability study with an observation period of up to 60 months. For purposes of the mouse studies, we utilized vectors pseudotyped with AAV8 rather than our AAVS3 capsid because AAVS3 is poor at transducing murine cells.

Our preclinical studies in mice demonstrated increased α-Gal A activity in plasma, resulting in normalization of Gb3 and Lyso-Gb3 and a reduction in pathologic lipid deposits in kidney and cardiac tissues. The level of α-Gal A expression achieved with a single IV injection of FLT190 therapeutic genome pseudotyped with AAV8 resulted in widespread reductions in Gb3 and Lyso-Gb3 storage in relevant organs as well as correction of organ lesions as illustrated in the chart below.

 

Our preclinical development program demonstrated that a single dose of FLT190 vector genome in GLAko mice resulted in as much plasma activity as the maximum activity after weekly administration of ERT. This level was durably sustained and reduced substrate accumulation in key affected organs.

Toxicology studies in NHPs showed that a single IV injection of FLT190 (at 6e12 vg/kg and 3e13 vg/kg) was generally well-tolerated. At the levels reached, there were no adverse findings following dosing or during the post-dose observational period for 13 weeks or 26 weeks, or at 48 months in the long-term tolerability study.

Clinical Development of FLT190

We currently have ongoing our Phase 1/2 MARVEL-1 clinical trial of FLT190 and an ongoing long-term follow-up study for FLT190, which we refer to as our MARVEL-2 long-term clinical study. In MARVEL 2 we will conduct follow-up on patients from our Phase 1/2 MARVEL-1 clinical trial for a period of at least five years following dosing in the Phase 1/2 MARVEL-1 clinical trial. FLT190 has received orphan drug designation from the FDA and the European Commission.

Phase 1/2 MARVEL-1 Clinical Trial: First-in-human, Dose-finding Study

Our Phase 1/2 MARVEL-1 clinical trial is a baseline-controlled, non-randomized, open-label, single ascending dose clinical trial of a novel AAV vector, FLT190, in patients with Fabry disease.

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We were conducting our Phase 1/2 MARVEL-1 clinical trial in two parts. In Part 1 of the clinical trial, we aimed to demonstrate that α-Gal A expression can be achieved with ascending doses of FLT190. We planned to enroll up to twelve PTPs. Part 2 of the clinical trial was to focus on the biological activity of a dose selected for further development following Part 1 and was to enroll up to three additional PUPs who have not previously received ERT or chaperone therapy. The main objective of the trial was to evaluate the safety of FLT190 at the planned dose. The trial was to also evaluate, among other things, efficacy endpoints (including changes from baseline in α-Gal A in plasma and in Gb3 and Lyso-Gb3 in plasma and urine), as well as immune response to the treatment. We conducted our Phase 1/2 MARVEL-1 clinical trial initially in Europe.

We planned to test up to four doses in Part 1 of the clinical trial, namely 7.5e11, 1.5e12, 4.5e12 and 1.3e13 vg/kg, although depending on dose response in the initial cohorts, we may not have ultimately needed to escalate to the higher doses. The initial goal of the program was to achieve continuous production of α-Gal A to achieve steady-state, efficacious levels of plasma α-Gal A activity which we believe would make patients independent of the need for ERT. We chose a low starting dose for safety reasons in this first human study and first-ever use of in vivo gene therapy in Fabry disease. The following graphic illustrates our planned dosing approach with respect to FLT190, with at least two and up to three patients in each cohort.

 

Once the PTPs had been treated at all dose levels, we planned to assess tolerability and determine α-Gal A levels at three months post-FLT190 administration. Based on those findings, we anticipated selecting a dose for a Phase 3 clinical trial in PTPs and Part 2 of the Phase 1/2 clinical trial. For Part 2, a single cohort of three PUPs was to be enrolled at the selected dose level, and the efficacy of FLT190 was to be assessed based on the change, relative to baseline, over a period of nine months (approximately six months at plateau levels of α-Gal A) in a number of relevant parameters, including α-Gal A levels, Gb3/Lyso-Gb3 clearance, baseline assessment of Gb3 in renal and skin biopsies, renal and cardiac function, α-Gal A immune response, quality of life assessment and patient reported outcomes.

Preliminary Data from Our Phase 1/2 MARVEL-1 Clinical Trial

As of February 28, 2023, two patients were dosed with FLT190 in the first dose cohort of our Phase 1/2 MARVEL-1 clinical trial and one patient was dosed in the second dose cohort.

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As the Phase 1/2 MARVEL-1 clinical trial is still ongoing, the data presented below is preliminary data extracted from trial case report forms and is subject to quality control processes. In connection with customary quality control processes, it is possible that items may be identified that would require adjustments to the preliminary data presented below. Accordingly, any final clinical data may differ from the preliminary data presented below, and any such differences could be material.

The first patient was administered FLT190 in August 2019 at a dose of 7.5e11 vg/kg. The infusion was well-tolerated with no infusion-related reaction, and no dose-limiting toxicity events, or DLTs, have been observed as of August 26, 2022.

Trough α-Gal A level measurements, taken prior to each subsequent administration of ERT, allow us to track endogenous FLT190-related α-Gal A production. Plasma α-Gal A activity rose from a baseline trough of 0.3 nmol/hr/mL to 1.2 nmol/hr/mL by week four. The patient restarted ERT from week six as the α-Gal A levels remained below the lower threshold of normal and some peripheral nerve-related symptoms were reported. The first patient dosed continued to show stable elevated α-Gal A expression at 0.8 nmol/hr/mL at 36 months post treatment which is approximately a 3-fold increase compared to the patient’s baseline level. These results indicate that a liver-directed AAV gene therapy can produce enzymatically-active α-Gal A in plasma.

The second patient dosed in June 2021, also in the lowest-dose cohort, experienced a sustained increase in plasma α-Gal A expression to near normal levels, from 0.0 nmol/hr/mL at baseline to an average of 3.4 nmol/hr/mL from weeks six to 24. As of August 26, 2022, the patient remained off ERT and has maintained stable levels up to one year after treatment. The total vector genome dose the second patient received (6.0375e13 vg) was approximately 40% higher than the first patient’s dose (4.125e13 vg) due to differences in the patients’ weights. The second patient saw an approximately 400% increase in enzyme levels compared with the first patient.

The third patient was dosed in September 2022 at a dose of 1.5e12 vg/kg. The infusion has been well-tolerated with no signs of increased cardiac risk to date.

FLT190 Safety Profile

As of August 26, 2022, we observed two SAEs considered related to FLT190 in the first patient treated in our FLT190 clinical trial, namely an increase in ALT levels and a grade two myocarditis marked by mild chest pain, a change in electrocardiogram and a transient elevation in high-sensitivity troponin-T levels. Each of these SAEs was observed eight weeks after the infusion of FLT190. As of August 26, 2022, there were no observed adverse events higher than Grade 1 (mild) in the second patient treated in our FLT190 clinical trial other than a common cold reported as moderate in severity.

The first patient has classic Fabry disease with evidence of cardiac involvement at baseline. At a routine site visit, the patient reported some mild chest pain. An electrocardiogram, or ECG, showed some new changes compared to baseline and a minimally elevated troponin-T level. The patient was allowed to return home after cardiology assessment and an outpatient cardiac magnetic resonance imaging, or MRI, was scheduled as follow-up. Three days later, an elevated ALT level was found on routine monitoring that was deemed to be an episode of gene therapy related transaminitis and the patient was brought back to hospital for treatment with IV methylprednisolone and tacrolimus in accordance with the trial protocol. On admission to the hospital, a significant troponin-T spike was also detected. A repeat cardiac MRI showed no significant changes compared to baseline or evidence of myocarditis. The patient’s troponin-T elevation and ECG changes settled within four days of first detection. The patient’s ALT elevation resolved after three weeks. The patient began to taper off the prophylactic steroid regimen in accordance with the protocol. We believe the similar timing of the transaminitis and the elevation in troponin-T suggest that both were caused by a related immune-mediated response to FLT190. Approximately 50% of patients with an underlying history of Fabry-related cardiac disease may have evidence of immune-mediated myocarditis on cardiac biopsy, and approximately 40% of Fabry patients will have elevated troponin-T at baseline. There has been no apparent reduction in α-Gal A activity associated with the transient increase in ALT levels in this patient. The patient has experienced no enduring clinical sequelae of the myocarditis episode. Ventricular functioning in the heart remained normal throughout with cardiac magnetic resonance imaging showing no evidence of scarring on follow-up at one, two and three years after dosing.

The second patient has classic Fabry disease with a history of cardiac disease and on routine weekly monitoring (per protocol), an incidental finding of changes in cardiac markers, troponin-T and electrocardiogram was observed, although the patient was asymptomatic. After evaluation, these findings were determined to be consistent

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with mild and transient myocarditis. The second patient’s troponin-T levels have since reverted to baseline, and the electrocardiogram remained stable as of August 26, 2022. Ventricular functioning in the patient’s heart has remained normal throughout treatment. The patient has not experienced transaminitis requiring treatment under our current immune management regimen.

The DMC conducted a comprehensive review of safety and efficacy data from the two patients in October 2021, including an independent cardiology assessment of all data, and recommended dosing a third patient in the first cohort at the same 7.5e11 vg/kg dose level with additional cardiac monitoring, to be followed by an additional DMC meeting. We engaged with regulatory authorities to update the study protocols and trial design for FLT190. In a subsequent DMC meeting in March 2022, the DMC revised its prior recommendation and recommended dosing the third patient in the second cohort at the 1.5e12 vg/kg dose level, with additional cardiac monitoring, which was to be followed by an additional DMC meeting. We dosed the third patient in September 2022.

In consultation with Fabry disease experts, before dosing the second patient, we modified the trial protocol, and the prophylactic immune management regimen was aligned with the regimen being used in our other programs at the time: oral prednisolone and tacrolimus beginning at day 21 and continuing on for a short duration followed by close monitoring for transaminitis so it can be treated promptly if required. In addition, we also evaluate troponin-T levels during the Phase 1/2 MARVEL-1 clinical trial at regular pre-specified intervals.

MARVEL-2 Long-term Clinical Study

All patients who receive FLT190 in our Phase 1/2 MARVEL-1 clinical trial will also be invited to enroll in our separate MARVEL-2 long-term clinical study in which we will assess long-term safety and efficacy for a period of at least five years after infusion with FLT190 in the Phase 1/2 MARVEL-1 clinical trial.

Efficacy of FLT190 will be assessed in our MARVEL-2 long-term clinical study based on the change, relative to baseline from the preceding Phase 1/2 MARVEL-1 clinical trial, in a number of relevant clinical parameters, including skin and renal biopsies, α-Gal A expression, substrate and toxic metabolite levels, renal function, cardiac imaging and CNS imaging. The main objective of the MARVEL-2 long-term clinical study is to evaluate the long-term safety of FLT190 following the initial dosing in the Phase 1/2 MARVEL-1 clinical trial at the planned dose. The MARVEL-2 long-term clinical study will also evaluate, among other things, efficacy endpoints, immune response, quality of life and healthcare utilization. We will continue the MARVEL-2 long-term clinical study to continue monitoring safety and efficacy in patients treated with FLT190 in our Phase 1/2 MARVEL-1 clinical trial.

FLT180a for the Treatment of Hemophilia B

FLT180a is intended for the treatment of patients with moderate or severe hemophilia B. The aim of FLT180a treatment is to provide hemophilia B patients with predictable and sustained FIX activity expression at protective levels over time, thereby addressing a clear unmet medical need in these patients. FIX is an essential protein for normal coagulation or clotting of the blood. Mutations in the gene for FIX can impair the functioning of the FIX protein, resulting in the bleeding disorder known as hemophilia B. This disorder can be classified as mild, moderate or severe, depending on the plasma levels of functional FIX.

In 2020, we completed our Phase 1/2 B-AMAZE clinical trial of FLT180a, which was sponsored by UCL and funded by Freeline. In December 2021, we initiated our Phase 1/2 B-LIEVE dose confirmation trial to confirm the dose and immune management regimen. In July 2022, we presented safety and initial efficacy data from the first dose cohort in the Phase 1/2 B-LIEVE dose confirmation trial at the International Society on Thrombosis and Haemostasis, or ISTH, Congress held in London, United Kingdom. We also announced that the availability of other treatment options and the need to prioritize our valuable resources dictated that we evaluate strategic options for FLT180a. In November 2022, we announced that following this review of strategic options, we decided to prioritize the development of our other candidates and not invest in further development of FLT180a without a partner. We will continue our long-term follow-up self-sponsored study to continue monitoring FIX activity and safety in patients treated with FLT180a in our Phase 1/2 clinical trials.

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Manufacturing

We have rights and access to two high quality AAV manufacturing platform processes developed and optimized with employees of our former German subsidiary, Freeline Therapeutics GmbH, towards vector potency, yield and lowest possible levels of replication-competent AAV, or rcAAV, which we believe provides us with a significant competitive advantage. We designed the differentiated manufacturing platform processes to facilitate the efficient development of product candidates by utilizing a modular structure and leveraging in-house capabilities, ranging from protein engineering to vector cassette design, and biological starting material engineering, process and analytical development capabilities at Freeline Therapeutics GmbH. We believe these manufacturing platform processes are capable of generating high product quality and potency both for toxicology studies and clinical trials of our product candidates, and also at commercial scale.

On February 8, 2023 we closed the sale of Freeline Therapeutics GmbH to Ascend Gene and Cell Therapies Ltd., or Ascend, a specialist biopharma CMO with operations in the United Kingdom and the United States. At closing we assigned certain patents and know-how related to chemistry, manufacturing and controls capabilities and technologies, including these manufacturing platform processes, and other intellectual property rights to Ascend. Ascend granted us a non-exclusive, royalty-free, perpetual, irrevocable, worldwide license back of the assigned rights necessary to develop or commercialize our current product candidates. We also agreed to utilize, and Ascend agreed to make exclusively available to Freeline, no fewer than 15 full-time employee equivalents, or FTEs, per annum to provide certain services in the area of development and manufacturing to us for a guarantee period of 18 months. These agreements allow us to maintain rights to use these manufacturing platform processes to develop and commercialize our current and deprioritized product candidates and provide flexible access to the analytical and process development capabilities and dedicated personnel of our former subsidiary.

Differentiated Manufacturing Platform Processes

We and our former subsidiary developed two manufacturing platform processes: one based on adherent mammalian cell lines, and the other based on suspension human cell lines. We established the adherent manufacturing platform process at Brammer in Cambridge, Massachusetts but terminated our agreement with Brammer in July 2022 as a result of alleged material breaches by Brammer. See “—Legal Proceedings” below. We are planning to transfer the manufacturing platform processes to CMOs in order to create a working platform of commercial scale and quality. We continue to assess advances in these technologies as they develop and retain flexibility in our development plans to give us the ability to manufacture our products on a platform that is appropriate for each program.

Our Adherent Manufacturing Platform

We believe that the adherent mammalian cell manufacturing platform has the potential to produce more potent and higher quality vectors than the insect cell derived baculovirus platform sometimes used in AAV gene therapy manufacturing. This is demonstrated in our view by the approximately ten- to 30-fold higher doses required to achieve the same FIX expression in hemophilia B patients dosed with insect cell derived vectors as compared with those dosed with mammalian cell derived vectors, as seen in published data across various hemophilia B programs. The molecular design of the plasmids we use in combination with the use of human HEK293T cells for AAV manufacturing is aimed at ensuring a natural regulation of the AAV genes, which, in turn, is designed to promote high vector potency and improved vector quality.

We and our former subsidiary developed a split-packaging plasmid system, which we refer to as the two-plasmid transfection system, which consists of a plasmid containing the AAV rep and helper virus genes, and a product specific plasmid containing the AAV cap gene and the AAV vector comprising the expression cassette including the product-specific transgene. This system facilitates modularity of the platform because only the second plasmid needs to be adapted by a simple “plug-and-play” approach to support another program. The modularity of the plasmids, in turn, is designed to minimize the cost and time investment required to initiate new programs and develop additional product candidates. Splitting AAV genes between two plasmids also significantly reduces the likelihood for formation of rcAAV, which we believe should be kept to a minimum to help improve a vector’s safety profile. In addition, splitting the AAV genes enables the user to improve overall vector yields several-fold when compared to more conventional plasmid systems. Further, the two-plasmid transfection system allows the user to adjust and balance vector genome yield against the vg/capsid ratio, traditionally referred to as the “full/empty ratio,” within a given range. As a result, the user can adjust the vg/capsid ratio on a program-by-program basis.

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For programs requiring a vector carrying a large gene, we and our former subsidiary developed a second-generation split-packaging plasmid system to support high yield and quality for large vector genomes. This system increases yields in the adherent manufacturing platform about two-fold and further improves the AAV quality profile, including by reducing rcAAV approximately five-fold and reducing packaging of undesired plasmid-derived sequences that could potentially cause immunogenicity issues for all vector lengths studied to date.

We selected a HEK293T cell line for AAV production on adherent cells because this cell line outperformed the alternative HEK293 cell lines which are also commonly used in AAV manufacturing by improving vector potency two-fold, as illustrated by the following chart, while concurrently reducing the payload of unwanted DNA packaging up to five-fold.

 

The levels of residual packaged DNA are important to assess as these DNA impurities are delivered to a patient’s cell as efficiently as the therapeutic vector. Potential safety issues linked to unwanted DNA packaging are tumorigenicity and immunogenicity driven by packaged residual host cell and plasmid DNA.

iCELLis® Bioreactor System

We selected the iCELLis® bioreactor system for use in the adherent manufacturing platform because it supports manufacturing using HEK293T cells at a commercial scale. Vector quality, potency and per-cell yield were the major strategic drivers in our selection of the iCELLis® bioreactor system. We systematically compared adherent and suspension platform processes for HEK293T and HEK293 cells. These studies also included comparisons between a HEK293 cell suspension cell platform in an early development stage and a suspension cell platform developed by a CRO using two other suspension cell lines, which is referred to as “X” and “XT” in the graphs below and which was optimized toward vector yields at the CRO. The following graph illustrates the superiority of the iCELLis® adherent platform in terms of its ability to minimize unwanted DNA packaging.

 

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The majority of packaged residual host cell DNA, or HCD, of an AAV batch from the adherent manufacturing platform is highly fragmented, which reduces the risk of delivery of functional oncogenes from the cell line. We believe that the higher quality of vector manufactured on adherent cells is at least partially explained by the higher per cell productivity of the adherent platform. We are able to benefit from the advantages of adherent manufacturing without sacrificing yield and potency, as we have determined that the overall yield and potency of vectors manufactured in an iCELLis®500 are comparable to reported 200L suspension bioreactor yields.

Downstream processing, even specific “empty-full” separation steps, cannot eliminate all unwanted packaged DNA and especially not the fraction of unwanted DNA with larger fragment sizes that potentially could deliver functional genes into a patient. As a result, in order to minimize the generation of such unwanted packaged DNA, we have focused on the efficiency of upstream processes and starting materials, which requires a deep understanding of AAV and cell biology. We and our former subsidiary also developed a downstream purification process at commercial scale, which is designed to further reduce process impurities to very low or undetectable levels.

We believe the adherent cell manufacturing platform has the ability to deliver high product quality at scale and at a competitive cost of goods. The platform is able to meet varied production requirements throughout the development pipeline, from product candidate selection to cGMP manufacturing and commercialization requirements. The adherent manufacturing platform is more efficient than many other classic adherent systems because it is less expensive to run on a per-unit basis. This is a result of the high degree of automation and the relatively large batch size. In addition, the adherent manufacturing platform can drive down facility costs as a result of reduced harvest volume and purification costs compared to similar scale traditional suspension cell processes.

Suspension Manufacturing Platform Process

We and our former subsidiary developed a next generation suspension manufacturing platform process for programs with higher dosing requirements. Suspension cell processes rely on single use bioreactors, or SUBs, which can be scaled-up to 2,000L. The maximum scale of a single iCELLis® device for adherent cell culture is 500m², which allows culture of a total number of cells approximately equivalent to that allowed by a classic 200L suspension cell bioreactor in a high productivity setup.

We and our former subsidiary grew the adherent HEK293T and HEK293 cell lines in suspension and tested the productivity and quality against the iCELLis® bioreactor system. The major development objectives were to increase yields per batch and reduce the payload of undesired impurities, while keeping vector quality and potency comparable to that of the adherent cell process. Results from the small scale model suggested the HEK293 cell line as a candidate for further process development and optimization. Ultimately we and our former subsidiary developed a suspension manufacturing platform process with a SUB that is free of animal-derived components, or ADC, and the HEK293 cell line, which is capable of producing vectors of comparable quality to those produced by the adherent manufacturing platform. We and our former subsidiary demonstrated the scalability of the suspension manufacturing platform process up to 200L with one of our product candidates. The ability to scale a suspension cell process to higher volumes with similar or improved yields per liter drives down manufacturing and testing costs on a per batch basis, resulting in a lower cost of goods.

Manufacturing Strategy and Infrastructure

Our manufacturing strategy includes leveraging our relationships with key CMOs and CROs and effective technology transfer to them to secure capacity for our clinical programs.

We established the adherent manufacturing platform at Brammer in Cambridge, Massachusetts. In June 2020, we entered into a dedicated manufacturing and commercial supply agreement with Brammer (part of Thermo Fisher Scientific). In July 2022, we terminated the dedicated manufacturing and commercial supply agreement as a result of alleged material breaches by Brammer. See “—Legal Proceedings” below.

The investigational drug product used in our Phase 1/2 MARVEL-1 clinical trial of FLT190 was manufactured at Henogen (also part of Thermo Fisher Scientific) in Belgium, and the product being used in our ongoing Phase 1/2 GALILEO-1 clinical trial of FLT201 was manufactured at Brammer in Cambridge, Massachusetts. We expected to use higher doses in the FLT190 program and as a result we and our former subsidiary developed the

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suspension manufacturing platform process discussed above. We are currently evaluating potential CMO partners for clinical manufacturing of future Phase 3 investigational drug product. Regulatory authorities will require both analytical and clinical comparability to be performed as part of the switch to suspension technology. We plan to seek guidance from regulatory authorities with respect to appropriate comparability requirements.

We plan to focus on ongoing enhancement of our manufacturing technology to drive productivity and quality, thus enabling access to larger indications that may require higher volume dose production. We believe further development of our capabilities and flexible access to the analytical and process development capabilities of our former subsidiary will improve our competitive position. In addition, we are engaging with regulators and the AAV manufacturing community to ensure that we can meet or exceed applicable quality and regulatory standards.

Raw Materials

We currently depend on a limited number of suppliers and, in some instances, a sole supplier, for some of the components and equipment necessary for the production of our viral vectors and drug product. In particular, we are dependent on Aldevron LLC for plasmids, and on Pall Corporation for iCELLis® bioreactors and components used in the current adherent cGMP production process. Additionally, the supply of fetal bovine serum, an important raw material for the current adherent production process, is limited in some cases due to the small number of source countries and the rigid screening protocols involved in supplying it.

Commercialization

We believe that our Gaucher disease program represents an attractive commercial opportunity and provides the basis for a strategic platform in gene therapy for rare diseases. Gaucher disease has established diagnostic pathways and treatment centers, yet has established unmet medical needs, thus minimizing the need for expensive market development activities, if approved. We believe the potential of our platform to provide one-time treatments could deliver a differentiated value proposition for health care providers and payors by eliminating the need to pay for continued ERT or SRT in our treated patients and by reducing the burden compared with existing treatments. Patients with Gaucher disease are treated by highly specialized physicians, requiring a relatively small and efficient sales and medical affairs infrastructure.

We have global rights to our Gaucher program through owned and in-licensed intellectual property rights. We currently plan to build our global commercialization capabilities internally over time such that we are able to commercialize any product candidate for which we may obtain regulatory approval. We may selectively pursue strategic collaborations with third parties in order to maximize the commercial potential of our product candidates. If approved, we intend to commercialize them initially in the United States and Europe. We plan to employ a small, targeted commercial and medical affairs infrastructure to build and promote access to the product through centers-of-excellence that treat Gaucher disease in the United States and Europe and potentially other major markets, including Japan, Israel, Australia and South Korea, and rest of world. We believe that this patient-centered approach will provide the foundation for future commercial and medical affairs operations.

Competition

The biotechnology and pharmaceutical industries, including the gene therapy field, are characterized by rapidly changing technologies, significant competition and a strong emphasis on intellectual property. We face substantial competition from many different sources, including large and specialty pharmaceutical and biotechnology companies, academic research institutions, government agencies and public and private research institutions.

We are aware of a number of companies focused on developing gene therapies in Gaucher and Fabry disease, including, but not limited to, AVROBIO, 4D Molecular, Pfizer, Prevail, Sangamo, and uniQure, as well as several companies addressing other methods for modifying genes and regulating gene expression. Any advances in gene therapy technology made by a competitor may be used to develop therapies that could compete against any of our product candidates.

For our current and deprioritized LSD therapy product candidates, the main competitors include:

•Type 1 Gaucher Disease: Our main competitor in the field of advanced therapy medicinal products for Gaucher disease Type 1 is AVROBIO, which is using an ex vivo lentiviral-based gene therapy approach in a Phase 1/2 clinical trial. Dosing was initiated during the second half of 2020, and the company has since

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reported that four patients have been dosed to date. Prevail Therapeutics is developing an AAV gene therapy using an AAV9 capsid in a Phase 1/2 clinical trial but has not reported dosing a patient to date. In November 2021, Pfizer announced an IND target date of fourth quarter of 2022 for its AAV gene therapy approach in Gaucher disease Type 1 which is currently in a pre-clinical phase but has not provided a further update.

•Fabry Disease: Previously, our most advanced competitor in the clinic was AVROBIO, which had been conducting clinical trials in Fabry disease using an ex vivo lentiviral platform. In January 2022 AVROBIO announced that it was deprioritizing its Fabry program and had halted enrollment in its clinical trial. Sangamo has disclosed that it is evaluating its ST-920 product candidate in adults with classic Fabry disease in a Phase 1/2 open-label, dose-ascending clinical trial. Sangamo has also disclosed that the FDA granted orphan drug designation to ST-920 and the company released updated patient data from the Phase 1/2 trial in the first quarter of 2023. 4D Molecular Therapeutics has an ongoing Phase 1/2 clinical trial of its 4D-310 AAV product candidate in Fabry disease, and it released updated data on the first dosed patients, paused further enrollment and was notified of a clinical hold by the FDA in the first quarter of 2023.

Many of our potential competitors, alone or with their strategic partners, have substantially greater financial, technical and other resources than we do, such as larger research and development, clinical, marketing and manufacturing organizations. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated among a smaller number of competitors. Our commercial opportunity could be reduced or eliminated if competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop. Competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. Additionally, technologies developed by our competitors may render our potential product candidates uneconomical or obsolete, and we may not be successful in marketing our product candidates against competitors.

Intellectual Property

Our success depends in part upon our ability to protect our technology and intellectual property. To protect our intellectual property rights, we rely on patents, trademarks, copyrights and trade secret laws, confidentiality procedures, and employee disclosure and invention assignment agreements. Our intellectual property is critical to our business and we strive to protect it through a variety of approaches, including by obtaining and maintaining patent protection in various countries for our product candidates, novel biological discoveries, manufacturing and analytical processes, and other inventions that are important to our business. For our product candidates, we generally intend to pursue patent protection covering compositions of matter, methods of making, and methods of use. Although we own patent applications with composition of matter claims directed to the transgene component of our FLT201 product candidate, as of February 28, 2023, no such U.S. patent application has issued as a patent and we do not otherwise own or in-license any issued patents in the United States or any other jurisdiction with composition of matter claims directed to the transgene component of our FLT201 product candidate. In addition, we in-license issued U.S. and foreign patents and pending patent applications with composition of matter claims directed to the transgene component of our deprioritized FLT190 product candidate but we do not otherwise own any issued patents in the United States with composition of matter claims directed to the transgene component of FLT190. Additionally, while we exclusively in-license U.S. and foreign issued patents, as of February 28, 2023, we do not own any U.S. or foreign issued patents covering FLT201 or FLT190. As we continue the development of product candidates, we intend to identify additional means of obtaining patent protection that would potentially enhance commercial success, including through claims covering additional methods of use, claims relating to innovations in CMC, and complementary diagnostic and/or companion diagnostic related claims.

The patent positions of companies like ours are generally uncertain and involve complex legal and factual questions. No consistent policy regarding the scope of claims allowable in patents in the field of genetic therapy has emerged in the United States and in Europe, among other countries. Changes in the patent laws and rules, either by legislation, judicial decisions, or regulatory interpretation in other countries may diminish our ability to protect our inventions and enforce our intellectual property rights, and more generally could affect the value of our intellectual property. In particular, our ability to stop third parties from making, using, selling, offering to sell, importing or otherwise commercializing any of our patented inventions, either directly or indirectly, will depend in part on our success in obtaining, defending and enforcing patent claims that cover our technology, inventions, and improvements. With respect to both licensed and company-owned intellectual property, we cannot be sure that patents will be granted

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with respect to any of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of our existing patents or any patents that may be granted to us in the future will be commercially useful in protecting our platform and product candidates. Moreover, our issued patents and those that may issue in the future may not guarantee us the right to practice our technology in relation to the commercialization of our platform’s product candidates. The area of patent and other intellectual property rights in biotechnology is an evolving one with many risks and uncertainties, which may prevent us from commercializing our current and future product candidates and practicing our proprietary technology.

Our issued patents and those that may issue in the future may be challenged, narrowed, circumvented or invalidated, which could limit our ability to stop competitors from marketing related platforms or product candidates or limit the length of the term of patent protection that we may have for our current and future product candidates and platforms such as our proprietary AAVS3 capsid. In addition, the rights granted under any issued patents may not provide us with complete protection or competitive advantages against competitors with similar technology. Furthermore, our competitors may independently develop similar technologies that achieve similar outcomes but with different approaches. For these reasons, we may have competition for our product candidates. Moreover, the time required for development, testing and regulatory review of our candidate products may shorten the length of effective patent protection following commercialization. For this and other risks related to our proprietary technology, inventions, improvements, platforms and product candidates, please see the section entitled “Risk Factors—Risks Related to Our Intellectual Property.”

Patent Portfolio

As of February 28, 2023, we solely own at least seven pending U.S. non-provisional patent applications, at least 53 pending foreign patent applications in Australia, Brazil, Canada, China, Europe, Israel, Japan, Republic of Korea, Singapore, Hong Kong, India, Mexico, South Africa and Taiwan, and at least three pending Patent Cooperation Treaty, or PCT, patent applications. We exclusively license from UCLB at least six issued U.S. patents, at least four pending U.S. non-provisional patent applications, at least twelve issued foreign patents in Australia, Canada, China, Europe, Japan and Singapore, and at least 19 pending foreign patent applications in Australia, Brazil, Canada, China, Europe, India, Israel, Japan, Hong Kong, Mexico, the Republic of Korea, South Africa and Singapore.

The claims of these owned or exclusively in-licensed patents and patent applications are directed toward various aspects of our product candidates, research programs, and technology. Specifically, the claims of these patents and patent applications include compositions of matter, methods of use of the same, and methods such as diagnostics. Our owned patent applications, if issued, are expected to expire between approximately as early as 2040 and 2042 and our in-licensed patents and patent applications, if issued, are expected to expire between approximately as early as 2035 and 2039, in each case without taking into account any possible patent term adjustments or extensions and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees.

AAV Capsid

As of February 28, 2023, we exclusively license from UCLB at least one issued U.S. patent, at least one pending U.S. non-provisional patent application, at least six issued foreign patents in Australia, Canada, China, Europe, Japan and Singapore and at least three pending foreign patent applications in Europe, Hong Kong and the Republic of Korea that include claims directed to our proprietary AAVS3 capsid. These in-licensed patents and pending applications, if issued, are expected to expire as early as 2036, in each case without taking into account any possible patent term adjustment or extensions and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees.

Manufacturing Platform

On February 8, 2023, we sold our German subsidiary, Freeline Therapeutics GmbH, and certain intellectual property rights pertaining to the business of Freeline Therapeutics GmbH, to Ascend Gene and Cell Therapies Ltd., or Ascend. At closing we and Ascend entered into an intellectual property deed of assignment and license, pursuant to which we assigned certain intellectual property rights pertaining to the business of Freeline Therapeutics GmbH to Ascend, including the patent applications described below under "Manufacturing Platform" and know-how related to chemistry, manufacturing and controls capabilities and technologies. Ascend in return granted us a non-exclusive, royalty-free, perpetual, irrevocable, worldwide license to the assigned rights necessary to develop or commercialize our current product candidates.

Prior to February 8, 2023, we solely owned one pending U.S. non-provisional patent application, at least one issued foreign patent in Europe and at least ten pending foreign patent applications in Australia, Brazil, Canada, China,

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Europe, Israel, Japan, the Republic of Korea and Singapore that included claims directed to our two-plasmid system for AAV production and methods for producing AAV using the system. These pending applications, if issued, are expected to expire as early as 2040, in each case without taking into account any possible patent term adjustment or extensions and assuming payment of all appropriate maintenance, renewal, annuity or other governmental fees. We sold the foregoing rights to Ascend on February 8, 2023.

Prior to February 8, 2023, we further solely owned at least one pending PCT patent application that included claims directed to an iteration of our two-plasmid system for AAV production and methods for producing AAV using the system. Any U.S. or foreign patent applications timely filed based on this PCT application, if issued, are expected to expire as early as 2041, without taking into account any possible patent term adjustment or extensions and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees. We sold the foregoing rights to Ascend on February 8, 2023.

Prior to February 8, 2023, we further solely owned three pending foreign priority patent applications in the United Kingdom that respectively included claims directed to methods for quantifying potentially replication-competent AAV species within rAAV production batches; methods for quantifying and sizing nucleic acid impurities within rAAV production batches; and methods of producing rAAV involving high-pressure mechanical lysis of producer cells. We sold the foregoing rights to Ascend on February 8, 2023.

TIA

In addition, as of February 28, 2023, we solely own at least one pending U.S. non-provisional patent application and at least seven pending foreign patent applications in Australia, Canada, Europe, Israel, Japan, the Republic of Korea and Singapore that include claims directed to a TIA, which is used in connection with our AAVS3 capsid. These pending applications, if issued, are expected to expire as early as 2041, without taking into account any possible patent term adjustment or extensions and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees.

FRE1 Promoter

As of February 28, 2023, we exclusively license from UCLB at least two issued U.S. patents and at least one pending U.S. non-provisional patent application that include claims directed to a liver-directed promoter, or vector containing the same, that is used in our deprioritized FLT190 product candidate. At least one foreign patent application is pending in Europe. These patents and patent applications, if issued, are expected to expire as early as 2035, in each case without taking into account any possible patent term adjustment or extensions and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees.

FLT201

In addition to the patents and patent applications described above with respect to the AAVS3 capsid, as of February 28, 2023, we solely own at least one pending U.S. non-provisional patent application and at least thirteen pending foreign patents applications in Australia, Brazil, Canada, China, Europe, Hong Kong, India, Israel, Japan, Mexico, the Republic of Korea, Singapore, and South Africa that include claims directed to codon-optimized glucocerebrosidase-encoding transgenes, constructs containing such transgenes, and their use for treating Gaucher disease that cover our FLT201 product candidate. These pending patent applications, if issued, are expected to expire as early as 2040, in each case without taking into account any possible patent term adjustment or extensions and assuming payment of all appropriate maintenance, renewal, annuity or other governmental fees.

We further solely own as of February 28, 2023, at least one pending U.S. non-provisional patent application and at least eleven pending foreign patents applications in Australia, Brazil, Canada, China, Europe, India, Israel, Japan, Mexico, the Republic of Korea and Singapore that include claims directed to the modified GCase polypeptide containing single amino acid substitutions, used in FLT201. These pending applications, if issued, are expected to expire as early as 2041, without taking into account any possible patent term adjustment or extensions and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees.

FLT190

In addition to the patents and patent applications described above with respect to the AAVS3 capsid and our FRE1 promoter, as of February 28, 2023, we exclusively license from UCLB at least one issued U.S. patent and at least one pending U.S. patent application, at least six issued foreign patents in Australia, Canada, China, Europe, Japan

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and Singapore, and at least two pending foreign patent applications in Europe and the Republic of Korea that include claims related to FLT190. These issued patents and pending applications, if issued, are expected to expire as early as 2036, in each case without taking into account any possible patent term adjustment or extensions and assuming payment of all appropriate maintenance, renewal, annuity or other governmental fees. We have decided to halt further development of FLT190 for the treatment of Fabry disease.

FLT180a

In addition to the patents and patent applications described above with respect to the AAVS3 capsid and our FRE1 promoter, as of February 28, 2023, we exclusively license from UCLB at least two issued U.S. patents, at least one pending U.S. non-provisional patent applications, and at least thirteen pending foreign patent applications in Australia, Brazil, Canada, China, Europe, Hong Kong, India, Israel, Japan, Mexico, the Republic of Korea, Singapore, and South Africa that include claims directed to FLT180a. These patents and pending patent applications, if issued, are expected to expire as early as 2038, in each case without taking into account any possible patent term adjustment or extensions and assuming payment of all appropriate maintenance, renewal, annuity or other governmental fees. We have decided to halt further development of FLT180a for the treatment of hemophilia B.

FLT210

In addition to the patents and patent applications described above with respect to the AAVS3 capsid, as of February 28, 2023, we solely own at least three pending U.S. non-provisional patent applications and at least thirteen pending foreign patent applications in Australia, Canada, China, Europe, Israel, Japan and the Republic of Korea that include claims directed to the modified FVIII polypeptide, and polynucleotide (including codon-optimized) sequences encoding such polypeptide, as well as use for treating hemophilia A. Some of these patent applications also include claims directed to a class of short, effective promoters derived from our FRE1 promoter, including the promoter used in FLT210, and claims directed to the FVIII modified polypeptide containing single amino acid substitutions, used in FLT210. These pending patent applications, if issued, are expected to expire as early as 2040, in each case without taking into account any possible patent term adjustment or extensions and assuming payment of all appropriate maintenance, renewal, annuity or other governmental fees. We have decided to halt further development of FLT210 for the treatment of hemophilia A.

We cannot predict whether the patent applications we pursue or license will issue as patents in any particular jurisdiction or whether the claims of any issued patents will provide any protection from competitors. Even if our pending patent applications are granted as issued patents, those patents, as well as any patents we license from third parties now or in the future, may be challenged, circumvented or invalidated by third parties. Consequently, we may not obtain or maintain adequate patent protection for any of our programs and product candidates.

The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained. In most countries in which we file, the patent term is 20 years from the earliest date of filing of a non-provisional patent application. In the United States, the patent term of a patent that covers an FDA-approved drug or biologic may also be eligible for patent term extension, which permits patent term restoration as compensation for the patent term lost during FDA regulatory review process. The Hatch-Waxman Act permits a patent term extension of up to five years beyond the expiration of the patent. The length of the patent term extension is related to the length of time the drug or biologic is under regulatory review. Patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only one patent applicable to an approved drug or biologic may be extended. Similar provisions are available in Europe and other foreign jurisdictions to extend the term of a patent that covers an approved drug or biologic. In the future, if our product candidates receive FDA approval, we expect to apply for patent term extensions where applicable on patents covering those products. We plan to seek patent term extensions to any of our issued patents in any jurisdiction where these are available, however there is no guarantee that the applicable authorities, including FDA in the United States, will agree with our assessment of whether these extensions should be granted, and if granted, the length of these extensions.

In addition to our reliance on patent protection for our inventions, product candidates and research programs, we also rely on trade secrets, know-how, confidentiality agreements and continuing technological innovation to develop and maintain our competitive position. For example, some elements of manufacturing processes, proprietary assays, analytics techniques and processes, knowledge gained through clinical experience such as approaches to dosing and administration and management of patients, as well as computational-biological algorithms, and related

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processes and software, are based on unpatented trade secrets and know-how that are not publicly disclosed. Although we take steps to protect our proprietary information and trade secrets, including through contractual means with our employees, advisors and consultants, these agreements may be breached and we may not have adequate remedies for any breach. In addition, third parties may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets or disclose our technology. As a result, we may not be able to meaningfully protect our trade secrets. It is our policy to require our employees, consultants, outside scientific collaborators, sponsored researchers and other advisors to execute confidentiality agreements upon the commencement of employment or consulting relationships with us. These agreements provide that all confidential information concerning our business or financial affairs developed or made known to the individual or entity during the course of the party’s relationship with us is to be kept confidential and not disclosed to third parties except in specific circumstances. In the case of employees, the agreements provide that all inventions conceived of by the individual during the course of employment, and which relate to or are reasonably capable of being used in our current or planned business or research and development are our exclusive property. In addition, we take other appropriate precautions, such as physical and technological security measures, to guard against misappropriation of our proprietary technology by third parties. However, such agreements and policies may be breached and we may not have adequate remedies for such breaches. For more information regarding the risks related to our intellectual property, see Item 3.D. “Risk Factors—Risks Related to Our Intellectual Property.”

Collaborations and License Agreements

UCLB License Agreement

In May 2015, we entered into a license agreement with UCLB pursuant to which we obtained rights to intellectual property generated by Prof. Amit Nathwani, who is our founder and Clinical and Scientific Adviser, and members of his research group under his supervision or direction at UCL. Specifically, we obtained an exclusive, worldwide, sublicensable license to certain intellectual property rights relating to therapeutic programs including hemophilia B and Fabry disease, as well as intellectual property rights relating to a viral capsid and liver-specific promoter, for the exploitation of any product without field limitation. We also obtained an exclusive, worldwide, sublicensable license to certain background intellectual property rights, that generally relate to liver-directed AAV gene therapy, as well as to manufacturing know-how, to develop, manufacture and commercialize products for a number of specific therapeutic indications including hemophilia B and Fabry disease. The same background and manufacturing intellectual property is licensed non-exclusively for other applications and uses. UCLB additionally granted us a right of first negotiation with respect to intellectual property developed by Prof. Nathwani relating to bi-specific antibody binders or derivatives thereof delivered by AAV technology. UCLB further granted us the right to acquire ownership, on a product-by-product basis, of the licensed patents covering such product, exercisable upon the occurrence of certain regulatory events and subject to our continued obligation to pay royalties on sales of such product. As of February 28, 2023, we have not exercised any of our option or negotiation rights under the agreement. UCLB retains for University College London the right to use the licensed intellectual property for academic research, including for collaborations with other academic institutions.

Upon execution of the agreement, we granted UCLB four million of our A ordinary shares. We additionally made payments to UCLB of £30,000 in June 2016, May 2017, June 2018 and July 2019. We are obligated to pay UCLB a sub-single digit to mid-single digit percentage royalty on net sales of products that utilize the licensed intellectual property, subject to certain customary reductions. Our royalty obligations continue on a product-by-product and country-by-country basis until, with respect to certain Factor X vector products, May 2022, and with respect to all other products, the later of the expiration of the last-to-expire valid patent claim covering such product in such country, the loss of any regulatory exclusivity for such product in such country and seven years following the date that marketing approval was granted for such product in certain jurisdictions. In addition, we are required to pay UCLB up to £3.5 million in milestone payments in the aggregate in connection with certain sales milestone events. We are additionally required to pay to UCLB a sublicense fee of a low-teen percentage of net receipts received under certain sublicenses we grant under the agreement that meets certain timing requirements. As of February 28, 2023 we have not made any milestone or royalty payments to UCLB. We have the option to negotiate with UCLB to buy out UCLB’s rights to royalties and milestone payments with respect to any licensed product once the aggregate net sales for such product exceed a certain threshold.

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Pursuant to the license agreement, we are required to use commercially reasonable efforts to develop products covered by the licensed intellectual property including products directed to hemophilia B and Fabry disease.

Unless terminated earlier, the term of the agreement continues until the later of the expiration of the last-to-expire royalty term and such time as no further milestone payments are due. UCLB has the right to terminate licensed intellectual property rights specific to a particular product program if we fail to use commercially reasonable efforts to develop a product that is the subject of such program. We have the right to terminate the agreement for convenience on a program-by-program basis or in its entirety upon 30 days’ notice. Either party may terminate the agreement if the other party is in material breach subject to a 180-day cure period or is subject to insolvency. UCLB may additionally terminate the agreement on 30 days’ notice if we fail to pay UCLB any sums over a certain threshold owed under the agreement, provided there is not a bona fide dispute regarding the sums. Upon expiration, the licenses granted to us under the agreement will become perpetual, irrevocable, royalty-free and fully paid-up. In the event of termination of a program-specific license, our rights under such license will terminate and in the case of termination for our failure to use diligent efforts to develop a product under such program-specific licensed rights, UCLB will have the right to negotiate a license to any intellectual property developed and owned by us relating to such program. In the event of termination of the agreement as a whole, all licenses granted to us, other than certain background and manufacturing licenses, will terminate and, in the case of termination for our material breach or insolvency, UCLB will have the right to negotiate a license to any intellectual property developed and owned by us relating to a product that is subject to the licenses granted under the agreement.

St. Jude Children’s Research Hospital License Agreement

In March 2017, we entered into a license agreement with St. Jude pursuant to which we obtained a non-exclusive, worldwide, sublicensable license under certain manufacturing know-how and patent rights to make, have made, use and sell AAV vectors covered by such patent rights, including AAV vectors specifically designed for delivering FIX to patients.

Upon execution of the license agreement, we paid to St. Jude an initial payment of $40,000. We are additionally obligated to pay St. Jude a sub-single digit percentage royalty on net sales of licensed AAV vectors, including licensed AAV vectors specifically designed for delivering FIX. Our royalty obligations continue on a product-by-product and country-by-country basis, with respect to AAV vectors, until the ten year anniversary of the first commercial sale of such product in such country, except that with respect to AAV vectors specifically designed for delivering FIX, the royalty obligations will expire upon the last-to-expire valid claim of a licensed patent covering such product in such country. In addition, we are required to pay an annual maintenance fee of $5,000 first due on March 1, 2020 and every anniversary thereafter, which may be reduced by the amount of any royalty payments made to St. Jude for sales of licensed AAV vectors in the previous calendar year. Our maintenance fee obligation continues until the later of the expiration of the last-to-expire claim of a licensed patent or the ten year anniversary of the first commercial sale of the latest AAV vector.

St. Jude may terminate the license agreement immediately if we do not pay royalties or any other fees owed or in the event of our insolvency. Either party may terminate the agreement for the other party’s material breach following a 30-day cure period. We additionally have the right to terminate the agreement for convenience upon 90 days’ notice. Upon expiration of the royalty term, the license granted under the St. Jude License will become an irrevocable, worldwide, non-exclusive, royalty-free license. In the event of termination for any reason, we must cease the use of all licensed patents and know-how except that we have the right to continue to dispose of all of our then-existing inventory of AAV vectors for a certain period of time and continue paying St. Jude royalties on such sales.

Ascend Agreements

On February 8, 2023, we sold our German subsidiary, Freeline Therapeutics GmbH, and certain intellectual property rights pertaining to the business of Freeline Therapeutics GmbH, to Ascend. At closing we and Ascend entered into an intellectual property deed of assignment and license, or the IP Agreement, pursuant to which we assigned certain intellectual property rights pertaining to the business of Freeline Therapeutics GmbH to Ascend, including the patent applications described under “Manufacturing Platform” above and know-how related to chemistry, manufacturing and controls capabilities and technologies. Ascend in return granted us a non-exclusive,

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royalty-free, perpetual, irrevocable, worldwide license to the assigned rights necessary to develop or commercialize our current product candidates.

At closing we and Ascend also entered into a transition services agreement, or the Transition Services Agreement, pursuant to which Ascend will provide certain services in the area of development and manufacturing to us. We agreed to utilize, and Ascend agreed to make exclusively available to Freeline, no fewer than 15 full-time employee equivalents, or FTEs (as defined in the Transition Services Agreement), per annum for a guarantee period of 18 months following the Transition Services Agreement’s effective date. We also agreed to pay Ascend a guaranteed minimum of approximately $7.9 million in respect of FTE costs during such period, $2.6 million of which was paid upfront. Ascend will own any intellectual property rights that arise from its performance of its services (except to the extent such rights relate solely and exclusively to Freeline’s proprietary materials and product candidates), and granted us a non-exclusive, royalty-free, perpetual, worldwide license to any of Ascend’s arising intellectual property rights necessary to develop or commercialize our product candidates which have been subject to work under the Transition Services Agreement. The Transition Services Agreement will terminate three years after its effective date, unless earlier terminated by the parties in accordance with its terms.

The foregoing descriptions of the IP Agreement and the Transition Services Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the agreements, with confidential portions redacted, copies of which are filed as exhibits to this Annual Report on Form 20-F for the year ended December 31, 2022.

U.S. Government Regulation

In the United States, the FDA regulates biological products, including gene therapy products under the Federal Food, Drug, and Cosmetic Act, or the FDCA, the PHSA and regulations and guidance implementing these laws. The FDCA, PHSA and their corresponding regulations govern, among other things, the research, development, testing, manufacturing, safety, efficacy, labeling, packaging, storage, record keeping, distribution, reporting, advertising and other promotional practices involving biological products. Applications to the FDA are required before conducting human clinical testing of biological products. FDA approval also must be obtained before marketing of biological products. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources and we may not be able to obtain the required regulatory approvals.

Within the FDA, the Center for Biologics Evaluation and Research, or CBER, regulates gene therapy products. Within CBER, the review of gene therapy and related products is consolidated in the Office of Tissues and Advanced Therapies and the FDA has established the Cellular, Tissue and Gene Therapies Advisory Committee to advise CBER on its reviews. Although the FDA has approved a limited number of human gene therapy products for sale, it has provided guidance for the development of gene therapy products. This guidance includes a growing body of guidance documents on CMC, clinical investigations and other areas of gene therapy development, all of which are intended to facilitate the industry’s development of gene therapy products.

Ethical, social and legal concerns about gene therapy, genetic testing and genetic research could result in additional regulations restricting or prohibiting the processes we may use. Federal and state agencies, congressional committees and foreign governments have expressed interest in further regulating biotechnology. More restrictive regulations or claims that our product candidates are unsafe or pose a hazard could delay or prevent us from obtaining regulatory approval for any of our product candidates. It is impossible to predict whether legislative changes will be enacted, regulations, policies or guidance changed, or interpretations by agencies or courts changed, or what the impact of such changes, if any, may be.

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U.S. Biological Products Development Process

Any product candidate must be approved by the FDA before it may be legally marketed in the United States. The process required by the FDA before a biological product candidate may be marketed in the United States generally involves the following:

•completion of preclinical laboratory tests and in vivo studies in accordance with the FDA’s current good laboratory practice, or GLP, regulations and applicable requirements for the humane use of laboratory animals or other applicable regulations;

•submission to the FDA of an IND application, which allows human clinical trials to begin unless the FDA objects within 30 days;

•approval by an independent institutional review board, or IRB, reviewing each clinical site before each clinical trial may be initiated;

•performance of adequate and well-controlled human clinical trials according to the FDA’s GCP regulations, the IND, protocol and any additional requirements for the protection of human research subjects and their health information, to establish the safety and efficacy of the proposed biological product candidate for its intended use;

•preparation and submission to the FDA of a BLA for marketing approval that includes substantial evidence of safety, purity and potency from results of nonclinical testing and clinical trials;

•a determination by the FDA within 60 days of its receipt of a BLA to file the application for review;

•review of the product by an FDA advisory committee, if applicable;

•satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the biological product candidate is produced to assess compliance with cGMP requirements and to assure that the facilities, methods and controls are adequate to preserve the biological product candidate’s identity, safety, strength, quality, potency and purity;

•potential FDA inspection of the preclinical and clinical trial sites that generated the data in support of the BLA and/or the sponsor;

•agreement with FDA on the final labeling for the product and the design and implementation of any required Risk Evaluation and Mitigation Strategy, or REMS; and

•payment of user fees and FDA review and approval, or licensure, of the BLA.

Before testing any biological product candidate in humans, including a gene therapy product candidate, the product candidate must undergo preclinical testing. Preclinical tests, also referred to as nonclinical studies, include laboratory evaluations of product chemistry, toxicity and formulation, as well as in vivo studies to assess the potential safety and activity of the product candidate and to establish a rationale for therapeutic use. The conduct of the preclinical tests must comply with federal regulations and requirements including GLPs.

An IND is an exemption from the FDCA that allows an unapproved product candidate to be shipped in interstate commerce for use in an investigational clinical trial and a request for FDA authorization to administer such investigational product to humans. Such authorization must be secured prior to interstate shipment and administration of any product candidate that is not the subject of an approved BLA. In support of a request for an IND, the clinical trial sponsor must submit the results of the preclinical studies, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical protocol, to the FDA as part of the IND. Some preclinical testing may continue even after the IND is submitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA places the clinical trial on a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. The FDA also may impose clinical holds on a biological product candidate at any time before or during clinical trials due to safety concerns or non-compliance. If the FDA imposes a clinical hold, clinical trials may not recommence without FDA authorization and then only under terms authorized by the FDA. Accordingly, we cannot be sure that submission of an IND will result in the FDA allowing clinical trials to commence, or that, once begun, issues will not arise that suspend or terminate such trials.

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U.S. Human Clinical Trials Under an IND

Clinical trials involve the administration of the biological product candidate to healthy volunteers or patients under the supervision of qualified investigators which generally are physicians not employed by, or under, the control of the trial sponsor. Clinical trials are conducted under written study protocols detailing, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria and the parameters to be used to monitor subject safety, including stopping rules that assure a clinical trial will be stopped if certain adverse events should occur. Each protocol and any amendments to the protocol must be submitted to the FDA as part of the IND. An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions related to a proposed clinical trial and places the trial on clinical hold, including concerns that human research subjects will be exposed to unreasonable health risks. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. Accordingly, submission of an IND may or may not result in the FDA allowing clinical trials to commence. Clinical trials must be conducted and monitored in accordance with the FDA’s regulations comprising the GCP requirements, including the requirement that all research subjects provide informed consent.

Further, each clinical trial must be reviewed and approved by an IRB at or servicing each institution at which the clinical trial will be conducted. An IRB is charged with protecting the welfare and rights of trial participants and considers items such as whether the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the study protocol and the form and content of the informed consent that must be signed by each clinical trial subject, or their legal representative, reviews and approves the trial protocol, and must monitor the clinical trial until completed.

A sponsor may choose, but is not required, to conduct a foreign clinical trial under an IND. When a foreign clinical trial is conducted under an IND, all FDA IND requirements must be met unless waived. When a foreign clinical trial is not conducted under an IND, the sponsor must ensure that the study complies with certain regulatory requirements of the FDA in order to use the study as support for an IND or application for marketing approval or licensing. In particular, such studies must be conducted in accordance with GCP, including review and approval by an independent ethics committee, or IEC, and informed consent from subjects. The FDA must be able to validate the data through an onsite inspection, if deemed necessary by the FDA. Some trials are overseen by an independent group of qualified experts organized by the trial sponsor, known as a data safety monitoring board or committee, or DSMB. This group provides authorization as to whether or not a trial may move forward at designated check points based on access that only the group maintains to available data from the study.

In addition to the submission of an IND to the FDA before initiation of a clinical trial in the United States, certain human clinical trials involving recombinant or synthetic nucleic acid molecules had historically been subject to review by the Recombinant DNA Advisory Committee, or RAC, of the NIH, Office of Biotechnology Activities, or the OBA, pursuant to the NIH Guidelines for Research Involving Recombinant or Synthetic Nucleic Acid Molecules, or NIH Guidelines. While the NIH Guidelines are not mandatory unless the research in question is being conducted at or sponsored by institutions receiving NIH funding of recombinant or synthetic nucleic acid molecule research, many companies and other institutions not otherwise subject to the NIH Guidelines voluntarily follow them. On August 17, 2018, the NIH issued a notice in the Federal Register and issued a public statement proposing changes to the oversight framework for gene therapy trials, including changes to the applicable NIH Guidelines to modify the roles and responsibilities of the RAC with respect to human clinical trials of gene therapy products, and requesting public comment on its proposed modifications. During the public comment period, which closed October 16, 2018, the NIH announced that it will no longer accept new human gene transfer protocols for review as a part of the protocol registration process or convene the RAC to review individual clinical protocols. In April 2019, NIH announced the updated guidelines, which reflect these proposed changes, and clarified that these trials will remain subject to the FDA’s oversight and other clinical trial regulations, and oversight at the local level will continue as set forth in the NIH Guidelines. Specifically, under the NIH Guidelines, supervision of human gene transfer trials includes evaluation and assessment by an institutional biosafety committee, or IBC, a local institutional committee that reviews and oversees research utilizing recombinant or synthetic nucleic acid molecules at that institution. The IBC assesses the safety of the research and identifies any potential risk to public health or the environment, and such review may result in some delay before initiation of a clinical trial. Further, NIH renamed the RAC the Novel and Exceptional Technology and Research Advisory Committee, or NExTRAC, and revised its role to provide recommendations to the NIH Director and a public forum for the discussion of the scientific, safety, and ethical issues associated with emerging biotechnologies.

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Human clinical trials typically are conducted in three sequential phases that may overlap or be combined:

•Phase 1. The biological product candidate initially is introduced into a small number of healthy human subjects and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early understanding of its effectiveness. In the case of some product candidates for severe or life-threatening diseases, especially when the product candidate may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients. Phase 1 clinical trials of gene therapies are typically conducted in patients rather than healthy volunteers.

•Phase 2. The biological product candidate is evaluated in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product candidate for specific targeted diseases and to determine dosage tolerance, optimal dosage and dosing schedule.

•Phase 3. Phase 3 clinical trials are commonly referred to as “pivotal” trials, which typically denotes a trial that presents the data that the FDA or other relevant regulatory agency will use to determine whether or not to approve a biological product. In Phase 3 clinical trials, the biological product candidate is administered to an expanded patient population, generally at multiple geographically dispersed clinical trial sites in adequate and well-controlled clinical trials to generate sufficient data to statistically confirm the potency, dosage, clinical efficacy and safety of the product for approval. These clinical trials are intended to establish the overall risk/benefit ratio of the product candidate and provide an adequate basis for product labeling.

Post-approval clinical trials, sometimes referred to as Phase 4 clinical trials, may be conducted voluntarily by the sponsor or required by FDA after initial approval. These clinical trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication, particularly for long-term safety follow-up.

During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all clinical activities, clinical data and clinical trial investigators. Annual progress reports detailing the results of the clinical trials must be submitted to the FDA.

Written IND safety reports must be promptly submitted to the FDA and the investigators for: serious and unexpected adverse events; any findings from other trials, in vivo laboratory tests or in vitro testing that suggest a significant risk for human subjects; or any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure. The sponsor must submit an IND safety report within 15 calendar days after the sponsor determines that the information qualifies for reporting. The sponsor also must notify the FDA of any unexpected fatal or life-threatening suspected adverse reaction within seven calendar days after the sponsor’s initial receipt of the information.

The FDA or the sponsor or its data safety monitoring board may suspend a clinical trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the biological product candidate has been associated with unexpected serious harm to patients.

Additional Regulation for Gene Therapy Clinical Trials in the United States

In addition to the regulations discussed above, there are a number of additional standards that apply to clinical trials involving the use of gene therapy. The FDA has issued various guidance documents regarding gene therapies, which outline additional factors that the FDA will consider at each of the above stages of development and relate to, among other things: the proper preclinical assessment of gene therapies; the CMC information that should be included in an IND application; the proper design of tests to measure product potency in support of an IND or BLA application; and measures to observe delayed adverse events in subjects who have been exposed to investigational gene therapies when the risk of such effects is high. Further, the FDA usually recommends that sponsors observe subjects for potential gene therapy-related delayed adverse events for a 15-year period, including a minimum of five years of annual examinations followed by ten years of annual queries, either in person or by questionnaire.

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Compliance with cGMP Requirements in the United States

Manufacturers of biological products must comply with applicable cGMP regulations, including quality control and quality assurance and maintenance of records and documentation. Manufacturers and others involved in the manufacture and distribution of such products also must register their establishments with the FDA and certain state agencies. Both domestic and foreign manufacturing establishments must register and provide additional information to the FDA upon their initial participation in the manufacturing process. Establishments may be subject to periodic, unannounced inspections by government authorities to ensure compliance with cGMP requirements and other laws. Discovery of problems may result in a government entity placing restrictions on a product, manufacturer or holder of an approved BLA, and may extend to requiring withdrawal of the product from the market. The FDA will not approve a BLA unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications.

Concurrent with clinical trials, companies usually complete additional preclinical studies and must also develop additional information about the physical characteristics of the biological product candidate, as well as finalize a process for manufacturing the product candidate in commercial quantities in accordance with cGMP requirements. To help reduce the risk of the introduction of adventitious agents or of causing other adverse events with the use of biological products, the PHSA emphasizes the importance of manufacturing control for products whose attributes cannot be precisely defined. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other requirements, the sponsor must develop methods for testing the identity, strength, quality, potency and purity of the final biological product. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the biological product candidate does not undergo unacceptable deterioration over its shelf life.

U.S. Review and Approval Processes

The results of the preclinical tests and clinical trials, together with detailed information relating to the product’s CMC and proposed labeling, among other things, are submitted to the FDA as part of a BLA requesting approval to market the product for one or more indications.

Under the Prescription Drug User Fee Act, or PDUFA, as amended, each BLA must be accompanied by a significant user fee. The FDA adjusts the PDUFA user fees on an annual basis. The PDUFA also imposes an annual product fee for biologics and an annual establishment license fee on facilities used to manufacture prescription biologics. Fee waivers or reductions are available in certain circumstances, including a waiver of the application fee for the first application filed by a small business. Additionally, no user fees are assessed on BLAs for product candidates designated as orphan drugs, unless the product candidate also includes a non-orphan indication.

The FDA reviews a BLA within 60 days of submission to determine if it is substantially complete before the agency accepts it for filing. The FDA may refuse to file any BLA that it deems incomplete or not properly reviewable at the time of submission and may request additional information. In that event, the BLA must be resubmitted with the additional information. The resubmitted application also is subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth, substantive review of the BLA.

The FDA reviews the BLA to determine, among other things, whether the proposed product candidate is safe and potent, or effective, for its intended use, has an acceptable purity profile and whether the product candidate is being manufactured in accordance with cGMP to assure and preserve the product candidate’s identity, safety, strength, quality, potency and purity. The FDA may refer applications for novel biological products or biological products that present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

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Before approving a BLA, the FDA will typically inspect the facilities at which the product candidate is manufactured. The FDA will not approve the product candidate unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product candidate within required specifications. Additionally, before approving a BLA, the FDA typically will inspect one or more clinical trial sites and/or the sponsor to assure that the clinical trials were conducted in compliance with IND requirements and GCP requirements.

On the basis of the BLA and accompanying information, including the results of the inspection of the manufacturing facilities, the FDA may issue an approval letter or a complete response letter. An approval letter authorizes commercial marketing of the biological product with specific prescribing information for specific indications. A complete response letter generally outlines the deficiencies in the submission and may require substantial additional testing or information in order for the FDA to reconsider the application. If and when those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the BLA, the FDA may issue an approval letter.

Under the Pediatric Research Equity Act, or PREA, a BLA or supplement to a BLA for a novel product (e.g., new active ingredient, new indication, etc.) must contain data to assess the safety and effectiveness of the biological product for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The FDA may grant deferrals for submission of data or full or partial waivers. Unless otherwise required by regulation, PREA does not apply to any biological product for an indication for which orphan designation has been granted.

If a product candidate receives regulatory approval, the approval may be significantly limited to specific diseases and dosages or the indications for use may otherwise be limited. Further, the FDA may require that certain contraindications, warnings or precautions be included in the product labeling. The FDA may impose restrictions and conditions on product distribution, prescribing or dispensing in the form of a REMS or otherwise limit the scope of any approval. In addition, the FDA may require post-marketing clinical trials, sometimes referred to as Phase 4 clinical trials, designed to further assess a biological product’s safety and effectiveness, and testing and surveillance programs to monitor the safety of approved products that have been commercialized. Failure to complete such post-marketing requirements in accordance with the timelines and conditions set forth by the FDA could significantly increase costs or delay, limit, or ultimately restrict the commercialization of the product candidate.

The FDA has agreed to specified performance goals in the review of BLAs under PDUFA. One such goal is to review standard BLAs in ten months after the FDA accepts the BLA for filing, and priority BLAs in six months, whereupon a review decision is to be made. The FDA does not always meet its PDUFA goal dates for standard and priority BLAs and its review goals are subject to change from time to time. The review process and the PDUFA goal date may be extended by three months if the FDA requests or the BLA sponsor otherwise provides a major amendment or additional information or clarification regarding information already provided in the submission within the last three months before the PDUFA goal date.

U.S. Orphan Drug Designation

Under the Orphan Drug Act, the FDA may designate a biological product as an “orphan drug” if it is intended to treat a rare disease or condition (generally meaning that it affects fewer than 200,000 individuals in the United States, or more in cases in which there is no reasonable expectation that the cost of developing and making a biological product available in the United States for treatment of the disease or condition will be recovered from sales of the product). Orphan product designation must be requested before submitting a BLA. If, at the time a sponsor requests orphan designation for a drug, the FDA has previously approved a drug considered the same drug for the same rare disease or condition, to obtain orphan designation, the sponsor must provide a plausible hypothesis of clinical superiority over the previously approved same drug. After the FDA grants orphan product designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. Orphan product designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.

Orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers. If a product with orphan status receives the first FDA approval for the disease or condition for which it has such designation, meaning there is no previously approved “same

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drug” for the same orphan condition, the product is entitled to orphan product exclusivity. If there is a previously approved same drug for the same orphan condition, to obtain orphan exclusivity, the sponsor of the subsequent drug must demonstrate clinical superiority over the previously approved same drug. With respect to gene therapies, the FDA has issued a specific guidance on how the agency interprets its sameness regulations. Specifically, whether two products are deemed to be the same by the FDA will depend on the products’ transgene expression, viral vectors groups and variants, and additional product features that may contribute to therapeutic effect. Minor product differences will not, generally, result in a finding that two products are different and there are some factors that FDA will consider on a case by case basis. Any of the FDA sameness determinations could impact our ability to receive approval for our product candidates and to obtain or retain orphan drug exclusivity.

If granted, orphan exclusivity means that the FDA may not approve any other applications to market the same drug or biological product for the same orphan indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity or if the party holding the exclusivity fails to assure the availability of sufficient quantities of the drug to meet the needs of patients with the disease or condition for which the drug was designated. In addition, exclusive marketing rights in the United States may be lost if the FDA later determines that the request for designation was materially defective. Competitors, however, may receive approval of different products for the same indication for which the orphan product has exclusivity or obtain approval for the same product but for a different indication for which the orphan product has exclusivity. A recent Eleventh Circuit decision in Catalyst Pharmaceuticals, Inc. vs. FDA regarding interpretation of the Orphan Drug Act exclusivity provisions as applied to drugs approved for orphan indications narrower than the drug’s orphan designation has the potential to significantly broaden the scope of orphan drug exclusivity for such products. The FDA has indicated that it will not follow Catalyst in other scenarios, but that may result in further suits against the agency. Orphan medicinal product status in the European Union has similar, but not identical, benefits.

U.S. Expedited Development and Review Programs

The FDA is authorized to expedite the review of BLAs in several ways:

•Fast Track Designation. Under the Fast Track program, the sponsor of a biological product candidate may request the FDA to designate the product for a specific indication as a Fast Track product concurrent with or after the filing of the IND. Biological products are eligible for Fast Track designation if they are intended to treat a serious or life-threatening condition and demonstrate the potential to address unmet medical needs for the condition. Fast Track designation applies to the combination of the product candidate and the specific indication for which it is being studied. In addition to other benefits, such as the ability to have greater interactions with the FDA, the FDA may initiate review of sections of a Fast Track BLA before the application is complete, a process known as rolling review. Any product submitted to the FDA for marketing, including under a Fast Track program, may be eligible for other types of FDA programs intended to expedite development and review, such as breakthrough therapy designation, priority review and accelerated approval.

•Breakthrough Therapy Designation. To qualify for the breakthrough therapy program, product candidates must be intended to treat a serious or life-threatening disease or condition and preliminary clinical evidence must indicate that such product candidates may demonstrate substantial improvement on one or more clinically significant endpoints over existing therapies. The FDA will seek to ensure the sponsor of a breakthrough therapy product candidate receives: intensive guidance on an efficient drug development program; intensive involvement of senior managers and experienced staff on a proactive, collaborative and cross-disciplinary review; and all the features of Fast Track designation.

•Accelerated Approval. Drugs or biological products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receive accelerated approval. Accelerated approval means that a product candidate may be approved on the basis of adequate and well-controlled clinical trials establishing that the product candidate has an effect on a surrogate endpoint that is reasonably likely to predict a clinical benefit, or on the basis of an effect on a clinical endpoint other than survival or irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity and prevalence of the condition and the availability or lack of alternative treatments. As a condition of approval, the FDA will generally require that a sponsor of a drug or biological product candidate receiving accelerated approval perform adequate and well-controlled post-marketing

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clinical trials to verify and describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit. The FDA may require such trials to be underway prior to, or within a specific period after, approval and will specify the conditions for such studies. Further, sponsors must provide reports on post-marketing trial progress no later than 180 days after approval and every 180 days thereafter until such trials are completed. The failure to conduct required post-approval studies with due diligence and the failure to submit the required reports are prohibited acts. Further, a failure to conduct such trials or confirm the efficacy of the product can result in withdrawal of the product or indication approved under accelerated approval. The FDA can withdraw accelerated approvals on an expedited basis provided certain procedures are followed In addition, the FDA currently requires that during the preapproval review period, accelerated approval applicants submit for the agency’s consideration promotional materials intended for use within 120 days following marketing approval, which could adversely impact the timing of the commercial launch of the product. After 120 days following marketing approval, unless otherwise notified by the agency, accelerated approval applicants are required to submit promotional materials at least 30 days prior to intended use.

•Regenerative Medicine Advanced Therapy Designation. As part of the 21st Century Cures Act, enacted in December 2016, Congress amended the FDCA to facilitate an efficient development program for, and expedite review of regenerative medicine therapies, which include certain cell and gene therapies, therapeutic tissue engineering products, human cell and tissue products, and combination products using any such therapies or products, except for those regulated solely under section 361 of the PHSA and 21 CFR Part 1271. This program is intended to facilitate efficient development and expedite review of regenerative medicine therapies, which are intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition and qualify for RMAT designation. A drug sponsor may request that FDA designate a drug as a RMAT concurrently with or at any time after submission of an IND. The FDA has 60 calendar days to determine whether the drug meets the criteria, including whether there is preliminary clinical evidence indicating that the drug has the potential to address unmet medical needs for a serious or life-threatening disease or condition. A BLA for a regenerative medicine therapy that has received RMAT designation may be eligible for priority review or accelerated approval through use of surrogate or intermediate endpoints reasonably likely to predict long-term clinical benefit, or reliance upon data obtained from a meaningful number of sites. Benefits of RMAT designation also include early interactions with FDA to discuss any potential surrogate or intermediate endpoint to be used to support accelerated approval. A regenerative medicine therapy with RMAT designation that is granted accelerated approval and is subject to post-approval requirements may fulfill such requirements through the submission of clinical evidence from clinical trials, patient registries, or other sources of real world evidence, such as electronic health records; the collection of larger confirmatory data sets; or post-approval monitoring of all patients treated with such therapy prior to its approval.

Fast Track designation, breakthrough therapy designation, accelerated approval and RMAT designation do not change the standards for approval but may expedite the development or review process. In addition, even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for designation.

U.S. Post-approval Requirements

Rigorous and extensive FDA regulation of biological products continues after approval, particularly with respect to cGMP requirements. Manufacturers are required to comply with applicable requirements in the cGMP regulations, including quality control and quality assurance and maintenance of records and documentation. Other post-approval requirements applicable to biological products include reporting of cGMP deviations that may affect the identity, potency, purity and overall safety of a distributed product, record-keeping requirements, reporting of adverse effects, reporting updated safety and efficacy information, reporting significant interruptions in manufacturing and complying with electronic record and signature requirements. After a BLA is approved, the product also may be subject to official lot release. If the product is subject to official release by the FDA, the manufacturer submits samples of each lot of product to the FDA, together with a release protocol, showing a summary of the history of manufacture of the lot and the results of all tests performed on the lot. The FDA also may perform certain confirmatory tests on

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lots of some products before releasing the lots for distribution. In addition, the FDA conducts laboratory research related to the regulatory standards on the safety, purity, potency and effectiveness of biological products.

A sponsor also must comply with the FDA’s advertising and promotion requirements, such as the prohibition on promoting products for uses or in patient populations that are not described in the product’s approved labeling (known as “off-label use”). Discovery of previously unknown problems or the failure to comply with the applicable regulatory requirements may result in restrictions on the marketing of a product or withdrawal of the product from the market as well as possible civil or criminal sanctions. In addition, changes to the manufacturing process or facility generally require prior FDA approval before being implemented and other types of changes to the approved product, such as adding new indications and additional labeling claims, are also subject to further FDA review and approval.

Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject an applicant or manufacturer to administrative or judicial civil or criminal actions and adverse publicity. These actions could include refusal to approve pending applications or supplemental applications, withdrawal of an approval, clinical hold, suspension or termination of a clinical trial by an IRB, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines or other monetary penalties, refusals of government contracts, mandated corrective advertising or communications with healthcare providers, debarment, restitution, disgorgement of profits or other civil or criminal penalties.

U.S. Patent Term Restoration and Marketing Exclusivity

Depending upon the timing, duration and specifics of FDA approval of product candidates, some of a sponsor’s U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent restoration term of up to five years as compensation for patent term lost during the FDA regulatory review process. However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date. The patent term restoration period generally is one-half the time between the effective date of an IND and the submission date of a BLA less any time the sponsor did not act with due diligence during the period, plus the time between the submission date of a BLA and the approval of that application less any time the sponsor did not act with due diligence during the period. Only one patent applicable to an approved biological product is eligible for the extension, only those claims covering the approved drug, a method for using it, or a method for manufacturing it may be extended, and the application for the extension must be submitted prior to the expiration of the patent. Moreover, a given patent may only be extended once based on a single product. The USPTO, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration. Similar provisions are available in Europe and other foreign jurisdictions to extend the term of a patent that covers an approved drug. In the future, if and when our products receive FDA approval, we expect to apply for patent term extensions on patents covering those products, however there is no guarantee that the applicable authorities, including the FDA in the United States, will agree with our assessment of whether such extensions should be granted, and if granted, the length of such extensions. For more information regarding the risks related to our intellectual property, see Item 3.D. “Risk Factors—Risks Related to Our Intellectual Property.”

A biological product can obtain pediatric market exclusivity in the United States. Pediatric exclusivity, if granted, adds six months to existing exclusivity periods, including some regulatory exclusivity periods tied to patent terms. This six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric study in accordance with an FDA-issued “Written Request” for such a study.

The PPACA includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 which created an abbreviated approval pathway for biological products shown to be similar to, or interchangeable with, an FDA-licensed reference biological product. This amendment to the PHSA attempts to minimize duplicative testing. Biosimilarity, which requires that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency, can be shown through analytical studies, animal studies, and a clinical trial or trials. Interchangeability requires that a product is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product and, for products administered multiple times, the biologic and the reference biologic may be switched after one has been

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previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic. Complexities associated with the larger, and often more complex, structures of biological products, as well as the processes by which such products are manufactured, pose significant hurdles to implementation of the abbreviated approval pathway, particularly for interchangeability determinations, that are still being worked out by the FDA.

A reference biological product is granted four- and 12-year exclusivity periods from the time of first licensure of the product. The FDA will not accept an application for a biosimilar or interchangeable product based on the reference biological product until four years after the date of first licensure of the reference product, and FDA will not approve an application for a biosimilar or interchangeable product based on the reference biological product until twelve years after the date of first licensure of the reference product. “First licensure” typically means the initial date the particular product at issue was licensed in the United States. Date of first licensure does not include the date of licensure of (and a new period of exclusivity is not available for) a biological product if the licensure is for a supplement for the biological product or for a subsequent application by the same sponsor or manufacturer of the biological product (or licensor, predecessor in interest, or other related entity) for a change (not including a modification to the structure of the biological product) that results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device or strength, or for a modification to the structure of the biological product that does not result in a change in safety, purity, or potency. Therefore, one must determine whether a new product includes a modification to the structure of a previously licensed product that results in a change in safety, purity, or potency to assess whether the licensure of the new product is a first licensure that triggers its own period of exclusivity. Whether a subsequent application, if approved, warrants exclusivity as the “first licensure” of a biological product is determined on a case-by-case basis with data submitted by the sponsor.

On December 20, 2019, the Further Consolidated Appropriations Act, 2020, or FCAA 2020, became law. Section 610 of Division N Title I, entitled “Actions for Delays of Generic Drugs and Biosimilar Biological Products”, provides biosimilar developers with a private right of action to obtain sufficient quantities of reference product from the brand manufacturer or another biosimilar manufacturer, necessary for approval of the developers’ biosimilar product. If a biosimilar developer is successful in its suit, the defendant manufacturer would be required to provide sufficient quantities of product on commercially-reasonable, market-based terms and may be required to pay the developer’s reasonable attorney’s fees and costs as well as major financial compensation under certain circumstances. The purpose of section 610 is to promote competition in the market for drugs and biological products by facilitating the timely entry of lower-cost biosimilar products. Further, Section 3206 of the Consolidated Appropriations Act, 2023, permits multiple interchangeable biological products to share a period of first interchangeable exclusivity if approved on the same day. We cannot determine what effect this these may have on manufacturers, if any, that may develop biosimilar or other competing versions of our products once approved.

FDA Approval of Companion Diagnostics

In August 2014, the FDA issued final guidance clarifying the requirements that will apply to approval of therapeutic products and in vitro companion diagnostics. According to the guidance, for novel drugs, a companion diagnostic device and its corresponding therapeutic should be approved or cleared contemporaneously by the FDA for the use indicated in the therapeutic product’s labeling. Approval or clearance of the companion diagnostic device will ensure that the device has been adequately evaluated and has adequate performance characteristics in the intended population. In July 2016, the FDA issued a draft guidance intended to assist sponsors of the drug therapeutic and in vitro companion diagnostic device on issues related to co-development of the products.

Under the FDCA, in vitro diagnostics, including companion diagnostics, are regulated as medical devices. In the United States, the FDCA and its implementing regulations, and other federal and state statutes and regulations govern, among other things, medical device design and development, preclinical and clinical testing, premarket clearance or approval, registration and listing, manufacturing, labeling, storage, advertising and promotion, sales and distribution, export and import, and post-market surveillance. Unless an exemption applies, diagnostic tests require marketing clearance or approval from the FDA prior to commercial distribution.

The FDA previously has required in vitro companion diagnostics intended to select the patients who will respond to the product candidate to obtain pre-market approval, or PMA, simultaneously with approval of the therapeutic product candidate. The PMA process, including the gathering of clinical and preclinical data and the

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submission to and review by the FDA, can take several years or longer. It involves a rigorous premarket review during which the applicant must prepare and provide the FDA with reasonable assurance of the device’s safety and effectiveness and information about the device and its components regarding, among other things, device design, manufacturing and labeling. PMA applications are subject to an application fee; for federal fiscal year 2023, the standard fee for review of a PMA is $441,547 and the small business fee is $110,387.

A clinical trial is typically required for a PMA application and, in a small percentage of cases, the FDA may require a clinical study in support of a 510(k) submission. A manufacturer that wishes to conduct a clinical study involving the device is subject to the FDA’s investigational device exemption, or IDE, regulation. The IDE regulations distinguish between significant and non-significant risk device studies and the procedures for obtaining approval to begin the study differ accordingly. Also, some types of studies are exempt from the IDE regulations. A significant risk device presents a potential for serious risk to the health, safety, or welfare of a subject. Significant risk devices include devices that are substantially important in diagnosing, curing, mitigating, or treating disease or in preventing impairment to human health. Studies of devices that pose a significant risk require both FDA and an IRB approval prior to initiation of a clinical study. Many companion diagnostics are considered significant risk devices due to their role in diagnosing a disease or condition. Non-significant risk devices are devices that do not pose a significant risk to the human subjects. A non-significant risk device study requires only IRB approval prior to initiation of a clinical study.

After a device is placed on the market, it remains subject to significant regulatory requirements, the extent of which depend on the particular class of device and clearance or approval. Medical devices may be marketed only for the uses and indications for which they are cleared or approved. Device manufacturers must also establish registration and device listings with the FDA. Device manufacturers are also subject to FDA’s medical device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused or contributed to a death or serious injury, or has malfunctioned and the device or a similar device that it markets would be likely to cause or contribute to a death or serious injury, if the malfunction were to recur, and FDA’s correction and removal reporting regulations, which require that manufacturers report to the FDA corrections or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health. A medical device manufacturer’s manufacturing processes and those of its suppliers are required to comply with the applicable portions of the Quality System Regulation, which covers the methods and documentation of the design, testing, production, processes, controls, quality assurance, labeling, packaging and shipping of medical devices. Domestic facility records and manufacturing processes are subject to periodic unscheduled inspections by the FDA. The FDA also may inspect foreign facilities that export products to the United States.

Government Regulation Outside of the United States

In addition to regulations in the United States, we are and will be subject, either directly or through third parties, to a variety of regulations in other jurisdictions governing, among other things, clinical trials and commercial sales and distribution of our products, if approved. In the United Kingdom and European Union, the requirements, regulatory approvals and process governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country, though there is some degree of European Union-wide harmonization (which broadly still applies in the United Kingdom post-Brexit).

Whether or not we obtain FDA approval for a product, we must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical trials or marketing of the product in those countries. Certain countries outside of the United States have a similar process that requires the submission of a CTA application much like the IND prior to the commencement of human clinical trials. In the United Kingdom and European Union, for example, a CTA must be submitted for each clinical trial to each country’s national health authority and an independent ethics committee must also provide a positive opinion on the trial, much like the FDA and an IRB, respectively. Once the CTA is approved and positive opinion received in accordance with a country’s requirements, the corresponding clinical trial may proceed.

The requirements and process governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country, although they are based on EU-wide legislation and guidance. In all cases, the clinical trials must be conducted in accordance with GCP and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.

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Regulation in the European Union

In the European Union, medicinal products, including advanced therapy medicinal products, or ATMPs, are subject to extensive pre- and post-market regulation by regulatory authorities at both the European Union and national levels. ATMPs comprise gene therapy products, somatic cell therapy products and tissue engineered products. We anticipate that our gene therapy development products would be regulated as ATMPs in the European Union.

Clinical Trials

Clinical trials of medicinal products in the European Union must be conducted in accordance with European Union and national regulations and the International Conference on Harmonization, or ICH, guidelines on GCP. Additional GCP guidelines from the European Commission, focusing in particular on traceability, apply to clinical trials of advanced therapy medicinal products. If the sponsor of the clinical trial is not established within the European Union, it must appoint an entity within the European Union to act as its legal representative. The sponsor must take out a clinical trial insurance policy, and in most European Union countries, the sponsor is liable to provide ‘no fault’ compensation to any study subject injured in the clinical trial.

Prior to commencing a clinical trial, the sponsor must obtain a clinical trial authorization from the competent authority, and a positive opinion from an independent ethics committee. The application for a clinical trial authorization must include, among other things, a copy of the trial protocol and an investigational medicinal product dossier containing information about the manufacture and quality of the medicinal product under investigation. Under the new Regulation on Clinical Trials, which was adopted and entered into force in 2014 and came in to effect in January 2022 and will be mandatory from January 31, 2023, there is a centralized application procedure where one national authority takes the lead in reviewing the application and the other national authorities can only provide comments on defined areas. Any substantial changes to the trial protocol or other information submitted with the CTAs must be notified to or approved by the relevant competent authorities and ethics committees. Medicines used in clinical trials must be manufactured in accordance with cGMP. Other national and European Union-wide regulatory requirements also apply.

During the development of a medicinal product, the EMA, on behalf of the European Commission, and national medicines regulators within the European Union provide the opportunity for dialogue and guidance on the development program. In relation to products to be approved through the centralized procedure (which would include ATMPs), this is usually done in the form of scientific advice, which is given by the Scientific Advice Working Party of the EMA’s Committee for Medicinal Products for Human Use, or CHMP, and advice can also be obtained from national authorities in the EU Member States. A fee is incurred with each scientific advice procedure. Advice from the EMA is typically provided based on questions concerning, for example, quality (chemistry, manufacturing and controls testing), nonclinical testing and clinical studies, and pharmacovigilance plans and risk-management programs. Advice is not legally binding with regard to any future marketing authorization application of the product concerned. In 2015, we received national scientific advice from the United Kingdom, Netherlands, Germany, Sweden and centralized scientific advice from the EMA. In 2020, we received national advice from MHRA and centralized scientific advice in 2021.

Marketing Authorizations

In order to market a new medicinal product in the European Union, a company must submit and obtain approval from regulators of a marketing authorization application, or MAA. The process for doing this depends, among other things, on the nature of the medicinal product.

The centralized procedure results in a single marketing authorization, or MA, granted by the European Commission that is valid across the EEA (i.e., the European Union as well as Iceland, Liechtenstein, and Norway). The centralized procedure is compulsory for human drugs that are: (i) derived from biotechnology processes, such as genetic engineering, (ii) contain a new active substance indicated for the treatment of certain diseases, such as HIV/AIDS, cancer, diabetes, neurodegenerative diseases, autoimmune and other immune dysfunctions and viral diseases, (iii) officially designated orphan medicines and (iv) advanced-therapy medicines, such as gene therapy, somatic cell therapy or tissue-engineered medicines. The centralized procedure may at the request of the applicant also be used in certain other cases. Therefore, the centralized procedure would be mandatory for the products we are developing.

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The Committee for Advanced Therapies, or CAT, is responsible in conjunction with the CHMP for the evaluation of ATMPs that are to be authorized by the European Commission. The CAT is primarily responsible for the scientific evaluation of ATMPs and prepares a draft opinion on the quality, safety and efficacy of each ATMP for which a marketing authorization application is submitted. The CAT’s opinion is then taken into account by the CHMP when giving its final recommendation regarding the authorization of a product in view of the balance of benefits and risks identified. Although the CAT’s draft opinion is submitted to the CHMP for final recommendations for the European Commission, the CHMP may depart from the draft opinion, if it provides detailed scientific justification. The CHMP and CAT are also responsible for providing guidelines on ATMPs and have published numerous guidelines, including specific guidelines on gene therapies and cell therapies. These guidelines provide additional guidance on the factors that the EMA, on behalf of the European Commission, will consider in relation to the development and evaluation of ATMPs and include, among other things, the preclinical studies required to characterize ATMPs; the manufacturing and control information that should be submitted in a marketing authorization application; and post-approval measures required to monitor patients and evaluate the long term efficacy and potential adverse reactions of ATMPs. Although these guidelines are not legally binding, we believe that our compliance with them is likely necessary to gain and maintain approval for any of our product candidates.

Under the centralized procedure in the European Union, the maximum timeframe for the evaluation of an MAA by the EMA is 210 days. This excludes so-called clock stops, during which additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP. At the end of the review period, the CHMP provides an opinion to the European Commission. If this opinion is favorable, the Commission may then adopt a decision to grant an MAA. In exceptional cases, the CHMP might perform an accelerated review of an MAA in no more than 150 days (excluding clock-stop). This is usually when the product is of major interest from the point of view of public health and, in particular, from the viewpoint of therapeutic innovation.

The European Commission may grant a so-called “marketing authorization under exceptional circumstances.” Such authorization is intended for products for which the applicant can demonstrate that it is unable to provide comprehensive data on the efficacy and safety under normal conditions of use, because the indications for which the product in question is intended are encountered so rarely that the applicant cannot reasonably be expected to provide comprehensive evidence, or in the present state of scientific knowledge, comprehensive information cannot be provided, or it would be contrary to generally accepted principles of medical ethics to collect such information. Consequently, marketing authorization under exceptional circumstances may be granted subject to certain specific obligations, which may include the following:

•the applicant must complete an identified program of studies within a time period specified by the competent authority, the results of which form the basis of a reassessment of the benefit/risk profile;

•the medicinal product in question may be supplied on medical prescription only and may in certain cases be administered only under strict medical supervision, possibly in a hospital and in the case of a radio-pharmaceutical, by an authorized person; and

•the package leaflet and any medical information must draw the attention of the medical practitioner to the fact that the particulars available concerning the medicinal product in question are as yet inadequate in certain specified respects.

A marketing authorization under exceptional circumstances is subject to annual review to reassess the risk-benefit balance in an annual reassessment procedure. Continuation of the authorization is linked to the annual reassessment and a negative assessment could potentially result in the marketing authorization being suspended, varied or revoked. The renewal of a marketing authorization of a medicinal product under exceptional circumstances, however, follows the same rules as a “normal” marketing authorization. Thus, a marketing authorization under exceptional circumstances is granted for an initial five years, after which the authorization will become valid indefinitely, unless the EMA decides that safety grounds merit one additional five-year renewal.

The European Commission may also grant a so-called “conditional marketing authorization” prior to obtaining the comprehensive clinical data required for an application for a full marketing authorization. Such conditional marketing authorizations may be granted for product candidates (including medicines designated as

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orphan medicinal products), if (i) the risk-benefit balance of the product candidate is positive, (ii) it is likely that the applicant will be in a position to provide the required comprehensive clinical trial data, (iii) the product fulfills an unmet medical need and (iv) the benefit to public health of the immediate availability on the market of the medicinal product concerned outweighs the risk inherent in the fact that additional data are still required. A conditional marketing authorization will contain specific obligations to be fulfilled by the marketing authorization holder, which may include obligations with respect to the completion of ongoing or new studies, and with respect to the collection of pharmacovigilance data. Conditional marketing authorizations are valid for one year, and may be renewed annually, if the risk-benefit balance remains positive, and after an assessment of the need for additional or modified conditions and/or specific obligations. The timelines for the centralized procedure described above also apply with respect to the review by the CHMP of applications for a conditional marketing authorization.

The European Union medicines rules expressly permit the EU Member States to adopt national legislation prohibiting or restricting the sale, supply or use of any medicinal product containing, consisting of or derived from a specific type of human or animal cell, such as embryonic stem cells. While the products we have in development do not make use of embryonic stem cells, it is possible that the national laws in certain EU Member States may prohibit or restrict us from commercializing our products, even if they have been granted an EU marketing authorization.

Data Exclusivity

Marketing authorization applications for generic medicinal products do not need to include the results of preclinical and clinical trials, but instead can refer to the data included in the marketing authorization of a reference product for which regulatory data exclusivity has expired. The first marketing authorization granted to an applicant for a particular active substance benefits from eight years of data exclusivity, during which generic marketing authorization applications referring to the data of that product may not be accepted by the regulatory authorities, and ten years, which runs concurrently and therefore leads to two additional years of market exclusivity, during which such generic products, if authorized, may not be placed on the market. The ten-year period of marketing protection may be extended to 11 years if during the first eight years a new therapeutic indication with significant clinical benefit over existing therapies is approved.

There is a special regime for biosimilars, or biological medicinal products that are similar to a reference medicinal product but that do not meet the definition of a generic medicinal product, for example, because of differences in raw materials or manufacturing processes. For such products, the results of appropriate preclinical or clinical trials must be provided, and guidelines from the EMA detail the type of quantity of supplementary data to be provided for different types of biological product. There are no such guidelines for complex biological products, such as gene or cell therapy medicinal products, and so it is likely that biosimilars of those products will currently only be approved in the European Union with difficulty and after providing significant amounts of data compared to other biosimilar products. However, guidance from the EMA states that they will be considered in the future in light of the scientific knowledge and regulatory experience gained at the time. The data and market exclusivity granted to the reference medicinal product for generic medicinal product discussed above applies fully to the reference biological medicinal product for the biosimilar.

The applicable data and market exclusivity periods in the EU can be substantially modulated and/or reduced as part of the EU Pharmaceutical Strategy and the overhaul of the EU pharmaceutical legislation. The related European Commission’s proposal is expected around March 2023.

Orphan Medicinal Products

The EMA’s Committee for Orphan Medicinal Products, or COMP, may recommend orphan medicinal product designation to promote the development of products that are intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions affecting not more than five in 10,000 persons in the European Union. Additionally, designation is granted for products intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition and when, without incentives, it is unlikely that sales of the product in the European Union would be sufficient to justify the necessary investment in developing the medicinal product. The COMP may only recommend orphan medicinal product designation when either there are no satisfactory method of diagnosis, prevention or treatment of the condition concerned or the product in question offers a significant clinical benefit over such existing method. Following a positive opinion by the COMP,

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the European Commission adopts a decision granting orphan status. Orphan medicinal product designation entitles a party to financial incentives such as reduction of fees or fee waivers. The COMP will reassess orphan status in parallel with EMA review of a marketing authorization application and orphan status may be withdrawn at that stage if it no longer fulfills the orphan criteria (for instance because in the meantime a new product was approved for the indication and no convincing data are available to demonstrate a significant benefit over that product). If orphan designation is retained at the time of authorization, ten years of market exclusivity is granted following marketing authorization. During this period, the competent authorities may not accept or approve any similar medicinal product for the same indication, unless it offers a significant clinical benefit over the existing product. This period may be reduced to six years if the orphan medicinal product designation criteria are no longer met, including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity.

The EU rules on orphan exclusivity are likely to be substantially changed and exclusivity periods reduced and/or modulated in the context of the EU Pharmaceutical Strategy. The related European Commission’s proposal is expected around March 2023

Pediatric Development

In the European Union, companies developing a new medicinal product, or a new indication or pharmaceutical form or route of administration for an existing product that benefits from a supplementary protection certificate or a patent that qualifies for the granting of a supplementary protection certificate, must agree to a paediatric investigation plan (PIP) with the EMA and must conduct pediatric clinical trials in accordance with that PIP, unless a waiver applies, (e.g., because the relevant disease or condition occurs only in adults). The marketing authorization application for a new product or indication, etc., must include the results of pediatric clinical trials conducted in accordance with the PIP, unless a waiver applies, or a deferral is in place, in which case the pediatric clinical trials must be completed at a later date. Where a new product is granted a marketing authorization, or new indication, etc., is granted, and the pediatric clinical trials have been conducted in accordance with the PIP (whether at the time of authorization or as a result of a deferral, after the authorization in adults) and certain other requirements are complied with, the product may be eligible for a six month extension of the protection under a supplementary protection certificate (if any is in effect at the time of approval) or, in the case of orphan medicinal products, a two year extension of the orphan market exclusivity. This pediatric reward is subject to specific conditions and is not automatically available when data in compliance with the PIP are developed and submitted. At this stage, it is unclear whether pediatric incentives and rewards would be substantially revised in the context of the EU Pharmaceutical Strategy.

Post-Approval Controls

The holder of a marketing authorization must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance, or QPPV, who is responsible for oversight of that system. Key obligations include expedited reporting of suspected serious adverse reactions and submission of periodic safety update reports, or PSURs.

All new marketing authorization applications must include a risk management plan, or RMP, describing the risk management system that the company will put in place and documenting measures to prevent or minimize the risks associated with the product. The regulatory authorities may also impose specific obligations as a condition of the marketing authorization. Such risk-minimization measures or post-authorization obligations may include additional safety monitoring, more frequent submission of PSURs, or the conduct of additional clinical trials or post-authorization safety studies. RMPs and PSURs are routinely available to third parties requesting access, subject to limited redactions.

All advertising and promotional activities for the product must be consistent with the approved summary of product characteristics, and therefore all off-label promotion is prohibited. Direct-to-consumer advertising of prescription medicines is also prohibited in the European Union. Although general requirements for advertising and promotion of medicinal products are established under EU directives, the details are governed by regulations and Codes of Practice in each EU Member State the provisions and in particular the enforcement of such provisions and can differ from one country to another.

Pricing and Reimbursement

Governments influence the price of medicinal products in the European Union through their pricing and reimbursement rules and control of national healthcare systems that fund a large part of the cost of those products to

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consumers. There is only very limited harmonization. Most countries use some form of international reference pricing. Some EU countries allow freedom of pricing for all or some new products, but control reimbursement by the national health system. Reimbursement may be managed through mechanisms including positive and negative list systems under which certain products are included or excluded from national health systems. To obtain reimbursement approval, some of these countries may conduct health technology assessment, requiring comparative data which assess the benefits of the new product relative to currently available therapies. A recent Regulation on health technology assessments seeks to harmonize and increase coordination of these assessment across the European Union. The downward pressure on healthcare costs in general, particularly prescription medicines, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products.

For other countries outside of the European Union, such as countries in Eastern Europe, Latin America or Asia, and the United Kingdom (See “—Regulation in the United Kingdom” below) the requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country. In all cases, again, the clinical trials are conducted in accordance with GCP and the other applicable regulatory requirements. If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension of clinical trials, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.

Regulation in the United Kingdom

Following the result of the 2016 referendum on the membership in the European Union and the formal notice served to the European Council in March 2017 pursuant to Article 50 of the Treaty of Lisbon, on January 31, 2020, or the Exit Day, the United Kingdom (England, Scotland, Wales and Northern Ireland) formally withdrew from the European Union. A post-Brexit transition period started on the Exit Day and expired on December 31, 2020. As of January 1, 2021, the MHRA is the United Kingdom’s standalone medicines and medical devices regulator and the U.K. legislation has been amended so that it can operate as a free-standing regulatory framework.

While much of the legislation in the United Kingdom is based on EU directives and regulations that continue to apply in the United Kingdom and are broadly in line with the summary set out above, a number of changes have been introduced to the U.K. legislation to take account of the fact the United Kingdom is no longer within the EU. In addition, as of January 1, 2021 the United Kingdom government confirmed:

•MHRA regulates clinical trials conducted within the United Kingdom, although the general requirements are as set out in relation to the EU under the Clinical Trials Directive. The EU Clinical Trials Regulation does not apply in United Kingdom, and a consultation was published in 2022 to determine the framework that will operate in the United Kingdom. Draft legislation is expected in 2023;

•The authorization of products to be placed on the market in the United Kingdom may be subject to a number of procedures. Under the national procedure, MHRA offers a 150-day assessment timeline for all high-quality marketing authorization applications. MHRA can also take into account marketing authorizations approved by the European Commission via the centralized procedure, or in European Union Member States (or Iceland, Liechtenstein, Norway) through the decentralized and mutual recognition procedure to facilitate granting the MA in the United Kingdom or Great Britain (England, Scotland and Wales). Acceptable applications for MAs under these procedures should be granted within 67 days of validation. EU centralized MAs and the procedures set out above will continue to be valid in Northern Ireland; and

•The United Kingdom has established information systems and databases to ensure the continued publication of information on clinical trials and disclosure of information on all therapies receiving marketing approval within the United Kingdom, including a list of orphan medicinal products in Great Britain. The United Kingdom has joined a number of international networks to remain aligned with the international regulatory system.

Other Healthcare Laws and Regulations

Healthcare providers, physicians and third-party payors play a primary role in the recommendation and use of pharmaceutical products that are granted marketing approval. Arrangements with third-party payors, existing or potential customers and referral sources, including healthcare providers and patients, are subject to broadly applicable fraud and abuse and other healthcare laws and regulations, and these laws and regulations may constrain the business or financial arrangements and relationships through which manufacturers conduct clinical research, market, sell and

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distribute the products for which they obtain marketing approval. Such restrictions under applicable federal and state healthcare laws and regulations include the following:

•the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering or paying remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or kind, in exchange for, or to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease or order of a good, facility, item or service for which payment may be made under federal healthcare programs, such as the Medicare and Medicaid programs. This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers, on the one hand, and prescribers, purchasers and formulary managers on the other. The PPACA amended the intent requirement of the federal Anti-Kickback Statute such that a person does not need to have actual knowledge of this statute or specific intent to violate it in order to commit a violation. There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution. Violations are subject to significant civil and criminal fines and penalties for each violation, plus up to three times the remuneration involved, imprisonment, and exclusion from government healthcare programs. In addition, the government may assert that a claim that includes items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act;

•the federal civil or criminal false claims and civil monetary laws, including the civil False Claims Act, or the FCA, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid or other third-party payors that are false, fictitious or fraudulent; knowingly making, using, or causing to be made or used, a false statement or record material to a false or fraudulent claim or obligation to pay or transmit money or property to the federal government; or knowingly concealing or knowingly and improperly avoiding, decreasing, or concealing an obligation to pay money to the federal government. Certain marketing practices, including off-label promotion, also may implicate the FCA. In addition, the PPACA codified case law that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA. Manufacturers can be held liable under the FCA even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims. The FCA also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery. When an entity is determined to have violated the FCA, the government may impose civil fines and penalties for each false claim, plus treble damages, and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs;

•the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services, or the CMS, information related to payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other non-physician healthcare providers (such as physician assistants and nurse practitioners), and teaching hospitals, and ownership and investment interests held by physicians and other healthcare providers and their immediate family members. In addition, many states also require reporting of payments or other transfers of value, many of which differ from each other in significant ways, are often not pre-empted, and may have a more prohibitive effect than the Sunshine Act, thus further complicating compliance efforts;

•the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes, including the Health Care Fraud Statute, that prohibit, among other things, a person from knowingly and willfully executing a scheme, or attempting to execute a scheme, to defraud any healthcare benefit program regardless of the payor (e.g., public or private), knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, or falsifying, concealing or covering up a material fact or making any materially false statements in connection with the delivery of or payment for healthcare benefits, items or services;

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•the Administrative Simplification provisions of HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and their implementing regulations, which impose obligations, including mandatory contractual terms, with respect to the security and privacy of protected health information by “covered entities”, such as health plans, health care clearinghouses and healthcare providers, and their respective business associates that access protected health information. Violations of the HIPAA rules are subject to civil monetary penalties as well as criminal penalties, and not only can HHS enforce the rules, but state attorneys general have authority to file civil actions for damages or injunctions in federal courts to enforce the HIPAA rules and may seek attorneys’ fees and costs associated with pursuing such actions;

•the federal false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for federal healthcare benefits, items or services; and

•state and foreign law and guidance equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers (including the U.K. Bribery Act 2010); state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to report and publicly disclose information related to, and in some cases seek pre-approval for, payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulations. Federal and state enforcement bodies have increased their scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry. It is possible that governmental authorities will conclude that our business practices do not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. Violation of the laws described above or any other governmental laws and regulations may result in penalties, including civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, exclusion from participation in federal and state healthcare programs, disgorgement, contractual damages, reputational harm, diminished profits and future earnings, individual imprisonment, and additional reporting requirements and oversight if a person or entity becomes subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws. Any action for violation of these laws, even if successfully defended, could cause a biopharmaceutical manufacturer to incur significant legal expenses and divert management’s attention from the operation of the business. Furthermore, efforts to ensure that business activities and business arrangements comply with applicable healthcare laws and regulations can be costly for manufacturers of branded prescription products.

In the United States, numerous federal and state laws and regulations, including state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws, govern the collection, use, disclosure, and protection of health-related and other personal information. For example, in June 2018, the State of California enacted the CCPA, which came into effect on January 1, 2020 and provides new data privacy rights for consumers and new operational requirements for companies. In November 2020, the CCPA was amended pursuant to a ballot initiative titled the California Privacy Rights Act, or CPRA, which became fully effective on January 1, 2023. The CPRA amendments impose a variety of new requirements on CCPA-regulated entities and also created a new state agency vested with authority to implement and enforce the CCPA. Although the CCPA has limited application to the personal information we handle, we do have privacy compliance obligations under the statute, which may increase our compliance costs and potential liability. Furthermore, the CCPA and CPRA could mark the beginning of a trend toward more stringent state privacy legislation in the United States, which could increase our potential liability and adversely affect our business.

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In addition, the collection, use, storage, disclosure, transfer, or other processing of personal data regarding individuals in the EEA including personal health data, is subject to the GDPR, which became effective on May 25, 2018. The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including requirements relating to processing health and other sensitive data (including pseudonymized personal data which is crucial for the conduct of clinical trials), obtaining consent of the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, ensuring that individuals could exercise easily and effectively the rights granted to them by the GDPR, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third-party processors. The GDPR also imposes strict rules on the transfer of personal data to countries outside the EEA, including the United States. For example, in 2016, the European Union and United States agreed to a transfer framework for data transferred from the European Union to the United States, called the Privacy Shield, but the Privacy Shield was invalidated in July 2020 by the Court of Justice of the European Union. While the Court confirmed the validity of the standard contractual clauses, which are another mechanism for transfer of personal data outside the EEA, the Court held that these clauses are not sufficient in themselves in the case of transfers of personal data to the United States and the data exporter and data importer must adopt additional safeguards to ensure compliance with the GDPR when transferring personal data to the United States Moreover, the standard contractual clauses issued by the European Commission for the transfer of personal data may be invalidated by courts in the United Kingdom in all or certain circumstances. While in June 2021 the European Commission adopted a new version of the Standard Contractual Clauses which are intended to address the concerns identified by the CJEU, it remains to be seen whether these standard contractual clauses will remain available, whether the ICO in the United Kingdom will approve their use, how the regulatory guidance issued in the European Union concerning the additional safeguards will be implemented in practice and whether additional means for lawful data transfers will become available. On December 13, 2022, following the signature of a US Executive Order by President Biden on October 7, 2022, the European Commission issued a draft adequacy decision which, if adopted and not successfully challenged in court, is intended to address the concerns expressed by CJEU in their 2016 ruling and allow transfer of personal data from the EEA to companies in the US which commit to comply with the EU-U.S. Data Privacy Framework. At this time, it is unclear if the adequacy decision will be adopted at EU level and whether the anticipated legal challenges against this decision would be successful.

The GDPR permits data protection authorities to impose large penalties for violations of the GDPR, including potential fines of up to €20 million or 4% of annual global revenues, whichever is greater. The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR. In June 2021, the CJEU issued a ruling that expanded the scope of the “one stop shop” under the GDPR. According to the ruling, the competent authorities of EU member states may, under certain strict conditions, bring claims to their national courts against a company for breaches of the GDPR, including unlawful cross-border processing activities, even such company does not have an establishment in the EU member state in question and the competent authority bringing the claim is not the lead supervisory authority. The GDPR may increase our responsibility and liability in relation to personal data that we process where such processing is subject to the GDPR, and we may be required to put in place additional mechanisms to ensure compliance with the GDPR, including as implemented by individual countries. Compliance with the GDPR will be a rigorous and time-intensive process that may increase our cost of doing business or require us to change our business practices, and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation, and reputational harm in connection with our European activities.

The United Kingdom’s vote in favor of exiting the EU, often referred to as Brexit, and ongoing developments in the United Kingdom have created uncertainty with regard to data protection regulation in the United Kingdom. As of January 1, 2021, and the expiry of transitional arrangements agreed to between the United Kingdom and EU, data processing in the United Kingdom is governed by a United Kingdom version of the GDPR (together with the Data Protection Act 2018), exposing us to two parallel regimes, each of which potentially authorizes similar fines and potentially divergent enforcement actions for certain violations. Pursuant to the Trade and Cooperation Agreement, which went into effect on January 1, 2021, the United Kingdom and EU agreed to a specified period during which the United Kingdom will be treated like an EU member state in relation to processing and transfers of personal data for four months from January 1, 2021. This period was extended by two further months. At the end of June 2021, the European Commission made an “adequacy finding” in respect of the United Kingdom, thus allowing the continued free flow of personal data from the EEA to the United Kingdom. The duration of this “adequacy filing” is, however, limited to a period of four years which could be renewed only following a new comprehensive review of the “adequacy” of the United Kingdom’s data protection legislation. To this end, the European Commission will continuously monitor the evolutions of the legal framework in the United Kingdom and may suspend, repeal or amend

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it “adequacy finding” at any time, subject to certain conditions. If the initial “adequacy finding” is suspended, repealed or not renewed after the initial four years period, the United Kingdom will become a “third country” under the GDPR and transfers of data from the EEA to the United Kingdom will require a “transfer mechanism,” such as the aforementioned standard contractual clauses. It is anticipated that there will be increasing scope for divergence in application, interpretation and enforcement of the data protection laws as between the United Kingdom and EEA moving forward. In addition, as of January 1, 2021, the United Kingdom ICO cannot be our “lead supervisory authority” in respect of any “cross border processing” for the purposes of the GDPR. In the event that we are unable to, and/or do not, designate a lead supervisory authority in an EEA member state, we would not be able to benefit from the GDPR’s “one stop shop” mechanism. Amongst other things, this would mean that, in the event of a violation of the GDPR affecting data subjects across the United Kingdom and the EEA, we could be investigated by, and ultimately fined by the United Kingdom ICO and the supervisory authority in each and every EEA member state where data subjects have been affected by such violation. This risk is further emphasized by the CJEU ruling of June 2021 discussed above. Other countries have also passed or are considering passing laws requiring local data residency and/or restricting the international transfer of data.

Coverage and Reimbursement

Significant uncertainty exists as to the coverage and reimbursement status of any products for which we may obtain regulatory approval. In the United States and markets in other countries, patients who are prescribed treatments for their conditions and providers performing the prescribed services generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Thus, even if a product candidate is approved, sales of any product candidates for which regulatory approval for commercial sale is obtained will depend in part on the availability of coverage and adequate reimbursement from third-party payors. Third-party payors include government authorities and health programs in the United States such as Medicare and Medicaid, managed care organizations, private health insurers and other organizations. These third-party payors are increasingly reducing reimbursements for medical products and services.

In the United States, the principal decisions about reimbursement for new medicines are typically made by the U.S. Centers for Medicare and Medicaid Services, or CMS, an agency within the Department of Health and Human Services, or HHS. CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare and private payors tend to follow CMS to a substantial degree. For example, in order for our products, if and when approved, to be eligible for payment under Medicare Part B and Medicaid, we will be required to enter into a Medicaid Drug Rebate Agreement, a 340B Pharmaceutical Pricing Agreement, and agreements with the Department of Veterans Affairs related to Federal Supply Schedule pricing. These programs have various requirements, including calculation and submission of pricing data pursuant to complex statutory, regulatory, and sub-regulatory guidance. The guidance governing such calculations is not always clear. Specifically related to the Medicaid Drug Rebate Program, on February 1, 2016, CMS issued a Final Rule implementing the Medicaid Drug Rebate provisions of the PPACA. To comply with these requirements, manufacturers are permitted to adopt reasonable assumptions where law, regulation, and guidance do not address specific participation issues, which in turn may impact the level of rebates owed under the program. Additionally, CMS issued a new rule on December 21, 2020 that also significantly alters a number of Medicaid Drug Rebate Program requirements, including, effective January 1, 2023, a change in the way that manufacturers calculate Best Price in relation to certain patient support programs, including coupons, which also may result in an increase in Medicaid rebates following the time that we commercialize a product. Compliance with the various requirements of these pricing programs can require significant investments in personnel, systems, and resources. Failure to calculate prices properly, report timely, or offer required discounts or rebates could subject us to substantial penalties or dispute resolution mechanisms.

In addition, several drug manufacturers have commenced litigation, which remains ongoing, challenging the legality of contract pharmacy arrangements under the 340B Drug Discount Program, which may affect the way in which manufacturers are required to extend the 340B Drug Discount Program prices to covered entities, including through contract pharmacies. There are also ongoing challenges regarding the implementation of the 340B Drug Discount Program Administrative Dispute Resolution Process, which is in part intended to resolve claims by covered entities that they have been overcharged for covered outpatient drugs by manufacturers. In particular, while a final rule issued in December 2020 implementing a 340B Administrative Dispute Resolution process was preliminarily enjoined by a court with respect to the plaintiff in that matter, HRSA has initiated dispute resolution proceedings against other manufacturers. Additionally, in November 2022, HRSA issued a new proposed rule titled “340B Drug Pricing Program; Administrative Dispute Resolution,” which is intended to address “policy and operational challenges” with the current rule. The modification of existing administrative dispute resolution processes, or the

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adoption of new rules governing the resolution of such disputes, may have a material adverse impact on our revenue should we participate in the 340B Drug Discount Program after receiving approval for our product candidates.

No uniform policy of coverage and reimbursement for drug products exists among third-party payors. The process for determining whether a payor will provide coverage for a product may be separate from the process for setting the reimbursement rate that the payor will pay for the product. Third-party payors may limit coverage to specific products on an approved list, or formulary, which might not include all of the FDA-approved products for a particular indication.

A payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved. Further, coverage and reimbursement for products can differ significantly from payor to payor. As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.

Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services and imposing controls to manage costs. New metrics frequently are used as the basis for reimbursement rates, such as average sales price, average manufacturer price and actual acquisition cost. In order to obtain coverage and reimbursement for any product that might be approved for sale, it may be necessary to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of the products, in addition to the costs required to obtain regulatory approvals. If third-party payors do not consider a product to be cost-effective compared to other available therapies, they may not cover the product after approval as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow a company to sell its products at a profit. Additionally, payors have employed the use of accumulator adjustment programs that do not consider amounts paid by pharmaceutical copay assistance programs as counting towards a patient’s deductible or other out-of-pocket costs. Under a 2020 rule promulgated by CMS that would have taken effect January 1, 2023, such accumulator adjustment (or similar) programs could have affected the amount of rebates owed by manufacturers under the Medicaid Drug Rebate Program or could have affected the ability to offer various forms of patient support, including copay assistance. However, in May 2022, the U.S. District Court for the District of Columbia invalidated the rule, holding that the rule was inconsistent with the Medicaid statute (and CMS did not appeal the decision). Additionally, certain states have passed laws prohibiting third-party payors from utilizing accumulator programs. During prior Congressional sessions, policymakers have introduced legislation that would prohibit third-party payors from using accumulator programs. Similar legislation was introduced in the current 118th Congressional session.

Additionally, the containment of healthcare costs has become a priority of federal and state governments, and the prices of products have been a focus in this effort. The U.S. government, state legislatures and foreign governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products or biologics. In addition, in the United States, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several recent congressional inquiries and proposed federal and state legislation and regulatory actions designed to, among other things, bring more transparency to product pricing (including, for example, by requiring drug manufacturers to disclose planned drug price increases and the rationales for such increases), implement data collection and reporting under Section 204 of Title II of Division BB of the Consolidated Appropriations Act, 2021, which requires, among other things, health plans and issuers to disclose rebates, fees, and other remuneration provided by drug manufacturers related to certain pharmaceutical products, contain the cost of drugs, review the relationship between pricing and manufacturer patient assistance programs, reform government healthcare program reimbursement methodologies, and revise rules associated with the calculation of Medicaid Average Manufacturer Price and Best Price, including the removal of the current statutory 100% of Average Manufacturer Price per-unit cap on Medicaid rebate liability effective as of January 1, 2024 under the American Rescue Plan Act of 2021, which may significantly affect the amount of rebates paid on prescription drugs under Medicaid and the prices that are required to be charged to covered entities under the 340B Drug Discount Program when we commercialize products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit our net revenue and results. In July 2021, President Biden issued an executive order pertaining to drug pricing, which expressed support for legislation allowing direct negotiation in Medicare Part D and inflationary rebates, and directed various executive branch agencies to take actions to lower drug prices and promote generic competition, including directing FDA to support and work with states and Indian Tribes to develop importation plans to import prescription drugs from Canada.

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The executive order required the Secretary of Health and Human Services to develop a comprehensive plan for addressing drug prices. The plan was released on September 9, 2021, and it includes support for legislative and administrative actions that would improve affordability, access, competition, and foster scientific innovation. In August 2022, Congress passed the Inflation Reduction Act, which includes drug pricing reforms that would, among other things, (i) allow the federal government to negotiate prices for some high-cost drugs covered under Medicare Parts B and D, (ii) introduce inflationary rebates on certain Medicare Part B and Medicare Part D drugs to support limits on drug price increases in Medicare and private insurance, and (iii) redesign the structure of the Part D benefit. Congress or the Administration may take further actions to control drug prices. In October 2022, President Biden issued an Executive Order that directs CMS’s Center for Medicare and Medicaid Innovation to consider new healthcare payment and delivery models that would lower drug costs and promote access to innovative therapies for Medicare and Medicaid beneficiaries. On February 14, 2023, HHS issued a report to the White House outlining three CMMI models that the Secretary has selected for testing: (i) Medicare High-Value Drug List Model, under which Part D plans would offer a Medicare-defined standard list of 150 generic drugs for a $2 maximum copayment; (2) Cell & Gene Therapy Access Model, under which CMS would coordinate multi-state Medicaid outcomes-based agreements with manufacturers of cell and gene therapies; and (3) Accelerating Clinical Evidence Model, which would adjust Medicare Part B payment amounts for drugs approved under the accelerated approval pathway. The report also directs CMMI to evaluate potential models in other areas, including accelerating biosimilar adoption, price transparency, and access to cell and gene therapy in Medicare fee-for-service.

The marketability of any product candidates for which we or our collaborators receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide coverage and adequate reimbursement. In addition, emphasis on managed care in the United States has increased and we expect will continue to increase the pressure on pharmaceutical pricing. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we or our collaborators receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

In the European Union and the United Kingdom, pricing and reimbursement schemes vary widely from country to country. Systems of international reference pricing are generally operated. Some EU countries allow freedom of pricing for all or some new products, but control reimbursement by the national health system. Reimbursement may be managed through mechanisms including positive or negative lists or control of company profits. Some EU Member States may require formal assessments to compare the cost-effectiveness of a particular product with currently available therapies. The downward pressure on health care costs has become intense. As a result, increasingly high barriers are being erected to the entry of new products. Furthermore, in some countries, cross-border imports from low-priced markets (so-called parallel distribution) exert competitive pressure that may reduce pricing within a country. Any country that has price controls or reimbursement limitations may not allow favorable reimbursement and pricing arrangements. Particular difficulties are faced by gene therapy products where evidence for long term benefits is generally limited and initial costs are high. The resulting uncertainties may limit the prices that will be reimbursed by national payors.

Healthcare Reform

The United States and some foreign jurisdictions are considering or have enacted a number of reform proposals to change the healthcare system. There is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by federal and state legislative initiatives, including those designed to limit the pricing, coverage, and reimbursement of pharmaceutical and biopharmaceutical products, especially under government-funded health care programs, and increased governmental control of drug pricing.

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By way of example, in March 2010, the PPACA was signed into law, intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add transparency requirements for the healthcare and health insurance industries, impose taxes and fees on the healthcare industry and impose additional health policy reforms. Among the provisions of the PPACA of importance to our business are:

•an annual, non-deductible fee on any entity that manufactures or imports specified branded prescription drugs and biological agents, apportioned among these entities according to their market share in certain government healthcare programs;

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

•a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected;

•extension of a manufacturer’s Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;

•expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability;

•a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts (increased to 70% pursuant to the Bipartisan Budget Act of 2018, effective as of 2019) off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for a manufacturer’s outpatient drugs to be covered under Medicare Part D. Under the IRA, the coverage gap phase of the Part D benefit will be eliminated, effective in 2025;

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

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

Since its enactment, there have been judicial and congressional challenges to certain aspects of the PPACA. As a result, there have been delays in the implementation of, and action taken to repeal or replace, certain aspects of the PPACA. See Item 3.D. “Risk Factors—Risks Related to Government Regulation—Healthcare legislative reform measures may have a negative impact on our business and results of operations.” We will continue to evaluate the effect that the PPACA and its possible repeal, replacement, or modification could have on our business.

During previous Congressional sessions, there were efforts to repeal the PPACA. The U.S. House of Representatives passed legislation known as the American Health Care Act of 2017 in May 2017. The Senate Republicans introduced and then updated a bill to replace the PPACA known as the Better Care Reconciliation Act of 2017. The Senate Republicans also introduced legislation to repeal the PPACA without companion legislation to replace it, and a “skinny” version of the Better Care Reconciliation Act of 2017. Each of these measures was rejected by the full Senate. Congress may consider legislation to replace, modify or augment elements of the PPACA.

Other legislative changes have been proposed and adopted in the United States since the PPACA was enacted. For example, in August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2012 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs. This includes aggregate reductions of Medicare payments to providers of up to 2% per fiscal year, which went into effect in April 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through the first six months of 2032 unless additional congressional action is taken. However, the Medicare sequester reductions under the Budget Control Act

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was suspended from May 1, 2020 through March 31, 2022 due to the COVID-19 pandemic. There was a 1% cut through the end of June 2022, after which the cuts returned to 2%. Separately, under the Statutory Pay-As-You-Go Act of 2010 (Statutory PAYGO), the White House Office of Management and Budget is required to issue a sequestration order (capped at 4% for Medicare payments) if the five or ten-year PAYGO scorecard shows a net cost at the end of a Congressional session. The American Rescue Plan Act of 2021 was expected to trigger a Statutory PAYGO sequestration order at the end of the 2021 Congressional session. However, subsequent legislation has delayed a Statutory PAYGO sequestration order until after 2024. In January 2013, the American Taxpayer Relief Act of 2012, among other things, further reduced Medicare payments to certain providers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. Additionally, there have been several recent congressional inquiries and proposed bills and regulatory actions designed to, among other things, bring more transparency to drug pricing (including, for example, by requiring drug manufacturers to disclose planned drug price increases and the rationales for such increases), implement data collection and reporting under Section 204 of Title II of Division BB of the Consolidated Appropriations Act, 2021, which requires, among other things, health plans and issuers to disclose rebates, fees, and other remuneration provided by drug manufacturers related to certain pharmaceutical products, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs reform government program reimbursement methodologies for drugs, and revise rules associated with the calculation of Medicaid Average Manufacturer Price and Best Price, including the removal of the current statutory 100% of Average Manufacturer Price per-unit cap on Medicaid rebate liability effective as of January 1, 2024 under the American Rescue Plan Act of 2021, which may significantly affect the amount of rebates paid on prescription drugs under Medicaid and the prices that are required to be charged to covered entities under the 340B Drug Discount Program when we commercialize products. In July 2021, President Biden issued an executive order pertaining to drug pricing, which expressed support for legislation allowing direct negotiation in Medicare Part D and inflationary rebates, and directed various executive branch agencies to take actions to lower drug prices and promote generic competition, including directing FDA to support and work with states and Indian Tribes to develop importation plans to import prescription drugs from Canada. The executive order required the Secretary of Health and Human Services to develop a comprehensive plan for addressing drug prices. The plan was released on September 9, 2021, and it includes support for legislative and administrative actions that would improve affordability, access, competition, and foster scientific innovation. In August 2022, Congress passed the IRA, which includes drug pricing reforms that would, among other things, (i) allow the federal government to negotiate prices for some high-cost drugs covered under Medicare Parts B and D, (ii) introduce inflationary rebates on certain Medicare Part B and Medicare Part D drugs to support limits on drug price increases in Medicare and private insurance, and (iii) redesign the structure of the Part D benefit. Congress or the Administration may take further actions to control drug prices. In October 2022, President Biden issued an Executive Order that directs CMS’s Center for Medicare and Medicaid Innovation to consider new healthcare payment and delivery models that would lower drug costs and promote access to innovative therapies for Medicare and Medicaid beneficiaries. On February 14, 2023, HHS issued a report to the White House outlining three CMMI models that the Secretary has selected for testing: (i) Medicare High-Value Drug List Model, under which Part D plans would offer a Medicare-defined standard list of 150 generic drugs for a $2 maximum copayment; (2) Cell & Gene Therapy Access Model, under which CMS would coordinate multi-state Medicaid outcomes-based agreements with manufacturers of cell and gene therapies; and (3) Accelerating Clinical Evidence Model, which would adjust Medicare Part B payment amounts for drugs approved under the accelerated approval pathway. The report also directs CMMI to evaluate potential models in other areas, including accelerating biosimilar adoption, price transparency, and access to cell and gene therapy in Medicare fee-for-service.

We expect that these initiatives, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and lower reimbursement, and in additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from Medicare or other government-funded programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our product candidates.

Additional Regulation

In addition to the foregoing, state and federal laws regarding environmental protection and hazardous substances, including the Occupational Safety and Health Act, the Resource Conservation and Recovery Act and the Toxic Substances Control Act, affect our business. These and other laws govern the use, handling and disposal of various biological, chemical and radioactive substances used in, and wastes generated by, operations. If our operations result in contamination of the environment or expose individuals to hazardous substances, we could be liable for

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damages and governmental fines. Equivalent laws have been adopted in other countries that impose similar obligations.

U.S. Foreign Corrupt Practices Act, U.K. Bribery Act and Other Laws

The U.S. Foreign Corrupt Practices Act of 1977, or FCPA, prohibits U.S. corporations and individuals from engaging in certain activities to obtain or retain business or secure any improper advantage, or to influence a person working in an official capacity. It is illegal to pay, offer to pay or authorize the payment of anything of value to any employee or official of a foreign government or public international organization, or political party, political party official, or political candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity. The scope of the FCPA also includes employees and officials of state-owned or controlled enterprises, which may include healthcare professionals in many countries. Equivalent laws have been adopted in other foreign countries that impose similar obligations.

Our operations are also subject to non-U.S. anti-corruption laws such as the U.K. Bribery Act 2010, or the Bribery Act. As with the FCPA, these laws generally prohibit us and our employees and intermediaries from authorizing, promising, offering, or providing, directly or indirectly, improper or prohibited payments, or anything else of value, to government officials or other persons to obtain or retain business or gain some other business advantage. Under the Bribery Act, we may also be liable for failing to prevent a person associated with us from committing a bribery offense.

We are also subject to other laws and regulations governing our international operations, including regulations administered by the governments of the United Kingdom and the United States and authorities in the European Union, including applicable export control regulations, economic sanctions and embargoes on certain countries and persons, anti-money laundering laws, import and customs requirements and currency exchange regulations, collectively referred to as Trade Control laws.

Failure to comply with the Bribery Act, the FCPA and other anti-corruption laws and trade control laws could subject us to criminal and civil penalties, disgorgement and other sanctions and remedial measures, and legal expenses.

Legal Proceedings

From time to time, we may be a party to litigation or subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of these ordinary course matters will not have a material adverse effect on our business. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. Except as set forth below, we are not currently a party to any material legal proceedings.

On October 3, 2022, our subsidiary Freeline Therapeutics Limited, or Limited, filed a demand for arbitration before the American Arbitration Association, or the AAA, in New York against Brammer Bio MA, LLC, or Brammer, pursuant to our Dedicated Manufacturing Commercial Supply Agreement, or the DMCSA. The demand seeks damages for Brammer’s alleged breaches of its obligations to Limited, as communicated in Limited’s July 15, 2022 termination notice to Brammer and also seeks a declaratory judgment that Brammer materially breached the DMCSA and related agreements and that, as a result of those material breaches, Limited had the right to terminate the DMCSA. On December 5, 2022, Brammer filed an answer to Limited’s demand for arbitration and a counterclaim against Limited. The counterclaim seeks significant damages for Limited’s alleged repudiation and breach of its obligations to Brammer, as communicated in Brammer’s August 17, 2022 letter to Limited. It also seeks a declaratory judgment that Limited’s alleged repudiation and purported termination constituted a material breach of the DMCSA and that Brammer is entitled to damages and any other relief set forth in the DMCSA or deemed just by the AAA. On January 18, 2023, Limited filed an answer to Brammer’s counterclaim. The final hearing in this matter has been scheduled for November 6 to 9, 2023. Limited is confident in the merits of its claims against Brammer and intends to prosecute this action vigorously.

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4.C. Organizational structure.

Freeline Therapeutics Holdings plc is the sole shareholder of Freeline Holdings (UK) Limited (incorporated in England), and Freeline Holdings (UK) Limited is the sole shareholder of Freeline Therapeutics Limited (incorporated in England). Freeline Therapeutics, Inc. (incorporated in Delaware) and Freeline Therapeutics (Ireland) Limited (incorporated in Ireland) are each wholly-owned subsidiaries of Freeline Therapeutics Limited.

4.D. Property, plants and equipment.

We lease our headquarters, with approximately 8,750 square feet of office space and 11,467 square feet of lab space, at Sycamore House, Gunnels Wood Road, Stevenage, Hertfordshire, SG1 2BP, United Kingdom. In addition, we lease a dedicated suite (1,076 square feet) at CGT Catapult (Stevenage Science Park, Gunnels Wood Road, Stevenage, Hertfordshire, United Kingdom), at which we have ceased operations. We lease 4,062 square feet of office space at 915 Broadway, New York, New York, United States of America.

We believe that our current facilities are adequate for our current needs and that suitable additional or substitute space at commercially reasonable terms will be available as needed to accommodate any future expansion of our operations.

ITEM 4A. Unresolved Staff Comments.

There are no written comments from the staff of the U.S. Securities and Exchange Commission that remain unresolved before the end of the fiscal year to which this Annual Report relates.

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ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes appearing elsewhere in this Annual Report. Some of the information contained in this discussion and analysis, including, but not limited to, information with respect to our plans and strategy for our business and our expectations with respect to liquidity and capital resources, includes forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, those risks and uncertainties described in the Item 3.D. “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in this Annual Report. Our actual results could differ materially from the results described in or implied by these forward-looking statements.

On April 3, 2020, Freeline Therapeutics Holdings Limited was incorporated under the laws of England and Wales to become the ultimate holding company for Freeline Therapeutics Limited pursuant to our corporate reorganization (described below). Prior to our initial public offering, or IPO, Freeline Therapeutics Holdings plc only engaged in activities incidental to its formation, the corporate reorganization and the IPO.

Accordingly, a discussion and analysis of the results of operations and financial condition of Freeline Therapeutics Holdings plc for the period of its operations prior to the corporate reorganization would not be meaningful and are not presented. Following the corporate reorganization, the historical consolidated financial statements of Freeline Therapeutics Holdings plc were retrospectively adjusted to include the historical financial results of Freeline Therapeutics Limited for all periods presented.

5.A. Operating results.

Overview

We are a clinical-stage biotechnology company with the ambition of developing transformative AAV vector-mediated gene therapies. We are dedicated to improving patient lives through innovative, potential one-time treatments for chronic debilitating diseases. We use our proprietary, rationally designed AAV vector and capsid (AAVS3) along with novel promoters and transgenes to deliver a functional copy of a therapeutic gene into human liver cells, thereby expressing a persistent functional level of the missing or dysfunctional protein into the patient’s bloodstream. Our pipeline includes a program in the clinic for Gaucher disease, deprioritized product candidates in Fabry disease and hemophilia B and research programs targeting novel applications for gene therapy, for which we have, through owned and in-licensed intellectual property rights, development and worldwide commercial rights.

Since our inception in May 2015, we have devoted substantially all of our resources to conducting preclinical studies and clinical trials, organizing and staffing our company, planning our business initiatives, raising capital and establishing our intellectual property portfolio. We do not have any products approved for sale and have not generated any revenue from product sales. We have funded our operations to date primarily with proceeds from the sale of our equity securities, including net proceeds from our IPO in August 2020, and subsequent issuances. Through December 31, 2022, we had received net cash proceeds of approximately $473.9 million from sales of our equity securities.

As of December 31, 2022, we had unrestricted cash and cash equivalents of $47.3 million. On February 8, 2023, we received gross proceeds of approximately $25.0 million from the Subsidiary Sale, subject to purchase price adjustments. However, we have incurred operating losses since inception, including a net loss of $89.0 million, $140.4 million and $96.3 million for the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022, we had an accumulated deficit of $445.4 million. The net cash used in operating and investing activities was $85.2 million for the year ended December 31, 2022. We expect to continue to incur significant expenses and generate operating losses for the foreseeable future as we advance our FLT201 product candidate through clinical development, seek regulatory approval, invest further in our gene therapy platform and seek to identify new gene therapy product candidates. Additionally, we are involved in a dispute with Brammer relating to the DMCSA as described above under “Item 4.B. Business Overview—Legal Proceedings.” There can be no assurance that the outcome of such dispute will be successful, and an adverse determination could have a material adverse effect on our financial condition. However, we are confident in the merits of our claims against Brammer and intend to prosecute this action vigorously. These conditions indicate that there is substantial doubt regarding our ability to continue as a going concern for at least 12 months from the issuance date of the audited consolidated financial statements. See “—Liquidity and Capital Resources—Funding Requirements” below for additional information.

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Recent Developments

Strategic Prioritization

Following an assessment of our strategic priorities based on our current financial position and the capital needs associated with advancing two clinical-stage programs in parallel, we have decided to focus our resources on the development of our candidate FLT201 in Gaucher disease and pause development of FLT190 in Fabry disease. We expect to close our Phase 1/2 MARVEL-1 clinical trial, enroll all three patients who received FLT190 in MARVEL-1 in our separate MARVEL-2 long-term clinical study and stop all non-essential spending on FLT190 in order to redirect those resources to FLT201. In parallel, we are restructuring the organization to align with our focus on FLT201 and to increase efficiencies and reduce operating expenses. We have proposed to reduce our workforce by nearly 30 percent, bringing our headcount to approximately 65 employees. In addition to reducing headcount related to FLT190, we are proposing to make cuts across the organization to further streamline, while maintaining core capabilities and ensuring the ability to drive enrollment in the GALILEO-1 trial of FLT201.

Clinical Trial Updates

We expect to report initial data, including assessments of safety and enzyme activity, from the first cohort of our Phase 1/2 GALILEO-1 clinical trial of FLT201in the third quarter of 2023.

Board of Director Changes

On March 29, 2023, Amit Nathwani, M.D. resigned as a director from our board of directors, or our Board, effective on March 30, 2023. Dr. Nathwani founded Freeline in May 2015, has been a member of our Board since May 2015 and was a member of the Nominating and Corporate Governance Committee of the Board, or the Nominating Committee. Dr. Nathwani will remain Clinical and Scientific Adviser to the Company. Dr. Nathwani’s resignation is not a result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

Also on March 29, 2023, the Board appointed our Chief Financial Officer Paul M. Schneider to the Board and director Colin Love to the Nominating Committee, effective on March 30, 2023. Mr. Schneider has served as our Chief Financial Officer since May 2022. Paul has more than 20 years of global financial, commercial and operational experience in the life sciences industry. Prior to joining Freeline, he was Senior Vice President, Finance and Operations at Exo Therapeutics; Senior Vice President, Finance at Casebia Therapeutics, and has also held senior corporate finance positions at Aegerion Pharmaceuticals, Systagenix Wound Management, Shire Human Genetics Therapies and Transkaryotic Therapies. Paul began his professional career at Coopers and Lybrand. He holds a Bachelor of Science in Accounting from Boston College and held a Certified Public Accountant license in Massachusetts. Mr. Schneider will serve as a director until his term expires at the 2023 Annual General Meeting, at which time it is expected he will stand for election by the Company’s shareholders. Mr. Schneider will not receive additional compensation for his service on the Board.

As a result of these changes, we are no longer subject to the U.K. City Code on Takeovers and Mergers, or the Takeover Code, because our place of central management and control is no longer in the United Kingdom. As a result, our shareholders are no longer entitled to the benefit of certain takeover offer protections provided under the Takeover Code.

Subsidiary Sale

On November 11, 2022, our subsidiary Freeline Therapeutics Limited, or Limited, signed a definitive agreement, or the Purchase Agreement, to sell its German subsidiary, Freeline Therapeutics GmbH, and certain intellectual property rights pertaining to the business of Freeline Therapeutics GmbH, to Ascend Gene and Cell Therapies Ltd., or Ascend, for an overall consideration of $25 million, subject to purchase price adjustments, or the Subsidiary Sale. The Subsidiary Sale closed on February 8, 2023.

At closing Limited and Ascend entered into an intellectual property deed of assignment and license, or the IP Agreement, pursuant to which Limited assigned certain intellectual property rights pertaining to the business of Freeline Therapeutics GmbH to Ascend, including certain patents and know-how related to chemistry, manufacturing

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and controls capabilities and technologies. Ascend granted a non-exclusive, royalty-free, perpetual, irrevocable, worldwide license back to Limited of the assigned rights necessary to develop or commercialize its current product candidates.

At closing Limited and Ascend also entered into a transition services agreement, or the Transition Services Agreement, pursuant to which Ascend will provide certain services in the area of development and manufacturing to Limited and its affiliates. Limited agreed to utilize, and Ascend agreed to make exclusively available to Freeline, no fewer than 15 full-time employee equivalents, or FTEs (as defined in the Transition Services Agreement), per annum for a guarantee period of 18 months following the Transition Services Agreement’s effective date. Limited also agreed to pay Ascend a guaranteed minimum of approximately $7.9 million in respect of FTE costs during such period, $2.6 million of which were paid upfront. The Transition Services Agreement will terminate three years after its effective date, unless earlier terminated by the parties in accordance with its terms.

The foregoing descriptions of the Purchase Agreement, the IP Agreement and the Transition Services Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the agreements, with confidential portions redacted, copies of which are filed as exhibits to this Annual Report on Form 20-F.

Brammer Dispute

On October 3, 2022, we filed a demand for arbitration before the American Arbitration Association, or AAA, in New York against Brammer Bio MA, LLC, or Brammer, pursuant to the Dedicated Manufacturing and Commercial Supply Agreement, or the DMCSA. The demand seeks damages for Brammer’s alleged breaches of its obligations to us and also seeks a declaratory judgment that Brammer materially breached the DMCSA and related agreements and that, as a result of those material breaches, we had the right to terminate the DMCSA. On December 5, 2022, Brammer filed an answer to our demand for arbitration and a counterclaim against us. The counterclaim seeks significant damages for our alleged repudiation and breach of our obligations to Brammer. It also seeks a declaratory judgment that our alleged repudiation and purported termination constituted a material breach of the DMCSA and that Brammer is entitled to damages and any other relief set forth in the DMCSA or deemed just by the American Arbitration Association. On January 18, 2023, we filed an answer to Brammer’s counterclaim. The final hearing in this matter has been scheduled for November 6 to 9, 2023. We are confident in the merits of our claims against Brammer and intend to prosecute this action vigorously.

Components of Our Results of Operations

Revenue

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

Operating Expenses

Research and Development Expenses

Research and development expenses consist primarily of costs incurred in connection with the research and development of our product candidates. Research and development expenses consist of:

•expenses incurred in connection with the preclinical and clinical development of our product candidates, including under agreements with CROs;

•the costs of CMOs that manufacture drug products for use in our preclinical studies and clinical trials;

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

•costs of outside consultants engaged in research and development activities, including their fees, non-cash share-based compensation and related travel expenses;

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•costs of laboratory supplies;

•costs related to compliance with regulatory requirements;

•facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs; and

•upfront, milestone and management fees for maintaining licenses under our third-party licensing agreements.

We expense research and development costs as incurred. We recognize external development costs based on an evaluation of the progress to completion of specific tasks using information provided to us by our service providers. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our consolidated financial statements as a prepaid expense or accrued research and development expenses.

Certain of our direct research and development expenses are not tracked on a program-by-program basis for our product candidates and consist primarily of external costs, such as fees paid to outside consultants, CROs and CMOs in connection with our preclinical development, manufacturing and clinical development activities. License fees and other costs incurred after a product candidate has been selected that are directly related to a product candidate are included in direct research and development expenses for that program. License fees and other costs incurred prior to designating a product candidate are included in other program expense. We do not allocate employee costs, costs associated with our discovery efforts, laboratory supplies, and facilities, including depreciation or other indirect costs, to specific programs because these costs are deployed across multiple programs and, as such, are not separately classified. We use internal resources primarily to oversee research and discovery as well as to manage our preclinical development, process development, manufacturing and clinical development activities. These employees work across multiple programs and, therefore, we do not track their costs by program.

Research and development activities are central to our business model. Our research and development expenses may decrease in the near term as a result of the program prioritization and workforce reductions announced in December 2021, November 2022 and April 2023. However, product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials and related product manufacturing expenses. As a result, we expect that our research and development expenses will continue to increase over the mid- to long-term as we seek to: (i) expedite clinical development and attempt to obtain marketing approval for our product candidates; (ii) initiate additional clinical trials of our product candidates; (iii) improve the efficiency and scalability of our manufacturing processes and supply chain; (iv) continue to discover and develop additional product candidates; and (v) prepare for regulatory filings related to our product candidates. We also expect to incur additional expenses related to milestone, royalty payments and maintenance fees payable to third parties with whom we have entered into license agreements to acquire the rights related to our product candidates.

The successful development and commercialization of our product candidates is highly uncertain. This is due to the numerous risks and uncertainties associated with development and commercialization, including the following:

•completing research and preclinical development of our product candidates and identifying new gene therapy product candidates and investing in our gene therapy platform;

•establishing an appropriate safety profile with IND- and CTA-enabling studies;

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

•the timing, receipt and terms of any marketing approvals from applicable regulatory authorities and reimbursement and market access from third-party payors;

•our ability to maintain suitable arrangements with third-party manufacturers for our product candidates, including our ability to meet CMC and other regulatory requirements relating to the manufacture of product candidates;

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

•defending against third-party infringement, misappropriation or other violation of intellectual property rights claims;

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•significant and changing government regulation;

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

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

A change in the outcome of any of these variables with respect to the development of our product candidates could mean a significant change in the costs and timing associated with such development. For example, if the U.S. Food and Drug Administration, the European Medicines Agency, the U.K. Medicines and Healthcare products Regulatory Agency or another regulatory authority were to delay our planned start of clinical trials or require us to conduct clinical trials or other testing beyond those that we currently expect, or if we experience significant delays in enrollment in any of our planned clinical trials, we could be required to commit significant additional financial resources and time to the completion of clinical development of that product candidate.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and related benefits, non-cash share-based compensation expense, travel and other expenses incurred by personnel in executive, finance and administrative functions. These expenses include professional fees for legal, consulting, accounting and audit services.

We have incurred and expect to continue to incur additional accounting, audit, legal, regulatory, compliance, director and officer insurance costs as well as investor and public relations expenses associated with being a public company. Additionally, if and when we believe a regulatory approval of a product candidate appears likely, we anticipate an increase in payroll and expense as a result of our preparation for commercial operations, especially as it relates to the sales and marketing of our product candidate.

Other (Expense) Income, Net

Other (Expense) Income, Net

Other (expense) income, net consists primarily of realized and unrealized gains and losses from foreign currency-denominated cash balances, vendor payables and receivables.

Interest (Expense) Income, Net

Interest (expense) income, net consists of interest income on cash and cash equivalents held in our banking institutions.

Income Tax Expense

We are subject to corporate taxation in the United States, Ireland and the United Kingdom and until the closing of the Subsidiary Sale, in Germany. Due to the nature of our business, we have generated losses since inception and therefore have not paid corporation tax in either the United Kingdom or Ireland. Our income tax expense represents income taxes in the United States and Germany.

Unsurrendered U.K. losses may be carried forward indefinitely to be offset against future taxable profits, subject to numerous utilization criteria and restrictions. The amount that can be offset each year is limited to £5.0 million plus an incremental 50% of U.K. taxable profits. We had accumulated tax losses for carry forward in the United Kingdom of $310.8 million, $258.1 million and $137.0 million as of December 31, 2022, 2021 and 2020 respectively. We have not recognized any deferred tax assets to date in relation to U.K. losses. This treatment is based on the Company being loss making while the clinical programs are not at a commercial stage. We believe there is no reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. We have recorded a full valuation allowance against our net deferred tax assets at each balance sheet date.

Benefit from R&D Tax Credit

As a company that carries out extensive research and development activities, we seek to benefit from the U.K. research and development tax credit cash rebate, or U.K. R&D tax credit, regimes. The amount of benefits

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received depends on whether we qualify for a tax credit either as a Small and Medium Enterprise, or SME, or under the Research and Development Expenditure Credit, or RDEC, program. We record the U.K. R&D tax credit benefit within other (expense) income, net. The U.K. R&D tax credit is fully refundable to us and is not dependent on current or future taxable income. As a result, we have recorded the entire benefit from the U.K. R&D tax credit as a benefit which is included in our net loss before income tax and, accordingly, not reflected as part of the income tax provision. If, in the future, any U.K. R&D tax credits generated are needed to offset a corporate income tax liability in the United Kingdom, that portion would be recorded as a benefit within the income tax provision and any refundable portion not dependent on taxable income would continue to be recorded within other (expense) income, net.

Under the RDEC scheme, we are able to surrender some of our trading losses that arise from qualifying research and development activities for a cash rebate of up to 10.53% (or, from April 2023, 15%) of such qualifying research and development expenditure. Qualifying expenditures largely comprise employment costs for research staff, consumables and certain internal overhead costs incurred as part of research projects for which we do not receive income. Based on criteria established by HMRC, we expect a portion of expenditures being carried out in relation to our pipeline R&D, clinical trials management and manufacturing development activities to be eligible for the RDEC regime for the years ended December 31, 2022 and 2021. We will assess whether it is possible to qualify under the more favorable SME regime for future accounting periods.

Results of Operations

Comparison of the Years Ended December 31, 2022 and 2021

The following table summarizes our results of operations for the years ended December 31, 2022 and 2021 (in thousands):

	Year Ended December 31,
	2022			2021			Change
Operating expenses:
Research and development	$	66,203		$	95,431		$	(29,228	)
General and administrative		30,656			44,567			(13,911	)
Restructuring expense		1,588			2,381			(793	)
Total operating expenses		98,447			142,379			(43,932	)
Loss from operations		(98,447	)		(142,379	)		43,932
Other (expense) income, net:
Other (expense) income, net		2,152			(165	)		2,317
Gain on lease termination		5,216			—			5,216
Interest income, net		904			404			500
Benefit from R&D tax credit		1,571			2,091			(520	)
Total other income, net		9,843			2,330			7,513
Loss before income taxes		(88,604	)		(140,049	)		51,445
Income tax expense		(368	)		(342	)		(26	)
Net loss	$	(88,972	)	$	(140,391	)	$	51,419

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Research and Development Expenses

The following table summarizes our research and development expenses for the years ended December 31, 2022 and 2021 (in thousands):

	Year Ended December 31,
	2022		2021		Change
Direct research and development expenses by program:
FLT180a	$	9,299	$	15,114	$	(5,815	)
FLT201		5,988		14,443		(8,455	)
FLT190		6,757		3,605		3,152
Pre-clinical and discovery		4,387		13,162		(8,775	)
Unallocated research and development expenses:
Personnel expenses		22,184		27,711		(5,527	)
Other expenses		15,461		16,885		(1,424	)
Non-cash share-based compensation expense		2,127		4,511		(2,384	)
Total research and development expenses	$	66,203	$	95,431	$	(29,228	)

Research and development expenses decreased by approximately $29.2 million from $95.4 million for the year ended December 31, 2021 to $66.2 million for the year ended December 31, 2022. The decrease in research and development expenses was primarily attributable to the following:

•a $5.8 million decrease in spending related to FLT180a, our deprioritized product candidate for the treatment of hemophilia B, primarily related to $3.9 million in reduced clinical trial costs, as preparations for our Phase 1/2 B-LIEVE clinical trial commenced in 2021 and we ceased further development of FLT180a in 2022, and $1.6 million in lower manufacturing costs;

•an $8.5 million decrease in spending related to FLT201, our product candidate for the treatment of Gaucher disease Type 1, primarily related to a $6.2 million decrease in manufacturing costs as clinical trial supply was primarily manufactured in 2021;

•a $3.2 million increase in spending related to FLT190, our deprioritized product candidate targeting Fabry disease, which was primarily related to increased clinical trial costs and related activities for our Phase 1/2 MARVEL-1 clinical trial in 2022;

•an $8.8 million decrease in spending related to preclinical and discovery, primarily related to our decision to halt further development of FLT210, our former product candidate for the treatment of hemophilia A;

•a $5.5 million decrease in personnel expenses, primarily related to a reduction of R&D and manufacturing personnel in connection with the December 2021 and October 2022 reductions in workforce;

•a $1.4 million decrease in other expenses, mainly due to a reduction in CMO capacity fees; and

•a $2.4 million decrease in non-cash share-based compensation expense, primarily due to reduced R&D personnel in connection with the December 2021 and October 2022 reductions in workforce.

We generally expect these costs to increase year on year to support our plan to advance FLT201 through clinical development, although these costs may decrease during the year ended December 31, 2023 due to our strategic prioritizations and reductions in workforce.

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General and Administrative Expenses

The following table summarizes our general and administrative expenses for the years ended December 31, 2022 and 2021 (in thousands):

	Year Ended December 31,
	2022		2021		Change
Personnel expenses	$	11,416	$	16,538		(5,122	)
Legal and professional fees		8,873		12,795		(3,922	)
Facilities and other expense		7,416		9,023		(1,607	)
Non-cash share-based compensation expense		2,950		6,211		(3,261	)
Total general and administrative expenses	$	30,656	$	44,567	$	(13,912	)

General and administrative expenses decreased by $13.9 million from $44.6 million for the year ended December 31, 2021 to $30.7 million for the year ended December 31, 2022. The decrease in general and administrative expenses was primarily attributable to the following:

•a $5.1 million decrease in personnel expenses, primarily as a result of the departure of employees in connection with the December 2021 and October 2022 reductions in workforce and the departure of several executive officers in 2021 and 2022;

•a $3.9 million decrease in legal and professional fees, primarily related to decreased legal activities and lower corporate strategy, audit, accountancy, HR and commercial costs;

•a $1.6 million decrease in facilities and other expense resulting primarily from a decrease in D&O insurance expense; and

•a $3.3 million decrease in non-cash share-based compensation expense, primarily as a result of the departure of several executive officers and reduced G&A staffing.

Total Other Income, Net

Total other income, net was $9.8 million for the year ended December 31, 2022, an increase of $7.5 million, from $2.3 million for the year ended 2021. The increase was largely the result of a $5.2 million gain due to the termination of the DMCSA, driven by derecognizing the right-of-use-assets and operating lease liabilities and a $2.1 million gain due to net unrealized gains on our monetary assets and liabilities arising from the translation of cash balances that were maintained in U.S. dollars, which is different from the legal entity's functional currency (pound sterling).

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Comparison of the Years Ended December 31, 2021 and 2020

The following table summarizes our results of operations for the years ended December 31, 2021 and 2020 (in thousands):

	Year Ended December 31,
	2021			2020			Change
Operating expenses:
Research and development	$	95,431		$	76,149		$	19,282
General and administrative		44,567			26,300			18,267
Restructuring expense		2,381			—			2,381
Total operating expenses		142,379			102,449			39,930
Loss from operations		(142,379	)		(102,449	)		(39,930	)
Other (expense) income, net:
Other expense, net		(165	)		(9,288	)		9,123
Interest income, net		404			275			129
Benefit from R&D tax credit		2,091			15,269			(13,178	)
Total other income, net		2,330			6,256			(3,926	)
Loss before income taxes		(140,049	)		(96,193	)		(43,856	)
Income tax expense		(342	)		(129	)		(213	)
Net loss	$	(140,391	)	$	(96,322	)	$	(44,069	)

Research and Development Expenses

The following table summarizes our research and development expenses for the years ended December 31, 2021 and 2020 (in thousands):

	Year Ended December 31,
	2021		2020		Change
Direct research and development expenses by program:
FLT180a	$	15,114	$	18,566	$	(3,452	)
FLT201		14,443		5,356		9,087
FLT190		3,605		7,343		(3,738	)
Pre-clinical and discovery		13,162		8,873		4,289
Unallocated research and development expenses:
Personnel expenses		27,711		22,027		5,684
Non-cash share-based compensation expense		4,511		2,510		2,001
Other expenses		16,885		11,475		5,410
Total research and development expenses	$	95,431	$	76,149	$	19,282

Research and development expenses increased by approximately $19.3 million from $76.1 million for the year ended December 31, 2020 to $95.4 million for the year ended December 31, 2021. The increase in research and development expenses was primarily attributable to the following:

•a $3.5 million decrease in spending related to FLT180a for the treatment of hemophilia B, our deprioritized gene therapy product candidate, which was primarily related to a $6.1 million decrease in manufacturing costs due to the availability of remaining clinical trial stock, offset by a $2.2 million increase in CRO costs in readiness for our Phase 1/2 B-LIEVE clinical trial;

•a $9.1 million increase in spending related to FLT201, our product candidate for the treatment of Gaucher disease Type 1, primarily related to an approximately $5.8 million increase in CRO expenses and an approximately $3.2 million increase in expenses incurred under the DMCSA for the production of clinical trial stock in readiness for our Phase 1/2 GALILEO-1 clinical trial;

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•a $3.7 million decrease in spending related to FLT190, our deprioritized product candidate targeting Fabry disease, which is primarily related to lower clinical trial costs for our Phase 1/2 MARVEL-1 clinical trial in 2021;

•a $4.3 million increase in spending related to preclinical and discovery, including costs related to FLT210, our former product candidate for the treatment of hemophilia A;

•a $5.7 million increase in personnel expenses primarily related to hiring R&D and manufacturing personnel to support increased clinical activity in 2021;

•a $2.0 million increase in non-cash share-based compensation expense primarily due to the continued vesting of equity grants to employees related to the completion of the series C financing and the IPO and subsequent equity grants to employees; and

•a $5.4 million increase in other expenses, mainly due to a $5.9 million increase in facility-related expenses, including rent expense, fees paid to our former CMO, and the leasing of additional laboratory and office space, offset by a decrease in costs of outside consultants.

General and Administrative Expenses

The following table summarizes our general and administrative expenses for the years ended December 31, 2021 and 2020 (in thousands):

	Year Ended December 31,
	2021		2020		Change
Legal and professional fees	$	16,538	$	9,220	$	7,318
Personnel expenses		12,795		7,343		5,452
Facilities and other expense		9,023		6,043		2,980
Non-cash share-based compensation expense		6,211		3,694		2,517
Total general and administrative expenses	$	44,567	$	26,300	$	18,267

General and administrative expenses increased by $18.3 million from $26.3 million for the year ended December 31, 2020, to $44.6 million for the year ended December 31, 2021. The increase in general and administrative expenses was primarily attributable to the following:

•a $7.3 million increase in legal and professional fees, primarily related to expenses associated with our status as a public company, including annual and periodic reporting, implementation of equity compensation programs, more extensive governance requirements, and increased audit fees and expenses related to U.S. GAAP requirements;

•a $5.5 million increase in personnel expenses, primarily related to personnel hired in corporate, legal, general and administrative functions to support our growth initiatives and our new public company requirements;

•a $3.0 million increase in facilities and other expense, including a $2.7 million increase in D&O insurance expense and a $1.2 million increase in rent expense for additional office space to accommodate previously planned growth in our operations; and

•a $2.5 million increase in non-cash share-based compensation expense, primarily due to the continued vesting of equity grants to employees related to the completion of the series C financing and the IPO and subsequent equity grants to employees, including accelerated vesting of some of our former Executive Director's equity awards in connection with her departure.

Total Other Income, Net

Total other income, net was $2.3 million for the year ended December 31, 2021, a decrease of $3.9 million, from $6.3 million for the year ended December 31, 2020. The decrease was largely the result of a $13.2 million decrease in the U.K. R&D tax credit benefit we received, due to a change in the tax credit from the SME program in 2020 to the RDEC program in 2021, which has a lower rate of benefits, or tax credit, offset by $9.3 million decrease in foreign exchange losses.

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5.B. Liquidity and Capital Resources

Since our inception, we have not generated any revenue from product sales or any other sources and have incurred significant operating losses in each period and on an aggregate basis. We have not yet commercialized any of our product candidates and we do not expect to generate revenue from sales of any product candidates for several years, if at all. We have funded our operations to date primarily with proceeds from the sale of preferred shares, ordinary shares and ADSs. Through December 31, 2022, we had received aggregate net cash proceeds of $473.9 million from sales of our equity securities.

On September 10, 2021, we filed a shelf registration on Form F-3 (File No. 333-259444) with the SEC, which was declared effective on September 22, 2021, or the Shelf Registration. Under the Shelf Registration, we may offer and sell up to $250.0 million of a variety of securities including ordinary shares (including ordinary shares represented by ADSs), preference shares, purchase contracts, warrants, units or any combination of such securities from time to time during the three-year period that commenced upon the Shelf Registration becoming effective.

On November 17, 2021, we entered into an Open Market Sale AgreementSM, or Sales Agreement, with Jefferies LLC, or Jefferies, pursuant to which we may issue and sell ADSs having aggregate offering sales proceeds of up to $75.0 million, from time to time, in “at-the-market” offerings pursuant to which Jefferies will act as sales agent and/or principal. During the year ended December 31, 2022, we issued 3,037,616 ADSs pursuant to the Sales Agreement, raising approximately $3.2 million in net proceeds.

On March 10, 2022, we entered into a purchase agreement with our majority shareholder, Syncona Portfolio Limited, a subsidiary of Syncona Limited, and certain other existing shareholders providing for the issuance and sale of $26.1 million of our ADSs at a price of $1.05 per ADS in a registered direct offering. The offering closed on March 15, 2022. We received net proceeds of approximately $24.2 million from the offering, after deducting offering expenses payable by us.

On March 18, 2022, we entered into a purchase agreement with Lincoln Park Capital Fund, LLC, or Lincoln Park, under which we may at our discretion, sell to Lincoln Park up to $35.0 million of our ADSs over a 36-month period, subject to certain daily limits, applicable prices, and conditions. In addition, under the purchase agreement, we issued 954,208 ADSs to Lincoln Park as consideration for its commitment to purchase ADSs under the purchase agreement. During the year ended December 31, 2022, we did not issue any additional ADSs pursuant to the purchase agreement.

On February 8, 2023, we received proceeds of approximately $25.0 million from the Subsidiary Sale, subject to purchase price adjustments and related transaction costs.

We currently have no ongoing material commitments, such as lines of credit or guarantees, that are expected to affect our liquidity over the next five years, other than our operating lease agreements described in Note 12 to the audited consolidated financial statements.

Cash Flows

The following table summarizes our cash flows for the years ended December 31, 2022, 2021 and 2020 (in thousands):

	Year Ended December 31,
	2022			2021			2020
Net cash used in operating activities	$	(78,224	)	$	(107,557	)	$	(94,965	)
Net cash used in investing activities		(7,014	)		(4,274	)		(2,388	)
Net cash (used in)/provided by financing activities		27,523			(984	)		242,620
Reclassification of cash to assets held for sale		(300	)		—			—
Effect of exchange rate changes on cash, cash equivalents and    restricted cash		(12,442	)		302			11,738
Net (decrease)/increase in cash, cash equivalents and restricted cash	$	(70,457	)	$	(112,513	)	$	157,005

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Net Cash Used in Operating Activities

During the year ended December 31, 2022, net cash used in operating activities was $78.2 million, primarily resulting from our net loss of $89.0 million, offset by net cash used resulting from changes in our operating assets and liabilities of $9.0 million and by non-cash charges of $1.7 million. The non-cash charges primarily related to non-cash share-based compensation of $5.1 million, depreciation of $1.7 million, and loss of disposal of property and equipment of $0.2 million offset by a gain on termination of lease of $5.2 million and a gain on deferred income tax of $0.2 million. Net cash used resulting from changes in our operating assets and liabilities for the year ended December 31, 2022 consisted primarily of a $7.9 million increase in prepaid expenses and other assets, current and non-current, and a $1.1 million increase in accounts payable and accrued expenses and other liabilities.

During the year ended December 31, 2021, net cash used in operating activities was $107.6 million, primarily resulting from our net loss of $140.4 million, offset by net cash used resulting from changes in our operating assets and liabilities of $19.9 million and by non-cash charges of $12.9 million. The non-cash charges primarily related to non-cash share-based compensation of $10.7 million, primarily due to the meeting of certain milestones that triggered vesting of ordinary shares in addition to significant 2019 equity grants to employees and becoming a public company, depreciation of $2.4 million, and loss of disposal of property and equipment of $0.1 million offset by a gain on deferred income tax of $0.4 million. Net cash used resulting from changes in our operating assets and liabilities for the year ended December 31, 2021 consisted primarily of a $17.5 million increase in prepaid expenses and other assets mostly due to decrease in the U.K. R&D tax credit benefit we received, due to a change in the tax credit from the SME program in 2020 to the RDEC program in 2021, which has a lower tax credit, current and non-current and a $2.1 million increase in accounts payable and accrued expenses and other liabilities.

During the year ended December 31, 2020, net cash used in operating activities was $95.0 million, primarily resulting from our net loss of $96.3 million, net cash used in changes in our operating assets and liabilities of $6.6 million partially offset by non-cash charges of $1.9 million for depreciation and $6.2 million of non-cash share-based compensation. Net cash used in changes in our operating assets and liabilities consisted primarily of a $11.9 million increase in prepaid expenses and other assets partially offset by a $5.2 million increase in accounts payable and accrued expenses, mostly related to increased research and development spending on our preclinical and clinical trials and increased general and administrative spending resulting from increased professional and legal expenses we have incurred in conjunction with our preparation for becoming a public company.

Net Cash Used in Investing Activities

During the year ended December 31, 2022, net cash used in investing activities was $7.0 million, primarily driven by purchases of property and equipment, which largely consisted of operating and lab equipment to be used in our new corporate headquarters and lab facility in the United Kingdom.

During the years ended December 31, 2021 and 2020, net cash used in investing activities was $4.3 million and $2.4 million, respectively, primarily driven by purchases of property and equipment, which largely consisted of operating and lab equipment to be used in our lab spaces in both the United Kingdom and Germany.

Net Cash (Used in) Provided by Financing Activities

During the year ended December 31, 2022, net cash provided by financing activities was $27.5 million, consisting of proceeds from the issuances of ADSs in the registered direct offering and pursuant to the Sales Agreement.

During the year ended December 31, 2021, net cash used in financing activities was $1.0 million.

During the year ended December 31, 2020, net cash provided by financing activities was $242.6 million, primarily consisting of net cash proceeds from our sale and issuance of series C preferred shares and ADSs in the IPO.

Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash

The effect of exchange rate changes on cash, cash equivalents and restricted cash was $12.4 million for the year ended December 31, 2022, primarily related to unrealized foreign currency gains arising from the translation of cash balances that were maintained in U.S. dollars, which is different from the legal entity’s functional currency

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(pound sterling). It is our policy to pay our vendors in the functional currency of the legal entity. Currently, our U.S. dollar balances are held in a pound sterling functional currency legal entity and converted as required into pound sterling because the predominant cash outflows are pound sterling. The effect of exchange rate changes on cash, cash equivalents and restricted cash was less than $0.1 million and $11.7 million for the years ended December 31, 2021 and 2020, respectively.

Capital Expenditures

Our capital expenditures were $7.0 million, $4.3 million and $2.4 million in the years ended December 31, 2022, 2021 and 2020, respectively. We intend to fund our future capital expenditures with our existing cash balance.

Contractual Obligations

We lease certain assets under noncancelable operating leases, which expire through 2032. The leases relate primarily to office space, laboratory and manufacturing space. As of December 31, 2022, aggregate future minimum commitments under these office and laboratory leases are $14.0 million through 2027 and $6.0 million thereafter, excluding any related common area maintenance charges or real estate taxes.

Funding Requirements

We expect our expenses to decrease in connection with our ongoing activities in the near term as a result of our program prioritization and workforce reductions. However, our expenses will increase over the mid- to long-term as we:

•continue our development of our FLT201 product candidate, including conducting our ongoing Phase 1/2 GALILEO-1 clinical trial of FLT201 for the treatment of Gaucher disease Type 1 and any other clinical trials that may be required to obtain marketing approval;

•initiate preclinical studies for future product candidates;

•develop the necessary processes, controls and manufacturing data to obtain marketing approval for our product candidates and to support manufacturing on a commercial scale;

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

•hire and retain additional personnel, such as clinical operations and affairs, pharmacovigilance, quality assurance, regulatory affairs, manufacturing, distribution, legal and compliance, medical affairs, finance, general and administrative, commercial and scientific personnel.

As of December 31, 2022, we had unrestricted cash and cash equivalents of $47.3 million. In February 2023, we received gross proceeds of approximately $25.0 million from the Subsidiary Sale, subject to purchase price adjustments. However, based on our recurring losses, expectation of continuing operating losses and negative cash flows from operations in the foreseeable future, the need to raise additional capital to finance future operations and our dispute with Brammer, we have concluded that there is substantial doubt about our ability to continue as a going concern for at least 12 months from the issuance date of the audited consolidated financial statements. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Accordingly, the consolidated financial statements have been prepared on a basis that assumes we will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

As a result, we will need additional funding to support our continuing operations. We will need to obtain this additional funding through private and public equity offerings, debt financings, government or other third-party funding, marketing and distribution arrangements and other collaborations, strategic collaborations or licensing arrangements. To the extent that we raise additional capital through the sale of equity, current ownership interests will be diluted. If we raise additional funds through government or third-party funding, collaboration agreements, strategic alliances, licensing arrangements or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. Debt financing, if available, may involve agreements that include covenants limiting

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or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. However, there can be no assurances that additional funding will be available at all. If we are unable to raise additional funds when needed, we will be required to reduce spending and potentially delay, limit, reduce or terminate our product research and development efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Because of the numerous risks and uncertainties associated with research and development of product candidates and programs, we are unable to estimate the exact amount of our working capital requirements. Our future funding requirements will depend on and could increase significantly as a result of many factors, including:

•the scope, progress, results and costs of drug discovery, laboratory testing, preclinical and clinical development for our current and future product candidates, as well as further development of our gene therapy platform;

•our ability to enroll clinical trials in a timely manner and to quickly resolve any delays or clinical holds that may be imposed on our development programs, including as a result of the COVID-19 pandemic;

•whether we elect to invest in and develop technology with the potential for further discovery and innovation, prioritize, delay or modify certain clinical programs, or implement any other strategic, scientific or operational changes;

•the costs, timing and outcome of our dispute with Brammer, which could have a material adverse effect on our results of operations and financial condition if we are not successful;

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

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

5.C. Research and development, patents and licenses, etc.

Full details of our research and development activities and expenditures are given in Item 4.B. “Information on the Company—Business Overview” and Item 5.A. “Operating and Financial Review and Prospects—Operating Results” within this Annual Report.

5.D. Trend information.

See Item 4.B. “Information on the Company—Business Overview,” Item 5.A. “Operating and Financial Review and Prospects—Operating Results” and Item 5.B. “Operating and Financial Review and Prospects—Liquidity and Capital Resources” within this Annual Report.

5.E. Critical Accounting Estimates

Our consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements appearing at the end of this Annual Report, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.

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Accrued Research and Development Expenses

As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued research and development expenses. This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs. We make estimates of our accrued expenses as of each balance sheet date in the consolidated financial statements based on facts and circumstances known to us at that time. We periodically confirm the accuracy of these estimates with the service providers and make adjustments if necessary. The estimate of accrued research and development expense is dependent, in part, upon the receipt of timely and accurate reporting from CROs, CMOs, and other third-party service providers. Examples of estimated accrued research and development expenses include fees paid to:

•vendors in connection with preclinical development activities;

•CROs and investigative sites in connection with preclinical studies and clinical trials; and

•CMOs in connection with drug substance and drug product formulation of preclinical study and clinical trial materials.

We base our expenses related to preclinical studies and clinical trials on our estimates of the services received and efforts expended pursuant to quotes and contracts with multiple research institutions and CROs that conduct and manage preclinical studies and clinical trials on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense.

Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust the accrual or the amount of prepaid expenses accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period. To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses.

Non-Cash Share-Based Compensation

We grant equity awards under our share-based compensation programs, which may include share options, restricted share awards, or RSAs, restricted share units, or RSUs, and other share-based awards. To date, the share-based awards granted to our employees and directors have been in the form of RSAs, RSUs and share options.

We measure non-cash share-based awards granted to employees, non-employees and directors based on the fair value on the date of the grant. Forfeitures are accounted for as they occur. We issue non-cash share-based awards with service-based vesting conditions and/or performance-based vesting conditions. For equity awards that vest based on a service condition, the non-cash share-based compensation expense is recognized on a straight-line basis over the requisite service period. For equity awards that vest based on a combination of service and performance conditions, we recognize non-cash share-based compensation expense using a straight-line basis over the requisite service period when the achievement of a performance-based milestone is probable, based on the relative satisfaction of the performance condition as of the reporting date.

We use the Black-Scholes option pricing model to estimate the fair value of share options. This option-pricing model requires the input of various subjective assumptions, including the option’s expected life the price volatility of the underlying ordinary share, the risk-free interest rate and expected dividend payments, if any. The fair value of each share option grant is estimated on the date of grant using the Black-Scholes option pricing model applying assumptions used in connection with share option grants made during the periods covered by these financial statements. Assumptions used in the option pricing model include the following:

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Expected Volatility. The company lacks company-specific historical and implied volatility information for its ADSs. Therefore, the company estimates the expected share volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded share price.

Expected Term. The expected term of the company’s share options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options.

Risk-free Interest Rate. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods that are approximately equal to the expected term of the award.

Expected Dividend. Expected dividend yield of zero is based on the fact that the company has never paid cash dividends on ordinary shares and does not expect to pay any cash dividends in the foreseeable future.

Fair Value of Ordinary Shares. Options granted after the company’s IPO are issued at the fair market value of the Company’s ADS at the date the grant is approved by the Board.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

6.A. Directors and senior management.

The following table sets forth information regarding our senior management and directors, including their ages as of December 31, 2022. Unless otherwise stated, the business address of our members of senior management and our directors is c/o Freeline Therapeutics Holdings plc, Sycamore House, Gunnels Wood Road, Stevenage, Hertfordshire, SG1 2BP, United Kingdom.

Name	Age	Position(s)
Senior Management:
Michael J. Parini	48	Chief Executive Officer and Director
James “Jay” Bircher	54	Chief Technical Operations Officer
Pamela Foulds, M.D.	53	Chief Medical Officer
Nicole Jones	52	Chief People Officer
Paul Schneider	52	Chief Financial Officer and Director
Henning R. Stennicke, Ph.D	55	Chief Scientific Officer
Directors:
Christopher Hollowood, Ph.D.	48	Chairman of the Board of Directors
Martin Andrews	59	Non-Executive Director
Jeffrey Chodakewitz, M.D.	67	Non-Executive Director
Julia P. Gregory	70	Non-Executive Director
Colin A. Love, Ph.D.	64	Non-Executive Director

Senior Management

Michael J. Parini has served as our Chief Executive Officer and a member of our board of directors since August 16, 2021. Mr. Parini joined Freeline in March of 2021 as our President and Chief Operating Officer. He brings more than 20 years’ experience in the biopharmaceutical industry. Most recently, Mr. Parini served as Executive Vice President and Chief Administrative, Legal and Business Development Officer at Vertex Pharmaceuticals from March 2020 until February 2021, and as Executive Vice President and Chief Legal and Administrative Officer from January 2016 to March 2020. Prior to joining Vertex, he spent more than a decade at Pfizer, where he served in multiple leadership roles within the company’s global legal team, including Senior Vice President and Associate General Counsel. Mr. Parini was responsible for the strategic management of Pfizer’s global litigation activities, including civil, intellectual property, government and employment litigation. He also served as Chief Counsel for multiple key business units within Pfizer, advising Pfizer’s leadership team on business issues related to investment decisions, patent disputes, global pricing strategies and commercial operations activities, among other responsibilities. Prior to joining Pfizer, Parini served as a healthcare attorney at Akin, Gump, Strauss, Hauer & Feld, L.L.P. in Washington,

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D.C., where he provided legal counsel on federal and state regulatory and policy issues. Mr. Parini is a member of the New York and District of Columbia bars. He received a Bachelor of Arts degree in American Government from Georgetown University and a J.D. from Georgetown University Law Center.

James “Jay” Bircher has served as our Chief Technical Operations Officer since July 2021. Mr. Bircher brings three decades of operational excellence in leadership roles across a wide range of pharmaceutical, biotechnology and medical device manufacturing platforms, including AAV gene therapy. Mr. Bircher has led manufacturing teams that received successful inspections from the U.S. Food and Drug Administration, including the Center for Biologics Evaluation and Research (CBER) and Center for Drug Evaluation and Research (CDER), the European Medicines Agency (EMA) and other regulatory agencies. Mr. Bircher joins Freeline from Abeona Therapeutics, where he served as their Chief Technology Officer leading Process Development, Assay Development, Quality, Validation, Manufacturing, Facilities, CMC Program Management, and Supply Chain. Before Abeona, he was Head of Quality at Becton, Dickinson and Company (BD), where he led the company from the groundbreaking of a 120,000 square foot sterile manufacturing facility to an FDA pre-approval inspection (PAI) and eventual launch of several ready-to-administer, prefilled syringe products. Later in his tenure at BD, Mr. Bircher served as Head of Manufacturing, where he was responsible for all formulation, fill and packaging operations. He also held positions of increasing responsibility related to quality with GlaxoSmithKline, Amgen and Tyco Healthcare. Mr. Bircher has a BS degree from Marshall University and is Six Sigma certified.

Pamela Foulds, M.D. has served as our Chief Medical Officer since November 2021. Dr. Foulds is a US-trained physician, with over 20 years of experience as a leader in the life sciences sector, with extensive practice in the rare disease field. She is an experienced CMO, serving in that capacity at both Auregen BioTherapeutics SA, as well as Aegerion Pharmaceuticals Inc. Prior to that, she spent eight years at Biogen Inc., working in both hemophilia and neurology. Earlier in her career, Dr. Foulds worked in the lysosomal storage disease arena at Genzyme. She is based in the US and leads the Company’s global clinical, medical and regulatory activities. Dr. Foulds holds a Bachelor of Science degree from Georgetown University and a medical degree from Georgetown University Medical School. She was trained in Neurology at Stanford University Hospital.

Nicole Jones, SPHR has served as our Chief People Officer since July 2022, bringing more than 25 years of diverse industry experience in senior global Human Resources and talent management roles. Ms. Jones oversees all of Human Resources including total rewards, people operations and talent acquisition, and inspires and leads efforts to foster an inclusive culture based on Freeline’s values. A high-energy leader passionate about talent development and culture, Ms. Jones has defined and delivered global talent strategies at such companies as Alexion Pharmaceuticals, Fidelity Investments Inc. and Raytheon Technologies Corporation. She joined Freeline from Merck & Co, Inc. where she served as Head of Global Talent Management & Leadership Development. She holds a Master of Business Administration from Meredith College and a Bachelor of Science in Economics from NC State University.

Paul Schneider has served as our Chief Financial Officer since May 2022 and a member of our board of directors since March 30, 2023. Paul has more than 20 years of global financial, commercial and operational experience in the life sciences industry. Prior to joining Freeline, he was Senior Vice President, Finance and Operations at Exo Therapeutics; Senior Vice President, Finance at Casebia Therapeutics, and has also held senior corporate finance positions at Aegerion Pharmaceuticals, Systagenix Wound Management, Shire Human Genetics Therapies and Transkaryotic Therapies. Paul began his professional career at Coopers and Lybrand. He holds a Bachelor of Science in Accounting from Boston College and held a Certified Public Accountant license in Massachusetts.

Henning R. Stennicke, Ph.D. has served as our Chief Scientific Officer since March 2022. Dr. Stennicke brings 26 years of experience in scientific research and leadership, including 20 years in various leadership positions at Novo Nordisk. Prior to joining Freeline, Dr. Stennicke most recently served as Senior Principal Scientist, leading a Novo Nordisk technology program within tissue targeting. Before this, he served as Corporate Project Vice President of Global Development, Biopharm, Novo Nordisk, leading the development of a portfolio of projects encompassing new treatments for growth disorders, hemophilia, and sickle cell disease through clinical development until regulatory approval. During this time, he helped secure the global regulatory approval of Refixia/Rebinyn®, Esperoct®, and Sogroya®. Dr. Stennicke is a director of atSpiro ApS. Dr. Stennicke earned his MSc in biochemistry and PhD in protein chemistry from the University of Copenhagen and The Carlsberg Laboratory followed by a postdoctoral position at the Sanford Burnham Prebys, La Jolla, CA. He further holds an executive MBA in Management of

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Technology from DTU, Technical University of Denmark. Dr. Stennicke is the co-author of more than 65 articles and book chapters as well as co-inventor of 25 patents.

Non-Executive Directors

Christopher Hollowood, Ph.D. has been the Chairman of our board of directors since December 2015 and served as our Executive Chairman from June 2019 to June 2020. He has served as the Chief Executive Officer of Syncona Investment Management Limited, part of Syncona Limited, a leading healthcare investment company focused on founding, building and funding global leaders in life sciences, since January 2023 and prior to that role served as its Chief Investment Officer from December 2016 to January 2023 and as a Partner of Syncona Partners LLP, its predecessor firm, from September 2012 to December 2016. In his role at Syncona, Dr. Hollowood has been instrumental in the foundation and development of Syncona’s gene therapy strategy. In addition to Freeline, Dr. Hollowood is also Chairman at Syncona’s other gene therapy companies, SwanBio Therapeutics and Purespring Therapeutics. Dr. Hollowood was previously Chairman of Nightstar, a retinal gene therapy company founded by Syncona, which was sold to Biogen in 2019 for $877 million and Gyroscope, which was sold to Novartis in February 2022 for up to $1.5 billion. Dr. Hollowood is currently a director of a number of Syncona Limited’s group companies and the following portfolio companies: SwanBio Therapeutics Limited, Purespring Therapeutics Limited, Tier1 Bio, Inc. and Forcefield Therapeutics Limited. Dr. Hollowood has many years’ experience investing in, acquiring and growing businesses in the health and pharma industries. Previously, he was a partner of Apposite Capital LLP, a venture and growth capital company focused on the healthcare and life science sector, from February 2007 to July 2012. Before Apposite, Dr. Hollowood had roles with Bioscience Managers Ltd from January 2004 to January 2007 and Neptune Investment Management Ltd from May 2002 to December 2003. Dr. Hollowood received a M.A. (Cantab) in Natural Sciences and a Ph.D. in Organic Chemistry, both from Cambridge University. We believe Dr. Hollowood is qualified to serve on our board because of his experience as an investor in and service on the boards of other life science companies.

Martin Andrews has been a member of our board of directors since October 2018 and brings over 35 years of broad commercial experience in pharmaceuticals to Freeline. Mr. Andrews has spent many years in senior leadership roles at GlaxoSmithKline and in integrative leadership roles at the interface between R&D and commercial disciplines, has led numerous successful global product launches in pharmaceuticals and vaccines, and has deep medicine development and supply chain experience. Most recently, Mr. Andrews was Senior Vice President of Rare Diseases from November 2013 to July 2018 at GlaxoSmithKline and led the development and launch of the world’s first lifesaving gene therapy for children, Strimvelis, in addition to developing a pipeline of autologous ex-vivo gene therapy medicines which were recently acquired by Orchard Therapeutics. Prior to leaving GSK, Mr. Andrews was a Board Member of Orchard Therapeutics, the Alliance for Regenerative Medicine and until 2022 was a Director of New Context Ltd, a consultancy specializing in rare disease, gene therapy and vaccine commercialization. Mr. Andrews is a non-executive director of Evox Therapeutics Limited and Porton Biopharma Limited. Mr. Andrews received a B.Sc. in Biology from the University of Salford, Manchester. We believe Mr. Andrews is qualified to serve on our board because of his experience in the pharmaceutical industry.

Jeffrey Chodakewitz, M.D. has been a member of our board of directors since August 2019 and has over 30 years of leadership experience in the bio-pharmaceutical industry. He served most recently from January 2014 to mid-2018 as Chief Medical Officer and EVP, Global Medicines Development & Medical Affairs at Vertex Pharmaceuticals, where he also served as a member of the Vertex Executive Committee. Prior to Vertex, Dr. Chodakewitz spent over 20 years at Merck & Co., where he served in several positions including Head of Infectious Diseases and Vaccines Global Development, Senior Vice President of Global Scientific Strategy (Infectious Disease, Respiratory & Immunology) and Senior Vice President of Late Stage Development. Dr. Chodakewitz is a Diplomate of the National Board of Medical Examiners and the American Board of Internal Medicine (both Internal Medicine and Infectious Disease). Dr. Chodakewitz also serves on the Boards of Directors of Adicet Bio, Inc., Praxis Precision Medicines, Inc. and Schrödinger, Inc. He received a B.S. in Biochemistry from Yale University and an M.D. from the Yale University School of Medicine. We believe Dr. Chodakewitz is qualified to serve on our board because of his executive experience in our industry.

Julia P. Gregory has been a member of our board of directors since November 2019. Since April 2016, Ms. Gregory has served as Chair and CEO of Isometry Advisors, Inc., a biotechnology advisory company, Ms. Gregory also serves as a non-executive director of biopharmaceutical companies, including Biohaven Ltd. and Nurix

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Therapeutics. In her previous executive roles, Ms. Gregory served as Chief Executive Officer, Chief Financial Officer and Board Director of ContraFect Corporation; President and CEO of Five Prime Therapeutics; and Executive Vice President, Corporate Development and Chief Financial Officer of Lexicon Pharmaceuticals, Inc. Her corporate development experience includes leading transactions for significant strategic partnerships including development and licensing agreements with GlaxoSmithKline, Human Genome Sciences, Genentech, Bristol-Myers Squibb Company and Takeda Pharmaceutical Company Limited. As CFO at Lexicon, Ms. Gregory led the company’s $220 million initial public offering and was involved in the creation of Lexicon’s $500 million private equity plan with Invus, LLP. Prior to her leadership positions in the biopharmaceutical industry, Ms. Gregory was an investment banker at Dillon, Read & Co. and subsequently at Punk, Ziegel & Company, where she served as the head of investment banking and head of its life sciences practice. She received a B.A. in International Affairs from George Washington University’s Elliot School of International Affairs and an M.B.A. from The Wharton School of The University of Pennsylvania. We believe Ms. Gregory’s experience as a senior corporate executive, her expertise in investment banking and business development and service on the boards of other life sciences companies qualifies her to serve on our board of directors.

Colin A. Love, Ph.D. has been a member of our Board of Directors since March 2021. He is the Chief Operating Officer and co-founder of Replimune, a biotechnology company developing novel oncolytic immunotherapies, where he has served since October 2015. Dr. Love has over 30 years’ experience developing and launching biotechnology products. Since December 2014, he has provided consultancy support to a range of life science companies, from small gene therapy start-ups to large established biotechnology companies, including Amgen. From 2011 to 2014, Dr. Love was a Vice President of Clinical Operations at Amgen, where he was responsible for the sites developing and manufacturing T-VEC (Imlygic), an approved oncolytic virus therapy. Dr. Love was previously Senior Vice President of Product Development at BioVex Group, Inc., a privately held biotechnology company developing T-VEC, from 2000 to 2011 until its acquisition by Amgen. Prior to joining BioVex, he held leadership positions in manufacturing and development at Celltech plc (now UCB Celltech) from 1992 to 2000, and previously held research and development positions with Serono Diagnostics (now Merck KGaA) and Amersham International plc (now GE Healthcare).

Family Relationships

There are no family relationships among any of the members of our senior management or board of directors.

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Board Diversity

The table below provides certain information regarding the diversity of our board of directors as of the date of this Annual Report.

Board Diversity Matrix (as of April 4, 2023)
Country of Principal Executive Offices	United Kingdom
Foreign Private Issuer	Yes
Disclosure Prohibited under Home Country Law	No
Total Number of Directors	7
	Female	Male	Non-Binary	Did Not Disclose Gender
Part I: Gender Identity
Directors	1	6	0	0
Part II: Demographic Background
Underrepresented Individual in Home Country Jurisdiction	0
LGBTQ+	0
Did Not Disclose Demographic Background	0

Additional Information

On March 29, 2023, Amit Nathwani, M.D. resigned as a director from our board of directors, or our Board, effective on March 30, 2023. Dr. Nathwani founded Freeline in May 2015, has been a member of our Board since May 2015 and was a member of the Nominating and Corporate Governance Committee of the Board, or the Nominating Committee. Dr. Nathwani will remain Clinical and Scientific Adviser to the Company. Dr. Nathwani’s resignation is not a result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

Also on March 29, 2023, the Board appointed our Chief Financial Officer Paul M. Schneider to the Board and director Colin Love to the Nominating Committee, effective on March 30, 2023. Mr. Schneider has served as our Chief Financial Officer since May 2022. Mr. Schneider will serve as a director until his term expires at the 2023 Annual General Meeting, at which time it is expected he will stand for election by the Company’s shareholders. Mr. Schneider will not receive additional compensation for his service on the Board.

6.B. Compensation.

The following discussion provides the amount of compensation paid, and benefits in-kind granted, by us and our subsidiaries to our directors for services in all capacities to us and our subsidiaries for the year ended December 31, 2022, as well as the amount contributed by us or our subsidiaries into money purchase plans for the year ended December 31, 2022 to provide pension, retirement or similar benefits to our directors.

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Director Compensation

For the year ended December 31, 2022, the table below sets forth the compensation paid or provided to our directors during the period each individual served as a member of the board of directors of Freeline Therapeutics Holdings plc. In the case of Mr. Michael J. Parini, the table below reflects the compensation paid for his services as a member of our senior management. He did not receive additional compensation for services on the board of directors. We did not set aside or accrue any amounts to provide pension, retirement or similar benefits to members of our board of directors in the year ended December 31, 2022. Payments denominated in pounds sterling have been translated into U.S. dollars at a rate of $1.2371 to £1.00, the average exchange rate during the year ended December 31, 2022 quoted by Xignite, Inc.

Name	Salary/Fees			Annual Bonus		Pension Benefit		All Other Compensation(3)		Total
	$000			$000		$000		$000		$000
Michael J. Parini		591			485		-		1,084		2,160
Executive Director
Christopher Hollowood, Ph.D.		-	(1)		-		-		93		93
Chairman of the Board of Directors
Amit Nathwani, M.D.		180	(2)		-		-		275		455
Clinical and Scientific Adviser and Director									-
Martin Andrews		52			-		-		102		154
Non-Executive Director
Jeffrey Chodakewitz, M.D.		52			-		-		114		166
Non-Executive Director
Julia P. Gregory		58							114		172
Non-Executive Director
Colin A. Love, Ph.D.		47			-		-		46		93
Non-Executive Director

(1)As the representative of Syncona, Dr. Hollowood does not receive fees from the Company.

(2)Consists of Dr. Nathwani’s consulting fees as the Company’s Clinical and Scientific Adviser. Dr. Nathwani resigned from our board of directors effective March 30, 2023.

(3)Except as otherwise indicated, represents the share-based compensation expense recognized during the year ended December 31, 2022 in connection with each director’s vested equity awards. The Company recognizes compensation expense for equity awards based on the grant date fair value of the award. For equity awards that vest based on a service condition, the share-based compensation expense is recognized on a straight-line basis over the requisite service period. For a description of the assumptions used in valuing option awards, see Note 7 to the audited consolidated financial statements included in this Annual Report.

Non-Executive Director Letters of Appointment

The compensation of our non-executive directors is determined by our board of directors as a whole on the recommendation of the remuneration committee of the board of directors, based, in part, on a review of current practices in other companies. We have entered into appointment letters with certain of our non-executive directors. The non-executive director appointment letters provide for an annual fee and a grant of awards under our equity incentive plan. For a period of three months following termination of the directorship, the non-executive director is restricted from accepting a directorship with a competing company.

Employment Agreements

We have entered into employment agreements with certain of our executive officers. Each of these employment agreements provides for an initial annual salary, annual bonus opportunity and equity incentive opportunities, as well as participation in certain retirement and welfare benefit plans. To the extent the employment of an executive officer is terminated without cause or by the executive officer for good reason following a change in control, the employment agreements generally require us to pay the executive officer an amount equal to the sum of 12 months of base salary and the target annual bonus for the year of termination, among other things, and any unvested equity awards held by the executive officer will vest in full as of the date of termination.

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Offer Letters

We have entered into offer letters with certain of our executive officers. The letters provide for an initial annual salary, annual bonus opportunity and equity incentive opportunities, as well as participation in certain retirement and welfare benefit plans. The letters provide for at-will employment, terminable by either party, at any time. To the extent the employment of an executive officer is terminated without cause or by the executive officer for good reason, the offer letters generally require us to pay the executive officer salary continuation for 12 months of base salary and a pro-rated bonus for the year of termination, among other things. If the termination occurs within 12 months after a change in control, the offer letters generally require us to pay the executive officer a full year’s bonus for the year of termination, and any unvested equity awards held by the executive officer will vest in full.

The executive officers have agreed to restrictive covenants not to compete against us or solicit our employees or customers or prospective customers during employment and for a period between six and twelve months following termination.

It is also anticipated that we will enter into an employment agreement or offer letter with prospective hires, on similar terms to those described in the preceding paragraphs.

Short-Term Incentive Plan

The board of directors maintains an annual Short-Term Incentive Plan, or STIP, for all employees. The STIP is designed to offer incentive compensation to our employees by rewarding the achievement of corporate goals and specifically measured personal goals that are consistent with and support the achievement of the corporate goals. The key terms of the STIP are summarized below.

Administration and Eligibility. The remuneration committee of the board of directors is responsible for the administration of the STIP.

All employees who have commenced work with Freeline by December 31 of the applicable plan year and are employed by Freeline on the date on which the incentive award is to be paid are eligible to receive an incentive award under the STIP. An employee who commenced work with Freeline during the applicable plan year will have their incentive award pro-rated for length of service.

Form and Determination of Incentive Awards. Incentive award payments are paid in cash. After the end of the plan year, the actual achievement of the corporate and individual goals is determined, each expressed as a percentage of complete achievement, resulting in the calculation of the individual’s total incentive award.

Annual performance reviews are completed before February of the applicable plan year, during which an employee’s achievement of individual targets will be determined, and payment of incentive awards is generally made in March.

Termination of Employment. If a participant in the STIP gives or receives notice of termination or his or her employment prior to the payment of an incentive award under the STIP, the employee is not eligible to receive an incentive award, subject to local employment regulations.

Amendment. The remuneration committee of our board of directors may abolish or alter the STIP at any time before, during or after a plan year is completed.

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Option Grants

The following table summarizes the options that we granted to members of our board of directors and senior management during the year ended December 31, 2022:

Name	Ordinary Shares Underlying Options		Exercise Price		Expiration Date
Senior Management:
Michael J. Parini		900,000	$	1.18	1/31/2032
Markus Hörer, Ph.D. (1)		180,000	$	1.18	8/8/2024
Mark Baldry (2)		160,000	$	1.18	3/30/2023
James Bircher		180,000	$	1.18	1/31/2032
Stephen P. Diamond, Jr. (2)		200,000	$	1.18	6/30/2023
Pamela Foulds, M.D.		45,000	$	1.18	1/31/2032
Nicole Jones		240,000	$	0.90	7/29/2032
Paul Schneider		270,000	$	0.76	5/31/2032
Henning R. Stennicke, Ph.D		240,000	$	1.15	3/31/2032
Benjamin Warriner (2)		36,000	$	1.18	10/4/2022
Directors:
Chris Hollowood, Ph.D.		-	$	-	-
Amit Nathwani, M.D. (3)		27,000	$	0.88	6/30/2032
Martin Andrews		27,000	$	0.88	6/30/2032
Jeffrey Chodakewitz, M.D.		27,000	$	0.88	6/30/2032
Julia P. Gregory		27,000	$	0.88	6/30/2032
Colin A. Love, Ph.D.		27,000	$	0.88	6/30/2032

(1) Left our company after December 31, 2022.

(2) Left our company during the year ended December 31, 2022.

(3) Left our board of directors after December 31, 2022.

No options were exercised by any members of our board of directors and senior management during the year ended December 31, 2022.

Share Incentive Program

In 2016, we established a share incentive program pursuant to which select eligible participants were allotted and issued B ordinary shares, C ordinary shares, D ordinary shares, E ordinary shares and/or F ordinary shares, subject to the terms of our articles of association. The terms are described in more detail below.

Awards. All employees were eligible to receive grants of B ordinary shares, C ordinary shares, D ordinary shares, E ordinary shares and/or F ordinary shares for which the employee agrees to pay the nominal value of the shares. In connection with our IPO, these shares were converted into ordinary shares, subject to the terms and conditions set forth below.

Vesting. Subject to the terms of the vesting agreements entered into with each holder of employee shares in connection with the IPO, the employee shares vest 20% or 25% on the first anniversary of the date of employment and in equal monthly installments thereafter until they are fully vested on or after the later of the first anniversary of the date of employment and the fifth (or fourth, as the case may be) anniversary of the commencement date, which is the date of employment, a date specified in the articles of association or a date specified in a letter from the company to the relevant employee, as applicable. Accordingly, for employees who have been employed at Freeline for greater than a year at the time of a new share award, their shares will vest in equal monthly installments from the date of issue.

Termination. Following the IPO, if an employee ceases to be an employee by reason of being a “bad leaver,” which means we are entitled to summarily dismiss the employee under the terms of the employee’s employment agreement, all of the employee shares will be subject to clawback. If any employee ceases to be an employee by reason of being a “good leaver,” which means the employee ceases to be an employee at any time and is not a “bad leaver,” the employee’s unvested shares will be subject to clawback.

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Share Sale. If, within twelve months following the completion of a share sale, which generally means a sale of any of the shares in the capital of the company (in one transaction or as a series of transactions) that results in the purchaser of those shares acquiring a controlling interest in the company, an employee ceases to be an employee by reason of being a good leaver or due to certain events described in the articles of association, all of the employee’s employee shares will be treated as vested.

IPO. In connection with our IPO, the board of directors required employees to enter into an IPO vesting agreement as described above, under which the employee shares continue to vest in a substantially equivalent manner to which the employee shares would have been subject had the IPO not occurred. For employees who did not enter into an IPO vesting agreement, all unvested shares were immediately forfeited.

Since the beginning of the last fiscal year ended December 31, 2022, we have not allotted or issued ordinary shares to participants.

Hurdle Share Program. In addition to the share incentive program, one of our former executive officers was allotted and issued F ordinary shares subject to the terms of an equity letter, which provided that the F ordinary shares will be treated as vested on the first to occur of (a) a “qualified fundraising” or (b) a “change in control” at a valuation at or above £3.25 per share (as such terms are defined in the equity letter). Our IPO was a “qualified fundraising” under the terms of such equity letter.

In connection with the Series C Financing, which closed on July 1, 2020, certain employees exchanged their employee shares for options under the 2020 Option Plan (described below).

On the date of the IPO, all of the outstanding B ordinary shares, C ordinary shares, D ordinary shares, E ordinary shares, F ordinary shares and G Ordinary shares were reorganized into a single class of ordinary shares of Freeline Therapeutics Holdings plc. Following the reorganization into a single class of ordinary shares, such ordinary shares of Freeline Therapeutics Holdings plc were consolidated and subdivided to reflect an approximately 1-for-0.159 reverse split of such ordinary shares. The 2016 share incentive program terminated in connection with our IPO; accordingly, as of December 31, 2022, there are no shares available for future grants under the 2016 share incentive program.

Share Option Plan

In 2020, we adopted the amended and restated share option plan, or the 2020 Option Plan. Under the 2020 Option Plan, select eligible participants were granted options to acquire shares of the company, subject to the terms of the 2020 Option Plan. Following the completion of our IPO, no further options will be granted under the 2020 Option Plan.

Administration. The 2020 Option Plan is administered by our board of directors.

Vesting. Unless otherwise specified in an option certificate, at any time on or after the first anniversary of the date on which the employee first became an employee and before the fourth anniversary of the vesting commencement date (as set forth in the option certificate), the option will be treated as vested as to a percentage of the shares underlying the option equal to 2.0833 multiplied by the number of whole months that have elapsed since the vesting commencement date. At any time on or after the fourth anniversary of the vesting commencement date, the option will be treated as fully vested.

Termination. If an employee ceases to be an employee by reason of being a “bad leaver,” which means we are entitled to summarily dismiss the employee under the terms of the employee’s employment agreement, all of the options will immediately be forfeited. If an employee ceases to be an employee by reason of being a “good leaver,” which means the employee ceases to be an employee and is not a “bad leaver,” the employee’s unvested options will cease to vest and any vested options will remain exercisable until the earlier of (x) the six-month anniversary of an initial public offering and (y) the option lapses pursuant to the terms of the 2020 Option Plan.

Share Sale. On the occurrence of a share sale, subject to (i) the employee’s continued employment with us at the time of the share sale and (ii) the person or persons acquiring a controlling interest in us have not otherwise offered to replace such option with an option or right to acquire securities that our board determines to be equivalent,

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all unvested options will be treated as vested and exercisable in full. At any time, our board may condition the exercise of such options on additional considerations, including the requirement that an employee experience a qualifying termination of employment within 12 months following the share sale, by reason of being a good leaver or due to certain events described in the articles of association.

2020 Equity Incentive Plan

In connection with our IPO, on July 31, 2020, we adopted an equity incentive plan, or the 2020 Plan. The purpose of the 2020 Plan is to attract, retain and motivate persons who make (or are expected to make) important contributions to the company. The 2020 Plan became effective as of our IPO.

Administration and Eligibility. Our employees and directors, referred to as service providers, are eligible to be granted awards under the 2020 Plan. The 2020 Plan is administered by our board of directors, or a committee designated by the Board (referred to as the administrator below). The administrator has the authority to determine which service providers receive awards, grant awards, set the terms and conditions and designate which awards will cover ordinary shares or ADSs.

Shares Available for Awards. Subject to adjustment, the maximum number of equity awards originally authorized under the 2020 Plan was 5,898,625 shares, which consisted of 3,474,469 new ordinary shares, and 2,424,156 ordinary shares that were subject to awards under prior plans that may become available for issuance under the 2020 Plan. Additionally, the number of ordinary shares reserved for issuance under the 2020 Plan will automatically increase on January 1st of each year, for a period of not more than ten years, by an amount equal to the lesser of (i) 4% of the total number of ordinary shares outstanding on December 31st of the previous calendar year or (ii) such fewer number of ordinary shares as the board of directors may designate prior to the applicable January 1st date. On January 1, 2021, 2022 and 2023, the reserve automatically increased by 1,434,198, 1,434,184 and 2,596,620 shares, which were 4% of the total number of ordinary shares outstanding on December 31, 2020, 2021 and 2022, respectively. No more than 35,655,250 shares may be issued under the 2020 Plan upon the exercise of incentive share options. If an award under the 2020 Plan, or any prior equity incentive plan, expires, lapses or is terminated, exchanged for cash, surrendered, repurchased, cancelled without having been fully exercised or forfeited, any unused shares subject to the award will, as applicable, become or again be available for new grants under the 2020 Plan. Shares delivered to the company to satisfy any applicable tax withholding obligation will also become or again be available for award grants under the 2020 Plan. Awards granted under the 2020 Plan in substitution for any options or other equity or equity-based awards granted by an entity before the entity’s merger or consolidation with us or our acquisition of the entity’s property or stock will not reduce the shares available for grant under the 2020 Plan, but will count against the maximum number of shares that may be issued upon the exercise of incentive share options.

Awards. The 2020 Plan provides for the grant of options, share appreciation rights, or SARs, restricted shares, dividend equivalents, restricted share units, or RSUs, and other share based awards. All awards under the 2020 Plan will be set forth in award agreements, which will detail the terms and conditions of awards, including any applicable vesting and payment terms.

Performance Criteria. The administrator may select performance criteria for an award to establish performance goals for a performance period.

Termination of Employment. The administrator may determine how a participant’s termination of service, for any reason, affects and award and the extent to which, and the period during which, the participant and others may exercise rights under the award, if applicable. If a participant’s employment is terminated for cause, all awards will terminate immediately upon a such termination, and the participant will be prohibited from exercising his or her options or share appreciation rights from and after the time of such termination.

Corporate Transactions. In connection with certain corporate transactions and events affecting our ordinary shares, including a change of control, another similar corporate transaction or event, another unusual or nonrecurring transaction or event affecting us or our financial statements or a change in any applicable laws or accounting principles, the administrator has broad discretion to take action under the 2020 Plan to prevent the dilution or enlargement of intended benefits, facilitate the transaction or event or give effect to the change in applicable laws or accounting principles. This includes cancelling awards for cash or property, accelerating the vesting of awards, providing for the assumption or substitution of awards by a successor entity, adjusting the number and type of shares subject to outstanding awards and/or with respect to which awards may be granted under the 2020 Plan and replacing or terminating awards under the 2020 Plan.

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Plan Amendment and Termination. Our board of directors may amend or terminate the 2020 Plan at any time; however, no amendment, other than an amendment that increases the number of shares available under the 2020 Plan, may materially and adversely affect an award outstanding under the 2020 Plan without the consent of the affected participant and shareholder approval will be obtained for any amendment to the extent necessary to comply with applicable laws. The 2020 Plan will remain in effect until the tenth anniversary of its effective date unless earlier terminated by our board of directors. No awards may be granted under the 2020 Plan after its termination.

Transferability and Participant Payments. Except as the administrator may determine or provide in an award agreement, awards under the 2020 Plan are generally non-transferrable, except by will or the laws of descent and distribution, or, subject to the administrator’s consent, pursuant to a domestic relations order, and are generally exercisable only by the participant. With regard to tax withholding obligations arising in connection with awards under the 2020 Plan, and exercise price obligations arising in connection with the exercise of options under the 2020 Plan, the administrator may, in its discretion, accept cash, wire transfer or check, our ordinary shares or such other consideration as the administrator deems suitable or any combination of the foregoing.

2020 Non-Employee Sub Plan. The 2020 Non-Employee Sub Plan governs equity awards granted to our non-executive directors and our service providers, including consultants and directors. The 2020 Non-Employee Sub Plan was adopted by the Board under the 2020 Plan and provides for equity and cash-based awards to be made on identical terms to awards made under our 2020 Plan.

2021 Equity Inducement Plan

On September 27, 2021, we adopted an equity inducement plan, or the Inducement Plan. On May 30, 2022, we amended the Inducement Plan to authorize an additional 2,000,000 shares under the Inducement Plan. The purpose of the Inducement Plan is to enhance the company’s ability to attract employees who are expected to make important contributions to the company by providing these individuals with equity ownership opportunities.

Administration and Eligibility. Awards may be granted only to a person, referred to as an eligible person, who, at the time of grant: (a) has been hired as an employee and such award is a material inducement to such person being hired; (b) has been rehired as an employee following a bona fide period of interruption of employment with the Company or any of its subsidiaries; or (c) has become an employee in connection with a merger or acquisition. The Inducement Plan is administered by our board of directors, or a committee designated by the Board (referred to as the administrator below). The administrator has the authority to determine which eligible persons receive awards, grant awards, set the terms and conditions and designate which awards will cover ordinary shares or ADSs.

Shares Available for Awards. Awards may be made under the Inducement Plan in an aggregate amount of up to 3,400,000 shares. If an award under the Inducement Plan expires, lapses or is terminated, exchanged for cash, surrendered, repurchased, cancelled without having been fully exercised or forfeited, any unused shares subject to the award will, as applicable, become or again be available for new grants under the Inducement Plan. Shares delivered to the company to satisfy any applicable tax withholding obligation will also become or again be available for award grants under the Inducement Plan.

Awards. The Inducement Plan provides for the grant of options, SARs, restricted shares, dividend equivalents, RSUs, and other share based awards. All awards under the Inducement Plan will be set forth in award agreements, which will detail the terms and conditions of awards, including any applicable vesting and payment terms.

Performance Criteria. The administrator may select performance criteria for an award to establish performance goals for a performance period.

Termination of Employment. The administrator may determine how a participant’s termination of service, for any reason, affects and award and the extent to which, and the period during which, the participant and others may exercise rights under the award, if applicable. If a participant’s employment is terminated for cause, all awards will terminate immediately upon a such termination, and the participant will be prohibited from exercising his or her options or share appreciation rights from and after the time of such termination.

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Corporate Transactions. In connection with certain corporate transactions and events affecting our ordinary shares, including a change of control, another similar corporate transaction or event, another unusual or nonrecurring transaction or event affecting us or our financial statements or a change in any applicable laws or accounting principles, the administrator has broad discretion to take action under the Inducement Plan to prevent the dilution or enlargement of intended benefits, facilitate the transaction or event or give effect to the change in applicable laws or accounting principles. This includes cancelling awards for cash or property, accelerating the vesting of awards, providing for the assumption or substitution of awards by a successor entity, adjusting the number and type of shares subject to outstanding awards and/or with respect to which awards may be granted under the Inducement Plan and replacing or terminating awards under the Inducement Plan.

Plan Amendment and Termination. Our board of directors may amend or terminate the Inducement Plan at any time; however, no amendment, other than an amendment that increases the number of shares available under the Inducement Plan, may materially and adversely affect an award outstanding under the Inducement Plan without the consent of the affected participant and shareholder approval will be obtained for any amendment to the extent necessary to comply with applicable laws. The Inducement Plan will remain in effect until the tenth anniversary of its effective date unless earlier terminated by our board of directors. No awards may be granted under the Inducement Plan after its termination.

Transferability and Participant Payments. Except as the administrator may determine or provide in an award agreement, awards under the Inducement Plan are generally non-transferrable, except by will or the laws of descent and distribution, or, subject to the administrator’s consent, pursuant to a domestic relations order, and are generally exercisable only by the participant. With regard to tax withholding obligations arising in connection with awards under the Inducement Plan, and exercise price obligations arising in connection with the exercise of options under the Inducement Plan, the administrator may, in its discretion, accept cash, wire transfer or check, our ordinary shares or such other consideration as the administrator deems suitable or any combination of the foregoing.

IPO Grants

In connection with our IPO and in the ordinary course thereafter, our Board granted awards under the 2020 Plan to certain of our employees, representing an aggregate of 1,152,432 ordinary shares. These awards were one-time grants solely related to the IPO and the number of ordinary shares subject to the awards described above was based on the initial public offering price of $18.00 per share. All of the awards described above were granted upon the filing of a registration statement on Form S-8 relating to the 2020 Plan. Each award is subject to the terms and conditions of the 2020 Plan and an option award agreement with the applicable grantee.

2020 Employee Share Purchase Plan

In connection with our IPO, on July 31, 2020, we adopted an employee share purchase plan, or the ESPP. The purpose of the ESPP is to provide employees the opportunity to purchase ordinary shares or ADSs. The rights to purchase ordinary shares granted under the ESPP are intended to qualify as options issued under an “employee stock purchase plan” as that term is defined in Section 423(b) of the Code.

Administration. The ESPP will be administered by a person or persons appointed by our board of directors. The administrator has the authority to make all determinations it deems advisable for the administration of the ESPP, including determining offerings and interpreting the terms and provisions of the ESPP. The administrator has the power to determine whether employees of any of our parent or subsidiary companies will be eligible to participate in the ESPP.

Shares Available. Subject to adjustment, the maximum number of ordinary shares that may be issued under the ESPP is up to 347,447 ordinary shares. Additionally, the number of ordinary shares reserved for issuance under our ESPP will automatically increase on January 1 of each year, commencing on January 1, 2022 and ending on January 1, 2030, by an amount equal to the lesser of (i) 347,447 ordinary shares, (ii) 1% of the total number of shares outstanding on December 31 of the same calendar year or (iii) such fewer shares as determined by the administrator, in each case up to a maximum of 3,127,023 ordinary shares. On each of January 1, 2022 and 2023, the reserve automatically increased by 347,447 shares.

Offerings. The ESPP will be implemented by offerings of rights to purchase ordinary shares to all eligible employees. The initial offering will begin on a date determined by our board and end six months from such date.

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Thereafter, the administrator will determine the duration of each offering, provided that in no event may an offering exceed 27 months. Each offering will have one or more purchase periods, as determined by the administrator. The administrator has the authority to alter the terms of an offering prior to the commencement of the offering. When an eligible employee elects to join an offering, he or she is granted a right to purchase ordinary shares on specified exercise dates during the purchase periods within the offering. On the exercise dates, all contributions collected from the participant are automatically applied to the purchase of our ordinary shares, subject to certain limitations.

Eligibility. Generally, any individual who is employed by us (or by any of our parent or subsidiary companies if such company is designated by the administrator as eligible to participate in the ESPP) may participate in offerings under the ESPP.

No participant may be granted an option under the ESPP if immediately after such options are granted the employee would own, directly or indirectly, shares possessing 5% or more of the total combined voting power or value of all classes of our shares or of any of our parent or subsidiary companies. In addition, no employee may purchase more than $25,000 worth of our ordinary shares (determined based on the fair market value of the shares at the time such rights are granted) under all our employee share purchase plans and any employee share purchase plans of our parent or subsidiary companies for each calendar year during which such rights are outstanding.

Participation. An eligible employee may enroll in the ESPP by submitting to us an enrollment form. The amount to be deducted from an employee’s compensation may not exceed 15% of such employee’s compensation during the offering.

Participants may withdraw from an offering at any time by delivering written notice of withdrawal to us. Upon such withdrawal, we will distribute to the employee his or her accumulated but unused contributions.

Purchase Price. The purchase price per share at which our ordinary shares are sold on the exercise date during an offering will not be less than the lower of (i) 85% of the fair market value of an ordinary share on the first day of the offering period or (ii) 85% of the fair market value of an ordinary share during on the exercise date.

Purchase Limits. If the aggregate number of ordinary shares issuable upon exercise of purchase rights granted under such offering would exceed the maximum number of shares issuable under the ESPP, the shares will be apportioned among participants in proportion to the amount of the payroll deductions accumulated on behalf of each participant that would otherwise be used to purchase shares on the exercise date.

Termination of Employment. If a participant’s employment terminates for any reason, no payroll deduction will be taken from any pay due and owing to the participant and the balance of the participant’s account will be paid to such participant.

Corporate Transactions. In the event of a corporate transaction, the board may make such adjustments as it deems appropriate to prevent dilution or enlargement of rights in the number of shares which may be delivered under the ESPP, in the number, class of or purchase price available for purchase under the ESPP and in the number of shares which a participant is entitled to purchase.

Our board may also elect to have the options assumed or substituted by a successor entity, to terminate all outstanding options, to provide for expiration or expiration upon completion of the purchase of shares on the next exercise date, to shorten the offering or take any other action as deemed appropriate by our board.

Adjustment. In the event of certain changes in our shares, the ESPP will be appropriately adjusted in the class(es) and maximum number of shares and share limitations of such outstanding options.

Plan Amendment and Termination. The administrator may amend or terminate the ESPP at any time; however, any such amendment must be approved by our shareholders within 12 months of such amendment, if approval is required by applicable law or listing requirements.

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Transferability, Rights granted under the ESPP are not transferable except by will, by the laws of descent and distribution. Options are only exercisable during a participant’s lifetime.

6.C. Board practices.

Composition of Our Board of Directors

Our board of directors presently has seven members. As a foreign private issuer, under the listing requirements and rules of Nasdaq, we are not required to have independent directors on our board of directors, except that our audit committee is required to consist fully of independent directors. Our board of directors has determined that Drs. Hollowood, Love and Chodakewitz, Ms. Gregory and Mr. Andrews, representing five of our seven directors, do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of director and that each of these directors is “independent” as that term is defined under Nasdaq rules.

In accordance with our Articles of Association, our board of directors consists of one class of directors constituting our entire board. At each annual general meeting, the successors to directors are elected to serve from the time of election and qualification until the subsequent annual meeting following election. Each director shall serve until his or her successor is duly elected and qualified or until his or her earlier death, resignation or removal.

Committees of Our Board of Directors

Our board of directors has three standing committees: an audit committee, a remuneration committee and a nominating and corporate governance committee. The board has adopted a written charter for each of the committees below that is available to shareholders on our website at https://www.freeline.life/investors-media/corporate-governance/.

Audit Committee

The audit committee is composed of Ms. Gregory (chair), Dr. Love and Mr. Andrews, and assists the board of directors in overseeing our accounting and financial reporting processes. The audit committee consists exclusively of members of our board who are financially literate, and our board of directors has determined that Ms. Gregory is an “audit committee financial expert” as defined by applicable SEC rules and has the requisite financial sophistication as defined under the applicable Nasdaq rules and regulations. Our board of directors has determined that each member of the audit committee is an independent director under Nasdaq listing rules and under Rule 10A-3 under the Exchange Act. Our audit committee meets at least four times per year and oversees and reviews our internal controls, accounting policies and financial reporting, and provides a forum through which our independent registered public accounting firm reports. Our audit committee meets regularly with our independent registered public accounting firm without management present.

The primary functions of the audit committee include:

•recommending the appointment of the independent auditor to shareholders for approval at the general meeting of shareholders;

•the appointment, compensation, retention and oversight of any accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit services;

•pre-approving the audit services and non-audit services to be provided by our independent auditor before the auditor is engaged to render such services;

•evaluating the independent auditor’s qualifications, performance and independence, and presenting its conclusions to the full board of directors on at least an annual basis;

•reviewing and discussing with management and our independent registered public accounting firm our financial statements and our financial reporting process; and

•reviewing, approving or ratifying any related party transactions.

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Remuneration Committee

The remuneration committee is composed of Dr. Hollowood (chairman), Dr. Chodakewitz and Mr. Andrews. Under SEC and Nasdaq rules, there are heightened independence standards for members of the remuneration committee, including a prohibition against the receipt of any compensation from us other than standard board member fees. Foreign private issuers are not required to meet this heightened standard. Dr. Chodakewitz and Mr. Andrews meet this heightened standard.

The primary functions of the remuneration committee include:

•identifying, reviewing, overseeing and proposing policies relevant to the compensation and benefits of our directors and senior management;

•evaluating the performance of senior management in light of such policies and reporting to the board; and

•overseeing and administering our 2020 Option Plan, 2020 Plan and other benefit plans in operation from time to time.

Nominating and Corporate Governance Committee

The nominating and corporate governance committee is composed of Dr. Chodakewitz (chairman), Ms. Gregory and Dr. Love.

The primary functions of the nominating and corporate governance committee include:

•drawing up selection criteria and appointment procedures for directors;

•recommending nominees for appointment to our board of directors and its corresponding committees; and

•assessing the functioning of individual members of our board of directors and management and reporting the results of such assessment to the full board of directors.

6.D. Employees

As of December 31, 2022, 2021 and 2020, we had 152, 235 and 235 employees, respectively. During the fourth quarter of the year ended December 31, 2022, we completed a financial and organizational assessment to increase efficiencies and reduce expenses. As a result of this assessment, we reduced our U.S. and U.K. workforce by 26 employees. On February 8, 2023, we closed the sale of our German subsidiary, Freeline Therapeutics GmbH, and no longer have any employees in Germany. In April 2023, we announced that we have proposed to reduce our remaining workforce by nearly 30%, bringing our headcount to approximately 65 employees.

	As of December 31,
	2022		2021		2020
Function:
General and administrative		33		52		40
Research and development		119		183		195
Total		152		235		235
Geography:
United Kingdom		70		130		161
Germany		55		70		55
United States		27		35		19
Total		152		235		235

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6.E. Share ownership

For information regarding the share ownership of our directors and executive officers, please refer to Item 6.B. “Directors, Senior Management and Employees—Compensation”, Item 7.A. “Major Shareholders and Related Party Transactions—Major Shareholders” and Item 7.B. “Major Shareholders and Related Party Transactions—Related Party Transactions.”

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

7.A. Major shareholders.

The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of February 1, 2023, by

•each executive officer;

•our directors;

•our directors and executive officers as a group; and

•each person or entity known by us to own beneficially more than 5% of any class of our outstanding shares (by number or by voting power).

We have determined beneficial ownership in accordance with the applicable rules and regulations of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Except as indicated by the footnotes below, we believe, based on information furnished to us, that the persons and entities named in the table below have sole voting and sole investment power with respect to all shares that they beneficially own, subject to applicable community property laws. None of our major shareholders have voting rights different from those of any other shareholder.

Applicable percentage ownership is based on 65,162,173 ordinary shares outstanding as of February 1, 2023. In computing the number of shares beneficially owned by a person and the percentage ownership of such person, we deemed to be outstanding all shares subject to options held by the person that are currently exercisable or exercisable within 60 days of February 1, 2023 or issuable upon the vesting of restricted shares or restricted share units held by the person within 60 days of February 1, 2023.

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However, except as described above, we did not deem such shares outstanding for the purpose of computing the percentage ownership of any other person.

Name of Beneficial Owner	Number of Ordinary Shares Beneficially Owned		Percentage of Ordinary Shares Beneficially Owned
5% or Greater Shareholders:
Syncona Portfolio Limited (1)		37,862,147		58.1	%
Eventide Asset Management LLC (2)		5,920,765		9.1	%
CHI Advisors LLC (3)		4,814,419		7.4	%
Tetragon Financial Group Limited (4)		4,000,000		6.1	%
Senior Management and Directors:
Michael J. Parini		717,270		1.1	%
James “Jay” Bircher	*		*
Pamela Foulds, M.D.	*		*
Nicole Jones	*		*
Paul Schneider	*		*
Henning R. Stennicke, Ph.D	*		*
Chris Hollowood, Ph.D.	*		*
Martin Andrews	*		*
Jeffrey Chodakewitz, M.D.	*		*
Julia P. Gregory	*		*
Colin A. Love, Ph.D.	*		*
All current directors and senior management as a group (11 persons)		1,137,843		1.7	%

* Represents beneficial ownership of less than one percent.

(1)Syncona Portfolio Limited is a controlled subsidiary of Syncona Holdings Limited, which in turn is a controlled subsidiary of Syncona Limited. Each of Syncona Holdings Limited and Syncona Limited may be deemed to have voting and dispositive power over the shares held by Syncona Portfolio Limited. Investment and voting decisions with respect to these shares are made by Syncona Portfolio Limited acting upon the recommendation of an investment committee of Syncona Investment Management Limited, also a subsidiary of Syncona Holdings Limited. The members of this investment committee consist of Martin Murphy and the Chairman of our Board, Christopher Hollowood. The address for Syncona Portfolio Limited is Arnold House, St. Julian’s Avenue, St. Peter Port, Guernsey GY1 3RD.

(2)Eventide Healthcare & Life Sciences Fund is a registered investment company for which Eventide Asset Management, LLC acts as investment adviser. Eventide Asset Management, LLC has voting and investment power with respect to the shares. The principal business address of Eventide Healthcare & Life Science Fund is One International Place, Suite 4210, Boston, Massachusetts 02110.

(3)CHI Advisors LLC is a registered investment adviser and has voting and investment power with respect to the shares. The principal business address of CHI Advisors LLC is 599 Lexington Avenue, 19th Floor, New York, New York 10022.

(4)Tetragon Financial Group Limited is a Guernsey company for which Tetragon Financial Management L.P., a Delaware limited partnership, acts as investment adviser. Each of Tetragon Financial Group Limited and Tetragon Financial Management L.P. may be deemed to have voting and investment power with respect to the shares. The principal business address of Tetragon Financial Group Limited is c/o Polygon Global Partners LLP, 4 Sloane Terrace, London SW1X 9DQ, United Kingdom.

To our knowledge, the only significant changes in the percentage ownership held by our major shareholders during the past three years were (1) as a result of our IPO, (2) a decrease in the percentage ownership of entities affiliated with Wellington Management from 9.8% as of December 31, 2020 to 1.2% as of December 31, 2021, (3) an increase in the percentage ownership of Syncona Portfolio Limited from 51.6% as of February 1, 2022 to 58.1% as of February 1, 2023 and (4) an increase in the percentage ownership of Tetragon Financial Group Limited to 6.1% as of February 1, 2023.

As of February 1, 2023, assuming that all of our ordinary shares represented by ADSs are held by residents of the United States other than ADSs held by the entities set forth in the table above and certain other holders that we know to be non-residents of the United States, we estimate that approximately 29.1% of our outstanding ordinary

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shares (including ordinary shares underlying ADSs) were held in the United States by 26 holders of record. The actual number of holders is greater than these numbers of record holders and includes beneficial owners whose ordinary shares are held in street name by brokers and other nominees. This number of holders of record also does not include holders whose shares may be held in trust by other entities.

7.B. Related Party Transactions

Policies and Procedures for Related Person Transactions

We have adopted a related person transaction policy that sets forth our procedures for the identification, review, consideration and approval or ratification of related person transactions. For purposes of our policy only, a related person transaction is a transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we or any of our subsidiaries and any related person are, were or will be participants in which the amount involved exceeds $100,000 or which is unusual in its nature or conditions. Transactions involving compensation for services provided to us as an employee or director are not covered by this policy. A related person is any executive officer, director or beneficial owner of more than 5% of any class of our voting securities, including any of their immediate family members and any entity owned or controlled by such persons.

Under the policy, if a transaction has been identified as a related person transaction, including any transaction that was not a related person transaction when originally consummated or any transaction that was not initially identified as a related person transaction prior to consummation, our management must present information regarding the related person transaction to our audit committee, or, if audit committee approval would be inappropriate, to another independent body of our board of directors for review, consideration and approval or ratification. The presentation must include a description of, among other things, the material facts, the interests, direct and indirect, of the related persons, the benefits to us of the transaction and whether the transaction is on terms that are comparable to the terms available to or from, as the case may be, an unrelated third party or to or from employees generally. The audit committee, or such other independent committee, will consider all facts and circumstances and will not approve or ratify the transaction unless it determines that it is in, or not inconsistent with, the company and its shareholders.

Transactions with Our Principal Shareholders, Directors and Members of our Senior Management

The following is a description of related party transactions we have entered into since January 1, 2022 with our directors, members of our senior management and holders of more than 5% of our outstanding voting securities and their affiliates, whom we refer to as our related persons, in which the amount involved exceeds $100,000 and that are material to us, other than the compensation arrangements we describe in Item 6.B. “Directors, Senior Management and Employees—Compensation.”

Syncona

On March 10, 2022, we entered into a purchase agreement with our majority shareholder, Syncona Portfolio Limited, a subsidiary of Syncona Limited, and certain other existing shareholders providing for the issuance and sale by us of $26.1 million of our ADSs at a price of $1.05 per ADS, in a registered direct offering. The offering closed on March 15, 2022. We received net proceeds of approximately $24.2 million from the offering, after deducting offering expenses payable by us.

Syncona IP Holdco (2) Limited

In March 2023, we entered into an exclusive patent and know-how license agreement with Syncona IP Holdco (2) Limited, or Syncona Holdco, a company controlled by Syncona. Under the terms of the agreement, we granted Syncona Holdco an exclusive license under certain patent rights related to an immune-modifying protein to develop and commercialize the technology other than in respect of liver-directed gene therapies and a non-exclusive license to certain know-how. Syncona Holdco was required to make an upfront payment to us of £0.5 million or $0.6 million and may be required to make up to £12.5 million or $15.1 million in development and regulatory milestone payments, and pay us a low-single-digit percentage royalty on net sales of certain licensed products and know-how products on a product-by-product and country-by-country basis, commencing on the date of the first commercial sale of such product in such country until (in respect of licensed products) the expiration of the last valid licensed patent claim covering such product in such country or (in respect of know-how products) 20 years from the date upon which the agreement was signed.

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Forcefield Therapeutics Limited

In March 2023, we entered into an exclusive patent and know-how license agreement with Forcefield Therapeutics Limited, or Forcefield, a company controlled by Syncona. Under the terms of the agreement, Forcefield granted us an exclusive license under certain patent rights to develop and commercialize AAV gene therapies for certain cardiac conditions and a non-exclusive license to certain know-how. We were required to make an upfront payment to Forcefield of £0.5 million or $0.6 million and may be required to make up to £18.3 million or $22.0 million in development and regulatory milestone payments, and pay Forcefield a mid-single-digit percentage royalty on net sales of certain royalty products on a product-by-product and country-by-country basis, until the later of (a) the expiration of the last valid licensed patent claim covering such product in such country or (b) ten years from the first commercial sale of such product sold in that country or 20 years from the date upon which the agreement was signed. We also agreed to make payments to Forcefield in accordance with a workplan to be agreed in connection with a sponsored research agreement entered into between Forcefield and a non-profit organization.

Agreements with Our Senior Management and Directors

We have entered into employment agreements or offer letters with the members of our senior management. See Item 6.A. “Directors, Senior Management and Employees—Director Compensation—Offer Letters” These agreements contain customary provisions and representations, including confidentiality, non-competition, non-solicitation and inventions assignment undertakings by the members of our senior management. However, the enforceability of the non-competition provisions may be limited under applicable law.

Indemnification Agreements

We have entered into a deed of indemnity with each of our directors and members of our senior management. Our articles of association provide that we indemnify our directors and members of our senior management to the fullest extent permitted by applicable law.

7.C. Interests of Experts and Counsel

Not applicable.

ITEM 8. FINANCIAL INFORMATION.

8.A. Consolidated Statements and Other Financial Information

Consolidated Financial Statements

Our consolidated financial statements are appended at the end of this Annual Report, starting on page F-1.

Dividend Policy

We have never declared or paid a dividend, and we do not anticipate declaring or paying dividends in the foreseeable future. We intend to retain all available funds and any future earnings to fund the development and expansion of our business.

Under current English law, among other things, a company’s accumulated, realized profits must exceed its accumulated, realized losses (on a non-consolidated basis) before dividends can be paid. Accordingly, we may only pay dividends if we have sufficient distributable reserves (on a non-consolidated basis), which are our accumulated, realized profits that have not been previously distributed or capitalized less our accumulated, realized losses, so far as such losses have not been previously written off in a reduction or reorganization of capital duly made. The amount of our distributable reserves is a cumulative calculation. We may be profitable in a single financial year but unable to pay a dividend if the profits of that year do not offset all previous years’ accumulated, realized losses. Additionally, a public company may only make a distribution if the amount of its net assets is not less than the aggregate of its called-up share capital and undistributable reserves, and if, and to the extent that, the distribution does not reduce the amount of those assets to less than that aggregate.

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Legal Proceedings

Except as set forth above under “Item 4 B. Business Overview—Legal Proceedings,” we are not currently a party to any material legal proceedings. From time to time, we may be a party to litigation or subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of these ordinary course matters will not have a significant effect on our financial position or profitability. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

8.B. Significant changes

Not applicable.

ITEM 9. THE OFFER AND LISTING

9.A. Offer and Listing Details

Our ADSs have been listed on the Nasdaq Capital Market under the symbol “FRLN” since November 30, 2022, and prior to that were listed on the Nasdaq Global Select Market under the symbol “FRLN” from August 11, 2020 to November 29, 2022. Prior to August 11, 2020, there was no public trading market for our ordinary shares. For more see Item 18 “Financial Statements.”

9.B. Plan of Distribution

Not applicable.

9.C. Markets

Our ADSs have been listed on the Nasdaq Capital Market under the symbol “FRLN” since November 30, 2022, and prior to that were listed on the Nasdaq Global Select Market under the symbol “FRLN” from August 11, 2020 to November 29, 2022.

9.D. Selling Shareholders

Not applicable.

9.E. Dilution

Not applicable.

9.F. Expenses of the Issue

Not applicable.

ITEM 10. ADDITIONAL INFORMATION

10.A. Share Capital

Not applicable.

10.B. Memorandum and Articles of Association

The information called for by this item has been reported previously in our Registration Statement on Form F-1 No. 0001193125-20-207194 as filed under the Securities Act with the SEC on August 3, 2020 and has not changed since, and therefore is incorporated by reference to that Registration Statement. A copy of our articles of association is attached as Exhibit 1.1 to this Annual Report. For additional information on our memorandum and articles of association, please see Exhibit 2.3 “Description of Ordinary Shares” to this Annual Report.

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10.C. Material Contracts

For additional information on our material contracts, please see Item 4. “Information on the Company,” Item 6. “Directors, Senior Management and Employees,” and Item 7.B. “Major Shareholders and Related Party Transactions—Related Party Transactions” of this Annual Report.

10.D. Exchange Controls

There is currently no U.K. legislation restricting the import or export of capital or affecting the remittance of dividends or other payments to holders of the Company’s ordinary shares who are non-residents of the United Kingdom.

10.E. Taxation

The following summary contains a description of certain U.K. and U.S. federal income tax considerations generally applicable to the acquisition, ownership and disposition of our ADSs. This summary should not be considered a comprehensive description of all the tax considerations that may be relevant to beneficial owners of ADSs.

U.S. Federal Income Tax Considerations for U.S. Holders

The following section is a summary of the U.S. federal income tax considerations generally applicable to U.S. Holders, as defined below, of owning and disposing of ADSs or ordinary shares.

This section applies only to a U.S. Holder that holds ADSs or ordinary shares as capital assets (generally, property held for investment) for U.S. federal income tax purposes. This section does not address the U.S. federal estate, gift or other non-income tax considerations or any state, local or non-U.S. tax considerations relating to the ownership or disposition of ADSs or ordinary shares. In addition, it does not set forth all of the U.S. federal income tax considerations that may be relevant in light of the U.S. Holder’s particular circumstances, including alternative minimum tax consequences, the potential application of the provisions of the U.S. Internal Revenue Code of 1986, as amended, or the Code, known as the Medicare contribution tax and tax consequences applicable to U.S. Holders subject to special rules, such as:

•certain banks and other financial institutions;

•dealers in securities or currencies

•traders that elect to use a mark-to-market method of accounting;

•persons holding ADSs or ordinary shares as part of a hedging transaction, straddle, wash sale, conversion transaction or other integrated transaction or persons entering into a constructive sale with respect to the ADSs or ordinary shares;

•persons whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;

•entities or arrangements classified as partnerships for U.S. federal income tax purposes;

•insurance companies;

•pension plans;

•cooperatives;

•regulated investment companies;

•real estate investment trusts;

•tax-exempt entities, including private foundations and “individual retirement accounts” or “Roth IRAs”;

•certain former U.S. citizens or long-term residents;

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•persons who acquire their ADSs or ordinary shares pursuant to any employee share option or otherwise as compensation;

•persons required for U.S. federal income tax purposes to conform the timing of income accruals with respect to the ADSs or ordinary shares to their financial statements under Section 451(b) of the Code;

•persons that actually or constructively own 10% or more of our shares (by vote or value); or

•persons holding ADSs or ordinary shares in connection with a trade or business conducted outside of the United States.

If an entity or arrangement that is classified as a partnership for U.S. federal income tax purposes holds ADSs or ordinary shares, the U.S. federal income tax treatment of a partner will depend on the status of the partner and the activities of the partnership. Partnerships holding ADSs or ordinary shares and partners in such partnerships should consult their tax advisers as to the particular U.S. federal income tax consequences of owning and disposing of the ADSs or ordinary shares.

Each U.S. Holder should consult its tax advisor as to the U.S. federal, state, local and non-U.S. tax considerations relevant to it with respect to the ownership and disposition of our ADSs or ordinary shares in light of its particular circumstances.

This section is based on the Code, administrative pronouncements, judicial decisions, final Treasury regulations, and the income tax treaty between the United Kingdom and the United States, or the Treaty, all as of the date hereof, any of which is subject to change or differing interpretations, possibly with retroactive effect.

A “U.S. Holder” is a holder who, for U.S. federal income tax purposes, is a beneficial owner of ADSs or ordinary shares and who is:

•a citizen or individual resident of the United States;

•a corporation, or other entity classified as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

•an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or

•a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons has or have the authority to control all of the trust’s substantial decisions, or the trust has validly elected to be treated as a domestic trust for U.S. federal income tax purposes.

In general, it is expected that a U.S. Holder who owns ADSs will be treated as the owner of the underlying shares represented by those ADSs for U.S. federal income tax purposes. The remainder of this discussion assumes that a U.S. Holder of our ADSs will be treated in this manner. Accordingly, no gain or loss will be recognized if a U.S. Holder exchanges ADSs for the underlying shares represented by those ADSs.

U.S. Holders should consult their tax advisers concerning the U.S. federal, state, local and non-U.S. tax consequences of owning and disposing of ADSs or ordinary shares in their particular circumstances.

Passive Foreign Investment Company Considerations

Under the Code, we will be a PFIC for any taxable year in which either (i) 75% or more of our gross income consists of “passive income,” or (ii) 50% or more of the average quarterly value of our assets consist of assets that produce, or are held for the production of, “passive income.” For purposes of the above calculations, we will be treated as if we hold our proportionate share of the assets of, and receive directly our proportionate share of the income of, any other corporation in which we directly or indirectly own at least 25%, by value, of the shares of such corporation.

Passive income includes, among other things, interest, dividends, certain non-active rents and royalties, net gains from the sale or exchange of property producing such income and net foreign currency gains. For this purpose,

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cash and assets readily convertible into cash are categorized as passive assets, and our goodwill and other unbooked intangibles are taken into account.

The determination of whether we are a PFIC is a fact-intensive determination that must be made on an annual basis applying principles and methodologies that are in some circumstances unclear. Whether we were a PFIC in 2022 or will be a PFIC in any taxable year thereafter is uncertain because, among other things, (i) we currently own a substantial amount of passive assets, including cash, (ii) the valuation of our assets that generate non passive income for PFIC purposes, including our intangible assets, is uncertain and may depend in part on the market price of our ADSs or ordinary shares from time to time, which may fluctuate substantially, (iii) in one or more years, our revenue may consist in whole or substantial part of grants received from governmental entities, the treatment of which as gross income that is not passive income is uncertain, and (iv) the composition of our income may vary substantially over time. We believe that we were a PFIC for our 2022 taxable year and may continue to be a PFIC for taxable years thereafter. However, there can be no assurance that we were a PFIC for our 2022 taxable year or will or will not be a PFIC for any taxable year thereafter, and our U.S. counsel expresses no opinion with respect to our PFIC status for our 2022 taxable year, or with respect to our expectations regarding our PFIC status in any taxable year thereafter.

If we are classified as a PFIC for any year during which a U.S. Holder holds our ADSs or ordinary shares, the PFIC rules discussed below under “—Passive Foreign Investment Company, or PFIC, Rules” generally will apply to such U.S. Holder for such taxable year, and unless the U.S. Holder makes certain elections, will apply in future years even if we cease to be a PFIC.

Taxation of Distributions

We do not currently expect to make distributions on our ADSs or ordinary shares. As noted above, we believe we were classified as a PFIC for our 2022 taxable year. Accordingly, the most likely treatment of a U.S. Holder is set forth in “—Passive Foreign Investment Company, or PFIC, Rules.” If we are not and have not been a PFIC, in the event that we do make distributions of cash or other property, the following rules would apply. The gross amount of any distributions paid on ADSs or ordinary shares, other than certain pro rata distributions of ADSs or ordinary shares, will be treated as dividends to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). To the extent such amount is treated as a dividend, it will generally be includible in the gross income of a U.S. Holder as dividend income on the day actually or constructively received by the U.S. Holder, in the case of ordinary shares, or by the depositary, in the case of ADSs. If distributions exceed our current and accumulated earnings and profits, such excess distributions will generally constitute a return of capital to the extent of the U.S. Holder’s tax basis in its ADSs or ordinary shares and will result in a reduction thereof. To the extent such excess exceeds a U.S. Holder’s tax basis in the ADSs or ordinary shares, such excess will generally be subject to tax as capital gain. Because we do not intend to determine our earnings and profits in accordance with U.S. federal income tax principles, the full amount of any distribution we pay is generally expected to be treated as a dividend for U.S. federal income tax purposes. Dividends received on our ADSs or ordinary shares will not be eligible for the dividends received deduction allowed to corporations in respect of dividends received from U.S. corporations.

Individuals and other non-corporate U.S. Holders will be subject to tax at the lower capital gains tax rate applicable to “qualified dividend income,” provided that certain conditions are satisfied, including that (1) the ADSs or ordinary shares on which the dividends are paid are readily tradable on an established securities market in the United States, or we are eligible for the benefits of the Treaty, (2) we are neither a PFIC nor treated as such with respect to a U.S. Holder (as discussed below) for the taxable year in which the dividend is paid or the preceding taxable year, and (3) certain holding period requirements are met.

If we are eligible for benefits under the Treaty, dividends we pay on our ADSs or ordinary shares, regardless of whether such ADSs or shares are considered readily tradable on an established securities market in the United States, would be eligible for the reduced rates of taxation described in this paragraph, provided the other conditions described above are satisfied. However, as discussed above under “—Passive Foreign Investment Company Considerations” although there can be no assurance that we will or will not be considered a PFIC for any taxable year,

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we believe we were a PFIC for our 2022 taxable year and may be a PFIC in the current and future taxable years. Individuals and other non-corporate U.S. Holders should, therefore, assume that dividends will generally not constitute “qualified dividend income” eligible for reduced rates of taxation. U.S. Holders should consult their tax advisors regarding the availability of the reduced tax rate on dividends in their particular circumstances.

For U.S. foreign tax credit purposes, dividends paid on our ADSs or ordinary shares generally will be treated as income from foreign sources and generally will constitute passive category income. The amount of any dividend income paid in British pounds will be the U.S. dollar amount calculated by reference to the exchange rate in effect on the date of actual or constructive receipt, regardless of whether the payment is in fact converted into U.S. dollars at that time. If the foreign currency received as a dividend is converted into U.S. dollars on the date it is received, a U.S. Holder will generally not be required to recognize foreign currency gain or loss in respect of the dividend income. If the foreign currency received as a dividend is not converted into U.S. dollars on the date of receipt, a U.S. Holder will have a basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Any gain or loss realized on a subsequent conversion or other disposition of the foreign currency will be treated as U.S. source ordinary income or loss.

Sale or Other Disposition of ADSs or Ordinary Shares

Subject to the discussion below under “—Passive Foreign Investment Company, or PFIC, Rules”, gain or loss realized on the sale or other disposition of ADSs or ordinary shares will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder held the ADSs or ordinary shares for more than one year. The amount of the gain or loss will equal the difference between the U.S. Holder’s tax basis in the ADSs or ordinary shares disposed of and the amount realized on the disposition, in each case as determined in U.S. dollars. Long-term capital gain of individuals and certain other non-corporate U.S. Holders will generally be eligible for a reduced rate of taxation. The deductibility of a capital loss may be subject to limitations. Any capital gain or loss will generally be treated as U.S.-source gain or loss for U.S. foreign tax credit purposes, which will generally limit the availability of foreign tax credits.

Passive Foreign Investment Company, or PFIC, Rules

As noted above, we believe that we were a PFIC for our 2022 taxable year and expect that we may be continue to be a PFIC in the current taxable year and in the future, although there can be no assurances in this regard. If we were a PFIC for any taxable year during which a U.S. Holder held ADSs or ordinary shares (assuming such U.S. Holder has not made a timely mark-to-market or QEF election, as described below), gain recognized by a U.S. Holder on a sale or other disposition (including certain pledges) of the ADSs or ordinary shares would be allocated ratably over the U.S. Holder’s holding period for the ADSs or ordinary shares. The amounts allocated to the taxable year of the sale or other disposition and to any year before we became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for that taxable year, and an additional tax based on the interest charge generally applicable to underpayments of tax would be imposed on the amount allocated to that taxable year. Further, to the extent that any distribution received by a U.S. Holder on its ADSs or ordinary shares exceeds 125% of the average of the annual distributions on the ADSs or ordinary shares received during the preceding three years or the U.S. Holder’s holding period, whichever is shorter, that distribution would be subject to taxation in the same manner as gain, described immediately above.

If we are a PFIC for any taxable year during which a U.S. Holder holds our ADSs or ordinary shares and any of our non-U.S. affiliated entities are also PFICs, the holder will be treated as owning a proportionate amount (by value) of the shares of each such non-U.S. affiliate classified as a PFIC for purposes of the application of these rules. We do not believe any of our subsidiaries were PFICs for the 2022 taxable year. U.S. Holders are urged to consult their tax advisors regarding the application of the PFIC rules to any of our subsidiaries.

A U.S. Holder can avoid certain of the adverse rules described above by making a mark-to-market election with respect to its ADSs or ordinary shares, provided that the ADSs or ordinary shares are “marketable.” ADSs or ordinary shares will be marketable if they are traded in other than de minimis quantities on at least 15 days during

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each calendar quarter (“regularly traded”) on a “qualified exchange” or other market within the meaning of applicable Treasury regulations. We expect that our ADSs, but not our ordinary shares, will continue to be listed on Nasdaq, which is a qualified exchange for these purposes, but no assurances may be given in this regard. Consequently, assuming that our ADSs are regularly traded, if a U.S. Holder holds our ADSs, it is expected that the mark-to-market election would be available to such holder were we to be or become a PFIC. In addition, because, as a technical matter, a mark-to-market election cannot be made for any lower-tier PFICs that we may own, a U.S. Holder may continue to be subject to the PFIC rules with respect to such holder’s indirect interest in any investments held by us that are treated as an equity interest in a PFIC for U.S. federal income tax purposes.

If a U.S. Holder makes the mark-to-market election, it will recognize as ordinary income any excess of the fair market value of the ADSs or ordinary shares at the end of each taxable year over their adjusted tax basis, and will recognize an ordinary loss in respect of any excess of the adjusted tax basis of the ADSs or ordinary shares over their fair market value at the end of the taxable year (but only to the extent of the net amount of income previously included as a result of the mark-to-market election). If a U.S. Holder makes the election, the U.S. Holder’s tax basis in the ADSs or ordinary shares will be adjusted to reflect the income or loss amounts recognized. Any gain recognized on the sale or other disposition of ADSs or ordinary shares in a year when we are a PFIC will be treated as ordinary income and any loss will be treated as an ordinary loss (but only to the extent of the net amount of income previously included as a result of the mark-to-market election). If a U.S. Holder makes such a mark-to-market election, tax rules that apply to distributions by corporations which are not PFICs would apply to distributions by us (except that the lower applicable capital gains rate for qualified dividend income would not apply). If a U.S. Holder makes a valid mark-to-market election, and we subsequently cease to be classified as a PFIC, such U.S. Holder will not be required to take into account the mark-to-market income or loss described above during any period that we are not classified as a PFIC.

In addition, in order to avoid the application of the foregoing rules, a United States person that owns shares in a PFIC for U.S. federal income tax purposes may make a “qualified electing fund,” or QEF, election with respect to such PFIC, if the PFIC provides the information necessary for such election to be made. If a United States person makes a QEF election with respect to a PFIC, the United States person will be currently taxable on its pro rata share of the PFIC’s ordinary earnings and net capital gain (at ordinary income and capital gain rates, respectively) for each taxable year that the entity is classified as a PFIC and will not be required to include such amounts in income when actually distributed by the PFIC. We have provided for the 2022 taxable year and we expect to provide in the future information necessary for U.S. Holders to make a QEF election by annually posting a “PFIC Annual Information Statement” on our website.

In addition, if we were a PFIC or, with respect to a particular U.S. Holder, were treated as a PFIC for the taxable year in which we paid a dividend or for the prior taxable year, the preferential dividend rates discussed above with respect to dividends paid to certain non-corporate U.S. Holders would not apply.

If a U.S. Holder owns ADSs or ordinary shares during any year in which we are a PFIC, the U.S. Holder must file annual reports, containing such information as the U.S. Department of the Treasury may require on IRS Form 8621 (or any successor form) with respect to us, with the U.S. Holder’s federal income tax return for that year, unless otherwise specified in the instructions with respect to such form.

U.S. Holders should consult their tax advisers concerning our potential PFIC status and the potential application of the PFIC rules.

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THE PRECEDING SUMMARY OF U.S. FEDERAL INCOME TAX CONSIDERATIONS IS INTENDED FOR GENERAL INFORMATION ONLY AND DOES NOT CONSTITUTE TAX ADVICE. U.S. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS AS TO THE U.S. FEDERAL, STATE, LOCAL, AND NON-U.S. TAX CONSIDERATIONS GENERALLY APPLICABLE TO THEM OF THE OWNERSHIP AND DISPOSITION OF OUR ADSs OR ORDINARY SHARES IN THEIR PARTICULAR CIRCUMSTANCES.

U.K. Taxation

The following is intended as a general summary of material U.K. tax considerations relating to the ownership and disposal of ADSs. The comments set out below are based on current U.K. tax law as applied in England and Wales and HM Revenue & Customs, or HMRC, published practice (which may not be binding on HMRC) as at the date of this Annual Report (both of which are subject to change at any time, possibly with retrospective effect). This summary is for general information only and is not intended to be, nor should it be considered to be, legal or tax advice and does not purport to be a complete analysis of all U.K. tax considerations relating to the holding of ADSs, or all of the circumstances in which holders of ADSs may benefit from an exemption or relief from U.K. taxation. This summary is written on the basis that we do not (and will not) directly or indirectly derive 75% or more of our qualifying asset value from U.K. land, and that we are and remain solely resident in the United Kingdom for tax purposes and will therefore be subject to the U.K. tax regime and not the U.S. tax regime save as set out above under “U.S. Federal Income Tax Considerations for U.S. Holders.”

Except to the extent that the position of non-U.K. resident persons, or persons who are not U.K. Holders, is expressly referred to, this guide relates only to persons who are resident (and, in the case of individuals, domiciled or deemed domiciled) for tax purposes solely in the United Kingdom and do not have a permanent establishment or fixed base in any other jurisdiction with which the holding of the ADSs is connected, or U.K. Holders, who are absolute beneficial owners of the ADSs (where the ADSs are not held through an Individual Savings Account or a Self-Invested Personal Pension) and who hold the ADSs as investments.

This guide may not relate to certain classes of U.K. Holders, such as (but not limited to):

•persons who are connected with the company;

•financial institutions;

•insurance companies;

•charities or tax-exempt organizations;

•collective investment schemes;

•pension schemes;

•market makers, intermediaries, brokers or dealers in securities;

•persons who have (or are deemed to have) acquired their ADSs by virtue of an office or employment or who are or have been officers or employees of the company or any of its affiliates; and

•individuals who are subject to U.K. taxation on a remittance basis.

The decision of the First-tier Tribunal (Tax Chamber) in HSBC Holdings PLC and The Bank of New York Mellon Corporation v HMRC (2012) cast some doubt on whether a holder of a depositary receipt is the beneficial owner of the underlying shares. However, based on published HMRC guidance we would expect that HMRC will regard a holder of ADSs as holding the beneficial interest in the underlying shares and therefore these paragraphs assume that a holder of ADSs is the beneficial owner of the underlying ordinary shares and any dividends paid in respect of the underlying ordinary shares (where the dividends are regarded for U.K. purposes as that person’s own income) for U.K. direct tax purposes.

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THESE PARAGRAPHS ARE A SUMMARY OF CERTAIN U.K. TAX CONSIDERATIONS AND ARE INTENDED AS A GENERAL SUMMARY ONLY. IT IS RECOMMENDED THAT ALL HOLDERS OF ADSS OBTAIN ADVICE AS TO THE CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSAL OF THE ADSS IN THEIR OWN SPECIFIC CIRCUMSTANCES FROM THEIR OWN TAX ADVISORS. IN PARTICULAR, NON-U.K. RESIDENT OR DOMICILED PERSONS ARE ADVISED TO CONSIDER THE POTENTIAL IMPACT OF ANY RELEVANT DOUBLE TAXATION AGREEMENTS.

Dividends

Withholding Tax

Dividends paid by us will not be subject to any withholding or deduction for or on account of U.K. tax.

Income Tax

An individual U.K. Holder may, depending on his or her particular circumstances, be subject to U.K. tax on dividends received from us. An individual who is not a U.K. Holder should not be chargeable to U.K. income tax on dividends received from us unless he or she carries on (whether solely or in partnership) a trade, profession or vocation in the United Kingdom through a branch or agency to which the ADSs are attributable. There are certain exceptions for trading in the United Kingdom through independent agents, such as some brokers and investment managers.

All dividends received by an individual U.K. Holder from us or from other sources will form part of that U.K. Holder’s total income for income tax purposes and will constitute the top slice of that income. A nil rate of income tax will apply to the first £2,000 of taxable dividend income received by the individual U.K. Holder in a tax year. Income within the nil rate band will be taken into account in determining whether income in excess of the £2,000 tax-free allowance falls within the basic rate, higher rate or additional rate tax bands. Dividend income in excess of the tax-free allowance is currently (subject to the availability of any income tax personal allowance) taxed at 8.75% to the extent that the excess amount falls within the basic rate tax band, 33.75% to the extent that the excess amount falls within the higher rate tax band and 39.35% to the extent that the excess amount falls within the additional rate tax band.

Corporation Tax

A corporate which is not a U.K. Holder should not be chargeable to U.K. corporation tax on dividends received from us unless it carries on (whether solely or in partnership) a trade in the United Kingdom through a permanent establishment to which the ADSs are attributable.

Corporate U.K. Holders should not be subject to U.K. corporation tax on any dividend received from us so long as the dividends qualify for the U.K.’s dividend exemption, which is generally the case, although certain conditions must be met. If the conditions for the exemption are not satisfied, or such U.K. Holder elects for an otherwise exempt dividend to be taxable, U.K. corporation tax will be chargeable on the amount of any dividends (currently 19%, although legislation has been enacted which would increase the main rate to 25% from April 2023 for companies with profits in excess of £250,000, and introduce marginal relief from such main rate for companies with profits between £50,000 and £250,000 and a small profits rate of 19% for companies with profits of £50,000 or less).

Chargeable Gains

A disposal or deemed disposal of ADSs by a U.K. Holder may, depending on the U.K. Holder’s circumstances and subject to any available exemptions or reliefs (such as the annual exemption), give rise to a chargeable gain or an allowable loss for the purposes of U.K. capital gains tax and corporation tax on chargeable gains.

If an individual U.K. Holder who is subject to U.K. income tax at either the higher or the additional rate is liable to U.K. capital gains tax on the disposal of ADSs, the current applicable rate will be 20%. For an individual U.K. Holder who is subject to U.K. income tax at the basic rate and liable to U.K. capital gains tax on such disposal, the current applicable rate would be 10%, save to the extent that any capital gains, when aggregated with the U.K. Holder’s other taxable income and gains in the relevant tax year, exceed the unused basic rate tax band. In that case, the rate currently applicable to the excess would be 20%.

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If a corporate U.K. Holder becomes liable to U.K. corporation tax on the disposal (or deemed disposal) of ADSs, the main rate of U.K. corporation tax (currently 19%, although legislation has been enacted which would increase the main rate to 25% from April 2023 for companies with profits in excess of £250,000, and introduce marginal relief from such main rate for companies with profits between £50,000 and £250,000 and a small profits rate of 19% for companies with profits of £50,000 or less) would apply.

A person who is not a U.K. Holder should not normally be liable to U.K. capital gains tax or corporation tax on chargeable gains on a disposal (or deemed disposal) of ADSs unless the person is carrying on (whether solely or in partnership) a trade, profession or vocation in the United Kingdom through a branch or agency (or, in the case of a corporate through a permanent establishment) to which the ADSs are attributable. However, an individual who is not a U.K. Holder, who has ceased to be resident for tax purposes in the United Kingdom for a period of less than five years and who disposes of ADSs during that period may be liable on his or her return to the United Kingdom to U.K. tax on any capital gain realized (subject to any available exemption or relief).

Stamp Duty and Stamp Duty Reserve Tax

The discussion below relates to the holders of our ordinary shares or ADSs wherever resident, however it should be noted that special rules may apply to certain persons such as market makers, brokers, dealers or intermediaries.

Issue of Ordinary Shares

Subject to the discussion below under "Clearance Services and Depositary Receipts", no U.K. stamp duty or stamp duty reserve tax, or SDRT, is payable on the issue of the underlying ordinary shares in the company, or Ordinary Shares.

Transfers of Ordinary Shares

An unconditional agreement to transfer Ordinary Shares in certificated form will normally give rise to a charge to SDRT at the rate of 0.5% of the amount or value of the consideration payable for the transfer. In general, the purchaser of the shares is liable for the SDRT. Transfers of Ordinary Shares in certificated form are generally also subject to stamp duty at the rate of 0.5% of the amount or value of the consideration given for the transfer or, in certain circumstances and if it is higher, the market value of the Ordinary Shares (in each case, rounded up to the next £5.00). Stamp duty is normally paid by the purchaser. The charge to SDRT will be canceled or, if already paid, it will generally be repaid (normally with interest), where a transfer instrument has been duly stamped within six years of the charge arising (either by paying the stamp duty or by claiming an appropriate relief) or if the instrument is otherwise exempt from stamp duty.

Clearance Services and Depositary Receipts

U.K. legislation provides that an issue or a transfer of Ordinary Shares to a clearance service or a depositary receipt system will generally be subject to SDRT (and, in case of transfers, where the transfer is effected by a written instrument, stamp duty) at a higher rate of 1.5% of the amount or value of the consideration given for the transfer or, in certain circumstances, the market value of the shares.

Following the Court of Justice of the European Union’s decision in C-569/07 HSBC Holdings Plc, Vidacos Nominees Limited v The Commissioners of Her Majesty’s Revenue & Customs and the First-tier Tax Tribunal decision in HSBC Holdings Plc and The Bank of New York Mellon Corporation v. The Commissioners of Her Majesty’s Revenue & Customs, HMRC has published guidance stating that 1.5% SDRT is no longer payable when new shares are issued to a clearance service or depositary receipt system. HMRC’s published guidance confirms that this remains HMRC’s position following the transition period which expired on December 31, 2020 after the withdrawal of the UK from the European Union. In certain circumstances, there may also be no charge to stamp duty or SDRT on the transfer of Ordinary Shares into a clearance service or depositary receipt system. Shareholders should accordingly seek their own advice before paying or accepting such charge.

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Except in relation to transfers or agreements to transfer within clearance services that have made and maintained an election under section 97A(1) of the U.K. Finance Act 1986, or a section 97A election, no stamp duty or SDRT is payable in respect of transfers or agreements to transfer within clearance services. It is understood that HMRC regards the facilities of DTC as a clearance service for these purposes and we are not aware of any section 97A election having been made by DTC.

Any stamp duty or SDRT payable on a transfer of Ordinary Shares to a depositary receipt system or clearance service, or in respect of a transfer within a depositary receipt system or clearance service, will strictly be accountable by the clearance service or depositary receipt system operator or their nominee, as the case may be, but will in practice generally be paid by the transferors or participants in the clearance service or depositary receipt system. Specific professional advice should be sought before incurring or reimbursing the costs of a 1.5% stamp duty or SDRT charge in any circumstance.

Issue or Transfers of ADSs

No U.K. stamp duty or SDRT is payable on the issue or transfer of (including an agreement to transfer) ADSs in the company in electronic form through the facilities of DTC.

10.F. Dividends and Paying Agents

Not applicable.

10.G. Statement by Experts

Not applicable.

10.H. Documents on Display

We are subject to certain of the information reporting requirements of the Exchange Act, or the Exchange Act. As a foreign private issuer, we are exempt from the rules and regulations under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions contained in Section 16 of the Exchange Act, with respect to their purchase and sale of our shares. In addition, we are not required to file reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. However, we are required to file with the SEC, within four months after the end of each fiscal year, an annual report on Form 20-F containing financial statements audited by an independent accounting firm. We plan to publish unaudited interim financial information after the end of each quarter following this Annual Report. We plan to furnish this quarterly financial information to the SEC under cover of a Form 6-K. The SEC maintains an Internet website that contains reports and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov.

10.I. Subsidiary Information

Not applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risks in the ordinary course of our business, which are principally limited to fluctuations in interest rates and foreign currency exchange rates and liquidity risks.

Interest Rate Risk

As of December 31, 2022 and 2021, we held unrestricted cash and cash equivalents of $47.3 million and $117.7 million, respectively. Our exposure to interest rate sensitivity is impacted by changes in the underlying U.K. and U.S. bank interest rates. Our surplus cash has been invested in interest-bearing savings. We have not entered into investments for trading or speculative purposes. Due to the conservative nature of our investment portfolio, which is predicated on capital preservation of investments with short-term maturities, we do not believe an immediate one percentage point change in interest rates would have a material effect on the fair market value of our portfolio, and therefore we do not expect our operating results or cash flows to be significantly affected by changes in market interest

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rates. As of December 31, 2022 and 2021, we had no debt outstanding and are therefore not subject to interest rate risk related to debt.

Foreign Currency Exchange Risk

We maintain the financial statements of each entity within the group in its local currency, which is also the entity’s functional currency. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Non-monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the date of the transaction. Exchange gains or losses arising from foreign currency transactions are included in other expense, net in the consolidated statement of comprehensive loss. For financial reporting purposes our financial statements have been presented in U.S. dollars, the reporting currency. The financial statements of entities are translated from their functional currency into the reporting currency as follows: assets and liabilities are translated at the exchange rates at the balance sheet dates, revenue and expenses are translated at the average exchange rates and shareholders’ equity is translated based on historical exchange rates. Translation adjustments are not included in determining net loss but are included as a foreign exchange adjustment to other comprehensive loss, a component of shareholders’ equity.

We do not currently engage in currency hedging activities in order to reduce our currency exposure, but we may begin to do so in the future. Instruments that may be used to hedge future risks may include foreign currency forward and swap contracts. These instruments may be used to selectively manage risks, but there can be no assurance that we will be fully protected against material foreign currency fluctuations.

Liquidity Risk

We maintain significant amounts of cash and cash equivalents that are in excess of insured limits in various currencies, placed with one or more financial institutions for varying periods according to expected liquidity requirements. We are managing our liquidity risk by continuously evaluating the financial institutions at which we place our cash and cash equivalents, monitoring our cash forecasts and our actual cash flows and matching the maturity profiles of financial assets and liabilities.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

12.A. Debt Securities

Not applicable.

12.B. Warrants and Rights

Not applicable.

12.C. Other Securities

Not applicable

12.D. American Depositary Shares

Citibank, N.A., as depositary bank, registers and delivers our American Depositary Shares, also referred to as ADSs. Each ADS represents one ordinary share (or a right to receive one ordinary share) deposited with Citibank, N.A., London Branch, or any successor, as custodian for the depositary. Each ADS will also represent any other securities, cash or other property which may be held by the depositary in respect of the depositary facility. The depositary’s corporate office at which the ADSs are administered is located at 388 Greenwich Street, New York, New York 10013. A deposit agreement among us, the depositary and the ADS holders sets out ADS holder rights as well as the rights and obligations of the depositary.

182

Fees and Charges

The following table shows the fees and charges that a holder of our ADSs may have to pay, either directly or indirectly. The majority of these costs are set by the depositary bank and are subject to change:

Service	Fee
Issuance of ADSs (e.g., an issuance of ADS upon a deposit of ordinary shares or upon a change in the ADS(s)-to-ordinary shares ratio), excluding ADS issuances as a result certain of distributions of ordinary shares	Up to $5.00 per 100 ADSs (or fraction thereof) issued
Cancellation of ADSs (e.g., a cancellation of ADSs for delivery of deposited property or upon a change in the ADS(s)-to-ordinary shares ratio, or for any other reason)	Up to $5.00 per 100 ADSs (or fraction thereof) cancelled
Distribution of cash dividends or other cash distributions (e.g., upon a sale of rights and other entitlements)	Up to $5.00 per 100 ADSs (or fraction thereof) held
Distribution of ADSs pursuant to (i) share dividends or other free share distributions, or (ii) exercise of rights to purchase additional ADSs	Up to $5.00 per 100 ADSs (or fraction thereof) held
Distribution of securities other than ADSs or rights to purchase additional ADSs (e.g., upon a spin-off)	Up to $5.00 per 100 ADSs (or fraction thereof) held
ADS Services	Up to $5.00 per 100 ADSs (or fraction thereof) held on the applicable record date(s) established by the depositary
Registration of ADS Transfers (e.g., upon a registration of the transfer of registered ownership of ADSs, upon a transfer of ADSs into DTC and vice versa, or for any other reason)	Up to $5.00 per 100 ADSs (or fraction thereof) transferred
Conversion of ADSs of one series for ADSs of another series (e.g., upon conversion of partial entitlement ADSs for full entitlement ADSs, or upon conversion of restricted ADSs into freely transferable ADSs, and vice versa)	Up to $5.00 per 100 ADSs (or fraction thereof) converted

As an ADS holder, you will also be responsible to pay certain charges such as:

•taxes (including applicable interest and penalties) and other governmental charges;

•the registration fees as may from time to time be in effect for the registration of ordinary shares on the share register and applicable to transfers of ordinary shares to or from the name of the custodian, the depositary or any nominees upon the making of deposits and withdrawals, respectively;

•certain cable, telex and facsimile transmission and delivery expenses;

•the expenses and charges incurred by the depositary in the conversion of foreign currency;

•the fees and expenses incurred by the depositary in connection with compliance with exchange control regulations and other regulatory requirements applicable to ordinary shares, ADSs and ADRs; and

•the fees and expenses incurred by the depositary, the custodian or any nominee in connection with the servicing or delivery of deposited property, including depositary service fees of $0.02 per ADR held per calendar year as of a record date established by the depositary in its sole discretion.

183

PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Not applicable.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

14.A Material modifications to instruments

Not applicable

14.B Material modifications to rights

Not applicable.

14.C Withdrawal or substitution of assets

Not applicable.

14.D Change in trustees of paying agents

Not applicable.

14.E Use of proceeds

Not applicable.

ITEM 15. CONTROLS AND PROCEDURES

15.A. Disclosure Controls and Procedures

We have evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of December 31, 2022. The Company’s disclosure controls and procedures are designed to ensure that the information we are required to disclose in the reports we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2022, our disclosure controls and procedures were effective.

15.B. Management's Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act.

Our management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth in “Internal Control - Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment, our management concluded that, as of December 31, 2022, our internal control over financial reporting was effective.

184

15.C. Attestation Report of the Registered Public Accounting Firm

This Annual Report does not include an attestation report of our registered public accounting firm due to a transition period established by rules of the SEC for newly public companies. For so long as we qualify as an “emerging growth company” as defined under the JOBS Act, our registered public accounting firm is not required to issue an attestation report on our internal control over financial reporting.

15.D. Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the period covered by this Annual Report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 16.

16.A. Audit Committee Financial Expert

Our Board has determined that Ms. Gregory is an “audit committee financial expert” as defined by SEC rules and has the requisite financial sophistication under the applicable rules and regulations of the Nasdaq Stock Market. Ms. Gregory is independent as such term is defined in Rule l0A-3 under the Exchange Act and under the listing standards of the Nasdaq Stock Market.

16.B. Code of Ethics

We have adopted a Code of Business Conduct and Ethics applicable to all of our directors and employees, including our Chief Executive Officer, Chief Financial Officer, controller or principal accounting officer, or other persons performing similar functions, which is a “code of ethics” as defined in Item 16.B of Form 20-F promulgated by the SEC. The full text of the Code of Business Conduct and Ethics is available on our website at https://www.freeline.life/investors-media/corporate-governance/. Information contained on, or that can be accessed through, our website does not constitute a part of this report and is not incorporated by reference herein. If we make any amendment to the Code of Business Conduct and Ethics or grant any waivers, including any implicit waiver, from a provision of the code of ethics, we will disclose the nature of such amendment or waiver on our website to the extent required by the rules and regulations of the SEC. Under Item 16.B of Form 20-F, if a waiver or amendment of the Code of Business Conduct and Ethics applies to our principal executive officer, principal financial officer, principal accounting officer or controller and relates to standards promoting any of the values described in Item 16.B(b) of Form 20-F, we are required to disclose such waiver or amendment on our website in accordance with the requirements of Instruction 4 to such Item 16.B.

16.C. Principal Accountant Fees and Services

Deloitte LLP has served as our principal independent registered public accounting firm for each of the two years ended December 31, 2022 and 2021.

The following table shows the aggregate fees for services rendered by Deloitte LLP to us and our subsidiaries, in the fiscal year ended December 31, 2022 and 2021 (in thousands):

	Year Ended December 31,
	2022		2021
Audit fees	$	662	$	702
Audit-related fees		43		83
Total	$	705	$	785

Audit fees. Audit fees consisted of fees for the audit of our annual financial statements and other professional services provided in connection with the statutory and regulatory filings or engagements.

Audit-related fees. Audit-related fees include fees for assurance reporting on our current and historical financial information included in our SEC registration statements in connection with our securities offerings.

185

Pre-Approval of Auditors’ Compensation

Our audit committee is responsible for pre-approving audit and permissible non-audit services provided to us by our independent registered public accounting firm. Our audit committee approves in advance the particular services or categories of services to be provided to the Company during the following yearly period and also sets forth a specific budget for such audit and non-audit services. Additional non-audit services may be pre-approved by the audit committee. All of the permissible non-audit services provided to us by the independent auditors following the formation of our audit committee were pre-approved by the audit committee.

16.D. Exemptions from the Listing Standards for Audit Committees

Not applicable.

16.E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Not applicable.

16.F. Changes in Registrant’s Certifying Accountant

Not applicable.

16.G. Corporate Governance

We are a “foreign private issuer,” as defined by the SEC. As a result, in accordance with Nasdaq listing requirements, we will comply with our home country governance requirements and certain exemptions thereunder rather than complying with certain Nasdaq corporate governance standards. While we voluntarily follow most Nasdaq corporate governance rules, we currently take advantage of the following exemptions:

•Exemption from Nasdaq rules requiring non-executive directors to meet on a regular basis without management present.

•Exemption from the Nasdaq rules applicable to domestic issuers requiring disclosure within four business days of any determination to grant a waiver of the code of business conduct and ethics to directors and officers. Although we will require board approval of any such waiver, we may choose not to disclose the waiver in the manner set forth in the Nasdaq rules, as permitted by the foreign private issuer exemption.

•Exemption from the requirement to obtain shareholder approval for certain issuances of securities, including shareholder approval of share option plans.

•Exemption from the requirement that our board of directors have a compensation committee that is composed of entirely independent directors.

•Exemption from the requirement to have independent director oversight of director nominations.

•Exemption from the requirement to disclose information regarding third-party compensation of our directors and director nominees.

We intend to follow our home country, United Kingdom, practices in lieu of the foregoing requirements. Although we currently rely on home country corporate governance practices in lieu of certain of the rules in the Nasdaq Rule 5600 series and Rule 5220(d), we must comply with Nasdaq’s Notification of Noncompliance requirement (Nasdaq Rule 5625) and the Voting Rights requirement (Nasdaq Rule 5640). Further, we must have an audit committee that satisfies Nasdaq Rule 5605(c)(3), which addresses audit committee responsibilities and authority and requires that the audit committee consist of members who meet the independence requirements of Nasdaq Rule 5605(c)(2)(A)(ii).

Although we currently intend to comply with the Nasdaq corporate governance rules applicable other than as noted above, we may in the future decide to use the foreign private issuer exemption with respect to some or all of any other Nasdaq corporate governance rules where we are permitted to follow our home country governance requirements in lieu of such Nasdaq rules.

186

16.H. Mine Safety Disclosure

Not applicable

16.I. Disclosure Regarding Foreign Jurisdictions that Prevents Inspections

Not applicable

PART III

ITEM 17. FINANCIAL STATEMENTS.

Not applicable.

ITEM 18. FINANCIAL STATEMENTS.

See the financial statements beginning on page F-1 of this Annual Report.

187

Item 19. EXHIBITS.

List all exhibits filed as part of the registration statement or annual report, including exhibits incorporated by reference.

EXHIBIT INDEX

		Incorporated by Reference
Exhibit	Description	Schedule/ Form	File Number	Exhibit	File Date
1.1	Articles of Association of Freeline Therapeutics Holdings plc	Form 20-F	001-39431	1.1	March 31, 2021
2.1	Deposit Agreement, dated as of August 11, 2020, by and among the registrant, Citibank N.A. as the depositary bank and the holders and beneficial holders of American Depositary Shares issued thereunder	Form 20-F	001-39431	2.1	March 31, 2021
2.2	Form of American Depositary Receipt (included in Exhibit 2.1)	Form 20-F	001-39431	2.2	March 31, 2021
2.3	Description of Ordinary Shares	Form 20-F	001-39431	2.3	March 31, 2021
2.4	Description of the American Depositary Shares	Form 20-F	001-39431	2.4	March 31, 2021
4.1#	License Agreement, dated as of May 22, 2015, by and between Freeline Therapeutics Limited and UCL Business plc	Form F-1	333-239938	10.1	July 17, 2020
4.2#	Deed of Variation, dated as of January 24, 2017, to License Agreement, dated as of May 22, 2015, by and between Freeline Therapeutics Limited and UCL Business plc	Form F-1	333-239938	10.2	July 17, 2020
4.3#	Second Deed of Amendment, dated as of May 24, 2018, to the License Agreement, dated as of May 22, 2015, by and between Freeline Therapeutics Limited and UCL Business plc	Form F-1	333-239938	10.3	July 17, 2020
4.4#	Collaboration Agreement, dated as of April 10, 2018, by and between Freeline Therapeutics Limited and Cell Therapy Catapult Limited	Form F-1	333-239938	10.4	July 17, 2020
4.5#	Third Deed of Amendment and Termination, dated as of December 18, 2019, by and between Freeline Therapeutics Limited and UCL Business Ltd.	Form F-1	333-239938	10.5	July 17, 2020
4.6#	Service Agreement, dated as of May 14, 2018, by and between Freeline Therapeutics Limited and Aldevron, LLC	Form F-1	333-239938	10.6	July 17, 2020
4.7#	Biopharma Services Agreement, dated as of June 5, 2016, by and between Freeline Therapeutics Limited and Henogen SA (a subsidiary of the NOVASEP Group)	Form F-1	333-239938	10.7	July 17, 2020

188

4.8#	Services Agreement, dated as of October 11, 2016, by and between Freeline Therapeutics Limited and Henogen SA (a subsidiary of the NOVASEP Group)	Form F-1	333-239938	10.8	July 17, 2020
4.9#	Amendment No. 2, dated as of September 7, 2018, by and between Freeline Therapeutics Limited and Henogen SA (a subsidiary of the NOVASEP Group), to Services Agreement, dated as of October 11, 2016	Form F-1	333-239938	10.9	July 17, 2020
4.10#	Amendment No. 3, dated as of April 9, 2020, by and between Freeline Therapeutics Limited and Henogen SA (a subsidiary of the NOVASEP Group), to Services Agreement, dated as of October 11, 2016	Form F-1	333-239938	10.10	July 17, 2020
4.11#	Development and Manufacturing Services Agreement, dated as of October 6, 2017, by and between Freeline Therapeutics Limited and Brammer Bio MA, LLC	Form F-1	333-239938	10.11	July 17, 2020
4.12#	Dedicated Manufacturing and Commercial Supply Agreement, dated as of June 30, 2020, by and between Freeline Therapeutics Limited and Brammer Bio MA, LLC	Form F-1	333-239938	10.12	July 17, 2020
4.13#	License Agreement, dated as of March 24, 2017, by and between Freeline Therapeutics Limited and St. Jude Children’s Research Hospital	Form F-1	333-239938	10.13	July 17, 2020
4.14#	Amendment, dated as of February 28, 2020, to License Agreement, dated as of March 24, 2017, by and between Freeline Therapeutics Limited and St. Jude Children’s Research Hospital	Form F-1	333-239938	10.14	July 17, 2020
4.15+	Freeline Therapeutics Holdings plc Amended and Restated 2020 Share Option Plan	Form 6-K	001-39431	99.3	January 28, 2022
4.16+	Freeline Therapeutics Holdings plc Amended and Restated 2020 Equity Incentive Plan	Form 6-K	001-39431	99.2	January 28, 2022
4.17	Form of Deed of Indemnity between the registrant and each of its members of senior management and directors	Form F-1/A	333-239938	10.17	August 3, 2020
4.18	Registration Rights Agreement, dated as of August 11, 2020, between the registrant and the shareholders listed therein	Form 20-F	001-39431	4.18	March 31, 2021
4.19+	Freeline Therapeutics Holdings plc Employee Share Purchase Plan	Form S-8	333-242129	99.2	August 7, 2020
4.20#	Collaboration Agreement, dated June 23, 2021, by and between Freeline Therapeutics Limited and Cell Therapy Catapult Limited	Form 20-F	001-39431	4.20	March 31, 2022
4.21+	Freeline Therapeutics Holdings plc Amended and Restated 2021 Equity Inducement Plan	Form S-8	333-265634	99.3	June 15, 2022

189

4.22	Open Market Sale AgreementSM, dated as of November 17, 2021, by and between the registrant and Jefferies LLC	Form 6-K	001-39431	1.1	November 17, 2021
4.23	Purchase Agreement, dated as of March 10, 2022, by and among the registrant, Syncona Portfolio Limited and certain other existing shareholders	Form 6-K	001-39431	99.1	March 15, 2022
4.24	Purchase Agreement, dated as of March 18, 2022, by and between the registrant and Lincoln Park Capital Fund, LLC	Form 6-K	333-242129	99.1	March 23, 2022
4.25	Registration Rights Agreement, dated as of March 18, 2022, by and between the registrant and Lincoln Park Capital Fund, LLC	Form 6-K	333-242129	99.2	March 23, 2022
4.26*#	Agreement for the Sale and Purchase of the Entire Issued Share Capital of Freeline Therapeutics GmbH, between Freeline Therapeutics Limited, Ascend Gene and Cell Therapies Ltd. and Freeline Therapeutics Holdings plc, dated November 11, 2022
4.27*#	Transition Services Agreement, between Freeline Therapeutics Limited and Ascend Gene and Cell Therapies Ltd., dated February 8, 2023
4.28*#	IP Deed of Assignment and License, between Freeline Therapeutics Limited and Ascend Gene and Cell Therapies Ltd., dated February 8, 2023
8.1*	List of subsidiaries
12.1*	Certification by the Principal Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2*	Certification by the Principal Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2020
13.1**	Certification by the Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1*	Consent of Deloitte LLP
101.INS*	Inline XBRL Instance Document
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document

190

101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

* Filed herewith.

** Furnished herewith.

+ Indicates management contract or compensatory plan.

# Portions of this exhibit (indicated by asterisks) have been omitted from the exhibit pursuant to Instruction 4(a) as to Exhibits to Form 20-F.

191

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this registration statement on Form 20-F on its behalf.

Freeline Therapeutics Holdings plc
By:	/s/ Michael J. Parini
	Name:	Michael J. Parini
	Title:	Chief Executive Officer
By:	/s/ Paul M. Schneider
	Name:	Paul M. Schneider
	Title:	Chief Financial Officer

Date: April 4, 2023

192

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Audited Financial Statements of Freeline Therapeutics Holdings plc
Report of Independent Registered Public Accounting Firm (PCAOB ID 1147)	F-2
Consolidated Balance Sheets	F-3
Consolidated Statements of Operations	F-4
Consolidated Statements of Comprehensive Loss	F-5
Consolidated Statements of Shareholders’ Equity	F-6
Consolidated Statements of Cash Flows	F-7
Notes to Consolidated Financial Statements	F-9

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Freeline Therapeutics Holdings plc

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Freeline Therapeutics Holdings plc and subsidiaries (the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive loss, shareholders’ equity and cash flows, for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

Going concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred recurring losses since inception and expects to continue to incur significant expenses and generate operating losses for the foreseeable future, and the Company is involved in a dispute with a supplier for which the outcome could have a material adverse effect on the Company’s financial condition that raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Change in Accounting Principle

As discussed in Note 2 to the financial statements, the Company changed its method of accounting for leases in fiscal year 2022 due to the adoption of Accounting Standards Update No. 2016-02, Leases (Topic 842), using the modified retrospective approach.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte LLP

Reading, United Kingdom

April 4, 2023

We have served as the Company's auditor since 2015.

F-2

FREELINE THERAPEUTICS HOLDINGS PLC

Consolidated Balance Sheets

(in thousands, except share and per share amounts)

(expressed in U.S. Dollars, unless otherwise stated)

	December 31,			December 31,
	2022			2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	47,279		$	117,662
Prepaid expenses and other current assets		6,235			10,630
Assets held for sale		14,113			—
Total current assets		67,627			128,292
NON-CURRENT ASSETS:
Property and equipment, net		9,007			9,906
Operating lease right of use assets		6,014			—
Other non-current assets		3,993			2,927
Total assets	$	86,641		$	141,125
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	10,058		$	5,187
Accrued expenses and other current liabilities		7,908			15,497
Operating lease liabilities, current		2,663			—
Liabilities related to assets held for sale		10,337			—
Total current liabilities		30,966			20,684
NON-CURRENT LIABILITIES:
Operating lease liabilities, non-current		3,261			—
Total liabilities	$	34,227		$	20,684
Commitments and contingencies (Note 12)
SHAREHOLDERS’ EQUITY:
Ordinary shares, £0.00001 par value, 400,000,000 and 160,000,000    shares authorized as of December 31, 2022 and 2021, respectively;    65,113,575 and 35,854,591 issued and outstanding as of    December 31, 2022 and 2021, respectively		—			—
Deferred shares, £0.00001 par value; 118,263 and 112,077 shares    authorized, issued and outstanding as of December 31, 2022 and    2021, respectively		—			—
Deferred shares, £100,000 par value; 1 authorized, issued and    outstanding as of December 31, 2022 and 2021		137			137
Additional paid-in capital		500,781			467,213
Accumulated other comprehensive (loss) gain		(3,151	)		9,472
Accumulated deficit		(445,353	)		(356,381	)
Total shareholders’ equity		52,414			120,441
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	86,641		$	141,125

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

F-3

FREELINE THERAPEUTICS HOLDINGS PLC

Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(expressed in U.S. Dollars, unless otherwise stated)

	For the Year Ended December 31,
	2022			2021			2020
OPERATING EXPENSES:
Research and development	$	66,203		$	95,431		$	76,149
General and administrative		30,656			44,567			26,300
Restructuring expense		1,588			2,381			—
Total operating expenses		98,447			142,379			102,449
LOSS FROM OPERATIONS:		(98,447	)		(142,379	)		(102,449	)
OTHER (EXPENSE) INCOME, NET:
Other (expense) income , net		2,152			(165	)		(9,288	)
Gain on lease termination		5,216			—			—
Interest income, net		904			404			275
Benefit from R&D tax credit		1,571			2,091			15,269
Total other income, net		9,843			2,330			6,256
Loss before income taxes		(88,604	)		(140,049	)		(96,193	)
Income tax expense		(368	)		(342	)		(129	)
NET LOSS	$	(88,972	)	$	(140,391	)	$	(96,322	)
Net loss per share attributable to ordinary    shareholders—basic and diluted	$	(1.50	)	$	(3.93	)	$	(6.81	)
Weighted average ordinary shares outstanding—basic    and diluted		59,271,778			35,704,368			14,152,843

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

F-4

FREELINE THERAPEUTICS HOLDINGS PLC

Consolidated Statements of Comprehensive Loss

(in thousands)

(expressed in U.S. Dollars, unless otherwise stated)

	For the Year Ended December 31,
	2022			2021			2020
Net loss	$	(88,972	)	$	(140,391	)	$	(96,322	)
Other comprehensive loss:
Foreign currency translation adjustment		(12,623	)		130			12,341
Comprehensive loss	$	(101,595	)	$	(140,261	)	$	(83,981	)

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

F-5

FREELINE THERAPEUTICS HOLDINGS PLC

Consolidated Statements of Shareholders’ Equity

(in thousands, except share amounts)

(expressed in U.S. Dollars, unless otherwise stated)

	PREFERRED SHARES $0.00001 PAR VALUE						A-G ORDINARY £0.00001 PAR VALUE					ORDINARY £0.00001 PAR VALUE					DEFERRED SHARES £0.00001 PAR VALUE						DEFERRED B SHARES £0.001 PAR VALUE						DEFERRED SHARES £100,000 PAR VALUE				ADDITIONAL PAID-IN			ACCUMULATED OTHER COMPREHENSIVE			ACCUMULATED			TOTAL SHAREHOLDERS'
	SHARES			AMOUNT			SHARES			AMOUNT		SHARES			AMOUNT		SHARES			AMOUNT			SHARES			AMOUNT			SHARES		AMOUNT		CAPITAL			GAIN (LOSS)			DEFICIT			EQUITY
Balance at December 31, 2019		106,081,025		$	1			16,047,440		$	—		—		$	—		110,370		$	—			—		$	—			—	$	—	$	207,622		$	(2,999	)	$	(119,668	)	$	84,956
Issuance of Series A preferred shares		230,249			—			—			—		—			—		—			—			—			—			—		—		299			—			—			299
Issuance of Series B preferred shares		448,631			—			—			—		—			—		—			—			—			—			—		—		875			—			—			875
Issuance of Series C preferred shares, net of issuance costs of $323		46,515,834			—			—			—		—			—		—			—			—			—			—		—		79,679			—			—			79,679
Issuance of ordinary shares		—			—			987,703			—		—			—		—			—			—			—			—		—		9			—			—			9
Forfeiture of ordinary shares		—			—			(165,414	)		—		(17,804	)		—		183,218			—			—			—			—		—		—			—			—			—
Employee exchange of ordinary shares for stock options		—			—			(1,780,944	)		—		—			—		1,780,944			—			—			—			—		—		—			—			—			—
Subdivision of £1 nominal shares and reduction in deferred share    capital, see Note 6		—			—			—			—		—			—		—			—			123,638,835			153			—		—		(153	)		—			—			—
Effect of corporate reorganization including conversion of preferred shares    and class A - G ordinary shares to ordinary share, see Note 6		(153,275,739	)		(1	)		(15,088,785	)		—		25,921,158			—		142,443,366			2			—			—			—		—		—			—			—			2
Issuance of ADSs in initial public offering, net of issuance costs of $4,832		—			—			—			—		9,951,591			—		—			—			—			—			—		—		161,758			—			—			161,758
Non-cash share-based compensation		—			—			—			—		—			—		—			—			—			—			—		—		6,204			—			—			6,204
Unrealized loss on foreign currency translation		—			—			—			—		—			—		—			—			—			—			—		—		—			12,341			—			12,341
Net loss		—			—			—			—		—			—		—			—			—			—			—		—		—			—			(96,322	)		(96,322	)
Balance at December 31, 2020		—			—			—			—		35,854,945			—		144,517,898			2			123,638,835			153			—		—		456,293			9,342			(215,990	)		249,800
Shares issued under employee share purchase plan		—			—			—			—		59,169			—		—			—			—			—			—		—		179			—			—			179
Vesting of restricted share units		—			—			—			—		34,750			—		—			—			—			—			—		—		—			—			—			—
Subdivision of £0.001 nominal shares and reduction in deferred share    capital, see Note 6		—			—			—			—		—			—		—			—			(100,000,000	)		(137	)		1		137		—			—			—			—
Forfeiture of ordinary shares		—			—			—			—		(94,273	)		—		94,273			—			—			—			—		—		—			—			—			—
Cancellation of deferred shares		—			—			—			—		—			—		(144,500,094	)		(2	)		(23,638,835	)		(16	)		—		—		18									—
Non-cash share-based compensation		—			—			—			—		—			—		—			—			—			—			—		—		10,723			—			—			10,723
Unrealized loss on foreign currency    translation		—			—			—			—		—			—		—			—			—			—			—		—		—			130			—			130
Net loss		—			—			—			—		—			—		—			—			—			—			—		—		—			—			(140,391	)		(140,391	)
Balance at December 31, 2021		—			—			—			—		35,854,591			-		112,077			-			-			-			1		137		467,213			9,472			(356,381	)		120,441
Shares issued under employee share purchase plan		—			—			—			—		372,139			—		—			—			—			—			—		—		200			—			—			200
Vesting of restricted share units		—			—			—			—		44,063			—		—			—			—			—			—		—		—			—			—			—
Forfeiture of ordinary shares		—			—			—			—		(6,186	)		—		6,186			—			—			—			—		—		—			—			—			—
Issuance of ordinary shares, net of issuance cost of $2.6M		—			—			—			—		28,848,968			—		—			—			—			—			—		—		28,291			—			—			28,291
Non-cash share-based compensation		—			—			—			—		—			—		—			—			—			—			—		—		5,077			—						5,077
Unrealized loss on foreign currency translation		—			—			—			—		—			—		—			—			—			—			—		—		—			(12,623	)		—			(12,623	)
Net loss		—			—			—			—		—			—		—			—			—			—			—		—		—			—			(88,972	)		(88,972	)
Balance at December 31, 2022		—			—			—			—		65,113,575			—		118,263			—			—			—			1		137		500,781			(3,151	)		(445,353	)		52,414

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

F-6

FREELINE THERAPEUTICS HOLDINGS PLC

Consolidated Statements of Cash Flows

(in thousands)

	For the Year Ended December 31,
	2022			2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(88,972	)	$	(140,391	)	$	(96,322	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,741			2,390			1,913
Non-cash share-based compensation expense		5,077			10,723			6,204
Deferred income tax		(156	)		(171	)		(158	)
Loss on disposal of property and equipment		235			148			76
Gain on lease termination		(5,216	)		—			—
Changes in components of operating assets and liabilities:
Accounts receivable		—			98			(91	)
Prepaids and other current assets		808			17,519			(11,885	)
Other non-current assets		(384	)		9			104
Operating lease right of use assets		7,506			—			—
Accounts payable		5,446			(2,890	)		1,540
Accrued expenses and other current liabilities		(5,124	)		5,008			3,654
Operating lease liabilities		815			—			—
Net cash used in operating activities		(78,224	)		(107,557	)		(94,965	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment		(7,014	)		(4,274	)		(2,513	)
Purchase of intangible assets		—			—			(1	)
Proceeds from disposal of property and equipment		—			—			126
Net cash used in investing activities		(7,014	)		(4,274	)		(2,388	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of preferred shares, net of issuance costs		—			—			80,853
Proceeds from exercise of ESPP		195			179			—
Proceeds from exercise of warrants for ordinary shares		—			—			9
Proceeds from issuance of ADSs, net of issuance costs		27,328			—			161,758
Payments of deferred financing costs		—			(1,163	)		—
Net cash (used) in/provided by financing activities		27,523			(984	)		242,620
Net increase in cash and cash equivalents classified within current assets for sale		(300	)		—			—
Effect of exchange rate changes on cash, cash equivalents and    restricted cash		(12,442	)		302			11,738
Net (decrease) increase in cash, cash equivalents and restricted    cash		(70,457	)		(112,513	)		157,005
Cash, cash equivalents and restricted cash
Beginning of period		119,063			231,576			74,571
End of period	$	48,606		$	119,063		$	231,576
SUPPLEMENTAL DISCLOSURE OF CASH FLOW    INFORMATION:
Operating lease liabilities arising from obtaining right-of-use assets	$	2,526		$	—		$	—
Commitment shares issued to Lincoln Park Capital Fund, LLC	$	963		$	—		$	—
Property and equipment purchases included in accounts payable	$	261		$	21		$	379
Cash paid for income taxes	$	317		$	—		$	281

F-7

The following table provides a reconciliation of the cash, cash equivalents and restricted cash balances as of each of the periods, shown above:

	For the Year Ended December 31,
	2022		2021		2020
Cash and cash equivalents	$	47,279	$	117,662	$	229,974
Long-term restricted cash		1,327		1,401		1,602
Total cash, cash equivalents and restricted cash	$	48,606	$	119,063	$	231,576

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

F-8

FREELINE THERAPEUTICS HOLDINGS PLC

Notes to Consolidated Financial Statements

1. Nature of the Business

Organization

Freeline Therapeutics Holdings plc (the “Company”) is a clinical-stage biotechnology company developing transformative adeno-associated virus (“AAV”) vector-mediated gene therapies for patients suffering from chronic debilitating diseases. The Company is headquartered in the United Kingdom (“U.K.”) and had operations in Germany and the United States (“U.S.”) as of December 31, 2022.

On November 11, 2022, the Company signed a definitive agreement to sell its German subsidiary, Freeline Therapeutics GmbH, and certain intellectual property rights pertaining to the business of Freeline Therapeutics GmbH, to Ascend Gene and Cell Therapies Ltd. (“Ascend”) for $25.0 million, subject to purchase price adjustments. Refer to the discussion in Note 3, Assets Held for Sale, for further information.

Reorganization and Initial Public Offering

The Company is a public limited company incorporated pursuant to the laws of England and Wales. On August 11, 2020, the Company completed its initial public offering (“IPO”) of American Depositary Shares (“ADSs”). In the IPO, the Company sold an aggregate of 9,951,591 ADSs representing the same number of ordinary shares, including 1,128,062 ADSs pursuant to the underwriters’ option to purchase additional ADSs, at an IPO price of $18.00 per ADS. Net proceeds were approximately $161.8 million after deducting underwriting discounts and commissions and offering expenses paid by the Company.

Freeline Therapeutics Holdings plc is the successor to Freeline Therapeutics Holdings Limited (the “Predecessor”) and the financial information for periods prior to the incorporation of the Company represents that of the Predecessor. In connection with the IPO, the Company completed a corporate reorganization. In connection with the corporate reorganization, the different classes of ordinary shares were converted into a single class of ordinary shares, and such ordinary shares were consolidated and subdivided to reflect an approximately 1-for-0.159 reverse split of such ordinary shares (see Note 8, Shareholders' Equity).

Going Concern

In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern.

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

The Company has funded its operations primarily with proceeds from the sale of its equity securities. As of December 31, 2022, the Company had unrestricted cash and cash equivalents of $47.3 million. On November 11, 2022, the Company signed a definitive agreement to sell its German subsidiary, Freeline Therapeutics GmbH, and certain intellectual property rights pertaining to the business of Freeline Therapeutics GmbH, to Ascend Gene and Cell Therapies Ltd. for $25.0 million, subject to purchase price adjustments. Subsequent to the balance sheet date, the Company closed this transaction. See Note 16, Subsequent Events. However, the Company has incurred recurring losses since its inception, including net losses of $89.0 million, $140.4 million, and $96.3 million for the years ended

F-9

December 31, 2022, 2021 and 2020, respectively. In addition, the Company had an accumulated deficit of $445.4 million as of December 31, 2022. The net cash used in operating and investing activities was $85.2 million for the year ended December 31, 2022. The Company expects to continue to incur significant expenses and generate operating losses for the foreseeable future. Additionally, the Company is involved in a dispute with Brammer relating to the Manufacturing Agreement as described in Note 12, Commitments and Contingencies. There can be no assurance that the outcome of such dispute will be successful, and an adverse determination could have a material adverse effect on the Company's financial condition. However, the Company is confident in the merits of its claims against Brammer and intends to prosecute this action vigorously. These conditions indicate that there is substantial doubt regarding the Company’s ability to continue as a going concern for at least 12 months from the issuance date of the audited consolidated financial statements.

As a result, the Company will need additional funding to support its continuing operations. There can be no assurances, however, that additional funding will be available on favorable terms, or at all. If adequate funds are not available, the Company will be required to reduce spending and potentially delay, limit, reduce or terminate its product research and development efforts in order to enable it to meet its obligations as they fall due for the foreseeable future.

The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Accordingly, the consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany accounts and transactions have been eliminated upon consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual for research and development expenses, the fair value of ordinary shares, the valuation of the warrants, non-cash share-based compensation and income taxes. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ materially from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments that have maturities of three months or less when acquired to be cash equivalents.

Restricted Cash

Restricted cash as of December 31, 2022 and 2021 consisted of collateral deposits for the office spaces leased by Freeline Therapeutics GmbH. Restricted cash is included as a component of prepaid expenses and other current assets or other non-current assets on the Company’s consolidated balance sheets, depending on whether it has been classified as short-term or long-term.

F-10

Deferred Financing Costs

The Company capitalizes deferred financing costs, which primarily consist of direct, incremental legal, professional, accounting and other third-party fees relating to the Company’s financing transactions, within other non-current assets. In November 2021, the Company entered into the Open Market Sale AgreementSM with Jefferies LLC. The Company incurred deferred financing costs of $1.2 million, which were capitalized within other non-current assets.

Fair Value of Financial Instruments

Financial instruments consist of cash and cash equivalents. Certain assets of the Company are carried at fair value under U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

•Level 1—Quoted prices in active markets for identical assets or liabilities.

•Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

•Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The hierarchy requires the use of observable market data when available and to minimize the use of unobservable inputs when determining fair value. The Company has classified cash equivalents at December 31, 2022 and 2021 as fair value on a recurring basis, as Level 1.

Management believes that the carrying amounts of the Company’s consolidated financial instruments approximate fair value due to the short-term nature of those instruments.

Concentrations of Credit Risk and Off-Balance Sheet Risk

Financial instruments that subject the Company to credit risk consist solely of cash and cash equivalents. While the Company is evaluating the financial institutions at which it places its cash and cash equivalents, the Company generally places its cash and cash equivalents at banks in amounts that may exceed the insurance coverage offered by the Financial Services Compensation Scheme (“FSCS”) or the Federal Deposit Insurance Corporation (“FDIC”). The Company has no significant off-balance-sheet risk or concentration of credit risk, such as foreign exchange contracts, options contracts, or other foreign hedging arrangements.

Property and Equipment

Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the respective assets, which are as follows:

	Estimated Useful Life
Office equipment, computers and fixtures and fittings	3 years
Laboratory equipment	5 years
Leasehold improvements	10 years Shorter of useful life or remaining lease term

F-11

Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the consolidated statement of operations and other comprehensive loss. Expenditures for repairs and maintenance are charged to expense as incurred.

Impairment of Long-Lived Assets

The Company evaluates assets for potential impairment when events or changes in circumstances indicate the carrying value of the assets may not be recoverable. Recoverability is measured by comparing the book values of the assets to the expected future net undiscounted cash flows that the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the book values of the assets exceed their fair value. The Company did not recognize impairment losses in the year ended December 31, 2022. The Company recognized $0.1 million impairment losses in the year ended December 31, 2021. The Company did not recognize impairment losses in the year ended December 31, 2020.

Segment Information

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker in deciding how to allocate resources and assess performance. The Company and the Company’s chief operating decision maker, the Company’s chief executive officer, views the Company’s operations and manages its business as a single operating segment, which is the business of developing and commercializing gene therapies. The Company is a public limited company incorporated pursuant to the laws of England and Wales, has its principal executive offices in Stevenage, United Kingdom and operates as one business segment.

The Company’s long-lived assets by country were as follows:

	December 31,		December 31,
	2022		2021
U.K	$	17,894	$	6,078
Germany		13,569		6,193
U.S		587		185
	$	32,050	$	10,233

Long-lived assets include assets classified as held for sale and exclude deferred tax assets.

Research and Development Costs

Research and development costs are expensed as incurred. Research and development expenses consist of costs incurred in performing research and development activities, including employee related salaries, benefits, and non-cash share-based compensation, facilities and related depreciation expenses, travel, third-party license fees, and external costs of outside vendors engaged to conduct clinical trial and development activities and manufacturing costs to develop and produce clinical trial materials.

Research Contract Costs and Accruals

The Company has entered into various research and development-related contracts with research institutions and other companies. These agreements are generally cancelable, and related payments are recorded as research and development expenses as incurred. Accruals for research and development expenses typically include fees paid to vendors in conjunction with preclinical development activities, contract research organization (“CROs”) and investigative sites in connection with preclinical and clinical activities, and contract manufacturing organization (“CMOs”) in connection with the manufacturing of drug formulations for use in preclinical and clinical activities. The Company records accruals for estimated ongoing research costs. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted costs. Estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates.

F-12

Patent Costs

The Company expenses patent application and related legal costs as incurred and classifies such costs as general and administrative expenses in the accompanying consolidated statement of operations and comprehensive loss.

Non-Cash Share-Based Compensation

The Company recognizes compensation expense for equity awards based on the grant date fair value of the award. For equity awards that vest based on a service condition, the non-cash share-based compensation expense is recognized on a straight-line basis over the requisite service period. The Company uses the fair value of its ordinary shares to determine the fair value of Employee Shares. The Company accounts for forfeitures as they occur. For equity awards with a combination of service and performance conditions, the Company recognizes non-cash share-based compensation expense using a straight-line basis over the requisite service period when the achievement of a performance-based milestone is probable, based on the relative satisfaction of the performance condition as of the reporting date.

The fair value of each share option grant is estimated on the date of grant using the Black-Scholes option pricing model. See Note 9, Non-cash Share-Based Compensation, for the Company's assumptions used in connection with option grants made during the periods covered by these financial statements. Assumptions used in the option pricing model include the following:

Expected volatility. The Company lacks company-specific historical and implied volatility information for its ADSs. Therefore, the Company estimates the expected share volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded share price.

Expected term. The expected term of the Company's share options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options.

Risk-free interest rate. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods that are approximately equal to the expected term of the award.

Expected dividend. Expected dividend yield of zero is based on the fact that the Company has never paid cash dividends on ordinary shares and does not expect to pay any cash dividends in the foreseeable future.

Fair value of ordinary shares. The ordinary shares underlying the options granted after the Company's IPO are issued at the fair market value of the Company's ADS at the date the grant is approved.

Foreign Currency Translation

The Company maintains its financial statements of each entity within the group in its local currency, which is also the entity’s functional currency. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Non-monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the date of the transaction. Exchange gains or losses arising from foreign currency transactions are included in other expense, net in the consolidated statement of comprehensive loss. The Company recorded foreign exchange loss of approximately $12.6 million for the year ended December 31, 2022. The Company recorded foreign exchange gains of approximately $0.1 million and $12.3 million for the years ended December 31, 2021 and 2020 respectively.

F-13

For financial reporting purposes, the financial statements of the Company have been presented in the U.S. dollar, the reporting currency. The financial statements of entities are translated from their functional currency into the reporting currency as follows: assets and liabilities are translated at the exchange rates at the balance sheet dates, revenue and expenses are translated at the average exchange rates and shareholders’ equity is translated based on historical exchange rates. Translation adjustments are not included in determining net loss but are included as a foreign exchange adjustment to other comprehensive loss, a component of shareholders’ equity.

Income Taxes

The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in its tax returns. Deferred tax assets and liabilities are determined on the basis of the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that deferred tax assets will be recovered in the future to the extent management believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies.

The Company accounts for uncertainty in income taxes by recognizing in the consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed as the amount of benefit to recognize in the consolidated financial statements. The amount of benefits that may be used is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate, as well as the related net interest and penalties.

The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations. As of December 31, 2022 and 2021, no accrued interest or penalties are included on the related tax liability line in the consolidated balance sheets.

Benefit from Research and Development Tax Credit

The Company is subject to corporate taxation in the U.K. Due to the nature of the business, the Company has generated losses since inception. The benefit from research and development (“R&D”) tax credits is recognized in the consolidated statements of operations as a component of other income, net, and represents the sum of the research and development tax credits recoverable in the U.K.

The U.K. R&D tax credit is fully refundable to the Company and is not dependent on current or future taxable income. As a result, the Company has recorded the entire benefit from the U.K. research and development tax credit as a benefit which is included in net loss before income tax and accordingly, not reflected as part of the income tax provision. If, in the future, any U.K. R&D tax credits generated are needed to offset a corporate income tax liability in the U.K., that portion would be recorded as a benefit within the income tax provision and any refundable portion not dependent on taxable income would continue to be recorded within other income, net.

As a company that carries out extensive research and development activities, the Company benefits from the U.K. R&D tax credit regime. The amount of benefits received depends on whether the Company qualifies for a tax credit either as a Small and Medium Enterprise (“SME”), or under the Research and Development Expenditure Credit (“RDEC”), program. The RDEC program provides a lower tax credit than the SME program. Based on criteria established by HM Revenue & Customs (“HMRC”), the Company expects a portion of expenditures being carried out in relation to its pipeline R&D, clinical trials management and manufacturing development activities to be eligible for the RDEC regime for the years ended December 31, 2022 and 2021. Such expenditures were eligible for the SME regime for the years ended December 31, 2020. Under the RDEC scheme, the Company is able to surrender some of its trading losses that arise from qualifying research and development activities for a cash rebate of up to 10.53% (or,

F-14

from April 2023, 15%) of such qualifying research and development expenditure. Qualifying expenditures largely comprise employment costs for research staff, consumables, and utilities costs incurred as part of research projects. A portion of costs relating to research and development, clinical trials and manufacturing activities are eligible for inclusion within these tax credit cash rebate claims.

Unsurrendered U.K. losses may be carried forward indefinitely to be offset against future taxable profits, subject to numerous utilization criteria and restrictions. The amount that can be offset each year is limited to £5.0 million plus an incremental 50% of U.K. taxable profits.

Value Added Tax (“VAT”) is broadly charged on all taxable supplies of goods and services by VAT-registered businesses. Under current rates, an amount of 20% of the value, as determined for VAT purposes, of the goods or services supplied is added to all sales invoices and is payable to HMRC. Similarly, VAT paid on purchase invoices is generally reclaimable from HMRC.

Comprehensive Loss

Comprehensive loss includes net loss as well as other changes in shareholders’ equity that result from transactions and economic events other than those with shareholders.

Net Loss per Share

The Company has reported losses since inception and has computed basic net loss per share attributable to ordinary shareholders by dividing net loss attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding for the period, without consideration for potentially dilutive securities. The Company computes diluted net loss per ordinary share after giving consideration to all potentially dilutive ordinary shares, including unvested Employee Shares and warrants to purchase ordinary shares and convertible preferred shares, outstanding during the period determined using the treasury-stock and if-converted methods, except where the effect of including such securities would be antidilutive. Because the Company has reported net losses since inception, these potential ordinary shares have been anti-dilutive and basic and diluted loss per share were the same for all periods presented.

Recently Adopted Accounting Pronouncement

Leases

Effective January 1, 2022, the Company adopted Accounting Standards Codification (“ASC”), Topic 842, Leases (“ASC 842”), using the modified retrospective approach and utilizing the effective date as its date of initial application, for which prior periods are presented in accordance with the previous guidance in ASC 840, Leases. Adoption of this standard resulted in the recording of operating lease right-of-use assets and operating lease liabilities of $61.9 million and $64.7 million, respectively, on the Company’s balance sheets on the effective date. The adoption of the standard did not have a material effect on the Company’s statements of operations and comprehensive loss, shareholders’ equity and cash flows. Refer to Note 12, Commitments and Contingencies, for right-of-use assets and liabilities recorded during the year ended December 31, 2022.

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, current lease liabilities and, if applicable, long-term lease liabilities. The Company has elected to utilize the practical expedient to not recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required for items such as incentives received, initial direct costs, or prepayments. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

F-15

The Company has elected to apply the package of three expedients to all of its leases requiring (1) no reassessment of whether any expired or existing contracts are or contain leases, (2) the lease classification of any expired or existing leases, or (3) the capitalization of initial direct costs for any existing leases. All the Company’s leases are classified as operating leases.

Assumptions made by the Company at the commencement date are re-evaluated upon occurrence of certain events, including a lease modification. A lease modification results in a separate contract when the modification grants the lessee an additional right of use not included in the original lease and when lease payments increase commensurate with the stand-alone price for the additional right of use. When a lease modification results in a separate contract, it is accounted for in the same manner as a new lease.

Operating lease costs are recognized on a straight-line basis over the lease term, and they are categorized within research and development and general and administrative expenses in the consolidated statements of operations. The operating lease cash flows are categorized under net cash used in operating activities in the consolidated statements of cash flows.

The Company subleased certain leased office spaces to third parties and recognized sublease income on a straight-line basis over the sublease term within research and development.

3. Assets Held for Sale

The Company classifies assets as held for sale when a sale is probable, is expected to be completed within one year, and the asset group meets all of the accounting criteria to be classified as held for sale. As discussed in Note 1, Nature of Business, on November 11, 2022, the Company entered into a definitive agreement to sell its German subsidiary, Freeline Therapeutics GmbH, and certain intellectual property. As a result, the assets related to Freeline Therapeutics GmbH were classified as held for sale as of December 31, 2022, and the Company ceased recording depreciation and amortization of the long-lived assets included in the sale from the date of execution of the definitive agreement.

The carrying amounts of the assets and liabilities held for sale in the consolidated balance sheet consisted of the following (in thousands):

	December 31,
	2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	300
Prepaid expenses and other current assets		244
Total current assets held for sale		544
NON-CURRENT ASSETS:
Property and equipment, net		5,384
Operating lease right of use assets		8,182
Other non-current assets		3
Total assets held for sale	$	14,113
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	193
Accrued expenses and other current liabilities		1,324
Operating lease liabilities, current		914
Total current liabilities related to assets held for sale		2,431
NON-CURRENT LIABILITIES:
Operating lease liabilities, non-current	$	7,906
Total liabilities related to assets held for sale	$	10,337

F-16

4. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):

	December 31,		December 31,
	2022		2021
U.K. R&D tax credit	$	1,230	$	2,211
Prepaid tax		1,373		2,070
Insurance		1,702		2,346
Prepaid manufacturing costs		456		2,002
Other current assets		1,474		2,001
	$	6,235	$	10,630

5. Property and Equipment, Net

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

	December 31,			December 31,
	2022			2021
Office equipment and computers	$	751		$	1,098
Furniture & Fixtures		2,584			4,602
Laboratory equipment		3,140			10,083
Leasehold improvements		7,549			955
		14,024			16,738
Less: accumulated depreciation		(5,017	)		(6,832	)
	$	9,007		$	9,906

Depreciation and amortization expense was $1.8 million, $2.4 million and $1.9 million for the years ended December 31, 2022, 2021 and 2020, respectively.

6. Other Non-current Assets

Other non-current assets consisted of the following (in thousands):

	December 31,		December 31,
	2022		2021
Restricted cash	$	1,327	$	1,400
Deferred financing costs		2,133		1,142
Deferred tax asset		533		377
Intangible assets		—		8
	$	3,993	$	2,927

Restricted cash consisted of collateral deposits for the office space leased by the Company's wholly owned subsidiary, Freeline Therapeutics GmbH.

7. Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following (in thousands):

	December 31,		December 31,
	2022		2021
Compensation and benefits costs	$	4,178	$	4,554
Restructuring charges		—		2,362
Research and development expenses		1,923		6,726
Consulting and professional services		1,215		1,083
Other liabilities		592		772
	$	7,908	$	15,497

F-17

8. Shareholders’ Equity

Ordinary Shares

As of December 31, 2022, the Company’s authorized capital consisted of 400,000,000 ordinary shares with a par value of £0.00001 per share.

Each holder of ordinary shares is entitled to one vote per ordinary share and to receive dividends when and if such dividends are recommended by the board of directors and approved by the shareholders. As of December 31, 2022, the Company has not declared any dividends.

Registered Direct Offering

On March 10, 2022, the Company entered into a purchase agreement with its majority shareholder, Syncona Portfolio Limited, a subsidiary of Syncona Limited, and certain other existing shareholders providing for the issuance and sale by the Company of 24,857,144 of the Company’s American Depositary Shares (“ADSs”) at a price of $1.05 per ADS for total gross proceeds of $26.1 million, in a registered direct offering. The offering closed on March 15, 2022. The Company received net proceeds of approximately $24.2 million from the offering, after deducting offering expenses payable by the Company.

Lincoln Park Capital

On March 18, 2022, the Company entered into a purchase agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”) under which the Company may at its discretion, sell to Lincoln Park up to $35.0 million of its ADSs over a 36-month period, subject to certain daily limits, applicable prices, and conditions. In addition, under the purchase agreement, the Company issued 954,208 ADSs as commitment shares to Lincoln Park as consideration for its commitment to purchase ADSs under the purchase agreement (the “Commitment Shares”). The Commitment Shares were valued using the closing price of the Company’s ADSs on the date of the purchase agreement resulting in a fair market value of $1.0 million. The fair value of the Commitment Shares as well as issuance costs of $0.2 million associated with the purchase agreement are classified as prepaid expenses and other current assets in the accompanying consolidated balance sheet. As the Company’s ADSs are sold in accordance with the purchase agreement, the fair value of the Commitment Shares and issuance costs will be reclassified to additional paid-in capital on the Company’s consolidated balance sheet. During the year ended December 31, 2022, the Company did not issue any additional ADSs pursuant to the purchase agreement.

Open Market Sale AgreementSM

On November 17, 2021, the Company entered into an Open Market Sale AgreementSM (the "Sales Agreement") with Jefferies LLC ("Jefferies") pursuant to which the Company may issue and sell ADSs having aggregate offering sales proceeds of up to $75.0 million, from time to time, in “at-the-market” offerings pursuant to which Jefferies will act as sales agent and/or principal. During the year ended December 31, 2022, the Company issued 3,037,616 ADSs pursuant to the Sales Agreement, raising approximately $3.2 million in net proceeds.

Initial Public Offering and Impact of Corporate Reorganization

On August 11, 2020, the Company completed its IPO. As part of the IPO, the Company sold an aggregate of 8,823,529 ADSs representing the same number of ordinary shares, at a public offering price of $18.00 per ADS for total net proceeds of approximately $147.7 million. On August 20, 2020, the underwriters of the IPO exercised a portion of their overallotment option by purchasing an additional 1,128,062 ADSs from the Company at the IPO price of $18.00 per ADS, resulting in additional net proceeds of $18.9 million. The total net proceeds were approximately $161.8 million, after deducting underwriting discounts, commissions and offering expense paid by the Company of $12.5 million.

Prior to the Company’s corporate reorganization and IPO, the Company had issued series A preferred shares, series B preferred shares, series C preferred shares, A ordinary shares, B ordinary shares, C ordinary shares, D ordinary shares, E ordinary shares, F ordinary shares and G ordinary shares. As part of the Company’s corporate reorganization and prior to its IPO, all shareholders of Freeline Therapeutics Limited exchanged each of their shares for shares of Freeline Therapeutics Holdings Limited, resulting in each shareholder holding the same number and class of newly issued shares of £1.00 each in Freeline Therapeutics Holdings Limited. Each resulting share was subdivided into (i)

F-18

one share of the same class, with a nominal value of £0.00001, and (ii) one deferred share of £0.99999 nominal value. Immediately prior to the closing of the IPO, the different classes of shares were converted into a single class of ordinary shares, and such ordinary shares were consolidated and subdivided to reflect an approximately 1-for-0.159 reverse split of such ordinary shares and the balance of any ordinary shares created various classes of deferred shares.

Deferred Shares

Deferred shares are a unit of equity that confer to their holder effectively no economic rights or any voting rights. The Company, without the consent of the shareholder, may transfer deferred shares at any time for $nil consideration.

In the first quarter of 2021, (i) 100,000,000 deferred shares of £0.001 each were consolidated into a single deferred share of £100,000 nominal value, and (ii) the remaining 23,638,835 deferred shares of £0.001 each and all 144,500,094 deferred shares of £0.00001 each were canceled. In each of the years ended December 31, 2022, 2021 and 2020, unvested Employee Shares were forfeited upon termination of employment, classified as additional deferred shares of £0.00001 each on the balance sheet and were or will be subsequently cancelled (see Note 9). The remaining deferred share of £100,000 nominal value is presented as a separate class of equity on the balance sheet and statement of shareholders’ equity.

Deferred shares are not included in the Company’s potentially dilutive securities as they are not ordinary shares and have no conversion rights.

The table below reflects the number of ordinary shares and deferred shares issued and outstanding at December 31, 2022, 2021 and 2020. The conversion of preferred and ordinary shares on an approximately 1-for-0.159 basis and the creation of deferred shares are reflected in the years ended December 31, 2021 and 2020 only.

	December 31,
	2022		2021		2020
Ordinary shares	65,113,575		35,854,591		35,854,945
Deferred shares of £0.00001	118,263	(1)	112,077	(2)	144,517,898	(3)
Deferred shares of £0.001	—		—		123,638,835
Deferred shares of £100,000	1		1		—
Total ordinary and deferred shares	65,231,839		35,966,669		304,011,678

(1)118,263 represents forfeiture of unvested ordinary shares of £0.00001 par value upon termination of employment (see Note 9).

(2)112,077 represents forfeiture of unvested ordinary shares of £0.00001 par value upon termination of employment (see Note 9).

(3)144,517,898 includes forfeiture of 17,804 unvested ordinary shares of £0.00001 par value upon termination of employment (see Note 9).

9. Non-Cash Share-Based Compensation

2020 Equity Incentive Plan

On July 31, 2020, the Company adopted an equity incentive plan (the “2020 Plan”). The 2020 Plan provides for the grant of options, share appreciation rights ("SARs"), restricted shares, dividend equivalents, restricted share units ("RSUs"), and other share-based awards. The maximum number of equity awards originally authorized under the 2020 Plan was 5,898,625 shares, which consisted of 3,474,469 new ordinary shares and 2,424,156 ordinary shares that were subject to awards under prior equity incentive plans that may become available for issuance under the 2020 Plan. Additionally, the number of ordinary shares reserved for issuance under the 2020 Plan automatically increases on January 1st of each year, for a period of not more than ten years, by an amount equal to the lesser of (i) 4% of the total number of ordinary shares outstanding on December 31st of the prior calendar year or (ii) such fewer number of ordinary shares as the board of directors may designate prior to the applicable January 1st date. On January 1, 2022

F-19

and 2021, the number of shares reserved automatically increased by 1,434,184 and 1,434,198 shares, which were 4% of the total number of ordinary shares outstanding on December 31, 2021 and 2020, respectively.

Any equity awards granted under the 2020 Plan or any prior equity incentive plan that expire, lapse, or are terminated, exchanged for cash, surrendered, repurchased, or cancelled, without having been fully exercised, or forfeited, will be added back to shares issuable under the 2020 Plan, subject to certain conditions.

The Company has typically granted equity awards under the 2020 Plan that vest over a four-year service period, with 25% of the award vesting on the first anniversary of the vesting commencement date, with the balance generally vesting periodically over the remaining three years.

2021 Equity Inducement Plan

On September 27, 2021, the Company adopted an equity inducement plan (the “Inducement Plan”). The purpose of the Inducement Plan is to enhance the Company’s ability to attract employees who are expected to make important contributions to the Company by providing these individuals with equity ownership opportunities. Awards under the Inducement Plan are granted as an inducement material to employees entering into employment with the Company. The Inducement Plan provides for the grant of options, SARs, restricted shares, dividend equivalents, RSUs, and other share-based awards. On May 30, 2022, the Board amended the Inducement Plan to authorize an additional 2,000,000 shares under the Inducement Plan. The maximum number of equity awards authorized under the Inducement Plan is 3,400,000 shares. Any equity awards granted under the Inducement Plan that expire, lapse, or are terminated, exchanged for cash, surrendered, repurchased or cancelled, without having been fully exercised, or forfeited, will be added back to shares issuable under the Inducement Plan, subject to certain conditions.

2020 Employee Share Purchase Plan

On July 31, 2020, the Company adopted an employee share purchase plan (the “ESPP”). The purpose of the ESPP is to provide employees the opportunity to purchase ordinary shares or ADSs at 85% of the fair market value of the ADSs on the offering date or the exercise date, whichever is lower, for up to 15% of such employee’s compensation for each pay period. The Company reserved 347,447 ordinary shares for the ESPP. The ESPP provides for an annual increase beginning on January 1, 2022 in an amount equal to the least of (i) 347,447 ordinary shares, (ii) 1% of the total number of ordinary shares outstanding on December 31st of the prior calendar year or (iii) such fewer number of ordinary shares as the board of directors may designate prior to the applicable January 1st date. On January 1, 2022, the reserve automatically increased by 347,447 shares. During the year ended December 31, 2022, 372,139 shares were purchased under the ESPP. As of December 31, 2022, 263,586 shares are available for future issuance.

Employee Shares

The Company measures all non-cash share-based awards using the fair value on the date of grant and recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award. Prior to the Company’s IPO, the Company granted share-based compensation in the form of ordinary shares, collectively referred to as Employee Shares, to employees and non-employees with both performance and service-based vesting conditions. The Company records expense for these awards using the straight-line method.

F-20

A summary of the changes in the Employee Shares from December 31, 2019 through December 31, 2022 is as follows.

	Number of Shares			Weighted Average Grant Date Fair Value
Unvested balance as of December 31, 2019		492,514		$	1.36
Granted		42,412			11.78
Vested		(209,836	)		7.10
Forfeited		(117,780	)		12.64
Unvested balance as of December 31, 2020		207,310			9.97
Granted		—			0.00
Vested		(65,705	)		8.71
Forfeited		(94,273	)		10.36
Unvested balance as of December 31, 2021		47,332			10.82
Granted		—			—
Vested		(24,837	)		8.71
Forfeited		(6,186	)		10.36
Unvested balance as of December 31, 2022		16,309		$	11.33

As of December 31, 2022, there was $0.2 million of unrecognized compensation cost related to unvested Employee Shares outstanding, which is expected to be recognized over a weighted average period of 1.5 years. Unvested Employee Shares are forfeited upon termination of employment, classified as deferred shares on the balance sheet and are subsequently cancelled.

Share Options Valuation

The assumptions used in the Black-Scholes option pricing model (see Note 2, Summary of Significant Accounting Policies) to determine the fair value of the share options granted to employees and directors during the years ended December 31, 2022 , 2021 and 2020 were as follows:

	For the Year Ended December 31,
	2022			2021			2020
Expected option life (years)		6.3			6.3			6.1
Expected volatility		74.7	%		76.9	%		77.4	%
Risk-free interest rate		2.2	%		1.1	%		0.4	%
Expected dividend yield		—			—			—

F-21

Share Options

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2019		—		$	—		—	$	—
Granted		3,760,210			14.79				—
Exercised		—			—				—
Canceled or Forfeited		(73,124	)		15.32				—
Outstanding as of December 31, 2020		3,687,086		$	13.03		9.59	$	9,931
Granted		4,352,281			6.87				—
Exercised		—			—				—
Expired		(145,638	)		13.02				—
Canceled or Forfeited		(2,472,014	)		13.20				—
Outstanding as of December 31, 2021		5,421,715			9.23		8.37		—
Granted		5,284,810			1.05			$	570
Exercised		—							—
Expired		(298,143	)		13.57				—
Canceled or Forfeited		(2,489,882	)		5.74				—
Outstanding as of December 31, 2022		7,918,500			4.76		8.40		—
Exercisable as of December 31, 2022		2,044,228			10.98		6.48		—
Vested and expected to vest as of December 31, 2022		7,918,500		$	4.76		8.40	$	—

The aggregate intrinsic value of share options is calculated as the difference between the exercise price of the share options and the fair value of the Company’s ordinary shares for those share options that had exercise prices lower than the fair value of the Company’s ordinary shares.

The weighted average grant-date fair values used for the share options granted during the years ended December 31, 2022, 2021 and 2020 were $0.70 per share, $4.49 per share and $9.87 per share, respectively.

As of December 31, 2022, there was $9.4 million of unrecognized compensation cost related to unvested share options outstanding, which is expected to be recognized over a weighted average period of 2.4 years.

F-22

Restricted Share Units

The Company has granted (i) RSUs that generally vest over a period of four years from the date of grant and (ii) RSUs to certain new employees in order to compensate them for equity awards forfeited to their previous employers. The latter RSUs generally vest over a period of under one year from the date of grant. The Company granted share options and RSUs as its annual equity incentive awards to employees during the year ended December 31, 2022. In 2021, the annual equity incentive awards consisted only of share options. The following table summarizes the activity related to RSUs during the years ended December 31, 2022 , 2021 and 2020:

	Number of RSUs			Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2019		—		$	—
Granted		2,500			17.56
Vested and settled		—			—
Forfeited		—			—
Outstanding as of December 31, 2020		2,500			17.56
Granted		120,375			9.64
Vested and settled		—			—
Forfeited		(34,125	)		8.63
Outstanding as of December 31, 2021		88,750		$	10.01
Granted		669,270			1.03
Vested and settled		—			—
Exercised		(44,688	)		5.63
Forfeited		(267,742	)		3.03
Outstanding as of December 31, 2022		445,590		$	0.98

Share-based Compensation Expense

Non-cash share-based compensation expense recorded as research and development and general and administrative expenses is as follows (in thousands):

	For the Year Ended December 31,
	2022		2021		2020
Research and development	$	2,127	$	4,511	$	2,510
General and administrative		2,950		6,212		3,694
	$	5,077	$	10,723	$	6,204

F-23

10. Income Taxes

The provision for income taxes for the years ended December 31, 2022, 2021 and 2020 was computed at the United Kingdom statutory income tax rate. The net loss (income) realized by the Company’s domestic and foreign entities before the calculation of income tax was $89.7 million and $(1.2) million in 2022, respectively. The net loss realized by the Company’s domestic and foreign entities before the calculation of income tax in 2021 was $141.2 million and $(1.0) million, respectively. The net loss realized by the Company’s domestic and foreign entities before the calculation of income tax in 2020 was $96.9 million and $(0.7) million, respectively. The income tax provision for the years then ended comprised (in thousands):

	For the Year Ended December 31,
	2022			2021			2020
Current expense:
United Kingdom	$	—		$	—		$	—
Foreign		524			513			287
Total current expense:	$	524		$	513		$	287
Deferred benefit
United Kingdom		—			—			—
Foreign		(156	)		(171	)		(158	)
Total deferred benefit:		(156	)		(171	)		(158	)
Total income tax expense:	$	368		$	342		$	129

A reconciliation of income tax expense computed at the statutory U.K. income tax rate to income taxes as reflected in the consolidated financial statements is as follows (in thousands):

	For the Year Ended December 31,
	2022			2021			2020
Income taxes at UK statutory rate of 19%	$	(16,806	)	$	(26,609	)	$	(18,277	)
R&D expenditure		—			—			5,756
Foreign rate differential		62			69			42
Change in valuation allowance		19,280			40,508			15,691
U.S. state income taxes		35			21			(13	)
Change in tax rates		(4,627	)		(16,777	)		—
Other		2,425			3,130			(3,070	)
	$	368		$	342		$	129

Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2022 and 2021 consist of the following (in thousands):

	For the Year Ended December 31,
	2022			2021
Deferred tax assets
Net operating loss carryforwards	$	78,057		$	64,527
Depreciation		(538	)		(885	)
Accrued expenses		531			393
Non-cash share-based compensation		2,686			4,900
Other		168			26
Total deferred tax assets	$	80,904		$	68,961
Valuation allowance		(80,369	)		(68,584	)
Net deferred tax assets	$	535		$	377

As of December 31, 2022 and 2021, the Company had U.K. net operating loss carryforwards of approximately $310.8 million and $258.1 million, respectively.

F-24

Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2022 and 2021 related primarily to the increases in net operating loss carryforwards and were as follows (in thousands):

	For the Year Ended December 31,
	2022		2021
Valuation allowance at beginning of year	$	68,584	$	24,450
Increases recorded to income tax provision		11,785		44,134
Valuation allowance at end of year	$	80,369	$	68,584

Future realization of the tax benefits of existing temporary differences and net operating loss carryforwards ultimately depends on the existence of sufficient taxable income within the carryforward period. As of December 31, 2022, the Company performed an evaluation to determine whether a valuation allowance was needed. The Company considered all available evidence, both positive and negative, which included the results of operations for the current and preceding years. The Company determined that it was not possible to reasonably quantify future taxable income and determined that it is more likely than not that all of the deferred tax assets in the United Kingdom and Ireland will not be realized. Accordingly, the Company maintained a full valuation allowance as of December 31, 2022 and 2021 on the United Kingdom and Ireland net deferred tax assets.

The Company applies the authoritative guidance on accounting for and disclosure of uncertainty in tax positions, which requires the Company to determine whether a tax position of the Company is more likely than not to be sustained upon examination, including resolution of any related appeals of litigation processes, based on the technical merits of the position. For tax positions meeting the more likely than not threshold, the tax amount recognized in the financial statements is reduced by the largest benefit that has a greater than fifty percent likelihood of being realized upon the ultimate settlement with the relevant taxing authority. There were no material uncertain tax positions as of December 31, 2022 and 2021.

The Company will recognize interest and penalties related to uncertain tax positions in income tax expense when in a taxable income position. As of December 31, 2022 and 2021, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Company’s statement of operations.

The Company and its subsidiaries file income tax returns in the U.K., the U.S., Germany, and Ireland. Generally, the tax years through 2022 remain open to examination by the major taxing jurisdictions to which the Company is subject. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the federal, state, or foreign tax authorities, if such tax attributes are utilized in a future period.

During the second quarter of 2021, the Finance Act 2021 (the Act) was enacted in the United Kingdom. The Act increases the main corporate income tax rate from 19% to 25% effective April 1, 2023 and enhances the first-year capital allowance on qualifying new plant and machinery assets effective April 1, 2021. The effects on the Company’s existing deferred tax balances have been recorded and is offset by the valuation allowance maintained against the Company’s U.K. net deferred tax assets.

F-25

11. Net Loss Per Share

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

	December 31,
	2022			2021			2020
Numerator
Net loss	$	(88,972	)	$	(140,391	)	$	(96,322	)
Net loss attributable to ordinary shareholders—basic and diluted	$	(88,972	)	$	(140,391	)	$	(96,322	)
Denominator
Weighted-average number of ordinary shares used in net loss
per share—basic and diluted		59,271,778			35,704,368			14,152,843
Net loss per share attributable to ordinary shareholders—basic and diluted	$	(1.50	)	$	(3.93	)	$	(6.81	)

The Company’s potentially dilutive securities, which include unvested Employee Shares, share options and RSUs, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of ordinary shares outstanding used to calculate both basic and diluted net loss per share attributable to ordinary shareholders is the same. The Company excluded the following potential ordinary shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to ordinary shareholders for the years ended December 31, 2022, 2021 and 2020 because including them would have had an anti-dilutive effect:

	December 31,
	2022		2021		2020
Unvested ordinary shares		16,309		47,332		207,310
Share options		7,918,500		5,421,715		3,687,086
Restricted share units		445,590		88,750		2,500
Total		8,380,399		5,557,797		3,896,896

12. Commitments and Contingencies

Legal Proceedings

From time to time, the Company may be a party to litigation or arbitration or subject to claims incident to the ordinary course of business. Regardless of the outcome, litigation and arbitration are subject to inherent uncertainties and could adversely impact the Company’s reputation, operations, and its operating results or overall financial condition. As of December 31, 2022, except as set forth below, there were no pending material legal proceedings to which the Company was a party or to which any of its property was subject, and the Company did not have contingency reserves established for any liabilities as of December 31, 2022 and December 31, 2021. When appropriate in management’s estimation, the Company will record adequate reserves in its financial statements for pending litigation or arbitration.

In June 2020, the Company entered into a dedicated manufacturing and commercial supply agreement (the “Manufacturing Agreement”) with Brammer Bio MA, LLC (“Brammer”) pursuant to which Brammer was obligated to reserve certain amounts of manufacturing capacity in its manufacturing facility to supply the Company with its product candidate FLT180a for the treatment of hemophilia B. As consideration for the reserved manufacturing capacity, the Company was required to pay Brammer an annual capacity access fee of $10.0 million, subject to inflationary annual increases, excluding any purchase commitment or other fees.

The Company committed to an annual minimum purchase commitment equivalent to $6.0 million throughout the term of the Manufacturing Agreement. The term of the Manufacturing Agreement was effective as of June 30, 2020 and was to continue until December 31, 2027.

F-26

On July 15, 2022, the Company sent notice in writing to Brammer that it was terminating, as of July 31, 2022, the Manufacturing Agreement as a result of alleged material breaches by Brammer of the Manufacturing Agreement and related agreements. On August 17, 2022, Brammer responded with a letter to terminate the Manufacturing Agreement effective immediately for the Company's alleged material breach of the Manufacturing Agreement and related agreements.

On October 3, 2022, the Company filed a demand for arbitration before the American Arbitration Association (the “AAA”) in New York against Brammer pursuant to the Manufacturing Agreement. The demand seeks damages for Brammer’s alleged breaches of its obligations to the Company, as communicated in the Company’s July 15, 2022 termination notice to Brammer and also seeks a declaratory judgment that Brammer materially breached the Manufacturing Agreement and related agreements and that, as a result of those material breaches, the Company had the right to terminate the Manufacturing Agreement. On December 5, 2022, Brammer filed an answer to the Company’s demand for arbitration and a counterclaim against the Company. The counterclaim seeks significant damages for the Company’s alleged repudiation and breach of its obligations to Brammer, as communicated in Brammer’s August 17, 2022 letter to the Company. It also seeks a declaratory judgment that the Company’s alleged repudiation and purported termination constituted a material breach of the Manufacturing Agreement and that Brammer is entitled to damages and any other relief set forth in the Manufacturing Agreement or deemed just by the AAA. The final hearing in this matter has been scheduled for November 6 to 9, 2023.

There can be no assurance that the outcome of such dispute will be successful, and an adverse determination could have a material adverse effect on the Company's results of operations and financial condition. However, the Company is confident in the merits of its claims against Brammer and intends to prosecute this action vigorously.

As a result of the mutual termination of the Manufacturing Agreement, the Company has derecognized the associated operating lease assets and liabilities (see "Operating Lease Agreements" below) and no longer recognizes the annual minimum purchase commitment as a contractual obligation. No loss contingencies have been recorded by the Company in relation to the dispute because the Company cannot reasonably estimate the potential outcome or amount of potential loss at this time.

Operating Lease Agreements

In August 2022, in connection with the termination of the Manufacturing Agreement, the Company deemed terminated the operating lease in connection with the dedicated capacity at the Brammer facility. The Company derecognized the related right-of-use asset of approximately $35.6 million and accordingly the operating lease liabilities of $40.3 million, resulting in a gain of $5.3 million, which was included in other income (expense), net on the consolidated statements of operations for the year ended December 31, 2022.

The following table summarizes the Company’s costs included in the statements of operations related to right-of-use lease assets entered into through December 31, 2022 (in thousands):

Lease Cost	For the Year Ended December 31, 2022
Operating lease cost
Research and development	$	11,558
General and administrative		608
Short-term lease cost		276
Sublease income		(246	)
Total lease cost	$	12,196

Other Information	For the Year Ended December 31, 2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	10,475
Right-of-use assets obtained in exchange for new operating lease liabilities	$	2,526
Weighted-average remaining lease term-operating leases		5.80
Weighted-average discount rate-operating leases		9.33	%

F-27

Contractual Obligations

The following table summarizes the Company’s contractual obligations as of December 31, 2022, and the effects that such obligations are expected to have on its liquidity and cash flows in future periods (in thousands):

Maturity of Contractual Obligations
Years Ended December 31,	Operating Leases
2023		4,564
2024		3,535
2025		2,224
2026		1,992
2027		1,668
Thereafter		6,268
Total payments		20,251
Less: imputed interest		(5,969	)
Less: foreign exchange (gain)/loss		463
Total	$	14,745

The Company recorded rent expense of $15.4 million and $4.2 million for the years ended December 31, 2021 and 2020, prior to the adoption of ASC 842.

Indemnification Agreements

In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnification. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations.

In accordance with the Articles of Association in force on December 31, 2022, the Company has indemnification obligations to its officers and directors for certain events or occurrences, subject to certain limits, while they are serving at the Company’s request in such capacity. There have been no claims to date, and the Company has director and officer insurance that may enable it to recover a portion of any amounts paid for future potential claims.

13. Related Party Transactions

The Company analyzed its transactions with related parties for the years ended December 31, 2022, 2021 and 2020, and determined it had the following material transactions.

Syncona

On March 10, 2022, the Company entered into a purchase agreement with its majority shareholder, Syncona Portfolio Limited, a subsidiary of Syncona Limited, and certain other existing shareholders providing for the issuance and sale by the Company of $26.1 million of the Company’s ADSs at a price of $1.05 per ADS, in a registered direct offering. The offering closed on March 15, 2022. The Company received net proceeds of approximately $24.2 million from the offering, after deducting offering expenses payable by the Company.

14. Employee Benefit Plans

In the United Kingdom, the Company makes contributions to private defined contribution pension schemes on behalf of its employees. The Company paid $0.6 million, $0.9 million and $0.8 million in contributions for the years ended December 31, 2022, 2021 and 2020, respectively.

In the United States, the Company established a defined contribution savings plan under Section 401(k) of the Internal Revenue Code. This plan covers substantially all U.S. employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. Matching contributions to the plan may be made at the discretion of the Company’s board of directors. The Company contributed

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$0.5 million, $0.5 million and $0.1 million to the plan for the years ended December 31, 2022, 2021 and 2020, respectively.

In Germany, the Company has made contributions to private defined contribution pension schemes on behalf of its employees. The Company paid $0.3 million, $0.4 million and $0.3 million in contributions for the years ended December 31, 2022, 2021 and 2020, respectively.

15. Restructuring Charges

During the fourth quarter of 2022, the Company completed a financial and organizational assessment to increase efficiencies and reduce expenses. As a result of this assessment, the Company reduced its U.S. and U.K. workforce by 26 employees. The Company incurred total expenses relating to the workforce reduction of approximately $1.5 million, consisting of severance and termination-related costs.

During the fourth quarter of 2021, the Company undertook a previous detailed strategic review of its programs and operations which allowed the Company to reduce expenses and extend its cash runway through a prioritization of its programs and an approximately 25% reduction in workforce. Associated total expenses for the workforce reduction of $2.1 million were accrued as at December 31, 2021 and settled in the year ended December 31, 2022.

16. Subsequent Events

On February 8, 2023, the Company closed the previously announced sale of its German subsidiary, Freeline Therapeutics GmbH, and certain intellectual property rights pertaining to the business of Freeline Therapeutics GmbH, to Ascend, for $25 million, subject to purchase price adjustments. At closing the Company and Ascend entered into an intellectual property deed of assignment and license and a transition services agreement (the "Transition Services Agreement"), pursuant to which Ascend will provide certain services in the area of development and manufacturing to the Company. The Company agreed to utilize, and Ascend agreed to make exclusively available to the Company, no fewer than 15 full-time employee equivalents, or FTEs (as defined in the Transition Services Agreement), per annum for a guarantee period of 18 months following the Transition Services Agreement’s effective date. The Company also agreed to pay Ascend a guaranteed minimum of approximately $7.9 million in respect of FTE costs during such period, $2.6 million of which were paid upfront.

The Company completed a financial and organizational assessment to increase efficiencies and reduce operating expenses. As a result of this assessment, the Company is reducing its U.S. and U.K. workforce by nearly 30%. The Company estimates that it will incur total expenses relating to the workforce reduction of approximately $1.0 to $1.5 million, consisting of severance and termination-related costs, and expects to record a significant portion of these charges in the first quarter of 2023.

F-29

EX-4

Exhibit 4.26

EXECUTED FORM

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL. REDACTED INFORMATION IS INDICATED BY [***].

IP Deed of Assignment and License

between

Freeline Therapeutics Limited

and

Ascend Gene and Cell Therapies Ltd

Dated 08 February 2023

9340530 v7

Contents

Parties 3

Preamble 3

Agreed terms 4

1 Definitions and Interpretations 4

2 IP Assignment 6

3 Back-License 7

4 Patent Formalities 7

5 IP License 7

6 Assistance with Claims 8

7 Confidentiality 8

8 Insolvency 8

10 Assignment Rights 8

11 General 9

DLA Piper

9340530 v7

This IP Deed of Assignment and License (this “IPA”) is entered into on 08 February 2023 (the “Effective Date”)

Parties

(1) Freeline Therapeutics Limited, a company incorporated in England and Wales with company number 09500073, whose registered office is at Sycamore House, Gunnels Wood Road, Stevenage, Hertfordshire, United Kingdom, SG1 2BP, hereinafter referred to as “Assignor”; and

(2) Ascend Gene and Cell Therapies Ltd, a company incorporated in England and Wales with company number 13471083, whose registered office is at 3rd Floor 1 Ashley Road, Altrincham, Cheshire, United Kingdom, WA14 2DT hereinafter referred to as “Ascend”.

Assignor and Ascend together are referred to as the “Parties”, and individually as a “Party”.

Preamble

AThe Assignor is a biotechnology company. The company’s focus is on the development of transformative adeno-associated virus vector-mediated systemic gene therapies.

BAscend is a contract development manufacturing organisation. The company’s focus is on servicing biotechnology clients for all their manufacturing needs. The company is initially focussed on manufacturing adeno-associated viruses and innovating on the manufacturing processes.

CAssignor’s German subsidiary is Freeline Therapeutics GmbH (“Target”), whose registered office is at 9b, Fraunhoferstrasse, Planegg, Bavaria, 82152 Germany. Assignor holds all shares in the Target.

DOn 11 November 2022, the Assignor as Seller and Ascend as Buyer have entered into a share purchase agreement regarding all shares in the Target (“SPA”). Completion of the SPA (“Completion”) is subject to certain completion conditions and completion actions. On the date of Completion, as a completion action under the SPA, the Assignor and Ascend will enter into certain ancillary agreements, in particular a Transition Services Agreement (“TSA”), under which certain services will be provided to the Assignor following Completion, and this IPA.

EUnder this IPA, the Parties intend to transfer certain intellectual property rights pertaining to the business of the Target to Ascend (such rights being the Assigned Rights as defined in Clause 1.1 below), grant a back-license by Ascend to the Assignor with respect to the Assigned Rights (as further specified in Clause 3 below) and grant a license by the Assignor to Ascend with respect to, inter alia, certain AAVS3 Technology (as further specified in Clause 5 below).

Therefore, in consideration of the mutual covenants and agreements contained herein and in consideration of the payment by Ascend to the Assignor of the IP Purchase Price (as defined in the SPA) in accordance with, and subject to the terms and conditions of, the SPA, the Parties have agreed to enter into this IPA:

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Agreed terms

1Definitions and Interpretations

1.1Definitions

In this IPA, the following terms shall have the following meanings:

AAVS3 Technology	has the meaning set out in Clause 5.1.
Assigned Know How	means the Know How set out in Annex 2.
Assigned Materials	means the materials set out in Annex 4.
Assigned Patents	means the Patents set out in Annex 1.
Assigned Rights	means the Assignor’s worldwide rights (including all Patents, Know How, data, processes, techniques, all intellectual property rights and materials) which pertain or otherwise relate to: (i) Chemistry, Manufacturing and Controls (“CMC”); and/or (ii) analytics capabilities pertaining to CMC, existing on the date of this IPA, which, in any event, shall include: (a) the Assigned Patents, (b) the Assigned Know How, and (c) the Assigned Materials.
Back-License	has the meaning set out in Clause 3.1.
Freeline Products	means the product candidates set out in Annex 5.
Insolvency Event	Any resolution is passed or legal proceedings are taken by or in respect of a Party in relation to: a) winding-up (save in respect of a winding-up petition which is presented and is withdrawn or dismissed within 21 days of presentation), dissolution or administration other than a solvent liquidation or reorganisation; or b) the appointment of a liquidator (other than in respect of a solvent liquidation), receiver, administrator, administrative receiver, supervisor, monitor or other similar officer in respect of such Party or any of its assets; or c) any analogous actions or legal proceedings are taken in any jurisdiction other than that of England and Wales.

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IP License	means the licenses set out in Clause 5.
Know How	means any and all technical, scientific and other know how, information, trade secrets, knowledge, technology, methods, processes, practices, formulae, instructions, skills, techniques, procedures, experiences, ideas, concepts, designs, drawings, assembly procedures, computer programs, apparatuses, specifications, inventions, discoveries, descriptions, data and results, (whether or not patented or patentable) in written, electronic or any other form now known.
Member(s)	means, in relation to a Party, that company, any subsidiary or any holding company from time to time of that company, and any subsidiary from time to time of a holding company of that company where “subsidiary” and “holding company” have the meanings defined in section 1159 of the UK Companies Act 2006.
Patents	means: (a) all national, regional and international patents and patent applications, including provisional patent applications and any and all rights to claim priority thereto; (b) all patent applications filed either from such patents, patent applications or provisional applications or from an application claiming priority from either of these, including divisionals, continuations, continuations-in-part, provisionals, converted provisionals and continued prosecution applications; (c) any and all patents that have issued or in the future issue from the foregoing patent applications ((a) and (b)), including utility models, petty patents, innovation patents and design patents and certificates of invention; and (d) any and all extensions or restorations by existing or future extension or restoration mechanisms, including revalidations, reissues, re-examinations and extensions (including any supplementary protection certificates and the like) of the foregoing patents or patent applications ((a), (b) and (c)).
Person	means any individual, corporation, limited liability company, trust, joint venture, association, company, limited or general partnership, unincorporated organization, governmental authority, or other entity.
Third Party	any Person who is not a Party or a Member of a Party.

1.2Interpretations. In this IPA (except where the context otherwise requires):

(a)any reference to a clause (“Clause”) or annex (“Annex”) is to the relevant clause of or annex to this IPA and any reference to a sub-clause or paragraph is to the relevant sub-clause or paragraph of the clause or annex in which it appears;

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(b)the clause headings are included for convenience only and shall not affect the interpretation of this IPA;

(c)the singular includes the plural and vice versa; and

(d)words preceding “include”, “includes”, “including” and “included” shall be construed without limitation by the words which follow those words.

1.3Annexes. The Annexes form part of this IPA. If a provision of an Annex is inconsistent with a provision of this IPA, the latter prevails.

2IP Assignment

2.1The Assignor hereby unconditionally and irrevocably assigns to Ascend absolutely all right, title and interest in and to the Assigned Rights and the right to bring and defend proceedings, and obtain and retain any relief recovered (including damages or an account of profits) in respect of any infringement, or any other cause of action arising from ownership, of any of the Assigned Rights whether occurring before, on, or after the date of this IPA.

2.2Insofar as the Assigned Rights, or any part thereof, do not vest in Ascend automatically by operation of law and/or the assignment under this IPA is ineffective:

(a)the Assignor holds legal title in such Assigned Rights on trust for Ascend;

(b)the Assignor hereby grants and agrees to grant to Ascend, without any limitations or additional remuneration, a worldwide, exclusive, royalty-free, irrevocable, perpetual, transferable and sublicensable (through multiple tiers) license to make, have made, use, import, sell, offer to sell, practice any method or process in connection with, copy, distribute, prepare derivative works of, display, perform and otherwise exploit such Assigned Rights;

(c)the Assignor agrees not to make any claim against Ascend or its Members, suppliers, customers or licensees with respect to such Assigned Rights; and

(d)Ascend hereby grants and agrees to grant to Assignor a sublicense (rather than a license) to the Assigned Rights on the terms set out in Clause 3.1.

2.3The Assignor shall at the request of Ascend promptly provide or procure the provision of all such further acts and execute or procure the execution (as a deed or otherwise) of all such documents as may from time to time be necessary to give full effect to this IPA and to vest in Ascend the full benefit of the Assigned Rights. The assistance provided under this Clause 2.3 shall be provided at the cost of Ascend, unless the need for such assistance has arisen as a result of the Assignor’s breach of this IPA, in which case such assistance shall be provided at the Assignor’s cost.

2.4The assignment of the Assigned Rights under this IPA occurs in performance of clause 3.3 of the SPA in which the Assignor as Seller and Ascend as Buyer have agreed on the sale of the Assigned Rights and the granting of the IP License for an overall consideration of USD [***], with such consideration payable under and in accordance with the provisions of the SPA and the transfer of the Assigned Rights and the granting of the IP License to be effected under this IPA.

2.5Any and all rights relating to representations, warranties and indemnities, including limitations on liability thereto, with respect to the Assigned Rights and the IP License

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made by either Party are exclusively provided for in the SPA. The aggregate maximum liability of either Party for claims relating to this Agreement is set out in, and is subject to, Schedule 7 para. 1.3 of the SPA.

3Back-License

3.1Ascend hereby grants to the Assignor a non-exclusive, royalty-free, perpetual, irrevocable, worldwide license to use, and to have used the Assigned Rights (including, solely to the extent such Patents claim the Assigned Know How, to any Patents owned by Ascend or its Members in the future) which are necessary to develop, or commercialise any of the Freeline Products, solely for the purpose of development and/or commercialisation of such Freeline Products (the “Back-License”). Such license is sublicensable: (i) without consent to any of the Assignor’s Members, and (ii) in all other circumstances, subject to Ascend’s prior written consent, not to be unreasonably withheld, conditioned or delayed.

3.2Ascend shall at the request and cost of the Assignor provide or procure the provision of all such further acts and execute or procure the execution (as a deed or otherwise) of all such documents as may from time to time be necessary to give full effect to the Back-License and to vest in the Assignor the full benefit of the Back-License.

3.3The Assignor may, at its sole discretion and own cost, record the Back-License, or documents executed to give effect thereto pursuant to Clause 3.2, in the relevant registries of any territory where Assigned Rights have been filed. Ascend shall provide or procure the provision of all reasonable assistance, at Assignor’s cost, to enable any such recordals.

4Patent Formalities

4.1Ascend undertakes to: (i) submit a request for recordal of change of ownership with respect to all Assigned Patents to the UKIPO, EPO and USPTO within 60 days of the date of Completion and, (ii) with respect to all Assigned Patents registered in any country or jurisdiction that is not within the jurisdiction of the UKIPO, EPO or USPTO, to instruct a patent agent to request a recordal of change of ownership within 60 days of the date of Completion.

4.2The Assignor is responsible for prosecution and maintenance (including costs) of the Assigned Patents before and until Completion and shall ensure that all Assigned Patents are maintained, and all fees paid when due, up until midnight CET on the day of Completion. Ascend is responsible for prosecution and maintenance (including costs) of the Assigned Patents from Completion.

5IP License

5.1The Assignor hereby grants Ascend a non-exclusive, non-sublicensable, fully paid-up, royalty free, perpetual, irrevocable, worldwide, all fields sub-license to use the Patents (listed in Annex 3) controlled by the Assignor and/or its Members relating to the AAV S3 capsid (“AAVS3 Technology”) to the extent necessary to implement, operate and further develop the Assigned Rights. For the avoidance of doubt, the foregoing license does not include the right to develop or commercialise a product candidate containing the AAV S3 capsid.

5.2The Assignor hereby grants Ascend a non-exclusive, non-sublicensable, fully paid-up, royalty-free, perpetual, irrevocable, worldwide, all fields license or sub-license to use

7

any intellectual property rights owned or controlled by Assignor and/or its Members which covers or otherwise relates to elements corresponding to one or more of the Freeline Products to the extent such elements are embodied in the production vector plasmids strictly for the purpose of facilitating continuity of investigations into the effect of vector plasmid size on CMC attributes.

6Assistance with Claims

The Assignor shall give Ascend on Ascend’s request and at Ascend’s cost, all reasonable assistance with any proceedings which may be brought by or against Ascend against or by any Third Party in relation to the Assigned Rights. For the avoidance of doubt, these costs shall include a reasonable compensation to Assignor for such support based upon an hourly rate commensurate to Assignor’s salary costs and all and any actual costs incurred by Assignor in connection with such assistance.

7Confidentiality

The Parties acknowledge and agree that confidentiality obligations of either Party shall be set out in the SPA and any breach by either Party of any such obligations thereunder shall be subject to and dealt with in accordance with the SPA.

8Insolvency

Where any right granted to one Party (the “Unaffected Party”) by this IPA requires the doing of an act or the giving of consent or any other act or thing by the other Party (the “Insolvent Party”) or such Insolvent Party’s Members (together being “Power To Consent”) as a condition or condition precedent to the Unaffected Party exercising any such right, any such Power To Consent shall cease to apply where an Insolvency Event occurs or has occurred in relation to such Insolvent Party, and the Unaffected Party may exercise such rights freely.

9Assignment Rights

9.1During the term of the TSA, Ascend may not assign or otherwise transfer this IPA nor any of its rights or obligations hereunder without the prior written consent of the Assignor (which consent shall not be unreasonably withheld, conditioned, or delayed); provided that Ascend may only assign or otherwise transfer this IPA without the Assignor’s consent to a Member of Ascend, provided always that such assignment is expressly made subject to all licenses granted to the Assignor under this IPA and that Ascend provides written notice to the Assignor of such dealing within 28 days of the assignment.

9.2After the termination or expiry of the TSA, Ascend may assign this IPA together with delegating the performance of its obligations to that assignee without the consent of the Assignor but always provided that such assignment and delegation is expressly made subject to all licenses granted to the Assignor under this IPA, that Ascend remains liable for the assignee’s performance of Ascend’s obligations under this IPA, and that Ascend provides written notice to the Assignor of such dealing within 28 days of the assignment.

9.3The Assignor may not assign or otherwise transfer this IPA nor any rights or obligations hereunder without the prior written consent of Ascend (which consent shall not be unreasonably withheld, conditioned, or delayed); provided that the Assignor may assign or otherwise transfer this IPA and its rights and obligations hereunder without Ascend’s consent to a Member of the Assignor always provided that Assignor provides written notice to Ascend of such dealing within 28 days of the assignment.

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9.4The rights and obligations of the Parties under this IPA shall be binding upon and inure to the benefit of the successors and permitted assigns of the Parties, save for any contractual obligations of Ascend remaining after assignment as set out in Clause 9.2. Any assignment not in accordance with this Clause 9 shall be null and void.

10General

10.1Variation. Any variation to this IPA shall be in writing and signed by or on behalf of both Parties to this IPA.

10.2Notices.

(a)Any notice, consent or other communication given under this IPA shall be in writing and in English and shall be delivered by hand or sent by prepaid recorded or special delivery post (or prepaid international recorded airmail if sent internationally), or sent by email, in each case in accordance with the details set out below:

(i)if delivered by hand or if send by pre-paid recorded delivery post (or pre-paid international recorded airmail if sent internationally):

(A)to Ascend:

For the attention of: [***]

At: [***]

with a copy (which shall not constitute notice) to [***].

(B)to Freeline:

For the attention of: [***]

At: [***]

with a copy (which shall not constitute notice) to [***].

(ii)if sent by email:

(A)to Ascend at [***], with a copy (which shall not constitute notice) to [***]; and/or

(B)to Freeline, at [***], with a copy (which shall not constitute notice) to [***].

(b)The Parties may from time to time notify each other of any other person or address for the receipt of notices or copy notices. Any such change shall take effect five Business Days after notice of the change is received or (if later) on the date (if any) specified in the notice as the date on which the change is to take place.

(c)A notice is deemed to have been received:

(i)if delivered by hand, at the time the notice is left at the proper address;

9

(ii)if sent by pre-paid recorded delivery post (or pre-paid international recorded airmail if sent internationally), on the second Business Day after posting; or

(iii)if sent by email, at the earlier of the time at which a delivery receipt is generated automatically by the recipient’s email server or 24 hours after transmission,

unless such deemed receipt would occur outside business hours (meaning 9.00 a.m. to 5.30 p.m. Monday to Friday on a day that is not a public holiday in the place of receipt), in which case receipt will occur when business hours resume in the place of receipt.

(d)The provisions of Sections 10.2(a) to 10.2(c) (inclusive) shall not apply in relation to the service of process in any legal proceedings arising out of or in connection with this IPA.

10.3Third Party Rights. Except as otherwise stated in this IPA (including Affiliates and permitted assignees), a person who is not a Party to this IPA shall have no right pursuant to the Contracts (Rights of Third Parties) Act 1999 to rely upon or enforce any term of this IPA. This Section shall not affect any right or remedy of a third party which exists or is available apart from that Act.

10.4Waiver. No delay, failure or omission (in whole or part) in enforcing, exercising or pursuing any right, power, privilege, claim or remedy conferred by or arising under this IPA or by law shall be deemed to be, or be construed as, a waiver of that or any other right, power, privilege, claim or remedy, or operate so as to bar the enforcement, exercise or pursuance of that or any other right, power, privilege, claim or remedy, in any other instance at any other time.

10.5Cumulative Rights. The rights and remedies provided by this IPA are cumulative and (except as otherwise provided in this IPA) are not exclusive of any rights or remedies provided by law.

10.6Severance. If any provision of this IPA: (i) is found by any court or administrative or regulatory body of competent jurisdiction to be invalid or unenforceable, such invalidity or unenforceability shall not affect the other provisions of this IPA which shall remain in full force and effect; and (ii) is so found to be invalid or unenforceable, but would be valid or enforceable if some part of the provision were deleted, restricted or limited in a particular manner, the provision in question shall apply with such deletions, restrictions or limitations as may be necessary to make it valid.

10.7Counterparts. This IPA may be executed in any number of counterparts and by the Parties to it on separate counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument. This IPA shall not be effective until each of the Parties has executed at least one counterpart.

10.8Entire Agreement. This IPA and the documents referred to in it together constitute the entire agreement and understanding of the Parties relating to the transactions contemplated by this IPA and those documents, and supersede any previous agreement between any of the Parties relating to the subject matter of this IPA and those documents, which shall cease to have any further effect. No representation, undertaking or promise shall be taken to have been given or be implied from anything said or written in negotiations between the Parties prior to this IPA except as expressly stated in this IPA. Neither Party shall have any remedy in respect of any untrue statement made by the other

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upon which that Party relied in entering into this IPA (unless such untrue statement was made fraudulently) and that Party's only remedies shall be for breach of contract as provided in this IPA.

10.9Applicable Law. The validity, construction and performance of this IPA and any claim, dispute or matter (whether contractual or non-contractual) arising under or in connection with this IPA or its enforceability shall be governed by and construed in accordance with the law of England.

10.10Jurisdiction. Each Party irrevocably submits to the exclusive jurisdiction of the courts of England over any claim, dispute or matter arising under or in connection with this IPA or its enforceability or the legal relationships established by this IPA (including non-contractual disputes or claims) and waives any objection to proceedings being brought in such courts on the grounds of venue or on the grounds that proceedings have been brought in an inconvenient forum. Each Party further irrevocably agrees that a judgment in any proceedings brought in the courts of England shall be conclusive and binding upon each Party and may be enforced in the courts of any other jurisdiction.

[Signature Page Follows]

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This IPA has been executed as a deed and is delivered and takes effect on the Effective Date.

Executed as a DEED by ASCEND GENE AND CELL THERAPIES LTD, acting by two directors: /s/ Tim Funnell Signature of Director Tim Funnell Name of Director /s/ Fred Cohen Signature of Director Fred Cohen Name of Director

Executed as a DEED by Freeline THERAPEUTICS LIMITED, acting by two directors: /s/ Michael J. Paini Signature of Director Michael J. Panini Name of Director /s/ Paul Schneider Signature of Director Paul Schneider Name of Director

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EX-4

Exhibit 4.27

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL. REDACTED INFORMATION IS INDICATED BY [***].

TRANSITION SERVICES AGREEMENT

between

ASCEND GENE AND CELL THERAPIES LTD

And

FREELINE THERAPEUTICS LIMITED

Dated as of 08 February 2023

 

TRANSITION SERVICES AGREEMENT

This Transition Services Agreement is madeand entered into effective as of 08 February 2023 (the “Effective Date”) by and between:

(1)Ascend Gene and Cell Therapies Ltd, a company incorporated in England and Wales with company number 13471083, whose registered office is at 3rd Floor 1 Ashley Road, Altrincham, Cheshire, United Kingdom, WA14 2DT (“Ascend”); and

(2)Freeline Therapeutics Limited,a company incorporated in England and Wales with company number 09500073, whose registered office is at Sycamore House, Gunnels Wood Road, Stevenage, Hertfordshire, United Kingdom, SG1 2BP (“Freeline”).

Ascend and Freeline are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.

INTRODUCTION

(A)On 11 November 2022, Freeline as Seller and Ascend as Buyer entered into a share purchase agreement (“SPA”) pursuant to which Ascend will, upon completion of the SPA, acquire one hundred percent of the issued share capital in Freeline Therapeutics GmbH, a wholly-owned subsidiary of Freeline with its registered seat in Planegg, Germany, and registered with the commercial register of the local court of Munich under registration number HRB 218160 (“Target”).

(B)The SPA contemplates that, in connection with the consummation of the transactions contemplated thereby, Ascend and Freeline will enter into this Agreement, pursuant to which Ascend and the Target shall provide to Freeline and/or its Affiliates, certain transition services in the area of the Scope of Services, on the terms and subject to the conditions set out in this Agreement.

AGREED TERMS

1.Definitions

For the purposes of this Agreement, (i) unless otherwise defined herein, capitalized terms used herein shall have the meanings assigned to them in the SPA, and (ii) the following terms shall have the meanings hereinafter specified:

1.1“Affected Party” has the meaning set forth in Section 11.2.

1.2“Affiliate” means, with respect to a Party, any Person that, directly or indirectly, through one (1) or more intermediaries, controls, is controlled by or is under common control with such Party. For purposes of this definition, “control” and, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with” means (a) the possession, directly or indirectly, of the power to direct the management or policies of a Person, whether through the ownership of voting securities, by contract relating to voting rights or corporate governance, or otherwise; or (b) the ownership, directly or indirectly,

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of more than fifty percent (50%) of the voting securities or other ownership interest of a Person (or, with respect to a limited partnership or other similar entity, its general partner or controlling entity). The Parties acknowledge that in the case of certain entities organized under the laws of certain countries outside of the United States, the maximum percentage ownership permitted by law for a foreign investor may be less than fifty percent (50%), and that in such case such lower percentage shall be substituted in the preceding sentence, provided that such foreign investor has the power to direct the management or policies of such entity. For the avoidance of doubt, the Target shall be deemed to be an Affiliate of Ascend for the purpose of this Agreement.

1.3“Agreement” means this Transition Services Agreement, including the Schedules hereto, as the same may be amended, supplemented or otherwise modified from time to time in accordance with Section 12.5.

1.4“Applicable Law” means federal, state, local, national and supra-national laws, statutes, rules, and regulations, including any rules, regulations, guidelines, or other requirements of regulatory authorities, major national securities exchanges or major securities listing organizations, that may be in effect from time to time during the Term and applicable to a particular activity performed hereunder which, to the extent applicable to the performance of any manufacturing Services, shall only include those laws, statues, rules and regulations applicable in the country in which such manufacturing Services were performed, unless otherwise expressly agreed in writing by the Parties.

1.5“Approved Subcontractor” has the meaning set forth in Section 5.2(a).

1.6“Ascend Arising IP” means any and all Know-How, Patents and all other intellectual property rights that are developed, invented, generated or first put into practice as a result of, or which arise from or are generated through, the performance of, any Services, by or on behalf of a Party or its Affiliates, or by or on behalf of both Parties or their Affiliates jointly, except to the extent it is Freeline Arising IP.

1.7“Ascend Indemnitees” has the meaning set forth in Section 10.1.

1.8“Auditor” has the meaning set forth in Section 8.2.

1.9“Breaching Party” has the meaning set forth in Section 9.2(a).

1.10“Breach Notice Period” has the meaning set forth in Section 9.2(a).

1.11“Breach Termination Notice” has the meaning set forth in Section 9.2(a).

1.12“Business Day”means 9.00am to 5.00pm local time on a day (other than a Saturday, Sunday, or a public holiday) on which the banks are open for business in London, England and Munich, Germany.

1.13“Calendar Quarter” means each successive period of three (3) calendar months commencing on January 1, April 1, July 1 and October 1, except that the first Calendar Quarter of the Term

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shall commence on the Effective Date and end on the day immediately prior to the first to occur of January 1, April 1, July 1 or October 1 after the Effective Date and the last Calendar Quarter shall end on the last day of the Term.

1.14“Claims” has the meaning set forth in Section 10.1.

1.15“Commercially Reasonable Efforts” means, with respect to a Party and an activity, the exercise of such care and the deduction of such efforts by such Party, its Affiliates or subcontractors appointed under Section 5.2, as such Party would typically devote to carrying out such activities, acting in good faith, and taking into account all relevant factors, including the terms and conditions of this Agreement.

1.16”Direct Consumables” means all components, consumables and other materials which are useful to perform the Services which are not Routine Consumables, unless otherwise agreed in a Work Package. Direct Consumables include in particular: suspension process materials (including disposable bags, media, buffers, agents, filters, and associated components), adherent process materials (including disposable bags, media, buffers, agents, filters, and associated components); and formulation material and kits required for testing (e.g. ELISA). For the avoidance of doubt, any form of general facility running costs (energy, office supplies, maintenance etc.) incurred by the Target are neither Direct Consumables nor Routine Consumables and are always borne by Ascend.

1.17“Dollars” or “$” means United States Dollars.

1.18“Force Majeure Event” has the meaning set forth in Section 11.1.

1.19“Forecast” has the meaning set forth in Section 4.1.

1.20“Freeline Arising IP” means any and all Know-How, Patents and all other intellectual property rights and including any Service Deliverables, regardless if any such Service Deliverable qualifies as intellectual property, that are developed, invented, generated or first put into practice as a result of, or which arise from or are generated through, the performance of, any Services, by Ascend or its Affiliates, by any Third Party subcontractor for the provision of Services, or by or on behalf of both Parties or their Affiliates jointly and which relate solely and exclusively to the Freeline Materials.

1.21“Freeline Materials” means those materials and product candidates, which: (i) are proprietary to Freeline or its Affiliates, (ii) are provided by Freeline or its Affiliates to Ascend for use in relation to the Services under this Agreement, and (iii) are specified in the relevant Work Package as being Freeline Materials.

1.22“FTE” means the equivalent of the work of one (1) employee full time during the applicable time period. Any person who devotes less than [***] hours per calendar year shall be treated as an FTE on a pro rata basis based upon the actual number of hours worked divided by [***]. For the purpose of the FTE Rate and calculating the FTE Costs, any person who devotes in excess of [***] hours per

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calendar year shall be treated as one (1) FTE regardless of how many additional hours such employee may devote and such additional hours shall not be chargeable to Freeline unless approved in writing by Freeline. Any employee engaged in general administrative work for Ascend and/or any of its Affiliates, whether directly or indirectly related to the Services does not qualify as an FTE under this Agreement and any costs resulting from such general administrative work shall not be compensated by Freeline separately, but has been taken into account in the FTE Rate. For the avoidance of doubt, any project manager engaged by Ascend in relation to providing the Services shall be an FTE in accordance with the allocation assigned to the project manager in the relevant Work Package.

1.23“FTE Costs” means, with respect to Ascend or its Affiliates (including the Target) for any period and in respect of specified activities, the applicable FTE Rate multiplied by the documented percentage of time spent by the applicable number of FTEs of Ascend or its Affiliates performing such activities during such period in accordance with this Agreement.

1.24“FTE Rate” means, for the duration of the Guarantee Period: (i) for the first fifteen (15) FTEs in any calendar year, [***], and (ii) for any subsequent FTEs in any calendar year, i.e. from FTE sixteen (16) onwards in a particular calendar year, [***]. For the avoidance of doubt, the costs of any Routine Consumables are included in the FTE Rate. No later than three (3) months prior to the end of the Guarantee Period, the Parties will negotiate in good faith the FTE Rate applicable following the end of the Guarantee Period. If, by the expiration of the Guarantee Period, the Parties are unable to agree on the applicable FTE Rate, Ascend’s then applicable FTE rate will apply.

1.25“Guarantee Period” means the period commencing on the Effective Date and expiring on the date which is eighteen (18) months after the Effective Date.

1.26“Guaranteed Minimum Spend” means seven million eight hundred and seventy-five thousand Dollars ($7,875,000).

1.27“Initial Payment” has the meaning set forth in Section 5.4(a).

1.28“Initial Work Package” has the meaning set forth in Section 4.2(a).

1.29“Joint Steering Committee” or the “JSC” has the meaning set forth in Section 3.1.

1.30“Know-How” means any and all data, results, inventions, methods, processes, trade secrets, techniques, technology, and other proprietary information, whether patentable or not but which are not generally known, including discoveries, formulae, materials (including chemicals), biological materials (including expression constructs, assays, animal models, nucleic acid sequences, amino acid sequences, and cell lines), practices, test data (including pharmacological, toxicological, pre-clinical and clinical information and test data), analytical and quality control data (including drug stability data), manufacturing technology and data (including formulation data), and sales forecasts, data and descriptions.

1.31“Losses”has the meaning set forth in Section 10.1.

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1.32“Minimum FTEs” means, during the Guarantee Period, fifteen (15) FTEs per calendar month (i.e. in aggregate [***]) hours of work by Ascend employees per calendar month).

1.33“Non-Breaching Party” has the meaning set forth in Section 9.2(a).

1.34“Patents” means: (a) all national, regional and international patents and patent applications, including provisional patent applications and any and all rights to claim priority thereto; (b) all patent applications filed either from such patents, patent applications or provisional applications or from an application claiming priority from either of these, including divisionals, continuations, continuations-in-part, provisionals, converted provisionals and continued prosecution applications; (c) any and all patents that have issued or in the future issue from the foregoing patent applications ((a) and (b)), including utility models, petty patents, innovation patents and design patents and certificates of invention; (d) any and all extensions or restorations by existing or future extension or restoration mechanisms, including revalidations, reissues, re-examinations and extensions (including any supplementary protection certificates and the like) of the foregoing patents or patent applications ((a), (b) and (c)).

1.35“Person” means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or other similar entity or organization, including a government or political subdivision, department, or agency of a government.

1.36“Project Team”has the meaning set forth in Section 3.6.

1.37“Records” has the meaning set forth in Section 8.1.

1.38“Retention Period” has the meaning set forth in Section 8.1.

1.39“Routine Consumables” means all pipette tips, pipettes, gloves, gowning (lab coats, shoe covers etc.), test tubes; glassware (flasks, beakers, Erlenmeyer etc.), 96-well plates, common reagents and chemicals, balance supplies, tubing, labelling supplies, cleaning / disinfectant agents, lab notebooks and other related supplies, utensils (forceps, spatula etc.) and other routine and generic consumables that are regularly used by the Target in the ordinary course of business. For the avoidance of doubt, any form of general facility running costs (energy, office supplies, maintenance etc.) incurred by the Target are neither Direct Consumables nor Routine Consumables and are always borne by Ascend.

1.40“Sales Tax” means any sales, use, value-added, goods, services, turnover, consumption or similar tax and any tax charged on the import or export of any goods or services (excluding, for the avoidance of doubt, any corporate income tax, income tax or capital gains tax).

1.41“Scope of Services” means the general description of the types of Services which may be performed under this Agreement, as set out in Schedule 1.41.

1.42“Senior Officers” means, with respect to both Ascend and Freeline, their respective CEO or their designee.

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1.43“Service” or “Services” means the services agreed to be performed by or on behalf of Ascend as set out in each Work Package.

1.44“Service Deliverables” means the deliverables specified in each Work Package to be produced by or on behalf of Ascend for Freeline under this Agreement and such Work Package.

1.45“SPA” has the meaning set forth in Recital (A).

1.46“Target” has the meaning set forth in Recital (A).

1.47“Term” has the meaning set forth in Section 9.1.

1.48“Third Party” means any Person other than Freeline or Ascend or an Affiliate of either Freeline or Ascend.

1.49“Third Party Costs” means all costs, fees and expenses incurred by or on behalf of Ascend in subcontracting the performance of any of the Services described in Schedule 5.2 to a Third Party in accordance with Section 5.2, or as otherwise agreed in a Work Package, together with the cost of any and all Direct Consumables used in performing such Services, but excluding any FTE Costs. For the avoidance of doubt, any costs, fees and expenses incurred by or on behalf of Ascend in subcontracting the performance of any Services to its Affiliates shall not be Third Party Costs.

1.50“Work Package” has the meaning set forth in Section 4.2(b).

2.Interpretation

2.1The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement, and Article, Section, Schedule and Exhibit references are to this Agreement unless otherwise specified. The meaning of defined terms shall be equally applicable to the singular and plural forms of the defined terms. The terms “include” and “including,” and variations thereof, are not limiting but rather shall be deemed to be followed by the words “without limitation.” Unless the context otherwise requires, wherever used, the word “or” is used in the inclusive sense (and/or). References to statutes shall include all regulations promulgated thereunder and references to statutes or regulations shall be construed as including all statutory and regulatory provisions consolidating, amending or replacing the statute or regulation. The captions and headings of this Agreement are for convenience of reference only and shall not affect the construction of this Agreement.

3.Governance

3.1Joint Steering Committee. Within fifteen (15) days after the Effective Date, or as mutually agreed to by the Parties, the Parties shall establish a joint steering committee (the “Joint Steering Committee” or the “JSC”).

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3.2Specific Responsibilities of the JSC. The JSC shall oversee the activities performed under this Agreement and serve as an information sharing body. Without limiting the foregoing, the JSC shall:

(a)share and discuss relevant business updates affecting the relationship between both Parties;

(b)discuss the performance of, or failure to agree details of, any Work Package, including quality and operational review;

(c)discuss Freeline’s anticipated Services requirements;

(d)discuss and resolve any escalations from the Project Team;

(e)establish subcommittees and appoint project managers, as deemed required by the Parties, to perform specific duties, direct each subcommittee and project manager to perform its or their appointed functions, and oversee each subcommittee and project manager; and

(f)perform such other functions as appropriate, as expressly set forth in this Agreement or allocated to it by the Parties’ written agreement.

3.3JSC Membership and Meetings.

(a)JSC Representatives. The JSC shall consist of three (3) representatives from each Party. Each JSC representative shall have appropriate knowledge and expertise and sufficient seniority within the applicable Party to make decisions arising within the scope of the JSC’s responsibilities, which shall include at least one C- suite member from each Party. Each Party may replace its representatives on the JSC on written notice to the other Party. Ascend shall appoint the chairperson of the JSC. The chairperson shall prepare and circulate agendas to JSC members at least thirty (30) days before each JSC meeting and shall direct the preparation of reasonably detailed minutes for each JSC meeting, which shall be circulated to JSC members for review and approval within thirty (30) days after such meeting.

(b)Meetings. The JSC shall hold meetings at such times as it elects to do so, but in no event less frequently than once per Calendar Quarter by telephone or video conference, unless otherwise agreed by the Parties. The first JSC meeting shall be held within thirty (30) days after the Effective Date. In-person meetings, if any, will be held at locations alternately selected by the Parties. Each Party shall be responsible for all of its own expenses of participating in any JSC meeting. No action taken at any meeting of the JSC shall be effective unless at least one (1) representative of each Party is participating. In addition, either Party may request that a special ad hoc meeting of the JSC be convened for the purpose of reviewing or making decisions pertaining to time-sensitive subject-matter, at such time as may be mutually agreed by the Parties in writing.

(c)Non-Member Attendance. Each Party may from time to time invite a reasonable number of participants, in addition to its JSC representatives, to attend the JSC meetings in a non‑voting

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capacity; provided that if either Party intends to have any Third Party (including any consultant) attend such a meeting, such Party shall provide reasonable prior written notice to the other Party and obtain the other Party’s approval for such Third Party to attend such meeting, which approval shall not be unreasonably withheld, conditioned, or delayed. Such Party shall ensure that such Third Party is bound by written confidentiality obligations consistent with those set out in the SPA.

3.4Decision-Making.

(a)General. The Parties shall use good faith efforts to reach all JSC decisions by consensus, with each Party’s representatives collectively having one (1) vote. If after reasonable discussion and good faith consideration of each Party’s view on a particular matter, the representatives of the Parties cannot reach an agreement as to such matter, then either Party at any time may refer such issue to the Senior Officers for resolution, who shall confer in good faith. Any final decision mutually agreed by the Senior Officers shall be conclusive and binding on the Parties.

(b)Decision-Making Authority. If the Senior Officers cannot reach consensus on an issue within twenty (20) Business Days of such issue first being referred to them, then:

(i) Ascend shall have final decision-making authority with regard to any question as to how it performs the Services and the individual FTEs and resources it uses to perform the Services unless otherwise agreed in a Work Package; and

(ii)Freeline shall have final decision-making authority with regard to any increase in any Work Package budget,

provided that, neither Party shall use their final decision-making authority to require the other Party or its Affiliates: (i) to perform activities beyond their capacity or capabilities, (ii) to breach Applicable Law, (iii) to breach the terms of any agreement it may have with any Third Party, (iv) to dedicate, in aggregate, more than twenty (20) FTEs per month or less than ten (10) FTEs per month to the performance of any services or activities under this Agreement, or (v) to enter into any contract with a Third Party. If the Senior Officers cannot reach consensus on any other issue, then neither Party shall have final decision-making authority with regard to the issue, and either Party may refer such issue in accordance with Section 12.14.

3.5Limitations on Authority. The JSC shall have only such powers as are expressly assigned to it in this Agreement, and such powers shall be subject to the terms and conditions of this Agreement. Without limiting the generality of the foregoing, the JSC shall not have the power to amend, interpret, or waive compliance with this Agreement, and no JSC decision may be in contravention of any terms and conditions of this Agreement. The activities to be performed by the JSC shall solely relate to governance under this Agreement, and are not intended to involve the delivery of services.

3.6Project Team. The Parties shall each appoint a representative (the “Project Manager”) and further personnel as necessary to oversee contact between the Parties for all matters under this Agreement (the Project Manager and personnel collectively the “Project Team”). The Project Team shall

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meet monthly and shall regularly report to the JSC on the progress and performance of the Services. Each Party may replace their representative to the Project Team at any time by written notice to the other Party. The Project Team shall be a subcommittee to the JSC and shall be subject to such rules, guidelines and procedures as the JSC may agree to impose upon the Project Team. Any disagreement between Project Team members shall be referred to the JSC for resolution.

4.Forecasting and Work Packages

4.1Forecasting of Services. Schedule 4.1 sets out Freeline’s best estimate for a description of all services requested to be performed by or on behalf of Ascend under this Agreement for the first eighteen (18) months of the Term (the “Forecast”).

4.2WorkPackages.

(a)In the first five (5) Business Days after the Effective Date, the Parties shall agree, in good faith, the Services to be performed by or on behalf of Ascend in the first Calendar Quarter of the Term (the “Initial Work Package”), which Initial Work Package shall substantially reflect the Statement of Work attached to this Agreement as Schedule 4.2.

(b)Within five (5) Business Days of the commencement of each Calendar Quarter, Freeline shall submit to Ascend a draft work package for the immediately following Calendar Quarter, setting out in writing the requested services to be performed by Ascend and/or any subcontractors appointed in accordance with Section 5.2. The Parties will then, in good faith, discuss and agree such work package (each, upon signature by both Parties a “Work Package”). Notwithstanding the foregoing, during the Guarantee Period only, Ascend shall agree to each draft work package submitted in accordance with this Section 4.2(b) that complies with the following criteria:

(i)the draft work package does not require Ascend or any of its Affiliates: (a) to breach any Applicable Laws, (b) to breach the terms of any agreement such party may have with any Third Party, (c) to dedicate, in aggregate, more than twenty (20) FTEs per month or less than ten (10) FTEs per month, or (d) to enter into any contract with a Third Party;

(ii)the requested services are: (a) entirely within, and are consistent with, the Scope of Services, (b) consistent with the expertise and capabilities of the Target at the Effective Date, and (c) commercially reasonable in the circumstances, taking into account, inter alia, contract development and manufacturing organisation industry practices and norms, the need to preserve the confidentiality of the rights acquired by Ascend from Freeline, the types and scope of the services set out in the Forecast, and the size and resources of the Target; and

(iii)for any requested services that require Freeline Materials, Freeline undertakes to provide such Freeline Materials in advance of the commencement of the related work, as further provided under Section 4.3.

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4.3Freeline Materials. Freeline shall provide Ascend with sufficient amounts of Freeline Materials for Ascend to perform the Services. Title and risk to the Freeline Materials shall remain with Freeline at all times. Ascend shall use the Freeline Materials solely to perform the Services and for no other purpose. Upon completion of the applicable Services or earlier upon Freeline’s request, Ascend shall, according to Freeline’s instructions, at Freeline’s cost, return the Freeline Materials to Freeline or destroy the Freeline Materials. Freeline shall provide in writing, on or before the date that it provides the relevant Freeline Materials, all safety and handling information necessary for Ascend to safely use all Freeline Materials. Freeline shall promptly notify Ascend in the event that it becomes aware of any new safety or handling requirements with respect to the Freeline Materials. Freeline warrants and represents that the Freeline Materials shall be fit for the purposes required for the performance of the Services. Ascend shall not be responsible for any failure of the Services to be consistent with Applicable Laws, delay in performance, or other failure to comply with any requirement of a Work Package to the extent such failure or delay is attributable to the Freeline Materials. Freeline warrants and represents that the Freeline Materials do not, and the Services to the extent they relate to the Freeline Materials will not, misappropriate or infringe any Third Party rights.

5.Services; Guarantees; Payment

5.1Service Performance. Unless otherwise agreed in writing by the Parties and subject to the other provisions of this Agreement, Ascend shall use Commercially Reasonable Efforts to provide the Services in a manner and quality that are consistent, in all material respects, with Applicable Law and any other requirements set out in the applicable Work Package. To the extent that timelines and/or delivery dates are agreed in any Work Package, Ascend shall use Commercially Reasonable Efforts to meet such timelines and/or delivery dates. Notwithstanding the foregoing, Freeline acknowledges that the Services include development services for which, by their nature, there is no guarantee of success.

5.2Subcontracting.

(a)In respect of a Work Package, Ascend shall be entitled to perform: (i) any Services using any of its Affiliates; and/or (ii) those Services described in Schedule 5.2 using the Third Party listed in Schedule 5.2 as being the provider of such Services (each an “Approved Subcontractor”), without the prior written consent of Freeline. Ascend may only perform Services using Third Parties which are not an Approved Subcontractor or change the scope of Services that is able to be provided by an Approved Subcontractor, with Freeline’s prior written consent.

(b)For the avoidance of doubt, if a Work Package references the use of a Third Party subcontractor and the specific Services to be performed by that Third Party subcontractor, then Freeline’s consent to the use of such Third Party subcontractor shall be deemed to have been given.

(c)Ascend shall ensure it has a binding agreement in full force and effect with each Third Party subcontractor with regards to the provision of the relevant Services.

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(d)If Freeline suffers (and/or any of its Affiliates suffer) any loss or damage as a result of the Services:

(i)performed by an Affiliate, Ascend shall be liable under this Agreement as if such acts and omissions were its own; and/or

(ii)performed by a Third Party subcontractor, then at Freeline’s cost (provided that where Ascend recovers its costs as part of any enforcement action, Freeline shall not be required to pay any further costs to Ascend in respect of such enforcement) Ascend shall: (i) use its Commercially Reasonable Efforts to enforce the terms of its agreement with such Third Party subcontractor against such Third Party subcontractor; (ii) conduct any such enforcement proceedings diligently using competent counsel; (iii) keep Freeline informed at all times of any developments in the enforcement; (iv) Ascend shall account to Freeline for any recovery made as a result of such enforcement action, to the extent the recovery relates to Freeline’s loss or damage; and (v) cease enforcement action solely in respect of recovery relating to Freeline’s loss or damage, where required by Freeline.

5.3Guarantees

(a)Freeline undertakes that it will, subject to Section 9.7, pay to Ascend no less than the Guaranteed Minimum Spend, solely in respect of FTE Costs during the Guarantee Period.

(b)Ascend undertakes that it and its Affiliates will have and maintain no fewer than the Minimum FTEs during the Guarantee Period to be exclusively available to perform Services during the Guarantee Period, in each case as required by any Work Package.

(c)Subject to Section 9.7, in the event that, at the end of the Guarantee Period or, if earlier, the date of termination of this Agreement, the Guaranteed Minimum Spend solely in respect of FTE Costs during the Guarantee Period has not been paid by Freeline to Ascend under this Agreement, then Ascend shall be entitled to invoice, and Freeline shall pay, the difference between the FTE Costs that have been paid during the Guarantee Period and the Guaranteed Minimum Spend. For the avoidance of doubt, should the FTEs for a month be reduced as a consequence of the rights of Freeline in Section 4.2(b)(i)(c) to unilaterally reduce the FTEs for a month from fifteen (15) FTEs equivalents to ten (10) FTEs (or any other FTE in between), there shall be no reduction of the Guaranteed Minimum Spend.

5.4Payment.

(a)Within ten (10) days of the Effective Date, Freeline shall pay an initial non-refundable payment of two million six hundred thousand Dollars ($2,600,000) to Ascend (the “Initial Payment”). The Initial Payment shall act as a credit against the cost of Services performed under this Agreement.

(b)Freeline shall pay all FTE Costs arising from the performance of the Services under this Agreement. In addition, all Third Party Costs incurred by Ascend in the performance of the Services

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shall be charged to Freeline on a pass-through basis plus [***], provided however, that to the extent any Direct Consumables that were in stock at the Target at the Effective Date are consumed in the performance of the Services, such Direct Consumables shall not be chargeable to Freeline and Freeline shall have no obligation to pay Ascend for such Direct Consumables. The Direct Consumables in stock at the Target on 27 October 2022 are set forth in Schedule 5.4.

(c)Invoices will be rendered each Calendar Quarter by Ascend to Freeline for Services delivered during the preceding Calendar Quarter. Subject to Section 5.4(d), all undisputed amounts under such invoice shall be payable in immediately available funds thirty (30) days after receipt of such invoice to such account as Ascend may designate by written notice to Freeline from time to time in Dollars. Invoices shall be delivered electronically to Freeline, in PDF format, to the following email address: [***] and marked for the attention of [***] or such other address as Freeline may communicate from time to time. Ascend may suspend performance of the Services in the event that Freeline fails to timely pay undisputed amounts within fifteen (15) days after written notice of non-payment from Ascend. In the event Freeline disputes any amount on an invoice, Freeline shall notify Ascend in writing within ten (10) Business Days after Freeline’s receipt of such invoice and shall describe in reasonable detail the reason for disputing such amount. The provisions of Clause 33.2 of the SPA shall apply with respect to any disputed amount. Upon resolution of the dispute, to the extent Freeline owed Ascend some or all of the amount withheld, it shall promptly pay such applicable amount to Ascend. Freeline shall timely pay the undisputed portion of each invoice in the manner set forth in this Agreement.

(d)Ascend shall ensure that each invoice includes a breakdown of the relevant charges, setting out the total charges for each of: (i) the FTE Costs, (ii) Direct Consumables and (iii) Third Party Costs.

(e)If requested by Freeline, Ascend shall promptly provide evidence to demonstrate the FTE Costs (including a breakdown of total hours worked per FTE), Direct Consumables and Third Party Costs included within an invoice.

(f)All sums or other consideration payable under this agreement are exclusive of any Sales Tax payable thereon.

(g)If any Sales Tax is payable or chargeable on or in respect of any supply made by Ascend or any of its Affiliates (including the Target) under this Agreement, Freeline shall pay to Ascend the amount of that Sales Tax in addition to the consideration payable for such supply, at the same time that such consideration is payable. Ascend (or the relevant Affiliate) shall provide to Freeline a valid Sales Tax invoice, where applicable.

(h)All sums or other consideration payable under this Agreement shall be paid by the Party making the payment (the “Paying Party”) to the Party entitled to receive the payment (the “Receiving Party”) without any withholding or deduction for, or on account of any taxes, duties, levies or imposts and other similar charges, except as required to be withheld or deducted by Applicable Law.

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(i) Where the Paying Party becomes aware that it will have an obligation to deduct or withhold an amount for, or on account of, tax in respect of any sums or consideration payable under this Agreement it shall, as soon as reasonably practicable, and, in any event, no later than thirty (30) Business Days before making any deduction or withholding, provide a written notice to the Receiving Party of the amounts subject to deduction or withholding and details of any forms, certificates or other items required, in accordance with Applicable Law, in order to reduce or eliminate any such deduction or withholding. Without prejudice to the foregoing, the Parties shall, in respect of the payment in question, cooperate and take all steps reasonably and lawfully available to them, including completing such procedural formalities as are necessary, to establish the Receiving Party’s entitlement to any exemption from, or diminution in the amount of, any relevant deduction or withholding for or on account of tax and to enable the Paying Party to obtain any necessary authorisation to make payment without, or subject to a reduced amount of, deduction or withholding for or on account of tax and to provide the Receiving Party with such assistance as is reasonably required to obtain a refund of, or credit with respect to, any such tax required to be deducted or withheld.

(j)If any deductions or withholdings for or on account of tax are required to made by Applicable Law in respect of any sums or consideration payable under this Agreement, the Paying Party shall withhold or deduct an amount equal to any such tax, account for such tax to the relevant tax authority within the time required by Applicable Law and provide to the Receiving Party reasonable evidence of the payment of such tax, including official receipts (where available). The Parties agree that under Applicable Law as at the date of this Agreement, there is no obligation on Freeline to deduct or withhold tax in respect of any sums or consideration payable under this Agreement.

6.Confidentiality

6.1The Parties acknowledge and agree that confidentiality obligations of each Party shall be set out in the SPA and any breach by either Party of any such obligations thereunder shall be subject to and dealt with in accordance with the SPA.

7.Intellectual Property

7.1United States Law. For purposes of establishing the Parties’ respective ownership of intellectual property conceived, discovered, developed, or otherwise made under this Agreement, inventorship of information and inventions conceived, discovered, developed, or otherwise made under this Agreement shall be determined in accordance with Applicable Law in the United States as such law exists from time to time, irrespective of where such conception, discovery, development or making occurs.

7.2Freeline Ownership. As between the Parties, Freeline shall solely own any and all Freeline Arising IP and Ascend hereby assigns all of its right, title and interest in and to any Freeline Arising IP to Freeline and Ascend furthermore agrees to undertake any act or sign any document as requested by Freeline and required in order to fully vest and/or register such rights in Freeline.

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7.3Ascend Ownership. As between the Parties, Ascend shall solely own any and all Ascend Arising IP, and Freeline hereby assigns all of its right, title and interest in and to any Ascend Arising IP to Ascend and Freeline furthermore agrees to undertake any act or sign any document as requested by Ascend and required in order to fully vest and/or register such rights in Ascend.

7.4Licence Grant.

(a)Freeline hereby grants to Ascend a non-exclusive, freely sublicensable (solely to Ascend’s Affiliates and each Third Party subcontractor performing any of the Services), royalty-free, worldwide licence under all Know-How, Patents and all other intellectual property rights owned or controlled by Freeline or its Affiliates during the Term (including, for the avoidance of doubt, the Freeline Arising IP) to the extent useful or necessary for the performance of the Services, solely for the performance of the Services hereunder.

(b)Ascend hereby grants to Freeline a non-exclusive, royalty-free, perpetual, worldwide licence to use and have used all Ascend Arising IP which is necessary for the further development or commercialization of Freeline Materials, solely for the development or commercialization of Freeline Materials. The licence granted under this Section 7.4 shall be sublicensable subject to Ascend’s prior written consent, which shall not be unreasonably withheld, conditioned or delayed.

8.Records and Audits

8.1Records. Ascend shall keep, and shall require its Affiliates to keep, all paper and electronic records pertaining to the performance of the Services and costs incurred (the “Records”). Ascend will keep such Records for three (3) years from the completion or early termination of the relevant Work Package to which such Records relate unless extended by the agreement of the Parties, or such longer period of time as may be required by Applicable Laws (the “Retention Period”). Ascend will make available the Records to Freeline after the expiry of the Retention Period or, at Freeline’s costs, upon Freeline’s written request, provided that Ascend shall be entitled to remove any Ascend Confidential Information from the Records before making the Records available to Freeline, and Ascend shall be entitled to keep a copy of all Records for its own compliance and record keeping purposes. During the Retention Period, Ascend will not destroy or permit the destruction of any Records without the prior written consent of Freeline.

8.2Audit. Upon reasonable prior notice and during regular business hours at such place or places where such Records are customarily kept, the Records may be inspected on Freeline’s behalf by an independent auditor (the “Auditor”) selected by Freeline and acceptable to Ascend (such acceptance not to be unreasonably withheld) solely to the extent relating to Third Party Costs for the sole purpose of verifying for Freeline the accuracy of any payments made, or required to be made, to Ascend pursuant to this Agreement in respect of such Third Party Costs. In addition, the Auditor may inspect the Records for any purpose that Freeline can demonstrate is required by Applicable Law. Such audits may not (i) be

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conducted for any calendar year ending more than twenty-four (24) months prior to the date of such request, (ii) be conducted more than once in any calendar year or (iii) be repeated for any Calendar Quarter, provided that where an audit reveals a material breach by Ascend (or any Affiliate) of any of its obligations under this Agreement, Freeline shall be entitled to conduct a further audit in the then current calendar year. Freeline shall require the Auditor to provide to Ascend an audit report containing its conclusions regarding any audit, and specifying whether the amounts paid in respect of Third Party Costs were correct or, if incorrect, the amount of any underpayment or overpayment. The Auditor shall provide to Ascend a preliminary copy of its audit report and shall discuss with Ascend any issues or discrepancies that Ascend identifies, prior to submission to Freeline. If such audit establishes that Freeline has been overcharged with respect to Third Party Costs in accordance with this Agreement during the period covered by any audit pursuant to this Section 8, Ascend shall remit to Freeline such overpaid amounts within thirty (30) days of the date on which Freeline delivers to Ascend an invoice reflecting such amounts. In the event such audit establishes that amounts have been undercharged by Ascend during such period, the amount of such undercharged amount shall promptly be paid to Ascend. The fees charged by the Auditor in connection with any audit pursuant to this Section 8 shall be paid by Freeline; provided, however, that if a discrepancy in favor of Freeline of more than [***] for the period being audited and/or a material breach by Ascend (or any Affiliate) of any of its obligations under this Agreement is established, then Ascend shall pay the reasonable fees and expenses charged by such Auditor in connection with such audit.

8.3Confidential Financial Information. Each Party shall treat all financial information of the other Party subject to review under this Section 8 as confidential. The Auditor shall enter into confidentiality terms acceptable to both Parties before any audit under Section 8.2 is conducted. The Auditor shall not disclose Ascend Confidential Information to Freeline.

9.Term and Termination

9.1Term. The term of this Agreement shall commence on the Effective Date and shall continue until the third (3rd) year anniversary of the Effective Date (the “Term”), unless earlier terminated in accordance with this Section 9 or extended by the mutual written agreement of the Parties.

9.2Termination for Cause. Without prejudice to any other available legal or equitable rights or remedies, a Party may terminate this Agreement and any agreed Work Package immediately upon written notice to the other Party as follows:

(a)Material Breach. In the event that either Party (the “BreachingParty”) is in material breach of the performance of any of its obligations under this Agreement, in addition to any other right and remedy the other Party (the “Non-BreachingParty”) may have, the Non-Breaching Party may terminate this Agreement in its entirety by providing ninety (90) days’ (or thirty (30) days’, in the case of a payment default) (the “Breach NoticePeriod”) prior written notice (the “Breach Termination Notice”) to the Breaching Party specifying the breach and its claim of right to terminate; provided that the

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termination shall not become effective at the end of the Breach Notice Period if the Breaching Party cures the breach specified in the Breach Termination Notice during the Breach Notice Period.

(b)Termination for Insolvency. Either Party may terminate this Agreement and any agreed Work Package if, at any time:

(i)the other Party is unable to pay its debts as they fall due or admits inability to pay its debts;

(ii)the other Party applies to court for, or obtains, a moratorium under Part A1 of the UK Insolvency Act 1986;

(iii)the other Party files a petition or passes a resolution, or an order is made, for or in connection with the winding up of such Party other than for the sole purpose of a scheme for a solvent amalgamation of the other Party with one or more other companies or the solvent reconstruction of the other Party;

(iv)a court order is made for the appointment of an administrator, or an administrator is appointed, over the other Party;

(v)a receiver is appointed over all or any of the assets of the other Party;

(vi)a creditor or encumbrancer of the other Party attaches or takes possession of, or a distress, execution, sequestration or other such process is levied or enforced on or sued against, the whole or any material part of the other Party’s assets and such attachment or process is not discharged within fourteen (14) days;

(vii)any event occurs, or proceeding is taken, with respect to the other Party in any jurisdiction to which it is subject that has an effect equivalent or similar to any of the events mentioned in Section 9.2(b)(ii) to 9.2(b)(vi) (inclusive); or

(viii)the other Party suspends or ceases carrying on all or a substantial part of its business, unless such suspension or ceasing occurs on the basis of voluntary actions of the respective Party.

9.3Termination by Mutual Agreement. The Parties may terminate this Agreement and any agreed Work Package by mutual, written consent.

9.4Termination by Freeline for Convenience. Freeline may terminate this Agreement for convenience on ninety (90) days’ prior written notice to Ascend, provided that such termination for convenience may not become effective earlier than prior to the expiry of the Guarantee Period.

9.5Termination for Force Majeure. A Party may terminate this Agreement in the event of a prolonged Force Majeure Event in accordance with Section 11.3.

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9.6Consequences of Expiration or Termination. If this Agreement is terminated by Freeline for convenience, Freeline shall reimburse Ascend for: (i) non-cancellable Third Party Costs arising before, on or after the date of expiry of this Agreement under any agreed Work Package, and (ii) FTE Costs arising for Services performed in accordance with this Agreement up to the date on which the termination becomes effective.

9.7Consequences of Termination for Cause or for Force Majeure. If this Agreement is terminated by Freeline pursuant to Section 9.2 or 9.5, and such termination becomes effective prior to the end of the Guarantee Period, the Guaranteed Minimum Spend shall be reduced on a pro rata basis to reflect the number of whole calendar months remaining of the Guarantee Period as a proportion of 18. So that, by way of example only, if the Effective Date of this Agreement is 1 January 2023, the Guarantee Period will expire on 1 July 2024. If this Agreement is terminated by Freeline pursuant to Section 9.2 and the effective date of such termination is 25 December 2023, then the Guaranteed Minimum Spend shall be reduced by six-eighteenths (6/18ths) reflecting the six (6) full calendar months remaining in the Guarantee Period, which would reduce the Guaranteed Minimum Spend by $2,625,000 to $5,250,000.

9.8Remedies. Except as otherwise expressly provided herein, termination of this Agreement in accordance with the provisions hereof shall not limit remedies that may otherwise be available in law or equity.

9.9Accrued Rights; Surviving Obligations. Termination or expiration of this Agreement for any reason shall be without prejudice to any rights that shall have accrued to the benefit of a Party prior to such termination or expiration. Such termination or expiration shall not relieve a Party from obligations that are expressly indicated to survive the termination or expiration of this Agreement. Without limiting the foregoing, Sections 1 (Definitions), 2 (Interpretation), 5.3(c) (Guaranteed Minimum Spend Reconciliation), 5.4 (Payment), 6 (Confidentiality), 7.2 (Freeline Ownership), 7.3 (Ascend Ownership), 7.4(b) (Licence of Ascend Arising IP), 8.1 (Records), 9.6 (Consequences of Expiration or Termination), 9.7 (Consequences of Termination for Cause or for Force Majeure), 9.8 (Remedies), 9.9 (Accrued Rights; Surviving Obligations), 10 (Indemnities and Limitations of Liability) and 12 (Miscellaneous) shall survive termination or expiration of this Agreement.

10.Indemnities and Limitations of Liability

10.1Indemnification by Freeline. Freeline shall indemnify Ascend and its Affiliates and its and their respective directors, officers, employees and agents (“Ascend Indemnitees”), from and against any and all losses, damages, liabilities, costs, and expenses (including reasonable attorneys’ fees and expenses) on an after-tax basis (collectively, “Losses”) in connection with any and all suits, investigations,

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claims, or demands of Third Parties (collectively, “Claims”) arising from or occurring as a result of: (i) Freeline’s or any Freeline Indemnitee’s failure to comply with Applicable Law; (ii) the negligence on the part of Freeline or its Affiliates in performing their obligations under this Agreement; (iii) the use of the Freeline Materials, including any Claims that the Freeline Materials misappropriate or infringe, or that the Services to the extent relating to the Freeline Materials misappropriate or infringe, the rights of any Third Party; or (iv) the use or other exploitation of the licence under the Ascend Arising IP granted to Freeline under Section 7.4(b); except for those Losses which Ascend has an obligation to indemnify Freeline pursuant to Section 10.2, as to which Losses each Party shall indemnify the other to the extent of their respective liability; provided, however, that Freeline shall not be obligated to indemnify Ascend for any Losses to the extent that such Losses arise as a result of breach of, or negligence in the performance of, this Agreement on the part of Ascend or any of its Affiliates. For the purposes of this Section 10.1, ‘after-tax basis’ shall mean that the amount payable pursuant to the indemnification given in this Section 10.1 will be calculated in such a manner as will ensure that, after taking into account the amount of any tax payable by Ascend Indemnitees as a result of the payment being subject to tax in the hands of Ascend Indemnitees (or the amount that would have been subject to tax but for a relief) Ascend Indemnitees are in the same position as they would have been in if the matter giving rise to the payment had not occurred.

10.2Indemnification by Ascend. Ascend shall indemnify Freeline and its Affiliates and its and their respective directors, officers, employees and agents (“Freeline Indemnitees”), from and against any and all Losses in connection with any and all Claims arising from or occurring as a result of: (i) Ascend’s or any Ascend Indemnitee’s failure to comply with Applicable Law; or (ii) the negligence on the part of Ascend or its Affiliates in performing its or their obligations under this Agreement; except for those Losses for which Freeline has an obligation to indemnify Ascend pursuant to Section 10.1, as to which Losses each Party shall indemnify the other to the extent of their respective liability for the Losses; provided, however, that Ascend shall not be obligated to indemnify Freeline for any Losses to the extent that such Losses arise as a result of breach of, or negligence in the performance of this Agreement by Freeline. For the purposes of this Section 10.2, ‘after-tax basis’ shall mean that the amount payable pursuant to the indemnification given in this Section 10.2 will be calculated in such a manner as will ensure that, after taking into account the amount of any tax payable by Freeline Indemnitees as a result of the payment being subject to tax in the hands of Freeline Indemnitees (or the amount that would have been subject to tax but for a relief) Freeline Indemnitees are in the same position as they would have been in if the matter giving rise to the payment had not occurred.

10.3Settlement. A Party that intends to claim indemnification under this Section 10 (the “Indemnitee”) shall as soon as reasonably practicable notify the other Party in writing of any Claim (including, if requested by the Indemnitor, a copy of any related complaint, summons, notice or other instrument, (save where to do so would result in a breach of any obligation of confidentiality or the loss of legal professional privilege)) for which such Indemnitee intends to base a request for indemnification under this Section 10; provided, that failure to give such notification shall not affect the indemnification except to the extent the Party giving the relevant indemnity (the “Indemnitor”) has been actually prejudiced as a

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result of such failure. The Indemnitee shall: (i) keep the Indemnitor reasonably informed on the progress of the Claim and of any material developments in relation to the Claim; (ii) take reasonable account of the views of the Indemnitor before taking action in relation to the same; and (iii) not admit liability in relation to, nor cease to defend, settle or compromise and Claim, without consulting the Indemnitor, it being noted that the Indemnitee shall not require the Indemnitor’s prior written consent to take any such action.

10.4Limitation of Liability

(a)Nothing in this Agreement shall limit any liability which cannot legally be limited, including liability for: (i)death or personal injury caused by negligence, or (ii) fraud or fraudulent misrepresentation.

(b)Subject to Section 10.4(a) and excluding either Party’s liability with respect to Claims under Sections 10.1 and 10.2, neither Party nor any of its respective Affiliates shall be liable to the other Party, whether in contract, tort (including negligence), breach of statutory duty, or otherwise, for: (i) loss of goodwill, (ii) loss of profit, (iii) loss of revenue or anticipated savings, (iv) any loss of business or contracts; or (v) indirect, consequential or special loss, in each case (i) to (v) even if the other Party was advised of the possibility of such losses or such losses arise naturally from the relevant breach.

(c)Subject to Sections 10.4(a) and 10.4(b), Ascend’s and its Affiliates aggregate liability (including for any claims, actions, losses, damages, injuries, defects, costs, expenses or any other liabilities) under this Agreement including under all Work Packages, for any and all claims, howsoever arising, shall in no event exceed, in total, [***]. Notwithstanding the foregoing, this Section 10.4(c) shall not apply to the gross negligence or wilful misconduct of Ascend of its Affiliates.

11.Force Majeure

11.1“Force Majeure Event” means the following circumstance not within a Party’s reasonable control:

(a)acts of God, flood, storm, drought, earthquake or other natural disaster;

(b)epidemic or pandemic, including any government mandated lockdown or quarantine imposed as a result of any epidemic or pandemic;

(c)terrorist attack, civil war, civil commotion or riots, war, threat of or preparation for war, armed conflict, imposition of sanctions, embargo, or breaking off of diplomatic relations;

(d)strikes, and labour disturbances (whether of a Party or a subcontractor);

(e)nuclear, chemical or biological contamination or sonic boom;

(f)any law or any action taken by a government or public authority, including imposing an export or import restriction, quota or prohibition;

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(g)collapse of buildings, breakdown of plant or machinery, fire, explosion or accident; and

(h)interruption or failure of utility service.

11.2Provided it has complied with Section 11.4, if a Party is prevented, hindered or delayed in or from performing any of its obligations under this Agreement by a Force Majeure Event (the “Affected Party”), the Affected Party shall not be in breach of this Agreement, or otherwise liable for any such failure or delay in the performance of such obligations while such Force Majeure Event remains in force. The time for performance of such obligations shall be extended accordingly.

11.3The corresponding obligations of the other Party will be suspended, and the time for performance of such obligations extended, to the same extent as those of the Affected Party. If the Affected Party is prevented, hindered or delayed in or from performing any of its obligations under this Agreement for more than ninety (90) days then the other Party may terminate this Agreement and any agreed Work Package immediately upon written notice to the Affected Party.

11.4The Affected Party shall:

(a)as soon as reasonably practicable after the start of the Force Majeure Event but no later than five (5) days from its start, notify the other Party in writing of the Force Majeure Event, the date on which it started, its likely or potential duration, and the effect of the Force Majeure Event on its ability to perform any of its obligations under the Agreement; and

(b)use reasonable endeavours to mitigate the effect of the Force Majeure Event on the performance of its obligations.

12.Miscellaneous

12.1Independent Contractor. In the exercise of their respective rights, and the performance of their respective obligations, under this Agreement, the Parties are, and shall remain, independent contractors. Nothing in this Agreement shall be construed to constitute the Parties as partners, joint venturers, or participants in a joint enterprise or undertaking, or to constitute either of the Parties as the agent of the other Party for any purpose whatsoever. Neither Party shall bind, or attempt to bind, the other Party hereto to any contract or the performance of any other obligation, or represent to any Third Party that it is authorised to enter into any contract or binding obligation on behalf of the other Party hereto.

12.2Employee Transfers. Without limiting or prejudice to Ascend’s obligations under this Agreement, Ascend and its Affiliates shall not be prevented from transferring after the date of this Agreement any employees who may perform any part of the Services, to support other products for Ascend or its Affiliates or to assume other roles with Ascend or its Affiliates. As long as Ascend performs its obligations under this Agreement, including with respect to the Minimum FTEs, neither Ascend nor any of its Affiliates shall, unless the Parties agree otherwise, have any obligation to: (i) hire replacements for

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employees that resign, retire or their employment is terminated for any other reason, or hire additional employees, or (ii) enter into retention agreements with employees or otherwise provide any incentive beyond payment of regular salary and benefits. Freeline acknowledges and agrees that Ascend may determine, at its discretion, the individual employees who will provide Services.

12.3Non-Solicitation. Freeline shall not, directly or indirectly, solicit or recruit any Ascend personnel who is then a current employee of Ascend or an Affiliate of Ascend until the sixth (6th) month anniversary of the date that such personnel ceases to conduct activities under this Agreement; provided, however, that: (i) advertisements or general solicitations to fill job openings not targeted specifically at employees of Ascend or its Affiliates shall not be deemed to be a “solicitation”, and (ii) Freeline shall have the right to recruit and hire any Ascend personnel who respond to any such advertisements or general solicitations or who initiate contact with Freeline.

12.4Assignment. Neither Party may assign or otherwise transfer this Agreement nor any rights or obligations hereunder without the prior written consent of the other Party (which consent shall not be unreasonably withheld, conditioned, or delayed). The rights and obligations of the Parties under this Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the Parties. Any assignment not in accordance with this Section 12.4 shall be null and void.

12.5Variation. Any variation to this Agreement shall be in writing and signed by or on behalf of both Parties to this Agreement.

12.6Notices.

(a)Any notice, consent or other communication given under this Agreement shall be in writing and in English and shall be delivered by hand or sent by prepaid recorded or special delivery post (or prepaid international recorded airmail if sent internationally), or sent by email, in each case in accordance with the details set out below:

(i)if delivered by hand or if send by pre-paid recorded delivery post (or pre-paid international recorded airmail if sent internationally):

(1)to Ascend:

For the attention of: [***]

At: [***]

with a copy (which shall not constitute notice) to [***].

(2)to Freeline:

For the attention of: [***]

with a copy (which shall not constitute notice) to [***].

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(ii)if sent by email:

(1)to Ascend at [***], with a copy (which shall not constitute notice) to [***]; and/or

(2)to Freeline, at [***], with a copy (which shall not constitute notice) to [***].

(b)The Parties may from time to time notify each other of any other person or address for the receipt of notices or copy notices. Any such change shall take effect five Business Days after notice of the change is received or (if later) on the date (if any) specified in the notice as the date on which the change is to take place.

(c)A notice is deemed to have been received:

(i)if delivered by hand, at the time the notice is left at the proper address;

(ii)if sent by pre-paid recorded delivery post (or pre-paid international recorded airmail if sent internationally), on the second Business Day after posting; or

(iii)if sent by email, at the earlier of the time at which a delivery receipt is generated automatically by the recipient’s email server or 24 hours after transmission,

unless such deemed receipt would occur outside business hours (meaning 9.00 a.m. to 5.30 p.m. Monday to Friday on a day that is not a public holiday in the place of receipt), in which case receipt will occur when business hours resume in the place of receipt.

(d)The provisions of Sections 12.6(a) to 12.6(c) (inclusive) shall not apply in relation to the service of process in any legal proceedings arising out of or in connection with this Agreement.

12.7Third Party Rights. Except as otherwise stated in this Agreement (including Affiliates and permitted assignees), a person who is not a Party to this Agreement shall have no right pursuant to the Contracts (Rights of Third Parties) Act 1999 to rely upon or enforce any term of this Agreement. This Section shall not affect any right or remedy of a third party which exists or is available apart from that Act.

12.8Waiver. No delay, failure or omission (in whole or part) in enforcing, exercising or pursuing any right, power, privilege, claim or remedy conferred by or arising under this Agreement or by law shall be deemed to be, or be construed as, a waiver of that or any other right, power, privilege, claim or remedy, or operate so as to bar the enforcement, exercise or pursuance of that or any other right, power, privilege, claim or remedy, in any other instance at any other time.

12.9Cumulative Rights. The rights and remedies provided by this Agreement are cumulative and (except as otherwise provided in this Agreement) are not exclusive of any rights or remedies provided by law.

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12.10Severance. If any provision of this Agreement: (i) is found by any court or administrative or regulatory body of competent jurisdiction to be invalid or unenforceable, such invalidity or unenforceability shall not affect the other provisions of this Agreement which shall remain in full force and effect; and(ii)is so found to be invalid or unenforceable, but would be valid or enforceable if some part of the provision were deleted, restricted or limited in a particular manner, the provision in question shall apply with such deletions, restrictions or limitations as may be necessary to make it valid.

12.11Counterparts. This Agreement may be executed in any number of counterparts and by the Parties to it on separate counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument. This Agreement shall not be effective until each of the Parties has executed at least one counterpart.

12.12Entire Agreement. This Agreement and the documents referred to in it together constitute the entire agreement and understanding of the Parties relating to the transactions contemplated by this Agreement and those documents, and supersede any previous agreement between any of the Parties relating to the subject matter of this Agreement and those documents, which shall cease to have any further effect. No representation, undertaking or promise shall be taken to have been given or be implied from anything said or written in negotiations between the Parties prior to this Agreement except as expressly stated in this Agreement. Neither Party shall have any remedy in respect of any untrue statement made by the other upon which that Party relied in entering into this Agreement (unless such untrue statement was made fraudulently) and that Party's only remedies shall be for breach of contract as provided in this Agreement.

12.13Applicable Law. The validity, construction and performance of this Agreement and any claim, dispute or matter (whether contractual or non-contractual) arising under or in connection with this Agreement or its enforceability shall be governed by and construed in accordance with the law of England.

12.14Jurisdiction. Each Party irrevocably submits to the exclusive jurisdiction of the courts of England over any claim, dispute or matter arising under or in connection with this Agreement or its enforceability or the legal relationships established by this Agreement (including non-contractual disputes or claims) and waives any objection to proceedings being brought in such courts on the grounds of venue or on the grounds that proceedings have been brought in an inconvenient forum. Each Party further irrevocably agrees that a judgment in any proceedings brought in the courts of England shall be conclusive and binding upon each Party and may be enforced in the courts of any other jurisdiction.

(Signature Page Follows)

23

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed by its duly authorized officer, in each case as of the Effective Date.

SIGNED by a director on behalf of ASCEND GENE AND CELL THERAPIES LTD ) ) ) Signature /s/ Tim Funnell Print Name Tim Funnell

SIGNED by a director on behalf of FREELINE THERAPEUTICS LIMITED ) ) ) Signature /s/ Michael J. Parini Print Name Michael J. Parini

24

EX-4

Exhibit 4.28

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND IS THE TYPE THAT
THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.
REDACTED INFORMATION IS INDICATED BY [***].

AGREEMENT FOR THE SALE AND PURCHASE OF THE ENTIRE ISSUED SHARE CAPITAL OF

FREELINE THERAPEUTICS GMBH

1. FREELINE THERAPEUTICS LIMITED

2. ASCEND GENE AND CELL THERAPIES LTD

3. FREELINE THERAPEUTICS HOLDINGS PLC

 

Cooley (UK) LLP, 22 Bishopsgate, London, EC2N 4BQ, UK
T: +44 (0) 20 7583 4055 F: +44 (0) 20 7785 9355 www.cooley.com

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Contents

Clause Page

1.	DEFINITIONS AND INTERPRETATION	1
2.	CONDITION PRECEDENT	10
3.	AGREEMENT FOR SALE OF SHARES AND IP	12
4.	CONSIDERATION	12
5.	PERIOD BEFORE COMPLETION	13
6.	TERMINATION	14
7.	COMPLETION	15
8.	COMPLETION ACCOUNTS AND ADJUSTMENT TO THE AMOUNT PAID AT COMPLETION	16
9.	BORROWINGS	16
10.	RELEASE OF ASSURANCES / SELLER’S GROUP GUARANTEES	16
11.	WARRANTIES	17
12.	OVERTIME PAYMENTS INDEMNITY	18
13.	INTELLECTUAL PROPERTY INDEMNITIES	18
15.	TAXATION	21
16.	PROTECTION OF THE INTERESTS OF THE BUYER	21
17.	SELLER’S GUARANTOR	23
18.	PAYMENTS	23
19.	FURTHER SELLER ASSURANCE	24
20.	FURTHER BUYER OBLIGATIONS	24
21.	ASSIGNMENT	25
22.	ANNOUNCEMENTS	25
23.	CONFIDENTIALITY	26
24.	COSTS	28
25.	NOTICES	29
26.	THIRD PARTY RIGHTS	30
27.	WAIVER	30
28.	SEVERANCE	30
29.	CUMULATIVE RIGHTS	31
30.	NO MERGER	31
31.	COUNTERPARTS	31
32.	ENTIRE AGREEMENT AND FRAUD	31
33.	APPLICABLE LAW AND JURISDICTION	31
Schedule 1 DETAILS OF THE COMPANY		33
Schedule 2 CONDUCT OF BUSINESS between signing and Completion		34
Schedule 3 Completion Obligations		36
Schedule 4 Warranties		38
Part 1 – Title and Capacity		38
Part 2 – General		39

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Contents
(continued)

Clause Page

Part 3 – Accounts, Financial, Banking and Current Trading	41
Part 4 – Compliance and Litigation	44
Part 5 – Contracts	47
Part 6 – Assets and insurance	50
Part 7 – Property	52
Part 8 – Employment	53
Part 9 – Pensions	56
Part 10 – Intellectual Property	57
Part 11 – Information Technology and Data Protection	61
Schedule 5 Taxation	65
Part 1 – Tax Definitions and Interpretation	65
Part 2 – Tax Warranties	70
Part 3 – Tax Covenant	74
Part 4 – Incentive Awards	85
Part 5 – Retention and Transfer Pricing Liability	88
Schedule 6 Properties	90
Schedule 7 Limitations on Seller's Liability	94
Schedule 8 Completion Accounts	99
Part 1 – Preparation of the Completion Accounts	99
Part 2 – Basis of Preparation of the Completion Accounts	102
Part 3 – Completion Statement	103
Part 4 – Completion Accounts' Pro forma Format	104
Part 5 – Exemplary Calculation of Cash, Debt and Working Capital per the Management Accounts Date	105
Schedule 9 Appointment of Independent Accountant	106

Agreed Form Documents

German Share Transfer Deed

Minutes of the Buyer

Minutes of the Seller

IT Side Letter

Transitional Services Agreement

IP Assignment and License Agreement

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THIS AGREEMENT is made on 11 November 2022

BETWEEN:

(1) FREELINE THERAPEUTICS LIMITED, a company incorporated in England (registered number 09500073) whose registered office is at Stevenage Bioscience Catalyst, Gunnels Wood Road, Stevenage, Herts, England, SG1 2FX (“Seller”);

(2) ASCEND GENE AND CELL THERAPIES LTD, a company incorporated in England (registered number 13471083) whose registered office is at 3rd Floor 1 Ashley Road, Altrincham, Cheshire, United Kingdom, WA14 2DT, (“Buyer”); and

(3) FREELINE THERAPEUTICS HOLDINGS PLC, a company incorporated in England (registered number 12546479) whose registered office is at Stevenage Bioscience Catalyst, Gunnels Wood Road, Stevenage, United Kingdom, SG1 2FX, as the Seller’s guarantor (“Seller’sGuarantor”),

(each a “Party” and collectively, the “Parties”).

RECITALS:

(A) The Company is a private company limited by shares. Further details about the Company are set out in Schedule 1.

(B) The Seller wishes to sell and assign, and the Buyer wishes to buy and acquire, all of the issued share capital of the Company on the terms of this Agreement. On the date of Completion of this Agreement, the Seller and the Buyer intend to enter into certain ancillary agreements, in particular a (i) Transitional Services Agreement, under which the Buyer, via the Company, shall provide certain services to the Seller following Completion, (ii) an IP Assignment and License Agreement, under which, inter alia, the Seller shall assign and licence certain IP rights relating to the business of the Company to the Buyer.

(C) On the Signing Date (as defined below) the Seller and the Buyer intend to enter into the IT Side Letter.

(D) The Seller’s Guarantor is willing to guarantee the obligations of the Seller under the Transaction Documents (as defined below) subject to the terms of this Agreement.

IT IS AGREED as follows:

1. DEFINITIONS AND INTERPRETATION

1.1 In this Agreement, the following words and expressions shall have the following meanings:

“Accounts” means the annual accounts of the Company for the financial year ended on the Accounts Date;

“Accounts Date” means 31 December 2021;

“Agreed Form Announcement” has the meaning given in clause 22.2(b);

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“Assigned Rights” has the meaning set out in the IP Assignment and Licence Agreement;

“Assurance” means any indemnity, guarantee or similar commitment;

“AWV” means the German Foreign Trade Ordinance (Außenwirtschaftsverordnung);

“BMWi” has the meaning given in clause 2.1;

“Borrowings” means, in relation to the Company, financial indebtedness and amounts in the nature of financial indebtedness, owed by the Company (whether or not that payment is due in respect thereof at or before Completion) in the following categories:

(a) borrowings from, and debit balances at, banks or other financial institutions;

(b) indebtedness under bonds, notes, debentures, loan stock, or any similar instrument;

(c) indebtedness under any finance or capital lease;

(d) the amount of any obligation under any Assurance given in respect of any obligation of any other person of any kind referred to above in this definition;

(e) interest (or similar amounts) accrued in respect of the matters referred to above in this definition, including any increased amount of interest (or similar) payable by reference to any obligation to withhold Tax;

(f) any premium, fees, costs and expenses (including prepayment fees, penalties and break costs) paid or payable in connection with the termination, release, discharge or repayment of facilities, borrowings or other indebtedness referred to above in this definition; and

but excluding the Shareholder Loan and excluding any obligations under or in connection with the lease agreements of the Company for the Leasehold Properties to provide securities to the respective landlord (including, but not limited to, any requirements to provide a letter of credit to a bank with respect to a required bank guarantee), and references in this Agreement to “repayment” of any Borrowings shall mean the taking of any action necessary to eliminate the liability of that person for such financial indebtedness or amounts in the nature of financial indebtedness, and any related words or phrases shall be construed accordingly;

“Business Day” means a day that is not a Saturday or Sunday or a public holiday in England or Germany;

“Buyer” has the meaning given in the introduction of this Agreement;

“Buyer Deal Team” shall comprise of [***];

“Buyer Indemnified Parties” has the meaning given in clause 13.1;

“Buyer's Group” means the Buyer and its group undertakings at the relevant time;

“Buyer's Solicitors” means Cooley (UK) LLP;

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“Cash” has the meaning given in Part 1 of Schedule 8;

“CDMO Services” means the provision to a third party of services, whether for charge or not, that relate to the development (including but not limited to the discovery, identification, technical design, analytical or process or other manufacturing-related development) or manufacturing of pharmaceutical products or product candidates under development; excluding for the avoidance of doubt the conduct of preclinical or clinical testing of pharmaceutical product candidates;

“Clearance Certificate” has the meaning given in clause 2.1;

“Companies Act” means the Companies Act, 2006;

“Company” means Freeline Therapeutics GmbH, a German limited liability company registered in the commercial register of Munich under number HRB 218160;

“Company Processor” has the meaning given in paragraph 1 of Part 11 of Schedule 4;

“Competition Law” means all applicable competition, state aid, antitrust or merger control laws in any jurisdiction in which the Company has material assets or carries on business or where its activities may have an effect;

“Completion” means completion of the sale and purchase of the Sale Shares in accordance with this Agreement;

“Completion Accounts” has the meaning given in Part 1 of Schedule 8;

“Completion Cash” has the meaning given in Part 1 of Schedule 8;

“Completion Date” has the meaning set out in clause 7.1;

“Completion Debt” has the meaning given in Part 1 of Schedule 8;

“Completion Statement” has the meaning given in Part 1 of Schedule 8;

“Completion Working Capital” has the meaning given in Part 1 of Schedule 8;

“Condition Precedent” has the meaning given in clause 2.1;

“Confidential Information” has the meaning given in clause 23.1;

“Data Room” means the electronic data room hosted by [***], named [***];

“Disclosed” has the meaning set out in clause 11.2;

“Disclosing Party” has the meaning given in clause 23.2;

“Disclosure Documents” means the documents listed in the index of documents attached to the Disclosure Letter;

“Disclosure Letter” means the disclosure letter in the Agreed Form from the Seller to the Buyer, dated on the date of this Agreement;

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“Encumbrance” means a mortgage, charge, pledge, lien, option, restriction, right of first refusal, right of pre-emption, retention of title arrangement or other third party right, interest or claim of any kind or any agreement or commitment to create or give any of the foregoing;

“Estimated Completion Cash” means the Seller's estimate of the Completion Cash, as set out in the notice given by the Seller under clause 5.4;

“Estimated Completion Debt” means the Seller's estimate of the Completion Debt, as set out in the notice given by the Seller under clause 5.4;

“Estimated Completion Working Capital” means the Seller's estimate of the Completion Working Capital, as set out in the notice given by the Seller under clause 5.4;

“Exchange Rate” means with respect to the conversion of a particular currency into another currency on a particular date (and where that date is not a Business Day, then the previous Business Day to that particular date shall be the relevant reference date), the closing mid-point spot rate for conversion of the first currency into that other currency as set out in the London edition of the Financial Times containing exchange rates applicable to the relevant Business Day;

“Estimated Shareholder Loan” means the Seller’s estimate of the Shareholder Loan, as set out in the notice given by the Seller under clause 5.4;

“Excluded Assets” has the meaning given in Part 1 of Schedule 8;

“Extended Longstop Date” has the meaning given in clause 2.4;

“Final Determination” has the meaning given to it in Part 5 of Schedule 5;

“General Warranties” means all Warranties, other than the Title and Capacity Warranties, the Tax Warranties and the IP Warranties;

“General Warranty Claim” means a claim for breach of any of the General Warranties;

“German GAAP” means the German generally accepted accounting principles (GAAP) under the HGB as in effect on the date of preparation of the respective accounting document in question;

“German Investment Screening Laws”means the Foreign Trade and Payments Act (Außenwirtschaftsgesetz) and the Foreign Trade and Payments Ordinance (Außenwirtschaftsverordnung) of the FederalRepublic of Germany;

“German Share Transfer Deed” means the local transfer deed by which the assignment and transfer of the Sale Shares from the Seller to the Buyer shall be effected;

“Group” means the Buyer's Group or the Seller's Group, as the context requires;

“Guaranteed Obligations” means all present and future obligations and liabilities of the Seller under the Transaction Documents or arising from any termination of the Transaction Documents including all money and liabilities of any nature from time to time due, owing or

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incurred by the Seller under the Transaction Documents or arising from any termination of the Transaction Documents;

“HGB” means the German Commercial Code (Handelsgesetzbuch, HGB);

“IFRS” means International Financial Reporting Standards International Accounting Standards and interpretations of those standards issued by the International Accounting Standards Board and the International Financial Reporting Interpretations Committee and their predecessor bodies as applied in Germany;

“Indemnitee” has the meaning given in clause 13.3(a);

“Indemnitor” has the meaning given in clause 13.3(a);

“IP Assignment and Licence Agreement” means the IP assignment and licence agreement, in agreed form as appended to this Agreement and to be entered into between the Buyer and the Seller, on the Completion Date;

“IP Purchase Price” has the meaning given in clause 4.1;

“IP Warranty” means a statement contained in Part 10 of Schedule 4, and “IP Warranties” means all such statements;

“IP Warranty Claim” means a claim for breach of any IP Warranty;

“IT Side Letter” means the side letter pertaining to the IT systems and services of he Company om the Agreed Form, dated on the date of this Agreement;

“Key Persons” means each of [***];

“Leasehold Properties” means the leasehold properties demised by the Leases;

“Leases” means the leases listed in Schedule 6;

“Longstop Date” means 3 months from the date of this Agreement;

“Losses” means in relation to any matter, all liabilities, losses, claims, costs, fees and expenses relating to that matter;

“Management Accounts” means the unaudited management accounts of the Company comprising a balance sheet as at the Management Accounts Date and a profit and loss account (for the period which began on the Accounts Date and ended on the Management Accounts Date);

“Management Accounts Date” means 30 September 2022;

“Material Adverse Change” means any fact, matter, event, circumstance, condition or change arising and occurring after the Signing Date and prior to Completion outside the ordinary course of the Company’s business which materially and adversely affects the business, operations, assets, liabilities, financial condition or operating results of the Company but excluding any of the foregoing

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(a) if the adverse effect on the Company from a monetary / financial perspective amounts to less than €[***]; and/or

(b) arising out of, resulting from, or attributable to:

(i) changes in stock markets, interest rates, exchange rates, commodity prices or other general economic conditions including the (re-)occurrence / worsening of a COVID-19 epidemic and natural disasters, acts of war or terrorism or similar force majeure events;

(ii) changes in conditions generally affecting the industries in which the Company operates;

(iii) any matter Disclosed;

(iv) the announcement of the Transaction or the change in control of the Company as a result of this Agreement, unless as a result of breach of obligations of the Company, it being understood, for the avoidance of doubt that the departure of any employees of the Company shall not constitute a Material Adverse Change;

"Notified Claim" means the Tax Demand(s) in respect of the Transfer Pricing Audits;

“Original Sum” has the meaning given in clause 18.4(b);

“Party / Parties” has the meaning given in the introduction of this Agreement;

"Pre‑Contractual Statement" means any representation, statement, assurance, covenant, undertaking, warranty, indemnity, guarantee or commitment (whether contractual or otherwise) made or given before the date of this Agreement.

“Properties” means the Freehold Properties and the Leasehold Properties and a reference to a “Property” is a reference to any one of them;

“Purchase Price” has the meaning given to it in Clause 4.2;

“Receiving Party” has the meaning given to it in clause 23.2;

“Relief” has the meaning given in Part 1 of Schedule 5;

“Repeated Warranties” means the Title and Capacity Warranties and the IP Warranties, excluding the specific parts of such Title and Capacity and IP Warranties which are given to the Seller’s Knowledge;

“Retention” means the amount in US Dollars equal to €[***] (determined using the Exchange Rate at the Completion Date);

“Sale Shares” means all the issued shares in the capital of the Company at Completion;

“Security Breach” means any security breach, or any similar or equivalent comprise or event, which leads, or is likely to lead, to the unintended, accidental or unlawful destruction, loss,

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alteration, unauthorised disclosure of, or access to, any: (i) Personal Data or confidential information; and/or (ii) any Information Technology (including the Internal Systems), databases, software or technology, owned or operated by or on behalf of Company, or any portion of any of the foregoing, including (in each case) any and all data (including Personal Data), content, media, information (including confidential information) or software stored therein or controlled or accessed thereby;

“Seller” has the meaning given in the introduction of this Agreement;

“Seller Indemnified Parties” has the meaning given in clause 13.2;

“Seller's Group” means the Seller and its group undertakings at any relevant time;

“Seller’s Group Awards” has the meaning given in Part 4 of Schedule 5;

“Seller’s Group Guarantees” means:

(a) the letter of credit in the amount of €[***] granted by the Seller for the benefit of Commerzbank AG with respect to the guarantee (Bankbürgschaft) provided by Commerzbank AG to the landlord of the office premises of the Company at Fraunhoferstrasse 9a/b, 82152 Martinsried dated 17. September 2019 and such guarantee increased by Amendment No. 1 thereto dated 6 October 2020.

(b) Letter of comfort (Patronatserklärung) dated 14 August 2019 for the benefit of the landlord of the Company’s lease premises at Fraunhoferstraße 9a/b, 82152 Martinsried.

(c) Letter of comfort (Patronatserklärung) dated 19 October 2017 for the benefit of the landlord of the Company’s lease premises at Semmelweissstraße 3, 82152 Planegg.

(d) Letter of credit dated 24 October 2022 to Seller for the benefit of Deutsche Bank AG with respect to the Company’s lease property Semmelweissstraße in the amount of USD [***].

(e) General letter of comfort issued by the Seller for the benefit of the Company dated 23 August 2022 (issued in connection with the statutory audit of the company for financial year ending 31 December 2021)

“Seller’s Guarantor” has the meaning given in the introduction of this Agreement;

“Seller’s Knowledge” means matters within the actual knowledge, as of the Signing Date, of [***] after:

(a) due inquiry with [***];

(b) in respect of the Warranties given at Part 11 of Schedule 4 (Information Technology and Data Protection) only, due inquiry also with [***].

“Seller's Solicitors” means DLA Piper;

“Share Purchase Price” has the meaning given in clause 4.2;

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“Shareholder Loan” means the loan receivable by the Seller against the Company under the Shareholder Loan Agreement in the principal amount outstanding as per Completion;

“Shareholder Loan Agreement” means the agreement between the Seller and the Company relating to the Shareholder Loan, dated 12 August 2015 and as subsequently amended.

“Signing Date” means the date of the signing of this Agreement;

“Software” means computer programs and systems, whether embodied in software, firmware or otherwise, (whether in, e.g., source code, object code, executable code or human readable form).

“Surviving Provisions” means clauses, 20 to 29, 31, 32 and 33;

“Target Working Capital” means [***] being the amount agreed by the Parties to be the target working capital of the Company at Completion;

“Tax” or “Taxation” has the meaning given in Part 1 of Schedule 5;

“Tax Authority” has the meaning given in Part 1 of Schedule 5;

“Tax Claim” means a claim under the Tax Covenant or a Tax Warranty Claim;

“Tax Covenant” means the tax covenants given in favour of the Buyer set out in Part 3 and paragraph 1 of Part 4 of Schedule 5;

“Tax Warranties” means the warranties given pursuant to clause 11.1 and set out in Part 2 of Schedule 5 and a reference to “Tax Warranty” shall be construed accordingly;

“Tax Warranty Claim” means a claim for breach of any of the Tax Warranties;

“Third Party IP Claim” has the meaning given in clause 13.1;

“Title and Capacity Warranties” means the Warranties set out in Part 1 of Schedule 4;

“Title and Capacity Warranty Claim” means a claim for breach of any of the Title and Capacity Warranties;

“Transaction” means the entering into the Transaction Documents;

“Transaction Documents” means this Agreement, the IP Assignment and Licence Agreement and the Transitional Services Agreement;

“Transferred IP” means the Assigned Rights and the IP Licenses;

“Transfer Pricing” means any legislation, other law or regulation in respect of transfer pricing or similar principles, including laws regarding intra-group transactions or arrangements with related persons being required to be treated as being made or entered into on arm’s length terms for Tax purposes and those requiring processes by which prices and terms have been arrived at have been documented (in particular, the rules pursuant to sections 1, 1a and 16 of the German Foreign Transactions Tax Act (Außensteuergesetz), sections 90 and 162 of the

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German Tax Act (Abgabenordnung) and section 8 (3) sentence 2 of the German Corporate Income Tax Act (Körperschaftsteuergesetz) and related decrees and circulars announced by the German Tax Authorities);

“Transfer Pricing Audits” means the audit(s) being conducted by the German Tax Authority in respect of Transfer Pricing matters in respect of the financial years of the Company ended 31 December 2017, 2018 and 2019;

“Transitional Services Agreement” means the transitional services agreement, in agreed form, as appended to this Agreement and to be entered into between the Buyer and the Seller, on the Completion Date;

“VAT” means (a) any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112), and (b) any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in subsection (a) above, or imposed elsewhere;

“Warranties” means the warranties given pursuant to clause 11.1 and set out in Schedule 4, and the Tax Warranties, and a reference to “Warranty” shall be construed accordingly; and

“Warranty Claim” means a claim for breach of any of the Warranties other than a Tax Warranty.

1.2 In this Agreement, unless the context requires otherwise, or otherwise stated:

(a) use of the singular includes the plural and vice versa, and use of any gender includes the other genders;

(b) a reference to any specific legislation includes a reference to that legislation as re-enacted, consolidated, replaced or amended; any previous legislation of which it is a re-enactment, consolidation, replacement or amendment; and any subordinate legislation made under any of the same (and “legislation” in this clause 1.2(b) includes any statute, statutory provision, regulation, rule or subordinate legislation); and

(c) “undertaking” shall have the meaning given in section 1161 of the Companies Act save that for the purposes of this Agreement, an undertaking shall include a limited liability partnership.

(d) any reference to the Parties or a recital, clause or Schedule is to the Parties (and permitted assignees) or the relevant recital, clause or schedule of or to this Agreement;

(e) any reference in a schedule to a part or a paragraph is to a part or a paragraph of that schedule or, where relevant, to a paragraph of that part of that schedule;

(f) any reference to a “person” includes an individual, firm, partnership, body corporate, corporation, association, organisation, government, state, foundation and trust, in each case whether or not having separate legal personality;

(g) any reference to a company's “annual accounts” shall mean its annual accounts and reports within the meaning of section 264 HGB and shall include the notes to those accounts;

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(h) “financial year” shall be the calendar year;

(i) “group undertaking” and “subsidiary undertaking” shall have the respective meanings given in section 1161(5) and section 1162 of the Companies Act, save that for the purposes of this Agreement, an undertaking shall be treated as a member of another undertaking if any of the shares in that other undertaking are registered in the name of another person (or its nominee) as security (or in connection with the taking of security) from the first undertaking or any of that first undertaking's subsidiary undertakings;

(j) “to the extent that”means “if and to the extent that”;

(k) any reference to an English legal term or concept, or any court, official, governmental or administrative authority or agency in England, includes in respect of any jurisdiction other than England a reference to whatever most closely approximates to it in that jurisdiction;

(l) the clause, Schedule and paragraph headings are included for convenience only and shall not affect the interpretation of this Agreement;

(m) the schedules and recitals form part of this Agreement and shall have effect as if set out in full in the body of this Agreement and any reference to this Agreement includes the schedules and recitals;

(n) any reference in this Agreement to a document being “in the Agreed Form” means a document in a form agreed by the Parties before the signing of this Agreement and either entered into on the date of this Agreement by the relevant Parties or initialled by the Parties (or on their behalf) and where that document is not entered into on the date of this Agreement, with such amendments as the Parties may subsequently agree; and

(o) the words “other”, “including”, “includes”, “include”, “in particular” and any similar words shall not limit the general effect of words that precede or follow them and the ejusdem generis rule shall not apply.

2. CONDITION PRECEDENT

2.1 Completion is conditional on the satisfaction of the following condition (“Condition Precedent”) that the acquisition of the Sale Shares is not restricted pursuant to sec. 4 para. 1 and 2 no. 4, sec. 5 para. 2 German Foreign Trade Act (Außenwirtschaftsgesetz – AWG) in conjunction with sec. 59 para. 1 AWV. This condition shall be deemed satisfied, if the German Federal Ministry for Economic Affairs and Climate Action (“BMWi”):

(a) has issued a clearance certificate (Unbedenklichkeitsbescheinigung) pursuant to sec. 58 AWV and/or a foreign investment control approval (Freigabe) (“Clearance Certificate”); or

(b) has within two months after receipt of a due application for a Clearance Certificate neither issued such Clearance Certificate nor initiated formal investigations pursuant to sec. 55 para. 1 AWV; or

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(c) has, in the event of formal investigations pursuant to sec. 55 para. 1 AWV, failed to prohibit the transaction or to impose any orders (Anordnungen) on the Buyer, in either case within the time period specified in sec. 59 para. 1 AWV.

2.2 The Buyer shall be responsible for and shall use all reasonable endeavours to ensure that the Condition Precedent is satisfied as soon as possible. The Buyer shall be obligated to file the application for a clearance certificate and/or foreign investment control approval 10 (ten) Business Days after Signing of this Agreement, at the latest. Any filings and notifications required to be made in that regard shall be made by the Buyer. The Seller shall use all reasonable endeavours to cooperate with the Buyer in the preparation of any filings and notifications and in particular provide the Buyer with the information on the Seller and the Company required for the preparation thereof. The Buyer shall keep the Seller promptly and fully informed as to the progress (including the completion) of the filing to the BMWi and shall give the Seller’s advisors the opportunity to attend all appropriate meetings with representatives of the BMWi (unless prohibited by applicable law or the BMWi). Any filings and notifications to the BMWi shall only be made after prior written consent of the Seller, such consent to be given promptly and not to be unreasonably withheld. The Buyer shall lead and make strategic decisions and coordinate all activities with respect to any requests that may be made by, or any actions, consents, undertakings, approvals or waivers that may be sought by or from the BMWi, including determining the strategy for contesting, litigating or otherwise responding to objections to, or proceedings challenging, the completion of the Transaction contemplated by this Agreement in close cooperation with the Seller. Each Party shall use all their respective reasonable endeavours to notify the other Party, with appropriate supporting documentation, as soon as that Party becomes aware the Condition Precedent is satisfied or has become, or is likely to become, incapable of being satisfied.

2.3 The Buyer shall offer, consent to, and comply with, any obligations or conditions, commitments or other agreements required by the BMWi as a condition to the clearance of the Transaction contemplated hereby, unless this would cause an unreasonable material hardship for the Buyer with respect to the business of the Company and the business currently conducted by the Buyer and its group, taken as a whole. For the avoidance of doubt, under no circumstances will the Buyer be compelled to divest, dispose of, hold separately or license any portion of the business of the Buyer (including its affiliates) or the Company.

2.4 If the Condition Precedent is not satisfied on or before the Longstop Date (or such other date as may be agreed in writing between the Seller and the Buyer), the Seller may at its sole discretion and the Buyer may, unless in material non-compliance with any of its obligations under clauses 2.2 or 2.3, in each case by notice in writing to the other Party, postpone the Longstop Date by a period of up to 3 (three) months after the Longstop Date – (such postponed Longstop Date the “Extended Longstop Date”). If neither Party opts to postpone the Longstop Date or (ii) at the postponed Longstop Date, the Condition Precedent is still not satisfied in accordance with this Agreement, each Party, may at its sole discretion terminate this Agreement by notice in writing to the other Parties.

2.5 In the event of a termination under clause 2.4, clause 6.3 applies mutatis mutandis.

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3. AGREEMENT FOR SALE OF SHARES AND IP

3.1 The Seller agrees to sell, and the Buyer agrees to buy, the Sale Shares, free from all Encumbrances and with all rights attaching to them at Completion, including the right to receive all dividends and other distributions declared, made or paid after Completion. The transfer in rem of the Sale Shares shall occur separately on the basis of the German Share Transfer Deed on the Completion Date.

3.2 The Seller covenants that it has the right to sell the Sale Shares on the terms of this Agreement.

3.3 The Seller agrees to sell, and the Buyer agrees to buy, the Transferred IP. The transfer in rem of the Transferred IP shall occur separately on the basis of the IP Assignment and License Agreement on the Completion Date.

4. CONSIDERATION

4.1 The purchase price for the Transferred IP (“IP Purchase Price”) shall be $ [***]

4.2 The purchase price for the Sale Shares (“Share Purchase Price”) shall be $ 25,000,000 (twenty-five million US dollars):

(a) plus the Completion Cash;

(b) minus the Completion Debt;

(c) plus the amount (if any) by which the Completion Working Capital exceeds the Target Working Capital or (as the case may be) minus the amount (if any) by which the Completion Working Capital is less than the Target Working Capital;

(d) minus the IP Purchase Price;

(e) minus the Shareholder Loan; and

(f) as adjusted by the provisions of Part 5 of Schedule 5 in respect of the Retention, which shall be paid (if at all) in accordance with the terms of that Schedule.

The IP Purchase Price and the Share Purchase Price together the “Purchase Price”.

4.3 The Purchase Price shall be paid in cash.

4.4 Immediately after Completion, the Buyer shall procure that the Company repays the Shareholder Loan to the Seller (see also Schedule 3, para. 3.3.).

4.5 Any amount paid by or on behalf of the Seller in respect of any claim for any breach of this Agreement or pursuant to any indemnity or undertaking to pay any amount under this Agreement shall, to the extent permitted by law, be deemed to reduce, the Purchase Price by, and be a repayment of, that amount.

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5. PERIOD BEFORE COMPLETION

5.1 The Seller shall ensure that during the period beginning on the signing of this Agreement and ending at Completion:

(a) the Company shall not, without the prior consent of the Buyer (not to be unreasonably withheld, delayed or conditioned), take any action set out in Schedule 2;

(b) to the extent permitted under Competition Law and the German Investment Screening Laws, and in all cases in compliance with applicable data protection laws, the Buyer receives advance notice of and is allowed to be present as an observer, through any duly authorised representative, at any meeting of the board of directors of the Company held during that period, if any; and

(c) to the extent permitted under Competition Law and the German Investment Screening Laws, and in all cases in compliance with applicable data protection laws, the Buyer and its agents and representatives are:

(i) given reasonable access during normal business hours to the key employees of the Company, including [***], and to the Properties upon reasonable prior written notice and accompanied by a representative of the Seller;

(ii) with the prior consent of the Seller (not to be unreasonably withheld delayed or conditioned) introduced to the suppliers and customers/clients of the Company;

(iii) subject to clause 22, given reasonable prior notice of any press release or other public announcement relating to the Company; and

(iv) it shall, and shall procure that the Company shall keep the Buyer fully and promptly informed in writing of the material progress, including all material developments, of the Transfer Pricing Audits and external costs and expenses incurred or payable in connection with such Transfer Pricing Audits and promptly provide copies of any material written correspondence that the Company receives or provides to the relevant Tax Authority in connection with the Transfer Pricing Audits (including, for the avoidance of doubt, any Final Determination), provided that where such correspondence contains confidential information of the Seller or the Seller’s Group (other than the Company), such confidential information shall first be redacted and copies of such redacted correspondence shall then be provided to the Buyer; and

(v) provided with reasonable additional information relating to the business and affairs of the Company as the Buyer may from time to time reasonably request.

5.2 During the period beginning on the signing of this Agreement and ending at Completion, the Seller shall not dispose of any interest in or otherwise grant an Encumbrance in respect of any of the Sale Shares.

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5.3 The Seller shall promptly notify the Buyer in writing of any matter which becomes known to it before Completion and which constitutes, a breach of the previous provisions of this clause, a breach of any of the Warranties, may give rise to a Tax Claim or a Material Adverse Change.

5.4 The Seller shall, on the 7th Business Day before the Completion Date, notify the Buyer of the Estimated Completion Cash, the Estimated Completion Debt, the Estimated Working Capital and Estimated Shareholder Loan.

5.5 Any notice given under clause 5.4 shall be given in good faith, as soon as reasonably practicable after 5.30p.m. on the relevant date and shall be accompanied by a breakdown of the items comprised within each estimate (including in relation to the Estimated Completion Debt, the information relating to Borrowings) and any relevant supporting documentation. The Seller shall provide (and shall ensure that the Company provides) any information in relation to those estimates as the Buyer may from time to time reasonably require.

6. TERMINATION

6.1 If (i) neither Party opts to postpone the Longstop Date in accordance with clause 2.4 or (ii) at the postponed Longstop Date, the Condition Precedent is still not satisfied in accordance with this Agreement, each Party, may at its sole discretion terminate this Agreement by notice in writing to the other Parties.

6.2 The Buyer may terminate this Agreement at any time before Completion by written notice to the Seller if:

(a) there has been a breach by the Seller of any of the Title and Capacity Warranties and/or IP Warranties at any time where the effect of that breach (or the cumulative effect of those breaches if there is more than one breach) is material in the context of the purchase by the Buyer of the Sale Shares;

(b) there has been a breach by the Seller of any of the Warranties given as at the Signing Date (other than the Title and Capacity Warranties and/or IP Warranties), and for the avoidance of doubt such breach having occurred on the Signing Date and the effect of that breach (or the cumulative effect of those breaches if there is more than one) has resulted, or will result, in Losses in the excess of $ [***];

(c) here has been a Material Adverse Change after the Signing Date; or

(d) two or more Key Persons (one of whom must be [***])_are no longer employed by (or have given notice to resign as employees of) the Company;

it being agreed without prejudice to the Buyer’s right of termination under this clause 6, that in the case of an occurrence of any of the events listed in clause 6.2 (a), (b) (c) and (d) the Parties shall, prior to the Buyer exercising any termination right under this clause, for a period of 10 (ten) Business Days following the occurrence of such event or discovery of such breach, discuss in good faith another mutually agreeable solution which avoids termination of the Agreement by the Buyer.

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6.3 If this Agreement is terminated pursuant to clause 6.1 or 6.2, then each Party's further rights, obligations and liabilities under this Agreement shall cease immediately on termination, except for:

(a) each Party’s accrued rights, obligations and liabilities (if any) as at the date of termination, it being understood, for the avoidance of doubt, that a termination by the Buyer under clause 6.2 does not entitle the Buyer to claim damages in respect of any costs or expenses or otherwise incurred in connection with the preparation of and entering into the Transaction under any of the Warranties or otherwise under this Agreement; and

(b) the Surviving Provisions.

Except as stated in this clause 6 or as expressly provided otherwise in this Agreement, no party shall have any right to rescind or terminate this agreement or to treat it as having been repudiated (whether before or after Completion).

7. COMPLETION

7.1 Subject to clause 6, Completion shall take place remotely on the later of:

(a) the 10th (tenth) Business Day after the Condition Precedent in clause 2.1 is satisfied; or

(b) the Longstop Date,

or at such other time and place as the Parties may agree in writing (the “Completion Date”).

7.2 At Completion, the Seller and the Buyer shall comply with their respective obligations set out in Schedule 3.

7.3 If either the Seller or the Buyer (referred to in this clause 7 as the “defaulting party”) does not or is unable to fulfil any of its respective material obligations set out in Schedule 3 at the time when Completion is due to take place under clause 7.1, the other (referred to in this clause 7 as the “non-defaulting party”) may, without prejudice and in addition to any other right or remedy the non-defaulting party may have, by notice to the defaulting party:

(a) postpone Completion for a period not exceeding 20 (twenty) Business Days; or

(b) elect to proceed to Completion, in which case the defaulting party shall be obliged to fulfil those obligations set out in Schedule 3 which the defaulting party is then able to fulfil and to fulfil the remaining obligations on or before any later date specified for the purpose in the notice; or

(c) if having already given notice under clause 7.3(a) and the period of postponement so notified having elapsed without each unfulfilled obligation in question having been fulfilled in all material respects, elect not to complete the sale and purchase of the Sale Shares and the Transferred IP.

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7.4 If Completion is postponed on any occasion under clause 7.3(a), this clause shall apply with respect to each occasion to which it is so postponed.

7.5 If the non-defaulting party elects not to complete the sale and purchase of the Sale Shares and the Transferred IP in accordance with clause 7.3(c), the Parties shall have no further rights or obligations under this Agreement, other than accrued rights and obligations at the time of that election and for those purposes the Surviving Provisions shall remain binding on the Parties in accordance with their terms.

8. COMPLETION ACCOUNTS AND ADJUSTMENT TO THE AMOUNT PAID AT COMPLETION

8.1 The Buyer and the Seller shall comply with their respective obligations under Schedule 8 pursuant to which the Completion Statement is to be prepared and become final and binding on the Parties.

8.2 On the date falling 10 (ten) Business Days after the Completion Statement becomes final and binding on the Parties:

(a) if the amount paid by the Buyer on account of the Purchase Price at Completion exceeds the Purchase Price, then the Seller shall pay the amount of the excess to the Buyer; or

(b) if the amount paid by the Buyer on account of the Purchase Price at Completion is less than the Purchase Price, then the Buyer shall pay the amount of the shortfall to the Seller;

and in both cases, such payments shall be made in accordance with clause 18.

8.3 Notwithstanding any provision of Schedule 8, the agreement or determination of the Completion Cash, the Completion Debt and the Completion Working Capital and any consequential payment made pursuant to clause 8, to the extent not taking into account or fully taking into account any matter then or subsequently giving rise to a Warranty Claim, a Tax Claim or any other claim under this Agreement, shall not prevent the Buyer from asserting that claim, or limit the damages recoverable.

9. BORROWINGS

9.1 The Seller shall ensure that at Completion any amounts owing by the Company to Seller or member of the Seller’s Group, other than the Shareholder Loan, are repaid in full.

9.2 The Seller shall ensure that at Completion there are no amounts owing by the Company by way of Borrowings other than amounts owing to another member of the Seller’s Group or amounts to be repaid pursuant to Clause 9.1.

10. RELEASE OF ASSURANCES / SELLER’S GROUP GUARANTEES

Release of Assurances

10.1 The Seller shall at its own cost execute and deliver all documents, and use all reasonable endeavours to take all other actions as the Buyer may reasonably request from time to time after Completion, in order to effect the release and discharge in full (on a non-recourse basis

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to the Buyer and the Company) of any Assurance given by the Company to any person in respect of any obligation of the Seller or any member of the Seller's Group. Pending each such release and discharge, the Seller shall pay to the Buyer on demand the amount of all Losses incurred by the Buyer and the Company arising directly or indirectly from or in connection with any such Assurance.

Release from Seller’s Group Guarantees

10.2 Buyer shall procure in cooperation with Seller and with effect as of the Completion Date, the full and unconditional release of all relevant members of Sellers' Group from all obligations and liabilities relating to the Seller’s Group Guarantees. To the extent documentation confirming such release has not been obtained on the fifth Business Day prior to the scheduled Completion Date, Buyer agrees to indemnify the relevant member of Seller’s Group from and against all Losses and shall pay to the Seller on demand the amount of all such Losses arising in connection with the Seller’s Group Guarantees from Completion up to the date on which the Seller’s Group are released from the relevant Seller’s Group Guarantee. in an amount equal to the aggregate (actual or contingent) liability of Seller’s' Group under such Seller’s Group Guarantees.

11. WARRANTIES

11.1 The Seller warrants to the Buyer that, save as Disclosed, as at the date of this Agreement and again as at Completion in respect of the Repeated Warranties only, each of the Warranties is true, accurate and not misleading.

11.2 A matter shall be regarded as “Disclosed” for the purposes of this Agreement

(a) If any member of the Buyer Deal Team had actual knowledge of the relevant matter at the Signing Date;

(b) to the extent that accurate information about that matter is contained in the Disclosure Letter or is contained in the Disclosure Documents in such a way and in such sufficient detail to enable a prudent business person (having taken professional advice), to identify the nature and scope of that matter and the Warranties which are to be regarded as qualified by it. The provisions of this clause 11.2 shall prevail over any provision to the contrary in the Disclosure Letter.

11.3 Each of the Warranties is separate and is to be construed independently of, and without reference to qualifications contained in, the other Warranties.

11.4 No matter within the actual, imputed or constructive knowledge of the Buyer or any of its agents or advisers on the date of this Agreement (other than a matter Disclosed) and no matter notified by the Seller to the Buyer after the date of this Agreement or otherwise coming within the actual, imputed or constructive knowledge of the Buyer after the date of this Agreement, shall be regarded as qualifying the Warranties or as being Disclosed. No warranty or representation is made by the Buyer, whether by executing this Agreement or otherwise, as to its (or its agents or advisors’) knowledge of any circumstances entitling it to make a Warranty Claim or a Tax Warranty Claim.

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11.5 The Seller unconditionally and irrevocably waives any rights it may have (in each case whether founded in negligence or otherwise) against the Company, or any director, employee, officer or agent of the Company, on whom the Seller has or may have relied in connection with preparing the Disclosure Letter or agreeing to any terms of this Agreement or any document to be entered into pursuant to it. Nothing in this clause 11.5 shall apply to restrict the ability of the Seller to make any claim against any person for fraud, wilful concealment or wilful misconduct.

11.6 Schedule 7 (in the case of a Warranty Claim and, where specified, a Tax Claim) shall apply to limit or exclude, in accordance with their respective terms, any liability which the Seller might otherwise have in respect of any Warranty Claim or any Tax Claim.

12. OVERTIME PAYMENTS INDEMNITY

The Seller agrees to indemnify, defend, and hold harmless the Buyer from and against, and the Buyer will be entitled to be compensated and reimbursed for, any and all Losses arising directly or indirectly from or in connection with any employees of the Company having due and payable but unsettled claims against the Company under German law for overtime work (Leistung von Überstunden) performed during the period, up to the Completion Date and such employees actually claiming payment for such overtime work from the Company, including the amount of all Losses arising from or in connection with the settlement of any claim or the enforcement of any settlement or judgment given in relation to the aforesaid matter or in relation to the enforcement of this clause 12.

13. INTELLECTUAL PROPERTY INDEMNITIES

13.1 The Seller agrees to indemnify, defend, and hold harmless the Buyer, all members of the Buyer’s Group (including, for the avoidance of doubt, the Company), and their respective successors, and assigns (collectively, the “BuyerIndemnified Parties”) from and against, and such Buyer Indemnified Parties will be entitled to be compensated and reimbursed for, any and all Losses resulting from any claim brought by a third party (such claim, a “Third Party IP Claim”) to the extent arising from:

(a) any breach of any IP Warranties given by the Seller with respect to the Assigned Rights and/or the Transferred IP in this Agreement;

(b) the use or other exploitation of any of the Assigned Rights and/or Transferred IP on or prior to the Completion Date; and

(c) the use or other exploitation of any Assigned Rights pursuant to any licence granted to the Seller under the IP Assignment and Licence Agreement.

13.2 The Buyer agrees to indemnify, defend, and hold harmless the Seller, all members of the Seller’s Group and their successors, and assigns (collectively, the “SellerIndemnified Parties”) from and against, and such Seller Indemnified Parties will be entitled to be compensated and reimbursed for, any and all Losses resulting from any Third Party IP Claim to the extent arising from the use or other exploitation of the Assigned Rights and/or the Transferred IP by the Buyer after the Completion Date, except to the extent that the Seller is obligated to indemnify the Buyer pursuant to clause 13.1, or such Third Party IP Claim otherwise results from the breach of any Transaction Document by the Seller.

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13.3 Third Party IP Claims

(a) A Party that intends to claim indemnification under this clause 13 (the “Indemnitee”) shall as soon as reasonably practicable notify the other Party in writing of any Third Party IP Claim (including, if requested by the Indemnitor, a copy of any related complaint, summons, notice or other instrument, (save where to do so would result in a breach of any obligation of confidentiality or the loss of legal professional privilege)) for which such Indemnitee intends to base a request for indemnification under this clause 13; provided, that failure to give such notification shall not affect the indemnification except to the extent the Party giving the relevant indemnity (the “Indemnitor”) has been actually prejudiced as a result of such failure.

(b) The Indemnitee shall keep the Indemnitor reasonably informed on the progress of the Third Party IP Claim and of any material developments in relation to the Third Party IP Claim.

(c) The Indemnitee shall take reasonable account of the views of the Indemnitor before taking action in relation to the same.

(d) The Indemnitee shall not admit liability in relation to, nor cease to defend, settle or compromise and Third Party IP Claim, without consulting the Indemnitor, it being noted that the Indemnitee shall not require the Indemnitor’s prior written consent to take any such action.

13.4 Limitation on liability

(a) The liability of the Seller under this Clause 13 shall fall under and be governed by paragraph 1.3 of Schedule 7 of this Agreement and shall therefore, together with all other claims within the scope of Schedule 7, paragraph 1.3, not exceed $ [***].

(b) Any claims by the Buyer under Clauses 13.1(a) and (b) shall become time-barred upon the expiration of a period of [***]s after Completion, unless such claim has been notified to the Seller in accordance with paragraph 2 of Schedule 7 of this Agreement. For the avoidance of doubt, no time bar shall apply to any claims by the Buyer under Clause 13.1(c).

(c) The liability of the Buyer under this clause 0 shall not exceed $ [***].

14. BUYER WARRANTIES AND UNDERTAKINGS

14.1 Buyer Warranties

The Buyer warrants to the Seller that:

(a) it is validly existing and is a company duly incorporated and registered under the law of its jurisdiction of incorporation;

(b) it has, and at Completion will have, the legal right, full power and, subject to satisfaction of the Condition Precedent, authority and all necessary consents and authorisations to

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enter into and to perform its obligations under this agreement and each other Transaction Document to which it is or will be party;

(c) this Agreement and each other Transaction Document to which it is or will be party constitutes, or will when executed constitute, legal, valid and binding obligations on the Buyer in accordance with their respective terms (assuming that each such Transaction Document has been properly executed by the other parties to it and that their entry into it has been duly authorised);

(d) the entry into and performance of its obligations under this Agreement and each other Transaction Document by the Buyer will not:

(i) conflict with or breach any provision of its constitutional documents;

(ii) breach any agreement or instrument to which it is a party or by which it is bound and which is material in the context of any of the transactions contemplated under the Transaction Documents;

(iii) conflict with or breach any applicable law or any requirement of any authority to which it is subject or submits which is material in the context of any of the transactions contemplated under the Transaction Documents; or

(iv) save as detailed in the Condition Precedent, require the consent, approval or authorisation of any authority or other entity, body or person;

(e) it is acquiring the Sale Shares for itself and not wholly or partly as agent or broker for any other person;

(f) there are no, and at Completion will not be any, agreements, arrangements or understandings (whether or not of a legally binding nature) for any of the Sale Shares or any interest in any of them to be sold, transferred or otherwise disposed of to, or held for the benefit of, any person other than the Buyer;

(g) it will at Completion have immediately available on an unconditional basis (subject only to Completion) the necessary cash resources to pay the Purchase Price on Completion and to repay the remaining balance of the Shareholder Loan immediately post-Completion; and

(h) it is the entity of the Buyer’s Group into which the Buyer Group’s investor funding flows.

14.2 No rights against persons other than the Seller

The Buyer undertakes to the Seller that (save in the case of fraud or as expressly provided for in the Transaction Documents), as at the Signing Date it has no rights against the Seller’s Group in connection with the transactions contemplated by the Transaction Documents (except as may be expressly agreed between the Buyer and the Seller).

15. TAXATION

15.1 The provisions of Schedule 5 shall apply with effect from the date of this Agreement save that the provisions in Part 3 of Schedule 5 shall apply with effect from Completion.

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15.2 The Disclosure Letter shall not qualify the Tax Covenant or otherwise limit the liability of the Seller in respect of any claim brought by the Buyer under the Tax Covenant.

16. PROTECTION OF THE INTERESTS OF THE BUYER

16.1 For the purposes of this clause 16, the following words and expressions shall have the following meanings:

“Key Employee” means:

(a) [***]

(b) [***];

(c) [***];

(d) [***];

(e) [***];

(f) [***];

(g) [***]; and

(h) [***].

“Supplier” means any supplier of goods or services to the Company at any time during the period of 12 (twelve) months ending on the Completion Date.

16.2 The Seller acknowledges that the Buyer is buying the Sale Shares in accordance with the terms of this Agreement and that the Buyer is therefore entitled to protect the goodwill of the Company. Accordingly, the Seller undertakes to the Buyer that it shall not, and shall procure that no member of the Seller’s Group shall, directly or indirectly, alone or jointly with any other person:

(a) for a period of 36 (thirty-six) months from the Completion Date, carry on or be engaged, interested or concerned in any Competing Business, whereas “Competing Business” shall be defined as the provision of CDMO Services.; for the avoidance of doubt, nothing in this clause 16.2(a) shall restrict the Seller or any member of the Seller’s Group to continue to be and/or become a customer of any third party CDMO Services provider at any time;

(b) for a period of 24 (twenty-four) months from the Completion Date employ or engage the services of any Key Employee; or

(c) for a period of 24 (twenty-four) months from the Completion Date, and to the detriment of the Company, induce or endeavour to induce any Supplier to cease to supply, or to restrict or adversely to vary the terms of supply to the Company;

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(d) for a period of 24 (twenty-four) months from the Completion Date, induce, or endeavour to induce, any Key Employee to leave his or her position, whether or not that person would commit a breach of his or her contract by so leaving.

16.3 Nothing in clause 16.2 shall prohibit the Seller or any member of the Seller’s Group from holding any interest in any securities listed or dealt in on any securities exchange or market if the Seller and any member of the Seller's Group are together interested in securities which amount to less than 3 (three) per cent of the issued securities of that class and which in all circumstances carry less than 3 (three) per cent of the voting rights (if any) attaching to the issued securities of that class, and if neither the Seller nor any member of the Seller's Group is involved in the management of the business of the issuer of the securities or any subsidiary undertaking of that issuer except by virtue of the exercise of any voting rights attaching to the securities.

16.4 The Seller shall provide reasonable assistance to the Buyer and/or the Company to retain the Key Employees, and with respect to Key Employees [***] provide such assistance on a best efforts basis, it being understood, for the avoidance of doubt, that the Seller shall, subject to clause 16.2, have no liability under this Agreement in respect of any Key Employees not being able to be retained by the Buyer and/or the Company.

16.5 The Seller shall not at any time after the Completion Date present itself or permit itself to be presented as in any way connected with the Company or interested in any of the Sale Shares, other than in relation to references to being the former shareholder of the Company and to receiving, via the Buyer as service provider, CDMO Services from the Company under the Transition Services Agreement.

16.6 The Seller shall ensure that no member of the Seller's Group takes or omits to take any action which, if taken or omitted by the Seller, would constitute a breach of clause 16.2, 16.4 or 16.5.

16.7 Since the Seller has confidential information relating to the Company and a detailed awareness of the Company’s supplier connections, and since the Purchase Price has been calculated on the basis that the Seller would assume the obligations set out in this clause 16, the Parties acknowledge that each of those obligations is reasonable as to subject matter, area and duration and is necessary to protect the Buyer's legitimate interest in the goodwill of the Company.

16.8 Without prejudice to any other remedy which may be available to the Buyer, the Parties agree that the Buyer shall be entitled to seek injunctive or other equitable relief in relation to any breach of clauses 16.2, 16.4, 16.5 and 16.6, it being acknowledged that an award of damages might not be an adequate remedy if there is such a breach.

16.9 The Seller and the Buyer each acknowledge that it has entered into this Agreement on an arm's length basis and that it has taken independent legal advice in so doing.

17. SELLER’S GUARANTOR

17.1 The Seller’s Guarantor guarantees to the Buyer the due and punctual performance, observance and discharge by the Seller of all the Guaranteed Obligations if and when they become performable or due under the Transaction Documents.

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17.2 If the Seller defaults in the payment when due of any amount that is a Guaranteed Obligation the Seller’s Guarantor shall, as soon as reasonably practicable, pay that amount to the Buyer in the manner prescribed by this agreement (or (as the case may be) the Transaction Documents, as if it were the Seller.

17.3 The liability of the Seller’s Guarantor under the guarantee in this clause 17 shall not be reduced, discharged or otherwise adversely affected by:

(a) any act, omission, matter or thing which would have discharged or affected the liability of the Seller’s Guarantor had it been a principal obligor instead of a guarantor or indemnifier; or

(b) anything done or omitted by any person which, but for this provision, might operate or exonerate or discharge the Seller’s Guarantor or otherwise reduce or extinguish its liability under the guarantee in this clause 17.

17.4 The Seller’s Guarantor waives any right it may have to require the Buyer (or any trustee or agent on its behalf) to proceed against or enforce any other right or claim for payment against any person before claiming from the Seller’s Guarantor under this clause 17.

17.5 Until all amounts which may be or become payable by the Seller under the Transaction Documents have been irrevocably paid in full, and unless the Buyer otherwise directs in writing, the Seller’s Guarantor shall not exercise any security or other rights it may have by reason of performing its obligations under clause 17, whether such rights arise by way of set-off, counterclaim, subrogation, indemnity or otherwise.

17.6 The guarantee in this clause 17 shall be in addition to and independent of all other security which the Buyer may hold from time to time in respect of the discharge and performance of the Guaranteed Obligations.

18. PAYMENTS

18.1 Payments to be made to the Seller under this Agreement shall be made in US dollars by electronic transfer of immediately available funds to any bank account of the Seller to which the Seller gives the Buyer at least three prior Business Days' written notice from time to time.

18.2 Payments to be made to the Buyer under this Agreement shall be made in US dollars by electronic transfer of immediately available funds to any bank account of the Buyer of which the Buyer gives the Seller at least three prior Business Days' written notice from time to time.

18.3 Payment of any sum in accordance with clause 18.1 or clause 18.2 will discharge the obligations of the paying party to pay the sum in question and the paying party shall not be concerned to see the application of the monies so paid.

18.4 If:

(a) any deduction or withholding is required by law to be made from any sum payable to the Buyer under this Agreement, the Seller shall be obliged to pay such increased sum as will, after the deduction or withholding has been made, leave the Buyer with the

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same amount as it would have been entitled to receive in the absence of such requirement to make a deduction or withholding; and

(b) any sum paid or payable to the Buyer under this Agreement (“Original Sum”) is or will be chargeable to Tax, the Seller shall be obliged to pay on demand such additional sum to the Buyer as will ensure that, after payment of the Tax, the Buyer is left with an amount equal to the Original Sum, and for these purposes a sum shall be regarded as chargeable to Tax in circumstances where it would have been chargeable to Tax but for some Relief available to the Buyer.

18.5 Subject to clause 18.6, any amounts which are or may become payable by any Party under to this Agreement, shall (unless expressly agreed otherwise between the Parties) be payable in US Dollars, as calculated based on the Exchange Rate on the first Business Day prior to the date on which the relevant amount is or becomes payable.

18.6 For the purpose of the Completion Accounts, the Exchange Rate shall be calculated on the first Business Day prior to Completion.

18.7 All payments or other consideration payable or provided under, or pursuant to, this Agreement or the IP Assignment and Licence Agreement are exclusive of VAT and an amount equal to any VAT chargeable in accordance with applicable law in respect of any supply made under, or pursuant to, this Agreement or the IP Assignment and Licence Agreement is payable at the applicable rate, subject to receipt of a valid VAT invoice in respect of such supply, by the Party receiving the supply to the Party making the supply, in addition to the payment or other consideration for such supply and at the same time as the payment or other consideration for such supply is payable or provided.

19. FURTHER SELLER ASSURANCE

The Seller shall ensure that all books, records and other information relating to the Company or its business which are owned by the Seller or any other member of the Seller's Group are retained for a period of 7 (seven) years starting on the Completion Date, and that during that period, the Buyer is promptly provided upon request with access to those books, records and information during normal working hours and on reasonable prior notice and is permitted at the Buyer's reasonable expense to make copies of them, in each case subject any restrictions under mandatory laws.

20. FURTHER BUYER OBLIGATIONS

20.1 For a period of 12 (twelve) months following Completion, the Buyer shall procure that the Company, at all times during that period, equipped with sufficient financial funds to allow the Company to operate as a going concern and such that the Company does not become insolvent in accordance with the German Insolvency Act (Insolvenzordnung).

20.2 Subject to clause 20.3, the Buyer shall not use, and shall procure that the Buyer Group shall not use, at any time after Completion, directly or indirectly, any company or trading name, domain name, logo or trade or service mark (whether registered or unregistered) which includes the word “Freeline” or any word which is confusingly similar.

20.3 Within 90 (ninety) Business Days of the Completion Date, the Buyer shall procure that:

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(a) all references to the Seller’s Group Names and Marks and any other wording or signs that suggest any continued association with the Seller’s Group are removed from all assets owned or used by the Company (including products, packaging, marketing materials, business stationery, vehicles and premises); and

(b) the Company changes its name to remove the word “Freeline Therapeutics”.

21. ASSIGNMENT

21.1 This Agreement shall be binding on and enure for the benefit of the successors and permitted assignees of the Parties.

21.2 Except as provided in clause 21.3, no Party may assign or otherwise dispose of any rights under this Agreement, at law or in equity, including by way of declaration of trust. Any purported assignment in breach of this clause shall be void and confer no rights on the purported assignee.

21.3 The Buyer may assign or encumber all or any of its rights under this Agreement to its lenders by way of security for financing purposes and to any member of the Buyer's Group, provided that any such member of the Buyer's Group shall cease to be entitled to exercise those rights, and shall reassign those rights to the Buyer, on ceasing to be a member of the Buyer's Group, and provided also that the liability of the Seller to any such assignee shall not be greater than its liability to the Buyer if that assignment had not occurred and all the rights, benefits and protections afforded to the Seller shall continue to apply for the benefit of the Seller as against the assignee as they would have applied as against the Buyer.

21.4 If there is any such assignment, references to the Buyer (other than in this clause) shall be construed as references to the holder, at any relevant time, of the Buyer's rights under this Agreement.

21.5 The Buyer shall, as soon as reasonably practicable, give notice of any assignment of rights under this Agreement to the Seller.

22. ANNOUNCEMENTS

22.1 No Party may make or permit any other person to make any press release or other public announcement about this Agreement or the transactions contemplated by it.

22.2 Clause 22.1 shall not apply to:

(a) any such announcement with the prior written consent of the other Party, such Consent to not be unreasonably withheld;

(b) any such announcement which is consistent in all material respects with the announcement regarding the Transaction as in Agreed Form between the Parties (“Agreed Form Announcement”);

(c) any press release or other public announcement which is required by any law, judgment, authority or securities exchange; provided that, in each case such announcement or disclosure only contains content which is so required and (unless

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such consultation is prohibited) after consultation (so far as reasonably practicable) as to the timing and content of such announcement or disclosure of the other Party;

(d) any other public announcement of the acquisition of the Sale Shares made by the Buyer or a member of the Buyer's Group, including any announcement to the customers or suppliers of (a) the Company or (b) any other member of the Buyer's Group, which contains no material information relating to this Agreement and the transactions contemplated by it that is not in the Agreed Form Press Release.

23. CONFIDENTIALITY

23.1 “Confidential Information” means:

(a) all information disclosed or made available to the Receiving Party (as defined below) by or on behalf of the Disclosing Party (as defined below) in connection with this Agreement and any agreement, document or arrangement entered into in connection with this Agreement, including the Transition Services Agreement and IP Assignment and Licence Agreement, including the negotiation thereof;

(b) (to the extent obtained as a result of or in connection with entering into, or fulfilling obligations under, this Agreement) information relating to the other Party or any member of the other Party's Group;

(c) all information relating to the Assigned Rights and the Company and its business, including the details of the Company’s suppliers, customers, products, services, employees, experience, business plans and actual or potential litigation; and

(d) all memoranda, notes, analyses, compilations, studies, and other materials prepared by or for the Receiving Party to the extent containing or reflecting the information in the preceding clause (a), (b) or (c), provided that:

(i) any and all information described in sub-clause (c), above, shall be deemed to be the Confidential Information of the Buyer;

(ii) all Freeline Arising IP (as such term is defined under the Transition Services Agreement) shall be deemed to be the Confidential Information of the Seller, and all Ascend Arising IP (as such term is defined under the Transition Services Agreement) shall be deemed to be the Confidential Information of the Buyer; and

(iii) the terms of any Transaction Document shall be deemed to be the Confidential Information of both Parties.

23.2 All Confidential Information provided by one Party (or any member of its Group) (collectively, the “Disclosing Party”) to the other Party (or any member of such other Party’s Group) (collectively, the “Receiving Party”) shall be subject to and treated in accordance with the terms of this clause 23.

23.3 The Receiving Party shall treat, and shall cause all members of its Group, to treat, Disclosing Party’s Confidential Information as confidential, using the same degree of care as Receiving

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Party normally employs to safeguard its own confidential information from unauthorized use or disclosure, but in no event less than a reasonable degree of care. The Receiving Party shall promptly notify the Disclosing Party upon discovery of any unauthorized use or unauthorized disclosure of the Disclosing Party’s Confidential Information.

23.4 Notwithstanding the foregoing, the confidentiality obligations of this clause 23 shall not include that portion of Disclosing Party’s Confidential Information that:

(a) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the Receiving Party unless such Confidential Information is so available due to the unauthorized actions of the Receiving Party;

(b) became generally available to the public or otherwise part of the public domain after its disclosure to the Receiving Party other than through any act or omission of the Receiving Party in breach of this Agreement; or

(c) is subsequently disclosed to the Receiving Party on a non-confidential basis by a third party without obligations of confidentiality with respect thereto.

23.5 The Receiving Party may disclose Confidential Information of the Disclosing Party if and to the extent such disclosure is necessary in the following instances:

(a) if and to the extent included in the press release or other public announcement referred to in clause 22.2(c);

(b) if disclosed to or used by that Party's insurers, professional advisers, auditors or bankers (at any relevant time); any other member of that Party's Group; or the insurers, professional advisers, auditors or bankers (at any relevant time) of any other member of that Party's Group;

(c) if and to the extent required for the purpose of any legal (including arbitration and regulatory) proceedings arising out of this Agreement or any other agreement, document or arrangement entered into in connection with this Agreement; complying with:

(i) court orders or applicable laws (other than securities laws); or

(ii) applicable securities laws, or rules of any recognized stock exchange on which the Receiving Party’s securities are traded (specifically including the recommendations and requests from the U.S. Securities and Exchange Commission),

provided in the event the Receiving Party is required to make a disclosure of the Disclosing Party’s Confidential Information pursuant to this clause 23.5(c), it will, except where impracticable, (A) give reasonable advance notice to the Disclosing Party of such disclosure, (B) use efforts to secure confidential treatment of such information at least as diligent as the Receiving Party would use to protect its own confidential information, and (C) in the case of disclosures under (A) above, reasonably cooperate with the Disclosing Party,

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at the Disclosing Party’s reasonable request and expense, to prevent or limit disclosure of such Confidential Information;

(d) in respect to disclosure by the Buyer or a member of the Buyer’s Group only, disclosure to actual or potential licensees, sublicensees, subcontractors, investors, acquirors, or other third parties in connection with an actual or potential investment, acquisition, license or collaboration, or as otherwise required to perform its activities under the Transition Services Agreement;

(e) disclosure to a Taxing Authority in connection with the Tax affairs or a reporting obligation of the Disclosing Party; or

(f) in respect to disclosure by the Seller only, disclosure of the rights licensed to the Seller under the Back-License (as such term is defined in the IP Assignment and License Agreement) or the rights granted to the Seller under Section 7.4(b) (Licence Grant) of the Transition Services Agreement, in each case, solely to (i) sublicensees who have been appointed under, and in accordance with, the terms of the IP Assignment and License Agreement or Transition Services Agreement, as applicable (with respect to the Back-License) or Transition Services Agreement (with respect to the license granted under Section 7.4(b) of the Transition Services Agreement) and/or (ii) service providers solely to the extent necessary to allow such service providers to act on behalf of the Seller or such sublicensees.

23.6 Each Party shall ensure that any person to whom confidential information is disclosed pursuant to clause 23.5(b), 23.5(d) or 23.5(f) is made aware of the obligations of confidentiality contained in this clause and is under a confidentiality obligation at least as onerous as those set out in this clause 23.

24. COSTS

24.1 Unless otherwise expressly provided for in this Agreement, each Party shall bear its own costs and expenses in connection with the preparation, negotiation, execution and performance of this Agreement and the documents referred to in it.

24.2 All transfer taxes (Verkehrssteuern), stamp duties, fees (including notarial fees), registration duties or other charges related to any regulatory requirements (including the FDI filing) and other charges and costs payable in connection with the implementation of the transactions contemplated hereby shall be borne by the Buyer. For the avoidance of doubt, income taxes of the Seller payable in connection with the implementation of the transactions contemplated hereby shall be borne by the Seller.

25. NOTICES

25.1 Any notice, consent or other communication given under this Agreement shall be in writing and in English and shall be delivered by hand or sent by prepaid recorded or special delivery post (or prepaid international recorded airmail if sent internationally), or sent by email, in each case in accordance with the details set out below:

(a) if delivered by hand or if send by pre-paid recorded delivery post (or pre-paid international recorded airmail if sent internationally):

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(i) to the Buyer:

For the attention of: [***]

At: [***]

with a copy (which shall not constitute notice) to [***].

(ii) to the Seller or Seller’s Guarantor:

For the attention of: [***]

At: [***]

with a copy (which shall not constitute notice) to [***].

(b) if sent by email:

(i) to the Buyer at [***]; and/or

(ii) to the Seller or Seller’s Guarantor, at [***].

25.2 The Parties may from time to time notify each other of any other person or address for the receipt of notices or copy notices. Any such change shall take effect five Business Days after notice of the change is received or (if later) on the date (if any) specified in the notice as the date on which the change is to take place.

25.3 A notice is deemed to have been received:

(a) if delivered by hand, at the time the notice is left at the proper address;

(b) if sent by pre-paid recorded delivery post (or pre-paid international recorded airmail if sent internationally), on the second Business Day after posting; or

(c) if sent by email, at the earlier of the time at which a delivery receipt is generated automatically by the recipient’s email server or 24 hours after transmission,

unless such deemed receipt would occur outside business hours (meaning 9.00 a.m. to 5.30 p.m. Monday to Friday on a day that is not a public holiday in the place of receipt), in which case receipt will occur when business hours resume in the place of receipt.

25.4 The provisions of this clause 25 shall not apply in relation to the service of process in any legal proceedings arising out of or in connection with this Agreement.

26. THIRD PARTY RIGHTS

26.1 The Company and its directors, employees, officers and agents may rely upon and enforce the terms of clause 11.5 and any person to whom the Buyer may assign rights pursuant to clause 21 may rely upon and enforce those rights.

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26.2 The terms and rights referred to in clause 26.1 may be enforced by the third parties referred to in that clause only with the prior written consent of the Buyer.

26.3 Notwithstanding any other provision of this Agreement, the Seller and the Buyer may by agreement in writing remove or vary any of the provisions of this Agreement without the consent of any third party, and accordingly section 2(1) Contracts (Rights of Third Parties) Act 1999 shall not apply.

26.4 No third party may enforce any term of this Agreement unless it has first (and as a pre-condition of commencing any legal proceedings in relation to such enforcement) confirmed in writing to each of the Parties to this Agreement that in doing so, it agrees to be bound by the terms of clause 33.

26.5 Except as otherwise stated in this Agreement, a person who is not a party to this Agreement shall have no right pursuant to the Contracts (Rights of Third Parties) Act 1999 to rely upon or enforce any term of this Agreement. This clause shall not affect any right or remedy of a third party which exists or is available apart from that Act.

27. WAIVER

27.1 No delay, failure or omission (in whole or part) in enforcing, exercising or pursuing any right, power, privilege, claim or remedy conferred by or arising under this Agreement or by law shall be deemed to be, or be construed as, a waiver of that or any other right, power, privilege, claim or remedy, or operate so as to bar the enforcement, exercise or pursuance of that or any other right, power, privilege, claim or remedy, in any other instance at any other time.

28. SEVERANCE

28.1 If any provision of this Agreement is found by any court or administrative or regulatory body of competent jurisdiction to be invalid or unenforceable, such invalidity or unenforceability shall not affect the other provisions of this Agreement which shall remain in full force and effect.

28.2 If any provision of this Agreement is so found to be invalid or unenforceable, but would be valid or enforceable if some part of the provision were deleted, restricted or limited in a particular manner, the provision in question shall apply with such deletions, restrictions or limitations as may be necessary to make it valid.

29. CUMULATIVE RIGHTS

The rights and remedies provided by this Agreement are cumulative and (except as otherwise provided in this Agreement) are not exclusive of any rights or remedies provided by law.

30. NO MERGER

The provisions of this Agreement shall remain in full force and effect notwithstanding Completion.

31. COUNTERPARTS

This Agreement may be executed in any number of counterparts and by the Parties to it on separate counterparts, each of which shall be an original, but all of which together shall

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constitute one and the same instrument. This Agreement shall not be effective until each of the Parties has executed at least one counterpart.

32. ENTIRE AGREEMENT AND FRAUD

32.1 This Agreement and the documents referred to in it together constitute the entire agreement and understanding of the Parties relating to the transactions contemplated by this Agreement and those documents, and supersede any previous agreement between any of the Parties relating to the subject matter of this Agreement and those documents, which shall cease to have any further effect.

32.2 Each Party acknowledges that it has not relied on, or been induced to enter into any Transaction Document by, any representation given by any Pre-Contractual Statement given by any person (whether a party to this Agreement or not) that is not incorporated in any Transaction Document.

32.3 No Party shall be liable to the other in equity, contract or tort (including negligence), under the Misrepresentation Act 1967 or in any other way for any Pre‑Contractual Statement that is not set out in this agreement or any other Transaction Document.

32.4 Nothing in this Agreement shall limit or exclude the liability of any Party for the fraud of that Party or any of its directors, employees, officers, agents or advisers.

33. APPLICABLE LAW AND JURISDICTION

33.1 The validity, construction and performance of this Agreement and any claim, dispute or matter (whether contractual or non-contractual) arising under or in connection with this Agreement or its enforceability shall be governed by and construed in accordance with the law of England, except for the transfer in rem of the Sale Shares under the German Share Transfer Deed which is mandatorily governed by the laws of Germany.

33.2 Each Party irrevocably submits to the exclusive jurisdiction of the courts of England over any claim, dispute or matter arising under or in connection with this Agreement or its enforceability or the legal relationships established by this Agreement (including non-contractual disputes or claims) and waives any objection to proceedings being brought in such courts on the grounds of venue or on the grounds that proceedings have been brought in an inconvenient forum. Each Party further irrevocably agrees that a judgment in any proceedings brought in the courts of England shall be conclusive and binding upon each Party and may be enforced in the courts of any other jurisdiction.

33.3 Nothing in this Agreement shall affect the right to serve process in any manner permitted by law.

THIS AGREEMENT has been executed by or on behalf of the Parties on the date at the top of page 1.

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BUYER

SIGNED by a director on behalf of ASCEND GENE AND CELL THERAPIES LTD ) ) ) Signature /s/ Tim Funnell Print Name Tim Funnell

SELLER

SIGNED by a director on behalf of FREELINE THERAPEUTICS LIMITED ) ) ) Signature /s/ Michael J. Parini Print Name Michael J. Parini

SELLER’S GUARANTOR

SIGNED by a signatory, a director on behalf of FREELINE THERAPEUTICS HOLDINGS PLC ) ) ) Signature /s/ Michael J. Parini Print NameMichael J. Parini

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EX-8

Exhibit 8.1

Freeline Therapeutics Holdings plc

List of Subsidiaries

Subsidiary	Jurisdiction
Freeline Holdings (UK) Limited	England and Wales
Freeline Therapeutics Limited	England and Wales
Freeline Therapeutics (Ireland) Limited	Ireland
Freeline Therapeutics, Inc	Delaware

IF "1"="1" "" "1"

EX-12

Exhibit 12.1

CERTIFICATION BY THE PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECURITIES EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a) AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael J. Parini, certify that:

1.I have reviewed this annual report on Form 20-F of Freeline Therapeutics Holdings plc;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4.The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5.The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: April 4, 2023	By:	/s/ Michael J. Parini
		Michael J. Parini
		Chief Executive Officer

EX-12

Exhibit 12.2

CERTIFICATION BY THE PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECURITIES EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a) AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Paul Schneider, certify that:

1.I have reviewed this annual report on Form 20-F of Freeline Therapeutics Holdings plc;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4.The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5.The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: April 4, 2023	By:	/s/ Paul Schneider
		Paul Schneider
		Chief Financial Officer

EX-13

Exhibit 13.1

CERTIFICATION BY THE PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The certification set forth below is being submitted in connection with the Annual Report on Form 20-F for the year ended December 31, 2022 (the “Report”) for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Michael J. Parini, the Chief Executive Officer, and Paul Schneider, the Chief Financial Officer of Freeline Therapeutics Holdings plc, each certifies that, to the best of his knowledge:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Freeline Therapeutics Holdings plc.

Date: April 4, 2023	By:	/s/ Michael J. Parini
		Michael J. Parini
		Chief Executive Officer

By:	/s/ Paul Schneider
	Paul Schneider
	Chief Financial Officer

EX-15

Exhibit 15.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos. 333-242129, 333-242133, 333-259852 and 333-265634 on Form S-8 and Registration Statement No. 333-259444 on Form F-3 of our report dated March 31, 2022, relating to the financial statements of Freeline Therapeutics Holdings plc appearing in this Annual Report on Form 20-F for the year ended December 31, 2022.

/s/ Deloitte LLP

Reading, United Kingdom

April 4, 2023

XML

Document and Entity Information	12 Months Ended
	Dec. 31, 2022 shares
Document Information [Line Items]
Document Type	20-F
Amendment Flag	false
Document Period End Date	Dec. 31, 2022
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Entity Registrant Name	Freeline Therapeutics Holdings plc
Entity Central Index Key	0001810031
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Interactive Data Current	Yes
Document Annual Report	true
Document Transition Report	false
Document Shell Company Report	false
Document Registration Statement	false
Document Accounting Standard	U.S. GAAP
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding	65,113,575
Entity Shell Company	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
ICFR Auditor Attestation Flag	false
Entity File Number	001-39431
Entity Incorporation State Country Code	X0
Entity Address Address Line1	Sycamore House
Entity Address, Address Line Two	Gunnels Wood Road
Entity Address City Or Town	Stevenage
Entity Address, Country	GB
Entity Address Postal Zip Code	Hertfordshire SG1 2BP
Auditor Firm ID	1147
Auditor Name	Deloitte LLP
Auditor Location	Reading, United Kingdom
Business Contact
Document Information [Line Items]
Entity Address Address Line1	Sycamore House
Entity Address, Address Line Two	Gunnels Wood Road
Entity Address City Or Town	Stevenage
Entity Address, Country	GB
Entity Address Postal Zip Code	Hertfordshire SG1 2BP
Contact Personnel Name	Chip McCorkle
City Area Code	44
Local Phone Number	(0)1438 906870
American Depository Shares
Document Information [Line Items]
Title of 12(b) Security	American Depositary Shares, each representing one ordinary share, nominal value £0.00001 per share
Security Exchange Name	NASDAQ
Trading Symbol	FRLN
Ordinary shares
Document Information [Line Items]
Title of 12(b) Security	Ordinary shares, nominal value £0.00001 per share
Security Exchange Name	NASDAQ
No Trading Symbol Flag	true

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
CURRENT ASSETS:
Cash and cash equivalents	$ 47,279	$ 117,662
Prepaid expenses and other current assets	6,235	10,630
Assets held for sale	14,113
Total current assets	67,627	128,292
Property and equipment, net	9,007	9,906
Operating lease right of use assets	6,014
Other non-current assets	3,993	2,927
Total assets	86,641	141,125
CURRENT LIABILITIES:
Accounts payable	10,058	5,187
Accrued expenses and other current liabilities	7,908	15,497
Operating lease liabilities, current	2,663
Liabilities related to assets held for sale	10,337
Total current liabilities	30,966	20,684
Operating lease liabilities, non-current	3,261
Total liabilities	34,227	20,684
Commitments and contingencies (Note 12)
SHAREHOLDERS’ EQUITY:
Additional paid-in capital	500,781	467,213
Accumulated other comprehensive (loss) gain	(3,151)	9,472
Accumulated deficit	(445,353)	(356,381)
Total shareholders’ equity	52,414	120,441
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	86,641	141,125
Deferred Shares One
SHAREHOLDERS’ EQUITY:
Deferred shares, value	$ 137	$ 137

XML

Consolidated Balance Sheets (Parenthetical) - £ / shares	Dec. 31, 2022	Dec. 31, 2021
Ordinary shares, par value	£ 0.00001	£ 0.00001
Ordinary shares, authorized	400,000,000	160,000,000
Ordinary shares, issued	65,113,575	35,854,591
Ordinary shares, outstanding	65,113,575	35,854,591
Deferred Shares
Deferred shares, par value	£ 0.00001	£ 0.00001
Deferred shares, authorized	118,263	112,077
Deferred shares, issued	118,263	112,077
Deferred shares, outstanding	118,263	112,077
Deferred Shares Two
Deferred shares, par value	£ 100,000	£ 100,000
Deferred shares, authorized	1	1
Deferred shares, issued	1	1
Deferred shares, outstanding	1	1

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Consolidated Statement of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
OPERATING EXPENSES:
Research and development	$ 66,203	$ 95,431	$ 76,149
General and administrative	30,656	44,567	26,300
Restructuring expense	1,588	2,381
Total operating expenses	98,447	142,379	102,449
LOSS FROM OPERATIONS:	(98,447)	(142,379)	(102,449)
OTHER (EXPENSE) INCOME, NET:
Other (expense) income, net	2,152	(165)	(9,288)
Gain on lease termination	5,216
Interest income, net	904	404	275
Benefit from R&D tax credit	1,571	2,091	15,269
Total other income, net	9,843	2,330	6,256
Loss before income taxes	(88,604)	(140,049)	(96,193)
Income tax expense	(368)	(342)	(129)
NET LOSS	$ (88,972)	$ (140,391)	$ (96,322)
Net loss per share attributable to ordinary shareholders - basic	$ (1.50)	$ (3.93)	$ (6.81)
Net loss per share attributable to ordinary shareholders - diluted	$ (1.50)	$ (3.93)	$ (6.81)
Weighted average ordinary shares outstanding - basic	59,271,778	35,704,368	14,152,843
Weighted average ordinary shares outstanding - diluted	59,271,778	35,704,368	14,152,843

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Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Statement of Comprehensive Income [Abstract]
Net loss	$ (88,972)	$ (140,391)	$ (96,322)
Other comprehensive loss:
Foreign currency translation adjustment	(12,623)	130	12,341
Comprehensive loss	$ (101,595)	$ (140,261)	$ (83,981)

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Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Total	SERIES A Preferred Stock	SERIES B $0.00001 PAR VALUE	Series C Preferred Stock	PREFERRED SHARES $0.00001 PAR VALUE	PREFERRED SHARES $0.00001 PAR VALUE SERIES A Preferred Stock	PREFERRED SHARES $0.00001 PAR VALUE SERIES B $0.00001 PAR VALUE	PREFERRED SHARES $0.00001 PAR VALUE Series C Preferred Stock	A-G ORDINARY £0.00001 PAR VALUE	ORDINARY £0.00001 PAR VALUE	DEFERRED SHARES £0.00001 PAR VALUE	Deferred Shares Two	DEFERRED B SHARES £0.001 PAR VALUE	ADDITIONAL PAID-IN CAPITAL	ADDITIONAL PAID-IN CAPITAL SERIES A Preferred Stock	ADDITIONAL PAID-IN CAPITAL SERIES B $0.00001 PAR VALUE	ADDITIONAL PAID-IN CAPITAL Series C Preferred Stock	ACCUMULATED OTHER COMPREHENSIVE GAIN (LOSS)	ACCUMULATED DEFICIT
Balance at Dec. 31, 2019	$ 84,956				$ 1									$ 207,622				$ (2,999)	$ (119,668)
Balance, Shares at Dec. 31, 2019					106,081,025				16,047,440		110,370
Issuance of preferred shares		$ 299	$ 875	$ 79,679											$ 299	$ 875	$ 79,679
Issuance of shares, Shares						230,249	448,631	46,515,834	987,703
Issuance of ordinary shares	9													9
Forfeiture of ordinary shares, Shares									(165,414)	(17,804)	183,218
Employee exchange of ordinary shares for stock options, Shares									(1,780,944)		1,780,944
Subdivision of £1 nominal shares and reduction in deferred share capital, see Note 6													$ 153	(153)
Subdivision of £1 nominal shares and reduction in deferred share capital, see Note 6, Shares													123,638,835
Effect of corporate reorganization including conversion of preferred shares and class A - G ordinary shares to ordinary share, see Note 6	2				$ (1)						$ 2
Effect of corporate reorganization including conversion of preferred shares and class A - G ordinary shares to ordinary share, see Note 6, Shares					(153,275,739)				(15,088,785)	25,921,158	142,443,366
Issuance of ADSs in initial public offering, net of issuance costs of $4,832	161,758													161,758
'Issuance of ADRs in initial public offering, net of issuance costs of $4,832, Shares										9,951,591
Non-cash share-based compensation	6,204													6,204
Foreign currency translation adjustment	12,341																	12,341
Net loss	(96,322)																		(96,322)
Balance at Dec. 31, 2020	249,800										$ 2		$ 153	456,293				9,342	(215,990)
Balance, Shares at Dec. 31, 2020										35,854,945	144,517,898		123,638,835
Shares issued under employee share purchase plan	179													179
Shares issued under employee share purchase plan, Shares										59,169
Vesting of restricted share units										34,750
Forfeiture of ordinary shares, Shares										(94,273)	94,273
Subdivision of £1 nominal shares and reduction in deferred share capital, see Note 6												$ 137	$ (137)
Subdivision of £1 nominal shares and reduction in deferred share capital, see Note 6, Shares												1	(100,000,000)
Cancellation of deferred shares											$ (2)		$ (16)	18
Cancellation of deferred shares, Shares											(144,500,094)		(23,638,835)
Non-cash share-based compensation	10,723													10,723
Foreign currency translation adjustment	130																	130
Net loss	(140,391)																		(140,391)
Balance at Dec. 31, 2021	120,441											$ 137		467,213				9,472	(356,381)
Balance, Shares at Dec. 31, 2021										35,854,591	112,077	1
Shares issued under employee share purchase plan	200													200
Shares issued under employee share purchase plan, Shares										372,139
Issuance of shares, Shares										28,848,968
Issuance of ordinary shares	28,291													28,291
Vesting of restricted share units										44,063
Forfeiture of ordinary shares, Shares										(6,186)	6,186
Non-cash share-based compensation	5,077													5,077
Foreign currency translation adjustment	(12,623)																	(12,623)
Net loss	(88,972)																		(88,972)
Balance at Dec. 31, 2022	$ 52,414											$ 137		$ 500,781				$ (3,151)	$ (445,353)
Balance, Shares at Dec. 31, 2022										65,113,575	118,263	1

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Consolidated Statements of Shareholders' Equity (Parenthetical) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2022 £ / shares	Dec. 31, 2022 $ / shares	Dec. 31, 2021 £ / shares	Dec. 31, 2021 $ / shares	Dec. 31, 2020 £ / shares	Dec. 31, 2020 $ / shares
Preferred shares, par value | $ / shares				$ 0.00001		$ 0.00001		$ 0.00001
A-G Ordinary shares par value			£ 0.00001		£ 0.00001		£ 0.00001
Ordinary shares, par value			0.00001		0.00001		0.00001
Subdivision of nominal shares and reduction in deferred share capital					0.001		1
Issuance of shares, issuance costs | $	$ 2,600	$ 4,832
Series C Preferred Stock
Issuance of shares, issuance costs | $		$ 323
DEFERRED SHARES £0.00001 PAR VALUE
Deferred shares, par value			0.00001		0.00001		0.00001
DEFERRED SHARES £100,000 PAR VALUE
Deferred shares, par value			100,000		100,000		100,000
DEFERRED B SHARES £0.001 PAR VALUE
Deferred shares, par value			£ 0.001		£ 0.001		£ 0.001

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (88,972)	$ (140,391)	$ (96,322)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,741	2,390	1,913
Non-cash share-based compensation expense	5,077	10,723	6,204
Deferred income tax	(156)	(171)	(158)
Loss on disposal of property and equipment	235	148	76
Gain on lease termination	(5,216)
Changes in components of operating assets and liabilities:
Accounts receivable		98	(91)
Prepaids and other current assets	808	17,519	(11,885)
Other non-current assets	(384)	9	104
Operating lease right of use assets	7,506
Accounts payable	5,446	(2,890)	1,540
Accrued expenses and other current liabilities	(5,124)	5,008	3,654
Operating lease liabilities	815
Net cash used in operating activities	(78,224)	(107,557)	(94,965)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment	(7,014)	(4,274)	(2,513)
Purchase of intangible assets			(1)
Proceeds from disposal of property and equipment			126
Net cash used in investing activities	(7,014)	(4,274)	(2,388)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of preferred shares, net of issuance costs			80,853
Proceeds from exercise of ESPP	195	179
Proceeds from exercise of warrants for ordinary shares			9
Proceeds from issuance of ADSs, net of issuance costs	27,328		161,758
Payments of deferred financing costs		(1,163)
Net cash (used) in/provided by financing activities	27,523	(984)	242,620
Net increase in cash and cash equivalents classified within current assets for sale	(300)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(12,442)	302	11,738
Net (decrease) increase in cash, cash equivalents and restricted cash	(70,457)	(112,513)	157,005
Cash, cash equivalents and restricted cash
Beginning of period	119,063	231,576	74,571
End of period	48,606	119,063	231,576
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Operating lease liabilities arising from obtaining right-of-use assets	2,526
Commitment shares issued to Lincoln Park Capital Fund, LLC	963
Property and equipment purchases included in accounts payable	261	21	379
Cash paid for income taxes	317		281
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents	47,279	117,662	229,974
Long-term restricted cash	1,327	1,401	1,602
Total cash, cash equivalents and restricted cash	$ 48,606	$ 119,063	$ 231,576

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Nature of the Business

12 Months Ended

Dec. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of the Business

1. Nature of the Business

Organization

Freeline Therapeutics Holdings plc (the “Company”) is a clinical-stage biotechnology company developing transformative adeno-associated virus (“AAV”) vector-mediated gene therapies for patients suffering from chronic debilitating diseases. The Company is headquartered in the United Kingdom (“U.K.”) and had operations in Germany and the United States (“U.S.”) as of December 31, 2022.

On November 11, 2022, the Company signed a definitive agreement to sell its German subsidiary, Freeline Therapeutics GmbH, and certain intellectual property rights pertaining to the business of Freeline Therapeutics GmbH, to Ascend Gene and Cell Therapies Ltd. (“Ascend”) for $25.0 million, subject to purchase price adjustments. Refer to the discussion in Note 3, Assets Held for Sale, for further information.

Reorganization and Initial Public Offering

The Company is a public limited company incorporated pursuant to the laws of England and Wales. On August 11, 2020, the Company completed its initial public offering (“IPO”) of American Depositary Shares (“ADSs”). In the IPO, the Company sold an aggregate of 9,951,591 ADSs representing the same number of ordinary shares, including 1,128,062 ADSs pursuant to the underwriters’ option to purchase additional ADSs, at an IPO price of $18.00 per ADS. Net proceeds were approximately $161.8 million after deducting underwriting discounts and commissions and offering expenses paid by the Company.

Freeline Therapeutics Holdings plc is the successor to Freeline Therapeutics Holdings Limited (the “Predecessor”) and the financial information for periods prior to the incorporation of the Company represents that of the Predecessor. In connection with the IPO, the Company completed a corporate reorganization. In connection with the corporate reorganization, the different classes of ordinary shares were converted into a single class of ordinary shares, and such ordinary shares were consolidated and subdivided to reflect an approximately 1-for-0.159 reverse split of such ordinary shares (see Note 8, Shareholders' Equity).

Going Concern

In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern.

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

The Company has funded its operations primarily with proceeds from the sale of its equity securities. As of December 31, 2022, the Company had unrestricted cash and cash equivalents of $47.3 million. On November 11, 2022, the Company signed a definitive agreement to sell its German subsidiary, Freeline Therapeutics GmbH, and certain intellectual property rights pertaining to the business of Freeline Therapeutics GmbH, to Ascend Gene and Cell Therapies Ltd. for $25.0 million, subject to purchase price adjustments. Subsequent to the balance sheet date, the Company closed this transaction. See Note 16, Subsequent Events. However, the Company has incurred recurring losses since its inception, including net losses of $89.0 million, $140.4 million, and $96.3 million for the years ended

December 31, 2022, 2021 and 2020, respectively. In addition, the Company had an accumulated deficit of $445.4 million as of December 31, 2022. The net cash used in operating and investing activities was $85.2 million for the year ended December 31, 2022. The Company expects to continue to incur significant expenses and generate operating losses for the foreseeable future. Additionally, the Company is involved in a dispute with Brammer relating to the Manufacturing Agreement as described in Note 12, Commitments and Contingencies. There can be no assurance that the outcome of such dispute will be successful, and an adverse determination could have a material adverse effect on the Company's financial condition. However, the Company is confident in the merits of its claims against Brammer and intends to prosecute this action vigorously. These conditions indicate that there is substantial doubt regarding the Company’s ability to continue as a going concern for at least 12 months from the issuance date of the audited consolidated financial statements.

As a result, the Company will need additional funding to support its continuing operations. There can be no assurances, however, that additional funding will be available on favorable terms, or at all. If adequate funds are not available, the Company will be required to reduce spending and potentially delay, limit, reduce or terminate its product research and development efforts in order to enable it to meet its obligations as they fall due for the foreseeable future.

The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Accordingly, the consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany accounts and transactions have been eliminated upon consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual for research and development expenses, the fair value of ordinary shares, the valuation of the warrants, non-cash share-based compensation and income taxes. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ materially from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments that have maturities of three months or less when acquired to be cash equivalents.

Restricted Cash

Restricted cash as of December 31, 2022 and 2021 consisted of collateral deposits for the office spaces leased by Freeline Therapeutics GmbH. Restricted cash is included as a component of prepaid expenses and other current assets or other non-current assets on the Company’s consolidated balance sheets, depending on whether it has been classified as short-term or long-term.

Deferred Financing Costs

The Company capitalizes deferred financing costs, which primarily consist of direct, incremental legal, professional, accounting and other third-party fees relating to the Company’s financing transactions, within other non-current assets. In November 2021, the Company entered into the Open Market Sale AgreementSM with Jefferies LLC. The Company incurred deferred financing costs of $1.2 million, which were capitalized within other non-current assets.

Fair Value of Financial Instruments

Financial instruments consist of cash and cash equivalents. Certain assets of the Company are carried at fair value under U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

•Level 1—Quoted prices in active markets for identical assets or liabilities.

•Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

•Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The hierarchy requires the use of observable market data when available and to minimize the use of unobservable inputs when determining fair value. The Company has classified cash equivalents at December 31, 2022 and 2021 as fair value on a recurring basis, as Level 1.

Management believes that the carrying amounts of the Company’s consolidated financial instruments approximate fair value due to the short-term nature of those instruments.

Concentrations of Credit Risk and Off-Balance Sheet Risk

Financial instruments that subject the Company to credit risk consist solely of cash and cash equivalents. While the Company is evaluating the financial institutions at which it places its cash and cash equivalents, the Company generally places its cash and cash equivalents at banks in amounts that may exceed the insurance coverage offered by the Financial Services Compensation Scheme (“FSCS”) or the Federal Deposit Insurance Corporation (“FDIC”). The Company has no significant off-balance-sheet risk or concentration of credit risk, such as foreign exchange contracts, options contracts, or other foreign hedging arrangements.

Property and Equipment

Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the respective assets, which are as follows:

	Estimated Useful Life
Office equipment, computers and fixtures and fittings	3 years
Laboratory equipment	5 years
Leasehold improvements	10 years Shorter of useful life or remaining lease term

Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the consolidated statement of operations and other comprehensive loss. Expenditures for repairs and maintenance are charged to expense as incurred.

Impairment of Long-Lived Assets

The Company evaluates assets for potential impairment when events or changes in circumstances indicate the carrying value of the assets may not be recoverable. Recoverability is measured by comparing the book values of the assets to the expected future net undiscounted cash flows that the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the book values of the assets exceed their fair value. The Company did not recognize impairment losses in the year ended December 31, 2022. The Company recognized $0.1 million impairment losses in the year ended December 31, 2021. The Company did not recognize impairment losses in the year ended December 31, 2020.

Segment Information

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker in deciding how to allocate resources and assess performance. The Company and the Company’s chief operating decision maker, the Company’s chief executive officer, views the Company’s operations and manages its business as a single operating segment, which is the business of developing and commercializing gene therapies. The Company is a public limited company incorporated pursuant to the laws of England and Wales, has its principal executive offices in Stevenage, United Kingdom and operates as one business segment.

The Company’s long-lived assets by country were as follows:

	December 31,		December 31,
	2022		2021
U.K	$	17,894	$	6,078
Germany		13,569		6,193
U.S		587		185
	$	32,050	$	10,233

Long-lived assets include assets classified as held for sale and exclude deferred tax assets.

Research and Development Costs

Research and development costs are expensed as incurred. Research and development expenses consist of costs incurred in performing research and development activities, including employee related salaries, benefits, and non-cash share-based compensation, facilities and related depreciation expenses, travel, third-party license fees, and external costs of outside vendors engaged to conduct clinical trial and development activities and manufacturing costs to develop and produce clinical trial materials.

Research Contract Costs and Accruals

The Company has entered into various research and development-related contracts with research institutions and other companies. These agreements are generally cancelable, and related payments are recorded as research and development expenses as incurred. Accruals for research and development expenses typically include fees paid to vendors in conjunction with preclinical development activities, contract research organization (“CROs”) and investigative sites in connection with preclinical and clinical activities, and contract manufacturing organization (“CMOs”) in connection with the manufacturing of drug formulations for use in preclinical and clinical activities. The Company records accruals for estimated ongoing research costs. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted costs. Estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates.

Patent Costs

The Company expenses patent application and related legal costs as incurred and classifies such costs as general and administrative expenses in the accompanying consolidated statement of operations and comprehensive loss.

Non-Cash Share-Based Compensation

The Company recognizes compensation expense for equity awards based on the grant date fair value of the award. For equity awards that vest based on a service condition, the non-cash share-based compensation expense is recognized on a straight-line basis over the requisite service period. The Company uses the fair value of its ordinary shares to determine the fair value of Employee Shares. The Company accounts for forfeitures as they occur. For equity awards with a combination of service and performance conditions, the Company recognizes non-cash share-based compensation expense using a straight-line basis over the requisite service period when the achievement of a performance-based milestone is probable, based on the relative satisfaction of the performance condition as of the reporting date.

The fair value of each share option grant is estimated on the date of grant using the Black-Scholes option pricing model. See Note 9, Non-cash Share-Based Compensation, for the Company's assumptions used in connection with option grants made during the periods covered by these financial statements. Assumptions used in the option pricing model include the following:

Expected volatility. The Company lacks company-specific historical and implied volatility information for its ADSs. Therefore, the Company estimates the expected share volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded share price.

Expected term. The expected term of the Company's share options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options.

Risk-free interest rate. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods that are approximately equal to the expected term of the award.

Expected dividend. Expected dividend yield of zero is based on the fact that the Company has never paid cash dividends on ordinary shares and does not expect to pay any cash dividends in the foreseeable future.

Fair value of ordinary shares. The ordinary shares underlying the options granted after the Company's IPO are issued at the fair market value of the Company's ADS at the date the grant is approved.

Foreign Currency Translation

The Company maintains its financial statements of each entity within the group in its local currency, which is also the entity’s functional currency. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Non-monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the date of the transaction. Exchange gains or losses arising from foreign currency transactions are included in other expense, net in the consolidated statement of comprehensive loss. The Company recorded foreign exchange loss of approximately $12.6 million for the year ended December 31, 2022. The Company recorded foreign exchange gains of approximately $0.1 million and $12.3 million for the years ended December 31, 2021 and 2020 respectively.

For financial reporting purposes, the financial statements of the Company have been presented in the U.S. dollar, the reporting currency. The financial statements of entities are translated from their functional currency into the reporting currency as follows: assets and liabilities are translated at the exchange rates at the balance sheet dates, revenue and expenses are translated at the average exchange rates and shareholders’ equity is translated based on historical exchange rates. Translation adjustments are not included in determining net loss but are included as a foreign exchange adjustment to other comprehensive loss, a component of shareholders’ equity.

Income Taxes

The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in its tax returns. Deferred tax assets and liabilities are determined on the basis of the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that deferred tax assets will be recovered in the future to the extent management believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies.

The Company accounts for uncertainty in income taxes by recognizing in the consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed as the amount of benefit to recognize in the consolidated financial statements. The amount of benefits that may be used is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate, as well as the related net interest and penalties.

The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations. As of December 31, 2022 and 2021, no accrued interest or penalties are included on the related tax liability line in the consolidated balance sheets.

Benefit from Research and Development Tax Credit

The Company is subject to corporate taxation in the U.K. Due to the nature of the business, the Company has generated losses since inception. The benefit from research and development (“R&D”) tax credits is recognized in the consolidated statements of operations as a component of other income, net, and represents the sum of the research and development tax credits recoverable in the U.K.

The U.K. R&D tax credit is fully refundable to the Company and is not dependent on current or future taxable income. As a result, the Company has recorded the entire benefit from the U.K. research and development tax credit as a benefit which is included in net loss before income tax and accordingly, not reflected as part of the income tax provision. If, in the future, any U.K. R&D tax credits generated are needed to offset a corporate income tax liability in the U.K., that portion would be recorded as a benefit within the income tax provision and any refundable portion not dependent on taxable income would continue to be recorded within other income, net.

As a company that carries out extensive research and development activities, the Company benefits from the U.K. R&D tax credit regime. The amount of benefits received depends on whether the Company qualifies for a tax credit either as a Small and Medium Enterprise (“SME”), or under the Research and Development Expenditure Credit (“RDEC”), program. The RDEC program provides a lower tax credit than the SME program. Based on criteria established by HM Revenue & Customs (“HMRC”), the Company expects a portion of expenditures being carried out in relation to its pipeline R&D, clinical trials management and manufacturing development activities to be eligible for the RDEC regime for the years ended December 31, 2022 and 2021. Such expenditures were eligible for the SME regime for the years ended December 31, 2020. Under the RDEC scheme, the Company is able to surrender some of its trading losses that arise from qualifying research and development activities for a cash rebate of up to 10.53% (or,

from April 2023, 15%) of such qualifying research and development expenditure. Qualifying expenditures largely comprise employment costs for research staff, consumables, and utilities costs incurred as part of research projects. A portion of costs relating to research and development, clinical trials and manufacturing activities are eligible for inclusion within these tax credit cash rebate claims.

Unsurrendered U.K. losses may be carried forward indefinitely to be offset against future taxable profits, subject to numerous utilization criteria and restrictions. The amount that can be offset each year is limited to £5.0 million plus an incremental 50% of U.K. taxable profits.

Value Added Tax (“VAT”) is broadly charged on all taxable supplies of goods and services by VAT-registered businesses. Under current rates, an amount of 20% of the value, as determined for VAT purposes, of the goods or services supplied is added to all sales invoices and is payable to HMRC. Similarly, VAT paid on purchase invoices is generally reclaimable from HMRC.

Comprehensive Loss

Comprehensive loss includes net loss as well as other changes in shareholders’ equity that result from transactions and economic events other than those with shareholders.

Net Loss per Share

The Company has reported losses since inception and has computed basic net loss per share attributable to ordinary shareholders by dividing net loss attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding for the period, without consideration for potentially dilutive securities. The Company computes diluted net loss per ordinary share after giving consideration to all potentially dilutive ordinary shares, including unvested Employee Shares and warrants to purchase ordinary shares and convertible preferred shares, outstanding during the period determined using the treasury-stock and if-converted methods, except where the effect of including such securities would be antidilutive. Because the Company has reported net losses since inception, these potential ordinary shares have been anti-dilutive and basic and diluted loss per share were the same for all periods presented.

Recently Adopted Accounting Pronouncement

Leases

Effective January 1, 2022, the Company adopted Accounting Standards Codification (“ASC”), Topic 842, Leases (“ASC 842”), using the modified retrospective approach and utilizing the effective date as its date of initial application, for which prior periods are presented in accordance with the previous guidance in ASC 840, Leases. Adoption of this standard resulted in the recording of operating lease right-of-use assets and operating lease liabilities of $61.9 million and $64.7 million, respectively, on the Company’s balance sheets on the effective date. The adoption of the standard did not have a material effect on the Company’s statements of operations and comprehensive loss, shareholders’ equity and cash flows. Refer to Note 12, Commitments and Contingencies, for right-of-use assets and liabilities recorded during the year ended December 31, 2022.

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, current lease liabilities and, if applicable, long-term lease liabilities. The Company has elected to utilize the practical expedient to not recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required for items such as incentives received, initial direct costs, or prepayments. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

The Company has elected to apply the package of three expedients to all of its leases requiring (1) no reassessment of whether any expired or existing contracts are or contain leases, (2) the lease classification of any expired or existing leases, or (3) the capitalization of initial direct costs for any existing leases. All the Company’s leases are classified as operating leases.

Assumptions made by the Company at the commencement date are re-evaluated upon occurrence of certain events, including a lease modification. A lease modification results in a separate contract when the modification grants the lessee an additional right of use not included in the original lease and when lease payments increase commensurate with the stand-alone price for the additional right of use. When a lease modification results in a separate contract, it is accounted for in the same manner as a new lease.

Operating lease costs are recognized on a straight-line basis over the lease term, and they are categorized within research and development and general and administrative expenses in the consolidated statements of operations. The operating lease cash flows are categorized under net cash used in operating activities in the consolidated statements of cash flows.

The Company subleased certain leased office spaces to third parties and recognized sublease income on a straight-line basis over the sublease term within research and development.

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Assets Held for Sale

12 Months Ended

Dec. 31, 2022

Discontinued Operations and Disposal Groups [Abstract]

Assets Held for Sale

3. Assets Held for Sale

The Company classifies assets as held for sale when a sale is probable, is expected to be completed within one year, and the asset group meets all of the accounting criteria to be classified as held for sale. As discussed in Note 1, Nature of Business, on November 11, 2022, the Company entered into a definitive agreement to sell its German subsidiary, Freeline Therapeutics GmbH, and certain intellectual property. As a result, the assets related to Freeline Therapeutics GmbH were classified as held for sale as of December 31, 2022, and the Company ceased recording depreciation and amortization of the long-lived assets included in the sale from the date of execution of the definitive agreement.

The carrying amounts of the assets and liabilities held for sale in the consolidated balance sheet consisted of the following (in thousands):

	December 31,
	2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	300
Prepaid expenses and other current assets		244
Total current assets held for sale		544
NON-CURRENT ASSETS:
Property and equipment, net		5,384
Operating lease right of use assets		8,182
Other non-current assets		3
Total assets held for sale	$	14,113
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	193
Accrued expenses and other current liabilities		1,324
Operating lease liabilities, current		914
Total current liabilities related to assets held for sale		2,431
NON-CURRENT LIABILITIES:
Operating lease liabilities, non-current	$	7,906
Total liabilities related to assets held for sale	$	10,337

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Prepaid Expenses and Other Current Assets

12 Months Ended

Dec. 31, 2022

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid Expenses and Other Current Assets

4. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):

	December 31,		December 31,
	2022		2021
U.K. R&D tax credit	$	1,230	$	2,211
Prepaid tax		1,373		2,070
Insurance		1,702		2,346
Prepaid manufacturing costs		456		2,002
Other current assets		1,474		2,001
	$	6,235	$	10,630

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Property and Equipment Net

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

5. Property and Equipment, Net

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

	December 31,			December 31,
	2022			2021
Office equipment and computers	$	751		$	1,098
Furniture & Fixtures		2,584			4,602
Laboratory equipment		3,140			10,083
Leasehold improvements		7,549			955
		14,024			16,738
Less: accumulated depreciation		(5,017	)		(6,832	)
	$	9,007		$	9,906

Depreciation and amortization expense was $1.8 million, $2.4 million and $1.9 million for the years ended December 31, 2022, 2021 and 2020, respectively.

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Other Non-current Assets

12 Months Ended

Dec. 31, 2022

Other Assets, Noncurrent Disclosure [Abstract]

Other Non-current Assets

6. Other Non-current Assets

Other non-current assets consisted of the following (in thousands):

	December 31,		December 31,
	2022		2021
Restricted cash	$	1,327	$	1,400
Deferred financing costs		2,133		1,142
Deferred tax asset		533		377
Intangible assets		—		8
	$	3,993	$	2,927

Restricted cash consisted of collateral deposits for the office space leased by the Company's wholly owned subsidiary, Freeline Therapeutics GmbH.

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Accrued Expenses and Other Liabilities

12 Months Ended

Dec. 31, 2022

Payables and Accruals [Abstract]

Accrued Expenses and Other Liabilities

7. Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following (in thousands):

	December 31,		December 31,
	2022		2021
Compensation and benefits costs	$	4,178	$	4,554
Restructuring charges		—		2,362
Research and development expenses		1,923		6,726
Consulting and professional services		1,215		1,083
Other liabilities		592		772
	$	7,908	$	15,497

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Shareholders’ Equity

12 Months Ended

Dec. 31, 2022

Equity [Abstract]

Shareholders’ Equity

8. Shareholders’ Equity

Ordinary Shares

As of December 31, 2022, the Company’s authorized capital consisted of 400,000,000 ordinary shares with a par value of £0.00001 per share.

Each holder of ordinary shares is entitled to one vote per ordinary share and to receive dividends when and if such dividends are recommended by the board of directors and approved by the shareholders. As of December 31, 2022, the Company has not declared any dividends.

Registered Direct Offering

On March 10, 2022, the Company entered into a purchase agreement with its majority shareholder, Syncona Portfolio Limited, a subsidiary of Syncona Limited, and certain other existing shareholders providing for the issuance and sale by the Company of 24,857,144 of the Company’s American Depositary Shares (“ADSs”) at a price of $1.05 per ADS for total gross proceeds of $26.1 million, in a registered direct offering. The offering closed on March 15, 2022. The Company received net proceeds of approximately $24.2 million from the offering, after deducting offering expenses payable by the Company.

Lincoln Park Capital

On March 18, 2022, the Company entered into a purchase agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”) under which the Company may at its discretion, sell to Lincoln Park up to $35.0 million of its ADSs over a 36-month period, subject to certain daily limits, applicable prices, and conditions. In addition, under the purchase agreement, the Company issued 954,208 ADSs as commitment shares to Lincoln Park as consideration for its commitment to purchase ADSs under the purchase agreement (the “Commitment Shares”). The Commitment Shares were valued using the closing price of the Company’s ADSs on the date of the purchase agreement resulting in a fair market value of $1.0 million. The fair value of the Commitment Shares as well as issuance costs of $0.2 million associated with the purchase agreement are classified as prepaid expenses and other current assets in the accompanying consolidated balance sheet. As the Company’s ADSs are sold in accordance with the purchase agreement, the fair value of the Commitment Shares and issuance costs will be reclassified to additional paid-in capital on the Company’s consolidated balance sheet. During the year ended December 31, 2022, the Company did not issue any additional ADSs pursuant to the purchase agreement.

Open Market Sale AgreementSM

On November 17, 2021, the Company entered into an Open Market Sale AgreementSM (the "Sales Agreement") with Jefferies LLC ("Jefferies") pursuant to which the Company may issue and sell ADSs having aggregate offering sales proceeds of up to $75.0 million, from time to time, in “at-the-market” offerings pursuant to which Jefferies will act as sales agent and/or principal. During the year ended December 31, 2022, the Company issued 3,037,616 ADSs pursuant to the Sales Agreement, raising approximately $3.2 million in net proceeds.

Initial Public Offering and Impact of Corporate Reorganization

On August 11, 2020, the Company completed its IPO. As part of the IPO, the Company sold an aggregate of 8,823,529 ADSs representing the same number of ordinary shares, at a public offering price of $18.00 per ADS for total net proceeds of approximately $147.7 million. On August 20, 2020, the underwriters of the IPO exercised a portion of their overallotment option by purchasing an additional 1,128,062 ADSs from the Company at the IPO price of $18.00 per ADS, resulting in additional net proceeds of $18.9 million. The total net proceeds were approximately $161.8 million, after deducting underwriting discounts, commissions and offering expense paid by the Company of $12.5 million.

Prior to the Company’s corporate reorganization and IPO, the Company had issued series A preferred shares, series B preferred shares, series C preferred shares, A ordinary shares, B ordinary shares, C ordinary shares, D ordinary shares, E ordinary shares, F ordinary shares and G ordinary shares. As part of the Company’s corporate reorganization and prior to its IPO, all shareholders of Freeline Therapeutics Limited exchanged each of their shares for shares of Freeline Therapeutics Holdings Limited, resulting in each shareholder holding the same number and class of newly issued shares of £1.00 each in Freeline Therapeutics Holdings Limited. Each resulting share was subdivided into (i)

one share of the same class, with a nominal value of £0.00001, and (ii) one deferred share of £0.99999 nominal value. Immediately prior to the closing of the IPO, the different classes of shares were converted into a single class of ordinary shares, and such ordinary shares were consolidated and subdivided to reflect an approximately 1-for-0.159 reverse split of such ordinary shares and the balance of any ordinary shares created various classes of deferred shares.

Deferred Shares

Deferred shares are a unit of equity that confer to their holder effectively no economic rights or any voting rights. The Company, without the consent of the shareholder, may transfer deferred shares at any time for $nil consideration.

In the first quarter of 2021, (i) 100,000,000 deferred shares of £0.001 each were consolidated into a single deferred share of £100,000 nominal value, and (ii) the remaining 23,638,835 deferred shares of £0.001 each and all 144,500,094 deferred shares of £0.00001 each were canceled. In each of the years ended December 31, 2022, 2021 and 2020, unvested Employee Shares were forfeited upon termination of employment, classified as additional deferred shares of £0.00001 each on the balance sheet and were or will be subsequently cancelled (see Note 9). The remaining deferred share of £100,000 nominal value is presented as a separate class of equity on the balance sheet and statement of shareholders’ equity.

Deferred shares are not included in the Company’s potentially dilutive securities as they are not ordinary shares and have no conversion rights.

The table below reflects the number of ordinary shares and deferred shares issued and outstanding at December 31, 2022, 2021 and 2020. The conversion of preferred and ordinary shares on an approximately 1-for-0.159 basis and the creation of deferred shares are reflected in the years ended December 31, 2021 and 2020 only.

	December 31,
	2022		2021		2020
Ordinary shares	65,113,575		35,854,591		35,854,945
Deferred shares of £0.00001	118,263	(1)	112,077	(2)	144,517,898	(3)
Deferred shares of £0.001	—		—		123,638,835
Deferred shares of £100,000	1		1		—
Total ordinary and deferred shares	65,231,839		35,966,669		304,011,678

(1)118,263 represents forfeiture of unvested ordinary shares of £0.00001 par value upon termination of employment (see Note 9).

(2)112,077 represents forfeiture of unvested ordinary shares of £0.00001 par value upon termination of employment (see Note 9).

(3)144,517,898 includes forfeiture of 17,804 unvested ordinary shares of £0.00001 par value upon termination of employment (see Note 9).

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Non-Cash Share-Based Compensation

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Non-Cash Share-Based Compensation

9. Non-Cash Share-Based Compensation

2020 Equity Incentive Plan

On July 31, 2020, the Company adopted an equity incentive plan (the “2020 Plan”). The 2020 Plan provides for the grant of options, share appreciation rights ("SARs"), restricted shares, dividend equivalents, restricted share units ("RSUs"), and other share-based awards. The maximum number of equity awards originally authorized under the 2020 Plan was 5,898,625 shares, which consisted of 3,474,469 new ordinary shares and 2,424,156 ordinary shares that were subject to awards under prior equity incentive plans that may become available for issuance under the 2020 Plan. Additionally, the number of ordinary shares reserved for issuance under the 2020 Plan automatically increases on January 1st of each year, for a period of not more than ten years, by an amount equal to the lesser of (i) 4% of the total number of ordinary shares outstanding on December 31st of the prior calendar year or (ii) such fewer number of ordinary shares as the board of directors may designate prior to the applicable January 1st date. On January 1, 2022

and 2021, the number of shares reserved automatically increased by 1,434,184 and 1,434,198 shares, which were 4% of the total number of ordinary shares outstanding on December 31, 2021 and 2020, respectively.

Any equity awards granted under the 2020 Plan or any prior equity incentive plan that expire, lapse, or are terminated, exchanged for cash, surrendered, repurchased, or cancelled, without having been fully exercised, or forfeited, will be added back to shares issuable under the 2020 Plan, subject to certain conditions.

The Company has typically granted equity awards under the 2020 Plan that vest over a four-year service period, with 25% of the award vesting on the first anniversary of the vesting commencement date, with the balance generally vesting periodically over the remaining three years.

2021 Equity Inducement Plan

On September 27, 2021, the Company adopted an equity inducement plan (the “Inducement Plan”). The purpose of the Inducement Plan is to enhance the Company’s ability to attract employees who are expected to make important contributions to the Company by providing these individuals with equity ownership opportunities. Awards under the Inducement Plan are granted as an inducement material to employees entering into employment with the Company. The Inducement Plan provides for the grant of options, SARs, restricted shares, dividend equivalents, RSUs, and other share-based awards. On May 30, 2022, the Board amended the Inducement Plan to authorize an additional 2,000,000 shares under the Inducement Plan. The maximum number of equity awards authorized under the Inducement Plan is 3,400,000 shares. Any equity awards granted under the Inducement Plan that expire, lapse, or are terminated, exchanged for cash, surrendered, repurchased or cancelled, without having been fully exercised, or forfeited, will be added back to shares issuable under the Inducement Plan, subject to certain conditions.

2020 Employee Share Purchase Plan

On July 31, 2020, the Company adopted an employee share purchase plan (the “ESPP”). The purpose of the ESPP is to provide employees the opportunity to purchase ordinary shares or ADSs at 85% of the fair market value of the ADSs on the offering date or the exercise date, whichever is lower, for up to 15% of such employee’s compensation for each pay period. The Company reserved 347,447 ordinary shares for the ESPP. The ESPP provides for an annual increase beginning on January 1, 2022 in an amount equal to the least of (i) 347,447 ordinary shares, (ii) 1% of the total number of ordinary shares outstanding on December 31st of the prior calendar year or (iii) such fewer number of ordinary shares as the board of directors may designate prior to the applicable January 1st date. On January 1, 2022, the reserve automatically increased by 347,447 shares. During the year ended December 31, 2022, 372,139 shares were purchased under the ESPP. As of December 31, 2022, 263,586 shares are available for future issuance.

Employee Shares

The Company measures all non-cash share-based awards using the fair value on the date of grant and recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award. Prior to the Company’s IPO, the Company granted share-based compensation in the form of ordinary shares, collectively referred to as Employee Shares, to employees and non-employees with both performance and service-based vesting conditions. The Company records expense for these awards using the straight-line method.

A summary of the changes in the Employee Shares from December 31, 2019 through December 31, 2022 is as follows.

	Number of Shares			Weighted Average Grant Date Fair Value
Unvested balance as of December 31, 2019		492,514		$	1.36
Granted		42,412			11.78
Vested		(209,836	)		7.10
Forfeited		(117,780	)		12.64
Unvested balance as of December 31, 2020		207,310			9.97
Granted		—			0.00
Vested		(65,705	)		8.71
Forfeited		(94,273	)		10.36
Unvested balance as of December 31, 2021		47,332			10.82
Granted		—			—
Vested		(24,837	)		8.71
Forfeited		(6,186	)		10.36
Unvested balance as of December 31, 2022		16,309		$	11.33

As of December 31, 2022, there was $0.2 million of unrecognized compensation cost related to unvested Employee Shares outstanding, which is expected to be recognized over a weighted average period of 1.5 years. Unvested Employee Shares are forfeited upon termination of employment, classified as deferred shares on the balance sheet and are subsequently cancelled.

Share Options Valuation

The assumptions used in the Black-Scholes option pricing model (see Note 2, Summary of Significant Accounting Policies) to determine the fair value of the share options granted to employees and directors during the years ended December 31, 2022 , 2021 and 2020 were as follows:

	For the Year Ended December 31,
	2022			2021			2020
Expected option life (years)		6.3			6.3			6.1
Expected volatility		74.7	%		76.9	%		77.4	%
Risk-free interest rate		2.2	%		1.1	%		0.4	%
Expected dividend yield		—			—			—

Share Options

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2019		—		$	—		—	$	—
Granted		3,760,210			14.79				—
Exercised		—			—				—
Canceled or Forfeited		(73,124	)		15.32				—
Outstanding as of December 31, 2020		3,687,086		$	13.03		9.59	$	9,931
Granted		4,352,281			6.87				—
Exercised		—			—				—
Expired		(145,638	)		13.02				—
Canceled or Forfeited		(2,472,014	)		13.20				—
Outstanding as of December 31, 2021		5,421,715			9.23		8.37		—
Granted		5,284,810			1.05			$	570
Exercised		—							—
Expired		(298,143	)		13.57				—
Canceled or Forfeited		(2,489,882	)		5.74				—
Outstanding as of December 31, 2022		7,918,500			4.76		8.40		—
Exercisable as of December 31, 2022		2,044,228			10.98		6.48		—
Vested and expected to vest as of December 31, 2022		7,918,500		$	4.76		8.40	$	—

The aggregate intrinsic value of share options is calculated as the difference between the exercise price of the share options and the fair value of the Company’s ordinary shares for those share options that had exercise prices lower than the fair value of the Company’s ordinary shares.

The weighted average grant-date fair values used for the share options granted during the years ended December 31, 2022, 2021 and 2020 were $0.70 per share, $4.49 per share and $9.87 per share, respectively.

As of December 31, 2022, there was $9.4 million of unrecognized compensation cost related to unvested share options outstanding, which is expected to be recognized over a weighted average period of 2.4 years.

Restricted Share Units

The Company has granted (i) RSUs that generally vest over a period of four years from the date of grant and (ii) RSUs to certain new employees in order to compensate them for equity awards forfeited to their previous employers. The latter RSUs generally vest over a period of under one year from the date of grant. The Company granted share options and RSUs as its annual equity incentive awards to employees during the year ended December 31, 2022. In 2021, the annual equity incentive awards consisted only of share options. The following table summarizes the activity related to RSUs during the years ended December 31, 2022 , 2021 and 2020:

	Number of RSUs			Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2019		—		$	—
Granted		2,500			17.56
Vested and settled		—			—
Forfeited		—			—
Outstanding as of December 31, 2020		2,500			17.56
Granted		120,375			9.64
Vested and settled		—			—
Forfeited		(34,125	)		8.63
Outstanding as of December 31, 2021		88,750		$	10.01
Granted		669,270			1.03
Vested and settled		—			—
Exercised		(44,688	)		5.63
Forfeited		(267,742	)		3.03
Outstanding as of December 31, 2022		445,590		$	0.98

Share-based Compensation Expense

Non-cash share-based compensation expense recorded as research and development and general and administrative expenses is as follows (in thousands):

	For the Year Ended December 31,
	2022		2021		2020
Research and development	$	2,127	$	4,511	$	2,510
General and administrative		2,950		6,212		3,694
	$	5,077	$	10,723	$	6,204

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Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

10. Income Taxes

The provision for income taxes for the years ended December 31, 2022, 2021 and 2020 was computed at the United Kingdom statutory income tax rate. The net loss (income) realized by the Company’s domestic and foreign entities before the calculation of income tax was $89.7 million and $(1.2) million in 2022, respectively. The net loss realized by the Company’s domestic and foreign entities before the calculation of income tax in 2021 was $141.2 million and $(1.0) million, respectively. The net loss realized by the Company’s domestic and foreign entities before the calculation of income tax in 2020 was $96.9 million and $(0.7) million, respectively. The income tax provision for the years then ended comprised (in thousands):

	For the Year Ended December 31,
	2022			2021			2020
Current expense:
United Kingdom	$	—		$	—		$	—
Foreign		524			513			287
Total current expense:	$	524		$	513		$	287
Deferred benefit
United Kingdom		—			—			—
Foreign		(156	)		(171	)		(158	)
Total deferred benefit:		(156	)		(171	)		(158	)
Total income tax expense:	$	368		$	342		$	129

A reconciliation of income tax expense computed at the statutory U.K. income tax rate to income taxes as reflected in the consolidated financial statements is as follows (in thousands):

	For the Year Ended December 31,
	2022			2021			2020
Income taxes at UK statutory rate of 19%	$	(16,806	)	$	(26,609	)	$	(18,277	)
R&D expenditure		—			—			5,756
Foreign rate differential		62			69			42
Change in valuation allowance		19,280			40,508			15,691
U.S. state income taxes		35			21			(13	)
Change in tax rates		(4,627	)		(16,777	)		—
Other		2,425			3,130			(3,070	)
	$	368		$	342		$	129

Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2022 and 2021 consist of the following (in thousands):

	For the Year Ended December 31,
	2022			2021
Deferred tax assets
Net operating loss carryforwards	$	78,057		$	64,527
Depreciation		(538	)		(885	)
Accrued expenses		531			393
Non-cash share-based compensation		2,686			4,900
Other		168			26
Total deferred tax assets	$	80,904		$	68,961
Valuation allowance		(80,369	)		(68,584	)
Net deferred tax assets	$	535		$	377

As of December 31, 2022 and 2021, the Company had U.K. net operating loss carryforwards of approximately $310.8 million and $258.1 million, respectively.

Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2022 and 2021 related primarily to the increases in net operating loss carryforwards and were as follows (in thousands):

	For the Year Ended December 31,
	2022		2021
Valuation allowance at beginning of year	$	68,584	$	24,450
Increases recorded to income tax provision		11,785		44,134
Valuation allowance at end of year	$	80,369	$	68,584

Future realization of the tax benefits of existing temporary differences and net operating loss carryforwards ultimately depends on the existence of sufficient taxable income within the carryforward period. As of December 31, 2022, the Company performed an evaluation to determine whether a valuation allowance was needed. The Company considered all available evidence, both positive and negative, which included the results of operations for the current and preceding years. The Company determined that it was not possible to reasonably quantify future taxable income and determined that it is more likely than not that all of the deferred tax assets in the United Kingdom and Ireland will not be realized. Accordingly, the Company maintained a full valuation allowance as of December 31, 2022 and 2021 on the United Kingdom and Ireland net deferred tax assets.

The Company applies the authoritative guidance on accounting for and disclosure of uncertainty in tax positions, which requires the Company to determine whether a tax position of the Company is more likely than not to be sustained upon examination, including resolution of any related appeals of litigation processes, based on the technical merits of the position. For tax positions meeting the more likely than not threshold, the tax amount recognized in the financial statements is reduced by the largest benefit that has a greater than fifty percent likelihood of being realized upon the ultimate settlement with the relevant taxing authority. There were no material uncertain tax positions as of December 31, 2022 and 2021.

The Company will recognize interest and penalties related to uncertain tax positions in income tax expense when in a taxable income position. As of December 31, 2022 and 2021, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Company’s statement of operations.

The Company and its subsidiaries file income tax returns in the U.K., the U.S., Germany, and Ireland. Generally, the tax years through 2022 remain open to examination by the major taxing jurisdictions to which the Company is subject. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the federal, state, or foreign tax authorities, if such tax attributes are utilized in a future period.

During the second quarter of 2021, the Finance Act 2021 (the Act) was enacted in the United Kingdom. The Act increases the main corporate income tax rate from 19% to 25% effective April 1, 2023 and enhances the first-year capital allowance on qualifying new plant and machinery assets effective April 1, 2021. The effects on the Company’s existing deferred tax balances have been recorded and is offset by the valuation allowance maintained against the Company’s U.K. net deferred tax assets.

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Net Loss Per Share

12 Months Ended

Dec. 31, 2022

Earnings Per Share [Abstract]

Net Loss Per Share

11. Net Loss Per Share

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

	December 31,
	2022			2021			2020
Numerator
Net loss	$	(88,972	)	$	(140,391	)	$	(96,322	)
Net loss attributable to ordinary shareholders—basic and diluted	$	(88,972	)	$	(140,391	)	$	(96,322	)
Denominator
Weighted-average number of ordinary shares used in net loss
per share—basic and diluted		59,271,778			35,704,368			14,152,843
Net loss per share attributable to ordinary shareholders—basic and diluted	$	(1.50	)	$	(3.93	)	$	(6.81	)

The Company’s potentially dilutive securities, which include unvested Employee Shares, share options and RSUs, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of ordinary shares outstanding used to calculate both basic and diluted net loss per share attributable to ordinary shareholders is the same. The Company excluded the following potential ordinary shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to ordinary shareholders for the years ended December 31, 2022, 2021 and 2020 because including them would have had an anti-dilutive effect:

	December 31,
	2022		2021		2020
Unvested ordinary shares		16,309		47,332		207,310
Share options		7,918,500		5,421,715		3,687,086
Restricted share units		445,590		88,750		2,500
Total		8,380,399		5,557,797		3,896,896

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

12. Commitments and Contingencies

Legal Proceedings

From time to time, the Company may be a party to litigation or arbitration or subject to claims incident to the ordinary course of business. Regardless of the outcome, litigation and arbitration are subject to inherent uncertainties and could adversely impact the Company’s reputation, operations, and its operating results or overall financial condition. As of December 31, 2022, except as set forth below, there were no pending material legal proceedings to which the Company was a party or to which any of its property was subject, and the Company did not have contingency reserves established for any liabilities as of December 31, 2022 and December 31, 2021. When appropriate in management’s estimation, the Company will record adequate reserves in its financial statements for pending litigation or arbitration.

In June 2020, the Company entered into a dedicated manufacturing and commercial supply agreement (the “Manufacturing Agreement”) with Brammer Bio MA, LLC (“Brammer”) pursuant to which Brammer was obligated to reserve certain amounts of manufacturing capacity in its manufacturing facility to supply the Company with its product candidate FLT180a for the treatment of hemophilia B. As consideration for the reserved manufacturing capacity, the Company was required to pay Brammer an annual capacity access fee of $10.0 million, subject to inflationary annual increases, excluding any purchase commitment or other fees.

The Company committed to an annual minimum purchase commitment equivalent to $6.0 million throughout the term of the Manufacturing Agreement. The term of the Manufacturing Agreement was effective as of June 30, 2020 and was to continue until December 31, 2027.

On July 15, 2022, the Company sent notice in writing to Brammer that it was terminating, as of July 31, 2022, the Manufacturing Agreement as a result of alleged material breaches by Brammer of the Manufacturing Agreement and related agreements. On August 17, 2022, Brammer responded with a letter to terminate the Manufacturing Agreement effective immediately for the Company's alleged material breach of the Manufacturing Agreement and related agreements.

On October 3, 2022, the Company filed a demand for arbitration before the American Arbitration Association (the “AAA”) in New York against Brammer pursuant to the Manufacturing Agreement. The demand seeks damages for Brammer’s alleged breaches of its obligations to the Company, as communicated in the Company’s July 15, 2022 termination notice to Brammer and also seeks a declaratory judgment that Brammer materially breached the Manufacturing Agreement and related agreements and that, as a result of those material breaches, the Company had the right to terminate the Manufacturing Agreement. On December 5, 2022, Brammer filed an answer to the Company’s demand for arbitration and a counterclaim against the Company. The counterclaim seeks significant damages for the Company’s alleged repudiation and breach of its obligations to Brammer, as communicated in Brammer’s August 17, 2022 letter to the Company. It also seeks a declaratory judgment that the Company’s alleged repudiation and purported termination constituted a material breach of the Manufacturing Agreement and that Brammer is entitled to damages and any other relief set forth in the Manufacturing Agreement or deemed just by the AAA. The final hearing in this matter has been scheduled for November 6 to 9, 2023.

There can be no assurance that the outcome of such dispute will be successful, and an adverse determination could have a material adverse effect on the Company's results of operations and financial condition. However, the Company is confident in the merits of its claims against Brammer and intends to prosecute this action vigorously.

As a result of the mutual termination of the Manufacturing Agreement, the Company has derecognized the associated operating lease assets and liabilities (see "Operating Lease Agreements" below) and no longer recognizes the annual minimum purchase commitment as a contractual obligation. No loss contingencies have been recorded by the Company in relation to the dispute because the Company cannot reasonably estimate the potential outcome or amount of potential loss at this time.

Operating Lease Agreements

In August 2022, in connection with the termination of the Manufacturing Agreement, the Company deemed terminated the operating lease in connection with the dedicated capacity at the Brammer facility. The Company derecognized the related right-of-use asset of approximately $35.6 million and accordingly the operating lease liabilities of $40.3 million, resulting in a gain of $5.3 million, which was included in other income (expense), net on the consolidated statements of operations for the year ended December 31, 2022.

The following table summarizes the Company’s costs included in the statements of operations related to right-of-use lease assets entered into through December 31, 2022 (in thousands):

Lease Cost	For the Year Ended December 31, 2022
Operating lease cost
Research and development	$	11,558
General and administrative		608
Short-term lease cost		276
Sublease income		(246	)
Total lease cost	$	12,196

Other Information	For the Year Ended December 31, 2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	10,475
Right-of-use assets obtained in exchange for new operating lease liabilities	$	2,526
Weighted-average remaining lease term-operating leases		5.80
Weighted-average discount rate-operating leases		9.33	%

Contractual Obligations

The following table summarizes the Company’s contractual obligations as of December 31, 2022, and the effects that such obligations are expected to have on its liquidity and cash flows in future periods (in thousands):

Maturity of Contractual Obligations
Years Ended December 31,	Operating Leases
2023		4,564
2024		3,535
2025		2,224
2026		1,992
2027		1,668
Thereafter		6,268
Total payments		20,251
Less: imputed interest		(5,969	)
Less: foreign exchange (gain)/loss		463
Total	$	14,745

The Company recorded rent expense of $15.4 million and $4.2 million for the years ended December 31, 2021 and 2020, prior to the adoption of ASC 842.

Indemnification Agreements

In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnification. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations.

In accordance with the Articles of Association in force on December 31, 2022, the Company has indemnification obligations to its officers and directors for certain events or occurrences, subject to certain limits, while they are serving at the Company’s request in such capacity. There have been no claims to date, and the Company has director and officer insurance that may enable it to recover a portion of any amounts paid for future potential claims.

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Related Party Transactions

12 Months Ended

Dec. 31, 2022

Related Party Transactions [Abstract]

Related Party Transactions

13. Related Party Transactions

The Company analyzed its transactions with related parties for the years ended December 31, 2022, 2021 and 2020, and determined it had the following material transactions.

Syncona

On March 10, 2022, the Company entered into a purchase agreement with its majority shareholder, Syncona Portfolio Limited, a subsidiary of Syncona Limited, and certain other existing shareholders providing for the issuance and sale by the Company of $26.1 million of the Company’s ADSs at a price of $1.05 per ADS, in a registered direct offering. The offering closed on March 15, 2022. The Company received net proceeds of approximately $24.2 million from the offering, after deducting offering expenses payable by the Company.

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Employee Benefit Plans

12 Months Ended

Dec. 31, 2022

Retirement Benefits [Abstract]

Employee Benefit Plans

14. Employee Benefit Plans

In the United Kingdom, the Company makes contributions to private defined contribution pension schemes on behalf of its employees. The Company paid $0.6 million, $0.9 million and $0.8 million in contributions for the years ended December 31, 2022, 2021 and 2020, respectively.

In the United States, the Company established a defined contribution savings plan under Section 401(k) of the Internal Revenue Code. This plan covers substantially all U.S. employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. Matching contributions to the plan may be made at the discretion of the Company’s board of directors. The Company contributed

$0.5 million, $0.5 million and $0.1 million to the plan for the years ended December 31, 2022, 2021 and 2020, respectively.

In Germany, the Company has made contributions to private defined contribution pension schemes on behalf of its employees. The Company paid $0.3 million, $0.4 million and $0.3 million in contributions for the years ended December 31, 2022, 2021 and 2020, respectively.

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Restructuring Charges

12 Months Ended

Dec. 31, 2022

Restructuring Charges [Abstract]

Restructuring Charges

15. Restructuring Charges

During the fourth quarter of 2022, the Company completed a financial and organizational assessment to increase efficiencies and reduce expenses. As a result of this assessment, the Company reduced its U.S. and U.K. workforce by 26 employees. The Company incurred total expenses relating to the workforce reduction of approximately $1.5 million, consisting of severance and termination-related costs.

During the fourth quarter of 2021, the Company undertook a previous detailed strategic review of its programs and operations which allowed the Company to reduce expenses and extend its cash runway through a prioritization of its programs and an approximately 25% reduction in workforce. Associated total expenses for the workforce reduction of $2.1 million were accrued as at December 31, 2021 and settled in the year ended December 31, 2022.

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Subsequent Events

12 Months Ended

Dec. 31, 2022

Subsequent Events [Abstract]

Subsequent Events

16. Subsequent Events

On February 8, 2023, the Company closed the previously announced sale of its German subsidiary, Freeline Therapeutics GmbH, and certain intellectual property rights pertaining to the business of Freeline Therapeutics GmbH, to Ascend, for $25 million, subject to purchase price adjustments. At closing the Company and Ascend entered into an intellectual property deed of assignment and license and a transition services agreement (the "Transition Services Agreement"), pursuant to which Ascend will provide certain services in the area of development and manufacturing to the Company. The Company agreed to utilize, and Ascend agreed to make exclusively available to the Company, no fewer than 15 full-time employee equivalents, or FTEs (as defined in the Transition Services Agreement), per annum for a guarantee period of 18 months following the Transition Services Agreement’s effective date. The Company also agreed to pay Ascend a guaranteed minimum of approximately $7.9 million in respect of FTE costs during such period, $2.6 million of which were paid upfront.

The Company completed a financial and organizational assessment to increase efficiencies and reduce operating expenses. As a result of this assessment, the Company is reducing its U.S. and U.K. workforce by nearly 30%. The Company estimates that it will incur total expenses relating to the workforce reduction of approximately $1.0 to $1.5 million, consisting of severance and termination-related costs, and expects to record a significant portion of these charges in the first quarter of 2023.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany accounts and transactions have been eliminated upon consolidation.

Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual for research and development expenses, the fair value of ordinary shares, the valuation of the warrants, non-cash share-based compensation and income taxes. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ materially from those estimates.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid investments that have maturities of three months or less when acquired to be cash equivalents.

Restricted Cash

Restricted Cash

Restricted cash as of December 31, 2022 and 2021 consisted of collateral deposits for the office spaces leased by Freeline Therapeutics GmbH. Restricted cash is included as a component of prepaid expenses and other current assets or other non-current assets on the Company’s consolidated balance sheets, depending on whether it has been classified as short-term or long-term.

Deferred Financing Costs

Deferred Financing Costs

The Company capitalizes deferred financing costs, which primarily consist of direct, incremental legal, professional, accounting and other third-party fees relating to the Company’s financing transactions, within other non-current assets. In November 2021, the Company entered into the Open Market Sale AgreementSM with Jefferies LLC. The Company incurred deferred financing costs of $1.2 million, which were capitalized within other non-current assets.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Financial instruments consist of cash and cash equivalents. Certain assets of the Company are carried at fair value under U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

•Level 1—Quoted prices in active markets for identical assets or liabilities.

•Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

•Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The hierarchy requires the use of observable market data when available and to minimize the use of unobservable inputs when determining fair value. The Company has classified cash equivalents at December 31, 2022 and 2021 as fair value on a recurring basis, as Level 1.

Management believes that the carrying amounts of the Company’s consolidated financial instruments approximate fair value due to the short-term nature of those instruments.

Concentrations of Credit Risk and Off-Balance Sheet Risk

Concentrations of Credit Risk and Off-Balance Sheet Risk

Financial instruments that subject the Company to credit risk consist solely of cash and cash equivalents. While the Company is evaluating the financial institutions at which it places its cash and cash equivalents, the Company generally places its cash and cash equivalents at banks in amounts that may exceed the insurance coverage offered by the Financial Services Compensation Scheme (“FSCS”) or the Federal Deposit Insurance Corporation (“FDIC”). The Company has no significant off-balance-sheet risk or concentration of credit risk, such as foreign exchange contracts, options contracts, or other foreign hedging arrangements.

Property and Equipment

Property and Equipment

Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the respective assets, which are as follows:

	Estimated Useful Life
Office equipment, computers and fixtures and fittings	3 years
Laboratory equipment	5 years
Leasehold improvements	10 years Shorter of useful life or remaining lease term

Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the consolidated statement of operations and other comprehensive loss. Expenditures for repairs and maintenance are charged to expense as incurred.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

The Company evaluates assets for potential impairment when events or changes in circumstances indicate the carrying value of the assets may not be recoverable. Recoverability is measured by comparing the book values of the assets to the expected future net undiscounted cash flows that the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the book values of the assets exceed their fair value. The Company did not recognize impairment losses in the year ended December 31, 2022. The Company recognized $0.1 million impairment losses in the year ended December 31, 2021. The Company did not recognize impairment losses in the year ended December 31, 2020.

Segment Information

Segment Information

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker in deciding how to allocate resources and assess performance. The Company and the Company’s chief operating decision maker, the Company’s chief executive officer, views the Company’s operations and manages its business as a single operating segment, which is the business of developing and commercializing gene therapies. The Company is a public limited company incorporated pursuant to the laws of England and Wales, has its principal executive offices in Stevenage, United Kingdom and operates as one business segment.

The Company’s long-lived assets by country were as follows:

	December 31,		December 31,
	2022		2021
U.K	$	17,894	$	6,078
Germany		13,569		6,193
U.S		587		185
	$	32,050	$	10,233

Long-lived assets include assets classified as held for sale and exclude deferred tax assets.

Research and Development Costs

Research and Development Costs

Research and development costs are expensed as incurred. Research and development expenses consist of costs incurred in performing research and development activities, including employee related salaries, benefits, and non-cash share-based compensation, facilities and related depreciation expenses, travel, third-party license fees, and external costs of outside vendors engaged to conduct clinical trial and development activities and manufacturing costs to develop and produce clinical trial materials.

Research Contract Costs and Accruals

Research Contract Costs and Accruals

The Company has entered into various research and development-related contracts with research institutions and other companies. These agreements are generally cancelable, and related payments are recorded as research and development expenses as incurred. Accruals for research and development expenses typically include fees paid to vendors in conjunction with preclinical development activities, contract research organization (“CROs”) and investigative sites in connection with preclinical and clinical activities, and contract manufacturing organization (“CMOs”) in connection with the manufacturing of drug formulations for use in preclinical and clinical activities. The Company records accruals for estimated ongoing research costs. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted costs. Estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates.

Patent Costs

Patent Costs

The Company expenses patent application and related legal costs as incurred and classifies such costs as general and administrative expenses in the accompanying consolidated statement of operations and comprehensive loss.

Non-Cash Share-Based Compensation

Non-Cash Share-Based Compensation

The Company recognizes compensation expense for equity awards based on the grant date fair value of the award. For equity awards that vest based on a service condition, the non-cash share-based compensation expense is recognized on a straight-line basis over the requisite service period. The Company uses the fair value of its ordinary shares to determine the fair value of Employee Shares. The Company accounts for forfeitures as they occur. For equity awards with a combination of service and performance conditions, the Company recognizes non-cash share-based compensation expense using a straight-line basis over the requisite service period when the achievement of a performance-based milestone is probable, based on the relative satisfaction of the performance condition as of the reporting date.

The fair value of each share option grant is estimated on the date of grant using the Black-Scholes option pricing model. See Note 9, Non-cash Share-Based Compensation, for the Company's assumptions used in connection with option grants made during the periods covered by these financial statements. Assumptions used in the option pricing model include the following:

Expected volatility. The Company lacks company-specific historical and implied volatility information for its ADSs. Therefore, the Company estimates the expected share volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded share price.

Expected term. The expected term of the Company's share options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options.

Risk-free interest rate. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods that are approximately equal to the expected term of the award.

Expected dividend. Expected dividend yield of zero is based on the fact that the Company has never paid cash dividends on ordinary shares and does not expect to pay any cash dividends in the foreseeable future.

Fair value of ordinary shares. The ordinary shares underlying the options granted after the Company's IPO are issued at the fair market value of the Company's ADS at the date the grant is approved.

Foreign Currency Translation

Foreign Currency Translation

The Company maintains its financial statements of each entity within the group in its local currency, which is also the entity’s functional currency. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Non-monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the date of the transaction. Exchange gains or losses arising from foreign currency transactions are included in other expense, net in the consolidated statement of comprehensive loss. The Company recorded foreign exchange loss of approximately $12.6 million for the year ended December 31, 2022. The Company recorded foreign exchange gains of approximately $0.1 million and $12.3 million for the years ended December 31, 2021 and 2020 respectively.

For financial reporting purposes, the financial statements of the Company have been presented in the U.S. dollar, the reporting currency. The financial statements of entities are translated from their functional currency into the reporting currency as follows: assets and liabilities are translated at the exchange rates at the balance sheet dates, revenue and expenses are translated at the average exchange rates and shareholders’ equity is translated based on historical exchange rates. Translation adjustments are not included in determining net loss but are included as a foreign exchange adjustment to other comprehensive loss, a component of shareholders’ equity.

Income Taxes

Income Taxes

The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in its tax returns. Deferred tax assets and liabilities are determined on the basis of the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that deferred tax assets will be recovered in the future to the extent management believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies.

The Company accounts for uncertainty in income taxes by recognizing in the consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed as the amount of benefit to recognize in the consolidated financial statements. The amount of benefits that may be used is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate, as well as the related net interest and penalties.

The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations. As of December 31, 2022 and 2021, no accrued interest or penalties are included on the related tax liability line in the consolidated balance sheets.

Benefit from Research and Development Tax Credit

Benefit from Research and Development Tax Credit

The Company is subject to corporate taxation in the U.K. Due to the nature of the business, the Company has generated losses since inception. The benefit from research and development (“R&D”) tax credits is recognized in the consolidated statements of operations as a component of other income, net, and represents the sum of the research and development tax credits recoverable in the U.K.

The U.K. R&D tax credit is fully refundable to the Company and is not dependent on current or future taxable income. As a result, the Company has recorded the entire benefit from the U.K. research and development tax credit as a benefit which is included in net loss before income tax and accordingly, not reflected as part of the income tax provision. If, in the future, any U.K. R&D tax credits generated are needed to offset a corporate income tax liability in the U.K., that portion would be recorded as a benefit within the income tax provision and any refundable portion not dependent on taxable income would continue to be recorded within other income, net.

As a company that carries out extensive research and development activities, the Company benefits from the U.K. R&D tax credit regime. The amount of benefits received depends on whether the Company qualifies for a tax credit either as a Small and Medium Enterprise (“SME”), or under the Research and Development Expenditure Credit (“RDEC”), program. The RDEC program provides a lower tax credit than the SME program. Based on criteria established by HM Revenue & Customs (“HMRC”), the Company expects a portion of expenditures being carried out in relation to its pipeline R&D, clinical trials management and manufacturing development activities to be eligible for the RDEC regime for the years ended December 31, 2022 and 2021. Such expenditures were eligible for the SME regime for the years ended December 31, 2020. Under the RDEC scheme, the Company is able to surrender some of its trading losses that arise from qualifying research and development activities for a cash rebate of up to 10.53% (or,

from April 2023, 15%) of such qualifying research and development expenditure. Qualifying expenditures largely comprise employment costs for research staff, consumables, and utilities costs incurred as part of research projects. A portion of costs relating to research and development, clinical trials and manufacturing activities are eligible for inclusion within these tax credit cash rebate claims.

Unsurrendered U.K. losses may be carried forward indefinitely to be offset against future taxable profits, subject to numerous utilization criteria and restrictions. The amount that can be offset each year is limited to £5.0 million plus an incremental 50% of U.K. taxable profits.

Value Added Tax (“VAT”) is broadly charged on all taxable supplies of goods and services by VAT-registered businesses. Under current rates, an amount of 20% of the value, as determined for VAT purposes, of the goods or services supplied is added to all sales invoices and is payable to HMRC. Similarly, VAT paid on purchase invoices is generally reclaimable from HMRC.

Comprehensive Loss

Comprehensive Loss

Comprehensive loss includes net loss as well as other changes in shareholders’ equity that result from transactions and economic events other than those with shareholders.

Net Loss per Share

Net Loss per Share

The Company has reported losses since inception and has computed basic net loss per share attributable to ordinary shareholders by dividing net loss attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding for the period, without consideration for potentially dilutive securities. The Company computes diluted net loss per ordinary share after giving consideration to all potentially dilutive ordinary shares, including unvested Employee Shares and warrants to purchase ordinary shares and convertible preferred shares, outstanding during the period determined using the treasury-stock and if-converted methods, except where the effect of including such securities would be antidilutive. Because the Company has reported net losses since inception, these potential ordinary shares have been anti-dilutive and basic and diluted loss per share were the same for all periods presented.

Recently Issued Accounting Pronouncements Not Yet Adopted

Recently Adopted Accounting Pronouncement

Leases

Effective January 1, 2022, the Company adopted Accounting Standards Codification (“ASC”), Topic 842, Leases (“ASC 842”), using the modified retrospective approach and utilizing the effective date as its date of initial application, for which prior periods are presented in accordance with the previous guidance in ASC 840, Leases. Adoption of this standard resulted in the recording of operating lease right-of-use assets and operating lease liabilities of $61.9 million and $64.7 million, respectively, on the Company’s balance sheets on the effective date. The adoption of the standard did not have a material effect on the Company’s statements of operations and comprehensive loss, shareholders’ equity and cash flows. Refer to Note 12, Commitments and Contingencies, for right-of-use assets and liabilities recorded during the year ended December 31, 2022.

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, current lease liabilities and, if applicable, long-term lease liabilities. The Company has elected to utilize the practical expedient to not recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required for items such as incentives received, initial direct costs, or prepayments. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

The Company has elected to apply the package of three expedients to all of its leases requiring (1) no reassessment of whether any expired or existing contracts are or contain leases, (2) the lease classification of any expired or existing leases, or (3) the capitalization of initial direct costs for any existing leases. All the Company’s leases are classified as operating leases.

Assumptions made by the Company at the commencement date are re-evaluated upon occurrence of certain events, including a lease modification. A lease modification results in a separate contract when the modification grants the lessee an additional right of use not included in the original lease and when lease payments increase commensurate with the stand-alone price for the additional right of use. When a lease modification results in a separate contract, it is accounted for in the same manner as a new lease.

Operating lease costs are recognized on a straight-line basis over the lease term, and they are categorized within research and development and general and administrative expenses in the consolidated statements of operations. The operating lease cash flows are categorized under net cash used in operating activities in the consolidated statements of cash flows.

The Company subleased certain leased office spaces to third parties and recognized sublease income on a straight-line basis over the sublease term within research and development.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Schedule of Estimated Useful Lives of the Respective Assets

Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the respective assets, which are as follows:

	Estimated Useful Life
Office equipment, computers and fixtures and fittings	3 years
Laboratory equipment	5 years
Leasehold improvements	10 years Shorter of useful life or remaining lease term

Schedule of Long-Lived Assets

The Company’s long-lived assets by country were as follows:

	December 31,		December 31,
	2022		2021
U.K	$	17,894	$	6,078
Germany		13,569		6,193
U.S		587		185
	$	32,050	$	10,233

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Assets Held for Sale (Tables)

12 Months Ended

Dec. 31, 2022

Discontinued Operations and Disposal Groups [Abstract]

Schedule of the Carrying Amounts of the Assets and Liabilities Held for Sale in the Consolidated Balance Sheet

The carrying amounts of the assets and liabilities held for sale in the consolidated balance sheet consisted of the following (in thousands):

	December 31,
	2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	300
Prepaid expenses and other current assets		244
Total current assets held for sale		544
NON-CURRENT ASSETS:
Property and equipment, net		5,384
Operating lease right of use assets		8,182
Other non-current assets		3
Total assets held for sale	$	14,113
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	193
Accrued expenses and other current liabilities		1,324
Operating lease liabilities, current		914
Total current liabilities related to assets held for sale		2,431
NON-CURRENT LIABILITIES:
Operating lease liabilities, non-current	$	7,906
Total liabilities related to assets held for sale	$	10,337

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Prepaid Expenses and Other Current Assets (Tables)

12 Months Ended

Dec. 31, 2022

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):

	December 31,		December 31,
	2022		2021
U.K. R&D tax credit	$	1,230	$	2,211
Prepaid tax		1,373		2,070
Insurance		1,702		2,346
Prepaid manufacturing costs		456		2,002
Other current assets		1,474		2,001
	$	6,235	$	10,630

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Property and Equipment Net (Tables)

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Summary of Property and Equipment, Net

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

	December 31,			December 31,
	2022			2021
Office equipment and computers	$	751		$	1,098
Furniture & Fixtures		2,584			4,602
Laboratory equipment		3,140			10,083
Leasehold improvements		7,549			955
		14,024			16,738
Less: accumulated depreciation		(5,017	)		(6,832	)
	$	9,007		$	9,906

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Other Non-current Assets (Tables)

12 Months Ended

Dec. 31, 2022

Other Assets, Noncurrent Disclosure [Abstract]

Summary of Other Non-current Assets

Other non-current assets consisted of the following (in thousands):

	December 31,		December 31,
	2022		2021
Restricted cash	$	1,327	$	1,400
Deferred financing costs		2,133		1,142
Deferred tax asset		533		377
Intangible assets		—		8
	$	3,993	$	2,927

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Accrued Expenses and Other Liabilities (Tables)

12 Months Ended

Dec. 31, 2022

Payables and Accruals [Abstract]

Schedule of Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following (in thousands):

	December 31,		December 31,
	2022		2021
Compensation and benefits costs	$	4,178	$	4,554
Restructuring charges		—		2,362
Research and development expenses		1,923		6,726
Consulting and professional services		1,215		1,083
Other liabilities		592		772
	$	7,908	$	15,497

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Shareholders’ Equity (Tables)

12 Months Ended

Dec. 31, 2022

Equity [Abstract]

Summary of Ordinary Shares and Deferred Shares Issued

The table below reflects the number of ordinary shares and deferred shares issued and outstanding at December 31, 2022, 2021 and 2020. The conversion of preferred and ordinary shares on an approximately 1-for-0.159 basis and the creation of deferred shares are reflected in the years ended December 31, 2021 and 2020 only.

	December 31,
	2022		2021		2020
Ordinary shares	65,113,575		35,854,591		35,854,945
Deferred shares of £0.00001	118,263	(1)	112,077	(2)	144,517,898	(3)
Deferred shares of £0.001	—		—		123,638,835
Deferred shares of £100,000	1		1		—
Total ordinary and deferred shares	65,231,839		35,966,669		304,011,678

(1)118,263 represents forfeiture of unvested ordinary shares of £0.00001 par value upon termination of employment (see Note 9).

(2)112,077 represents forfeiture of unvested ordinary shares of £0.00001 par value upon termination of employment (see Note 9).

(3)144,517,898 includes forfeiture of 17,804 unvested ordinary shares of £0.00001 par value upon termination of employment (see Note 9).

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Non-Cash Share-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Summary of Changes in Employee Shares

A summary of the changes in the Employee Shares from December 31, 2019 through December 31, 2022 is as follows.

	Number of Shares			Weighted Average Grant Date Fair Value
Unvested balance as of December 31, 2019		492,514		$	1.36
Granted		42,412			11.78
Vested		(209,836	)		7.10
Forfeited		(117,780	)		12.64
Unvested balance as of December 31, 2020		207,310			9.97
Granted		—			0.00
Vested		(65,705	)		8.71
Forfeited		(94,273	)		10.36
Unvested balance as of December 31, 2021		47,332			10.82
Granted		—			—
Vested		(24,837	)		8.71
Forfeited		(6,186	)		10.36
Unvested balance as of December 31, 2022		16,309		$	11.33

Assumptions Used in Black-Scholes Option Pricing Model to Determine Fair Value of Share Options Granted to Employees and Directors

The assumptions used in the Black-Scholes option pricing model (see Note 2, Summary of Significant Accounting Policies) to determine the fair value of the share options granted to employees and directors during the years ended December 31, 2022 , 2021 and 2020 were as follows:

	For the Year Ended December 31,
	2022			2021			2020
Expected option life (years)		6.3			6.3			6.1
Expected volatility		74.7	%		76.9	%		77.4	%
Risk-free interest rate		2.2	%		1.1	%		0.4	%
Expected dividend yield		—			—			—

Summary of Share Options

Share Options

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2019		—		$	—		—	$	—
Granted		3,760,210			14.79				—
Exercised		—			—				—
Canceled or Forfeited		(73,124	)		15.32				—
Outstanding as of December 31, 2020		3,687,086		$	13.03		9.59	$	9,931
Granted		4,352,281			6.87				—
Exercised		—			—				—
Expired		(145,638	)		13.02				—
Canceled or Forfeited		(2,472,014	)		13.20				—
Outstanding as of December 31, 2021		5,421,715			9.23		8.37		—
Granted		5,284,810			1.05			$	570
Exercised		—							—
Expired		(298,143	)		13.57				—
Canceled or Forfeited		(2,489,882	)		5.74				—
Outstanding as of December 31, 2022		7,918,500			4.76		8.40		—
Exercisable as of December 31, 2022		2,044,228			10.98		6.48		—
Vested and expected to vest as of December 31, 2022		7,918,500		$	4.76		8.40	$	—

Summary of Activity Related to RSUs

The following table summarizes the activity related to RSUs during the years ended December 31, 2022 , 2021 and 2020:

	Number of RSUs			Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2019		—		$	—
Granted		2,500			17.56
Vested and settled		—			—
Forfeited		—			—
Outstanding as of December 31, 2020		2,500			17.56
Granted		120,375			9.64
Vested and settled		—			—
Forfeited		(34,125	)		8.63
Outstanding as of December 31, 2021		88,750		$	10.01
Granted		669,270			1.03
Vested and settled		—			—
Exercised		(44,688	)		5.63
Forfeited		(267,742	)		3.03
Outstanding as of December 31, 2022		445,590		$	0.98

Summary of Non-Cash Share-Based Compensation Expense

Non-cash share-based compensation expense recorded as research and development and general and administrative expenses is as follows (in thousands):

	For the Year Ended December 31,
	2022		2021		2020
Research and development	$	2,127	$	4,511	$	2,510
General and administrative		2,950		6,212		3,694
	$	5,077	$	10,723	$	6,204

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Schedule of Income Tax Provision

The income tax provision for the years then ended comprised (in thousands):

	For the Year Ended December 31,
	2022			2021			2020
Current expense:
United Kingdom	$	—		$	—		$	—
Foreign		524			513			287
Total current expense:	$	524		$	513		$	287
Deferred benefit
United Kingdom		—			—			—
Foreign		(156	)		(171	)		(158	)
Total deferred benefit:		(156	)		(171	)		(158	)
Total income tax expense:	$	368		$	342		$	129

Schedule of Reconciliation of Income Tax Expense

A reconciliation of income tax expense computed at the statutory U.K. income tax rate to income taxes as reflected in the consolidated financial statements is as follows (in thousands):

	For the Year Ended December 31,
	2022			2021			2020
Income taxes at UK statutory rate of 19%	$	(16,806	)	$	(26,609	)	$	(18,277	)
R&D expenditure		—			—			5,756
Foreign rate differential		62			69			42
Change in valuation allowance		19,280			40,508			15,691
U.S. state income taxes		35			21			(13	)
Change in tax rates		(4,627	)		(16,777	)		—
Other		2,425			3,130			(3,070	)
	$	368		$	342		$	129

Schedule of Deferred Tax Assets and Liabilities

Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2022 and 2021 consist of the following (in thousands):

	For the Year Ended December 31,
	2022			2021
Deferred tax assets
Net operating loss carryforwards	$	78,057		$	64,527
Depreciation		(538	)		(885	)
Accrued expenses		531			393
Non-cash share-based compensation		2,686			4,900
Other		168			26
Total deferred tax assets	$	80,904		$	68,961
Valuation allowance		(80,369	)		(68,584	)
Net deferred tax assets	$	535		$	377

Schedule of Changes in Valuation Allowance for Deferred Tax Assets

Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2022 and 2021 related primarily to the increases in net operating loss carryforwards and were as follows (in thousands):

	For the Year Ended December 31,
	2022		2021
Valuation allowance at beginning of year	$	68,584	$	24,450
Increases recorded to income tax provision		11,785		44,134
Valuation allowance at end of year	$	80,369	$	68,584

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Net Loss Per Share (Tables)

12 Months Ended

Dec. 31, 2022

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Net Loss Per Share Attributable to Ordinary Shareholders

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

	December 31,
	2022			2021			2020
Numerator
Net loss	$	(88,972	)	$	(140,391	)	$	(96,322	)
Net loss attributable to ordinary shareholders—basic and diluted	$	(88,972	)	$	(140,391	)	$	(96,322	)
Denominator
Weighted-average number of ordinary shares used in net loss
per share—basic and diluted		59,271,778			35,704,368			14,152,843
Net loss per share attributable to ordinary shareholders—basic and diluted	$	(1.50	)	$	(3.93	)	$	(6.81	)

Schedule of Potential Ordinary Shares Excluded from Computation of Diluted Net Loss Per Share

The Company excluded the following potential ordinary shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to ordinary shareholders for the years ended December 31, 2022, 2021 and 2020 because including them would have had an anti-dilutive effect:

	December 31,
	2022		2021		2020
Unvested ordinary shares		16,309		47,332		207,310
Share options		7,918,500		5,421,715		3,687,086
Restricted share units		445,590		88,750		2,500
Total		8,380,399		5,557,797		3,896,896

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Summary of Lease Cost

The following table summarizes the Company’s costs included in the statements of operations related to right-of-use lease assets entered into through December 31, 2022 (in thousands):

Lease Cost	For the Year Ended December 31, 2022
Operating lease cost
Research and development	$	11,558
General and administrative		608
Short-term lease cost		276
Sublease income		(246	)
Total lease cost	$	12,196

Summary of Right of Use Lease Assets

Other Information	For the Year Ended December 31, 2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	10,475
Right-of-use assets obtained in exchange for new operating lease liabilities	$	2,526
Weighted-average remaining lease term-operating leases		5.80
Weighted-average discount rate-operating leases		9.33	%

Schedule of Future Minimum Lease Payments

The following table summarizes the Company’s contractual obligations as of December 31, 2022, and the effects that such obligations are expected to have on its liquidity and cash flows in future periods (in thousands):

Maturity of Contractual Obligations
Years Ended December 31,	Operating Leases
2023		4,564
2024		3,535
2025		2,224
2026		1,992
2027		1,668
Thereafter		6,268
Total payments		20,251
Less: imputed interest		(5,969	)
Less: foreign exchange (gain)/loss		463
Total	$	14,745

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Nature of the Business - Additional Information (Details) $ / shares in Units, $ in Thousands			12 Months Ended
	Aug. 20, 2020 $ / shares shares	Aug. 11, 2020 USD ($) $ / shares shares	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Nov. 11, 2022 USD ($)
Nature Of Business [Line Items]
Consideration transferred from sale of subsidiary						$ 25,000
Reverse split, description			1-for-0.159 reverse split
Reverse split, ratio			6.289	6.289	6.289
Net losses			$ 88,972	$ 140,391	$ 96,322
Accumulated deficit			445,353	356,381
Net cash used in operating and investing activities			85,200
Cash and cash equivalents			$ 47,279	$ 117,662	$ 229,974
American Depositary Shares
Nature Of Business [Line Items]
Proceeds from issuance of ADSs in initial public offering, net of issuance costs		$ 161,800
American Depositary Shares | IPO
Nature Of Business [Line Items]
Issuance of shares, Shares | shares		9,951,591
Ordinary shares, price per share | $ / shares		$ 18.00
American Depositary Shares | Overallotment Options to Underwriters
Nature Of Business [Line Items]
Issuance of shares, Shares | shares		1,128,062
American Depository Shares | IPO
Nature Of Business [Line Items]
Issuance of shares, Shares | shares		8,823,529
Ordinary shares, price per share | $ / shares		$ 18.00
American Depository Shares | Overallotment Options to Underwriters
Nature Of Business [Line Items]
Issuance of shares, Shares | shares	1,128,062
Ordinary shares, price per share | $ / shares	$ 18.00

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Summary of Significant Accounting Policies - Additional Information (Details)	1 Months Ended	12 Months Ended
	Apr. 30, 2023	Dec. 31, 2022 USD ($)	Dec. 31, 2022 GBP (£)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Summary Of Significant Accounting Policies [Line Items]
Impairment losses		$ 0		$ 100,000	$ 0
Foreign currency translation adjustment		(12,623,000)		130,000	$ 12,341,000
Income tax, accrued interest or penalties		0		$ 0
Operating lease right-of-use assets		6,014,000
Operating lease liabilities		$ 14,745,000
Forecast
Summary Of Significant Accounting Policies [Line Items]
Cash rebate percentage on research and development	15.00%
U.K
Summary Of Significant Accounting Policies [Line Items]
Incremental percentage on taxable profit		50.00%	50.00%
Maximum
Summary Of Significant Accounting Policies [Line Items]
Cash rebate percentage on research and development		10.53%	10.53%
Maximum | U.K
Summary Of Significant Accounting Policies [Line Items]
Offset amount against future taxable profits | £			£ 5,000,000.0
ASU 2016-02
Summary Of Significant Accounting Policies [Line Items]
Operating lease right-of-use assets		$ 61,900,000
Operating lease liabilities		$ 64,700,000
Change in accounting principle, accounting standards update, adopted [true false]		true
Change in accounting principle, accounting standards update, adoption date		Jan. 01, 2022
Change in accounting principle, accounting standards update, immaterial effect [true false]		true
Other Non-current Assets
Summary Of Significant Accounting Policies [Line Items]
Deferred financing costs		$ 1,200,000

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Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives of the Respective Assets (Details)	12 Months Ended
	Dec. 31, 2022
Office Equipment, Computers and Fixtures and Fittings
Property Plant And Equipment [Line Items]
Estimated Useful Life	3 years
Laboratory Equipment
Property Plant And Equipment [Line Items]
Estimated Useful Life	5 years
Leasehold Improvements
Property Plant And Equipment [Line Items]
Estimated Useful Life	10 years
Property, plant and equipment, estimated useful lives	Shorter of useful life or remaining lease term

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Summary of Significant Accounting Policies - Schedule of Long-Lived Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Revenues From External Customers And Long Lived Assets [Line Items]
Long-lived assets	$ 32,050	$ 10,233
U.K
Revenues From External Customers And Long Lived Assets [Line Items]
Long-lived assets	17,894	6,078
Germany
Revenues From External Customers And Long Lived Assets [Line Items]
Long-lived assets	13,569	6,193
U.S
Revenues From External Customers And Long Lived Assets [Line Items]
Long-lived assets	$ 587	$ 185

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Assets Held for Sale - Schedule of the Carrying Amounts of the Assets and Liabilities Held for Sale in the Consolidated Balance Sheet (Details) $ in Thousands	Dec. 31, 2022 USD ($)
CURRENT ASSETS:
Cash and cash equivalents	$ 300
Prepaid expenses and other current assets	244
Total current assets held for sale	544
NON-CURRENT ASSETS:
Property and equipment, net	5,384
Operating lease right of use assets	8,182
Other non-current assets	3
Total assets held for sale	14,113
CURRENT LIABILITIES:
Accounts payable	193
Accrued expenses and other current liabilities	1,324
Operating lease liabilities, current	914
Total current liabilities related to assets held for sale	2,431
NON-CURRENT LIABILITIES:
Operating lease liabilities, non-current	7,906
Total liabilities related to assets held for sale	$ 10,337

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Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
U.K. R&D tax credit	$ 1,230	$ 2,211
Prepaid tax	1,373	2,070
Insurance	1,702	2,346
Prepaid manufacturing costs	456	2,002
Other current assets	1,474	2,001
Prepaid expenses and other current assets	$ 6,235	$ 10,630

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Property and Equipment, Net - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 14,024	$ 16,738
Less: accumulated depreciation	(5,017)	(6,832)
Property plant and equipment net	9,007	9,906
Office Equipment and Computers
Property Plant And Equipment [Line Items]
Property and equipment, gross	751	1,098
Fixtures and Fittings
Property Plant And Equipment [Line Items]
Property and equipment, gross	2,584	4,602
Laboratory Equipment
Property Plant And Equipment [Line Items]
Property and equipment, gross	3,140	10,083
Leasehold Improvements
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 7,549	$ 955

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Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Property, Plant and Equipment [Abstract]
Depreciation and amortization expense	$ 1.8	$ 2.4	$ 1.9

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Other Non-current Assets - Summary of Other Non-current Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Other Assets, Noncurrent [Abstract]
Restricted cash	$ 1,327	$ 1,400
Deferred financing costs	2,133	1,142
Deferred tax asset	533	377
Intangible assets		8
Other Non-current assets	$ 3,993	$ 2,927

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Accrued Expenses and Other Liabilities - Schedule of Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Payables and Accruals [Abstract]
Compensation and benefits costs	$ 4,178	$ 4,554
Restructuring charges		2,362
Research and development expenses	1,923	6,726
Consulting and professional services	1,215	1,083
Other liabilities	592	772
Accrued expenses and other liabilities	$ 7,908	$ 15,497

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Shareholders' Equity - Additional Information (Details)						3 Months Ended	12 Months Ended
	Mar. 18, 2022 USD ($) shares	Mar. 10, 2022 USD ($) $ / shares shares	Nov. 17, 2021 USD ($)	Aug. 20, 2020 USD ($) $ / shares shares	Aug. 11, 2020 USD ($) $ / shares shares	Mar. 31, 2021 £ / shares shares	Dec. 31, 2022 USD ($) shares	Dec. 31, 2021 USD ($) shares	Dec. 31, 2020 USD ($)	Dec. 31, 2022 £ / shares	Dec. 31, 2021 £ / shares	Dec. 31, 2020 £ / shares
Class Of Stock [Line Items]
Ordinary shares, authorized | shares							400,000,000	160,000,000
Ordinary shares, par value | £ / shares										£ 0.00001	£ 0.00001	£ 0.00001
Common stock, voting rights							Each holder of ordinary shares is entitled to one vote per ordinary share
Dividends declared or paid							$ 0
Proceeds from issuance of ordinary shares							27,328,000		$ 161,758,000
Stock Issued							963,000
Prepaid expenses and other current assets							$ 6,235,000	$ 10,630,000
Newly issued shares, nominal value per share | £ / shares										1.00
Common stock, conversion basis							the different classes of shares were converted into a single class of ordinary shares
Reverse split, description							1-for-0.159 reverse split
Reverse split, ratio							6.289	6.289	6.289
Deferred shares voting rights							no
Deferred shares conversion rights							no conversion rights
American Depository Shares
Class Of Stock [Line Items]
Proceeds from issuance of ordinary shares				$ 161,800,000
Underwriting discounts, commissions and offering expense				$ 12,500,000
American Depository Shares | IPO
Class Of Stock [Line Items]
Stock issued during period, shares | shares					8,823,529
Price per ADS | $ / shares					$ 18.00
Proceeds from issuance of ordinary shares					$ 147,700,000
American Depository Shares | Overallotment Options to Underwriters
Class Of Stock [Line Items]
Stock issued during period, shares | shares				1,128,062
Price per ADS | $ / shares				$ 18.00
Proceeds from issuance of ordinary shares				$ 18,900,000
American Depository Shares | Syncona Portfolio Limited
Class Of Stock [Line Items]
Stock issued during period, shares | shares		24,857,144
Price per ADS | $ / shares		$ 1.05
Stock issued during period, value		$ 26,100,000
Proceeds from issuance of ordinary shares		$ 24,200,000
American Depository Shares | Lincoln Park Capital Fund, LLC
Class Of Stock [Line Items]
Stock issued during period, shares | shares	954,208						0
Sale of stock period	36 months
Stock Issued	$ 1,000,000.0
Prepaid expenses and other current assets	200,000
American Depository Shares | Lincoln Park Capital Fund, LLC | Maximum
Class Of Stock [Line Items]
Value of stock available for sale under the purchase agreement	$ 35,000,000.0
American Depository Shares | Jefferies LLC | Open Market Sale Agreement
Class Of Stock [Line Items]
Stock issued during period, shares | shares							3,037,616
Proceeds from issuance of ordinary shares							$ 3,200,000
American Depository Shares | Jefferies LLC | At-the-Market Offerings | Open Market Sale Agreement
Class Of Stock [Line Items]
Maximum offering Sales proceeds from issuance of common stock			$ 75,000,000.0
Deferred Shares
Class Of Stock [Line Items]
Deferred shares, par value | £ / shares										0.00001	0.00001	0.00001
Deferred B Shares
Class Of Stock [Line Items]
Deferred shares, par value | £ / shares										0.001	0.001	0.001
Deferred share, nominal value | £ / shares										0.99999
DEFERRED SHARES £100,000 PAR VALUE
Class Of Stock [Line Items]
Deferred shares, par value | £ / shares						£ 0.001
Number of deferred shares cancelled | shares						100,000,000
Number of remaining deferred shares cancelled | shares						23,638,835
Deferred Shares of £ 100,000 Par Value
Class Of Stock [Line Items]
Deferred shares, par value | £ / shares										£ 100,000	£ 100,000	£ 100,000
Deferred share, nominal value | £ / shares						£ 100,000
Deferred Shares of £0.00001 Par Value
Class Of Stock [Line Items]
Deferred shares, par value | £ / shares						£ 0.00001
Number of deferred shares cancelled | shares						144,500,094

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Shareholders' Equity - Summary of Ordinary Shares and Deferred Shares Issued (Details) - shares	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Class Of Stock [Line Items]
Ordinary shares, issued	65,113,575	35,854,591
Total ordinary and deferred shares	65,231,839	35,966,669	304,011,678
Ordinary shares
Class Of Stock [Line Items]
Ordinary shares, issued	65,113,575	35,854,591	35,854,945
Deferred Shares
Class Of Stock [Line Items]
Deferred shares	118,263	112,077	144,517,898
Deferred B Shares
Class Of Stock [Line Items]
Deferred shares			123,638,835
Deferred Shares of £ 100,000 Par Value
Class Of Stock [Line Items]
Deferred shares	1	1

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Shareholders' Equity - Summary of Ordinary Shares and Deferred Shares Issued (Parenthetical) (Details) - £ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Class Of Stock [Line Items]
Ordinary shares, par value	£ 0.00001	£ 0.00001	£ 0.00001
Ordinary shares
Class Of Stock [Line Items]
Forfeiture of ordinary shares	6,186	94,273	17,804
Ordinary shares, par value	£ 0.00001	£ 0.00001	£ 0.00001
Deferred Shares
Class Of Stock [Line Items]
Deferred shares, par value	£ 0.00001	£ 0.00001	£ 0.00001
Deferred shares, issued	118,263	112,077	144,517,898
Deferred B Shares
Class Of Stock [Line Items]
Deferred shares, par value	£ 0.001	£ 0.001	£ 0.001
Deferred shares, issued			123,638,835
Deferred Shares of £ 100,000 Par Value
Class Of Stock [Line Items]
Deferred shares, par value	£ 100,000	£ 100,000	£ 100,000
Deferred shares, issued	1	1

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Non-Cash Share-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions				12 Months Ended
	Jan. 01, 2022	Jan. 01, 2021	Jul. 31, 2020	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	May 30, 2022	Sep. 27, 2021	Jul. 30, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation cost related to unvested employee shares outstanding				$ 0.2
Weighted-average period of unvested employee shares outstanding				1 year 6 months
Share Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation cost related to unvested employee shares outstanding				$ 9.4
Weighted-average period of unvested employee shares outstanding				2 years 4 months 24 days
Weighted average grant-date fair value of share options granted				$ 0.70	$ 4.49	$ 9.87
RSUs
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
General vesting period				1 year
2020 Employee Share Purchase Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage of ordinary shares subject to automatic increase in outstanding ordinary shares on each year			1.00%
Terms of share option plan				The ESPP provides for an annual increase beginning on January 1, 2022 in an amount equal to the least of (i) 347,447 ordinary shares, (ii) 1% of the total number of ordinary shares outstanding on December 31st of the prior calendar year or (iii) such fewer number of ordinary shares as the board of directors may designate prior to the applicable January 1st date.
Number of ordinary shares subject to automatic increase in outstanding ordinary shares on each year	347,447		347,447
Ordinary shares reserved for issuance			347,447	263,586
Purchase price of ordinary shares, percentage of fair market value			85.00%
Percentage of employee's compensation eligible			15.00%
Number of shares purchased				372,139
2020 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Maximum number of equity awards authorized			5,898,625
Term of ordinary shares subject to automatic increase in outstanding ordinary shares on each year			10 years
Percentage of ordinary shares subject to automatic increase in outstanding ordinary shares on each year			4.00%
Terms of share option plan				Additionally, the number of ordinary shares reserved for issuance under the 2020 Plan automatically increases on January 1st of each year, for a period of not more than ten years, by an amount equal to the lesser of (i) 4% of the total number of ordinary shares outstanding on December 31st of the prior calendar year or (ii) such fewer number of ordinary shares as the board of directors may designate prior to the applicable January 1st date.
Number of ordinary shares subject to automatic increase in outstanding ordinary shares on each year	1,434,184	1,434,198
Percentage of number of ordinary shares outstanding	4.00%	4.00%
Service based options, vesting period				4 years
Vesting percentage				25.00%
General vesting period				3 years
2020 Plan | Ordinary shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Maximum number of equity awards authorized			3,474,469						2,424,156
Inducement Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Maximum number of equity awards authorized							2,000,000	3,400,000

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Non-Cash Share-Based Compensation - Summary of Changes in Employee Shares (Details) - Performance and Service Based - $ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Shares, Unvested balance	47,332	207,310	492,514
Number of Shares, Granted			42,412
Number of Shares, Vested	(24,837)	(65,705)	(209,836)
Number of Shares, Forfeited	(6,186)	(94,273)	(117,780)
Number of Shares, Unvested balance	16,309	47,332	207,310
Weighted Average Grant Date Fair Value, Unvested balance	$ 10.82	$ 9.97	$ 1.36
Weighted Average Grant Date Fair Value, Granted		0.00	11.78
Weighted Average Grant Date Fair Value, Vested	8.71	8.71	7.10
Weighted Average Grant Date Fair Value, Forfeited	10.36	10.36	12.64
Weighted Average Grant Date Fair Value, Unvested balance	$ 11.33	$ 10.82	$ 9.97

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Non-Cash Share-Based Compensation - Assumptions Used in Black-Scholes Option Pricing Model to Determine Fair Value of Share Options Granted to Employees and Directors (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Share-Based Payment Arrangement [Abstract]
Expected option life (years)	6 years 3 months 18 days	6 years 3 months 18 days	6 years 1 month 6 days
Expected volatility	74.70%	76.90%	77.40%
Risk-free interest rate	2.20%	1.10%	0.40%

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Non-Cash Share-Based Compensation - Summary of Share Options (Details) - Share Options - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Shares, Outstanding beginning balance	5,421,715	3,687,086
Number of Shares, Granted	5,284,810	4,352,281	3,760,210
Number of Shares, Expired	(298,143)	(145,638)
Number of Shares, Canceled or Forfeited	(2,489,882)	(2,472,014)	(73,124)
Number of Shares, Outstanding ending balance	7,918,500	5,421,715	3,687,086
Number of Shares, Exercisable as of December 31, 2022	2,044,228
Number of Shares, Vested and expected to vest as of December 31, 2022	7,918,500
Weighted Average Exercise Price, Outstanding beginning balance	$ 9.23	$ 13.03
Weighted Average Exercise Price, Granted	1.05	6.87	$ 14.79
Weighted Average Exercise Price, Expired	13.57	13.02
Weighted Average Exercise Price, Canceled or Forfeited	5.74	13.20	15.32
Weighted Average Exercise Price, Outstanding ending balance	4.76	$ 9.23	$ 13.03
Weighted Average Exercise Price, Exercisable as of December 31, 2022	10.98
Weighted Average Exercise Price, Vested and expected to vest as of December 31, 2022	$ 4.76
Weighted Average Remaining Contractual Term (in years), Outstanding	8 years 4 months 24 days	8 years 4 months 13 days	9 years 7 months 2 days
Weighted Average Remaining Contractual Term (in years), Exercisable as of December 31, 2022	6 years 5 months 23 days
Weighted Average Remaining Contractual Term (in years), Vested and expected to vest as of December 31, 2022	8 years 4 months 24 days
Aggregate Intrinsic Value, Outstanding		$ 570	$ 9,931

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Non-Cash Share-Based Compensation - Summary of Activity Related to RSUs (Details) - RSUs - $ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Shares, Unvested balance	88,750	2,500
Number of RSUs, Granted	669,270	120,375	2,500
Number of Shares, Exercised	(44,688)
Number of RSUs, Forfeited	(267,742)	(34,125)
Number of Shares, Unvested balance	445,590	88,750	2,500
Weighted Average Grant Date Fair Value, Unvested balance	$ 10.01	$ 17.56
Weighted Average Grant Date Fair Value, Granted	1.03	9.64	$ 17.56
Weighted Average Grant Date Fair Value, Exercised	5.63
Weighted Average Grant Date Fair Value, Forfeited	3.03	8.63
Weighted Average Grant Date Fair Value, Unvested balance	$ 0.98	$ 10.01	$ 17.56

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Non-Cash Share-Based Compensation - Summary of Non-Cash Share-Based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Non-cash share-based compensation expense	$ 5,077	$ 10,723	$ 6,204
Research and Development
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Non-cash share-based compensation expense	2,127	4,511	2,510
General and Administrative
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Non-cash share-based compensation expense	$ 2,950	$ 6,212	$ 3,694

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Income Taxes - Additional Information (Details) - USD ($)	3 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Tax [Line Items]
Net loss (income) realized before calculation of income tax, domestic		$ 89,700,000	$ 141,200,000	$ 96,900,000
Net loss (income) realized before calculation of income tax, foreign		(1,200,000)	(1,000,000.0)	$ (700,000)
Net operating loss carryforwards		310,800,000	258,100,000
Uncertain tax positions		0	0
Accrued interest or penalties related to uncertain tax positions		$ 0	$ 0
Minimum
Income Tax [Line Items]
Corporate income tax rate reconciliation, change in enacted tax rate, percentage	19.00%
Maximum
Income Tax [Line Items]
Corporate income tax rate reconciliation, change in enacted tax rate, percentage	25.00%

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Income Taxes - Schedule of Income Tax Provision (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Current expense:
Foreign	$ 524	$ 513	$ 287
Total current expense:	524	513	287
Deferred benefit
Foreign	(156)	(171)	(158)
Total deferred benefit:	(156)	(171)	(158)
Total income tax expense:	$ 368	$ 342	$ 129

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Income Taxes - Schedule of Reconciliation of Income Tax Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Income taxes at UK statutory rate of 19%	$ (16,806)	$ (26,609)	$ (18,277)
R&D expenditure			5,756
Foreign rate differential	62	69	42
Change in valuation allowance	19,280	40,508	15,691
U.S. state income taxes	35	21	(13)
Change in tax rates	(4,627)	(16,777)
Other	2,425	3,130	(3,070)
Total income tax expense:	$ 368	$ 342	$ 129

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Income Taxes - Schedule of Reconciliation of Income Tax Expense (Parenthetical) (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Statutory income tax rate, percent	19.00%	19.00%	19.00%

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Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Deferred tax assets
Net operating loss carryforwards	$ 78,057	$ 64,527
Depreciation	(538)	(885)
Accrued expenses	531	393
Non-cash share-based compensation	2,686	4,900
Other	168	26
Total deferred tax assets	80,904	68,961
Valuation allowance	(80,369)	(68,584)	$ (24,450)
Net deferred tax assets	$ 535	$ 377

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Income Taxes - Schedule of Changes in Valuation Allowance for Deferred Tax Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Valuation allowance at beginning of year	$ 68,584	$ 24,450
Increases recorded to income tax provision	11,785	44,134
Valuation allowance at end of year	$ 80,369	$ 68,584

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Net Loss Per Share - Schedule of Basic and Diluted Net Loss Per Share Attributable to Ordinary Shareholders (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Numerator
Net loss	$ (88,972)	$ (140,391)	$ (96,322)
Net loss attributable to ordinary shareholders—basic and diluted	$ (88,972)	$ (140,391)	$ (96,322)
Denominator
Weighted average ordinary shares outstanding - basic	59,271,778	35,704,368	14,152,843
Weighted average ordinary shares outstanding - diluted	59,271,778	35,704,368	14,152,843
Net loss per share attributable to ordinary shareholders - basic	$ (1.50)	$ (3.93)	$ (6.81)
Net loss per share attributable to ordinary shareholders - diluted	$ (1.50)	$ (3.93)	$ (6.81)

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Net Loss Per Share - Schedule of Potential Ordinary Shares Excluded from Computation of Diluted Net Loss Per Share (Details) - shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Ordinary shares excluded from computation of diluted net loss per share	8,380,399	5,557,797	3,896,896
Unvested Ordinary Shares
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Ordinary shares excluded from computation of diluted net loss per share	16,309	47,332	207,310
Share Options
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Ordinary shares excluded from computation of diluted net loss per share	7,918,500	5,421,715	3,687,086
RSUs
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Ordinary shares excluded from computation of diluted net loss per share	445,590	88,750	2,500

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Commitments and Contingencies - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Commitments And Contingencies [Line Items]
Loss contingencies, loss in period	$ 0
Operating lease right-of-use assets	6,014,000
Operating lease liabilities	14,745,000
Gain on lease termination	(5,216,000)
Rent expense		$ 15,400,000	$ 4,200,000
Brammer Bio MA, LLC
Commitments And Contingencies [Line Items]
Annual capacity access fee	10,000,000.0
Operating Lease Agreements
Commitments And Contingencies [Line Items]
Operating lease right-of-use assets	35,600,000
Operating lease liabilities	40,300,000
Gain on lease termination	(5,300,000)
Manufacturing Agreement
Commitments And Contingencies [Line Items]
Annual minimum purchase commitment	$ 6,000,000.0

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Commitments and Contingencies - Summary of Lease Cost (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Lease Cost
Short-term lease cost	$ 276
Sublease income	(246)
Total lease cost	12,196
Research and Development
Lease Cost
Operating lease cost	11,558
General and Administrative
Lease Cost
Operating lease cost	$ 608

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Commitments and Contingencies - Summary of Right of Use Lease Assets (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Other Information
Operating cash flows from operating leases	$ 10,475
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 2,526
Weighted-average remaining lease term-operating leases	5 years 9 months 18 days
Weighted-average discount rate-operating leases	9.33%

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Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2023	$ 4,564
2024	3,535
2025	2,224
2026	1,992
2027	1,668
Thereafter	6,268
Total payments	20,251
Less: imputed interest	(5,969)
Less: foreign exchange (gain)/loss	463
Total	$ 14,745

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Related Party Transactions - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
	Mar. 10, 2022	Dec. 31, 2022	Dec. 31, 2020
Related Party Transaction [Line Items]
Proceeds from issuance of ordinary shares		$ 27,328	$ 161,758
American Depositary Shares | Syncona Portfolio Limited
Related Party Transaction [Line Items]
Stock issued during period, value	$ 26,100
Price per ADS	$ 1.05
Proceeds from issuance of ordinary shares	$ 24,200

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Employee Benefit Plans - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
U.K
Defined Contribution Plan Disclosure [Line Items]
Defined contribution plan, amount paid	$ 0.6	$ 0.9	$ 0.8
Germany
Defined Contribution Plan Disclosure [Line Items]
Defined contribution plan, amount paid	0.3	0.4	0.3
U.S
Defined Contribution Plan Disclosure [Line Items]
Defined contribution plan, employer discretionary contribution to 401(k) plan	$ 0.5	$ 0.5	$ 0.1

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Restructuring Charges - Additional Information (Details) $ in Thousands	3 Months Ended		12 Months Ended
	Dec. 31, 2022 USD ($) Employees	Dec. 31, 2021 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Restructuring Cost and Reserve [Line Items]
Reduction in workforce | Employees	26
Restructuring charges, accrued		$ 2,100	$ 1,588	$ 2,381
Reduction in workforce, percentage		25.00%
Severance and Termination
Restructuring Cost and Reserve [Line Items]
Restructuring charges, estimates cost	$ 1,500		$ 1,500

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Subsequent Events - Additional Information (Details)		3 Months Ended		12 Months Ended
	Feb. 08, 2023 USD ($) Employees	Mar. 31, 2023 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Nov. 11, 2022 USD ($)
Subsequent Event [Line Items]
Consideration transferred from sale of subsidiary						$ 25,000,000.0
FTE costs			$ 2,100,000	$ 1,588,000	$ 2,381,000
Reduction in workforce, percentage			25.00%
Severance and Termination
Subsequent Event [Line Items]
Restructuring charges, estimates cost				$ 1,500,000
Subsequent Events
Subsequent Event [Line Items]
Reduction in workforce, percentage		30.00%
Subsequent Events | Minimum | Severance and Termination
Subsequent Event [Line Items]
Restructuring charges, estimates cost		$ 1,000,000.0
Subsequent Events | Maximum | Severance and Termination
Subsequent Event [Line Items]
Restructuring charges, estimates cost		$ 1,500,000
Subsequent Events | Freeline Therapeutics GmbH
Subsequent Event [Line Items]
Consideration transferred from sale of subsidiary	$ 25,000,000
Number of full-time employee equivalents | Employees	15
Upfront payment	$ 2,600,000
Subsequent Events | Freeline Therapeutics GmbH | Minimum
Subsequent Event [Line Items]
FTE costs	$ 7,900,000