SELECTA BIOSCIENCES INC (Form: 10-Q, Received: 11/03/2022 08:07:15)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


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

For the quarterly period ended September 30, 2022


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

For the transition period from _______ to _______

Commission File Number: 001-37798

Selecta Biosciences, Inc.

(Exact name of registrant as specified in its charter)


			Delaware			26-1622110
			(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

			65 Grove Street, Watertown, MA			02472
			(Address of principal executive offices)			(Zip Code)

(617) 923-1400

(Registrant’s telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value per share	SELB	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ☐

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

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

Smaller reporting company

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

As of October 28, 2022, the registrant had 153,031,097 shares of common stock, par value $0.0001 per share, outstanding.


TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	4
	Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	4
	Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Nine Months ended September 30, 2022 and 2021	5
	Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the Three Months ended March 31, June 30, and September 30, 2022 and 2021	6
	Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2022 and 2021	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	43

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	45
Item 4.	Mine Safety Disclosures	45
Item 5.	Other Information	45
Item 6.	Exhibits	46
	Signatures

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or the Quarterly Report, contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in 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. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial position, business strategy, prospective products, product approvals, research and development costs, timing and likelihood of success, the plans and objectives of management for future operations and future results of anticipated products, the impact of the COVID-19 pandemic on our business and operations and our future financial results, and the period over which we estimate our existing cash and cash equivalents will be sufficient to fund our future operating expenses and capital expenditure requirements are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential”, or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including the factors described under the sections in this Quarterly Report titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as the following:

•our status as a development-stage company and our expectation to incur losses in the future;

•our future capital needs and our need to raise additional funds;

•our ability to build a pipeline of product candidates and develop and commercialize such pipeline;

•our unproven approach to therapeutic intervention;

•our ability to enroll patients in clinical trials, timely and successfully complete those trials and receive necessary regulatory approvals;

•our ability to access manufacturing facilities and to receive or manufacture sufficient quantities of our product candidates;

•our ability to maintain our existing or future collaborations or licenses;

•the continuing impact of the COVID-19 pandemic on our operations, the continuity of our business, including our preclinical studies and clinical trials, and general economic conditions;

•our ability to protect and enforce our intellectual property rights;

•federal, state, and foreign regulatory requirements, including FDA regulation of our product candidates;

•our ability to obtain and retain key executives and attract and retain qualified personnel;

•developments relating to our competitors and our industry, including the impact of government regulation; and

•our ability to successfully manage our growth.

Moreover, we operate in an evolving environment. New risks and uncertainties may emerge from time to time, and it is not possible for management to predict all risk and uncertainties.

You should read this Quarterly Report and the documents that we reference in this Quarterly Report completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

Selecta Biosciences, Inc. and Subsidiaries

Consolidated Balance Sheets

(Amounts in thousands, except share data and par value)


	September 30,		December 31,
	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	112,843	$	114,057

Marketable securities	33,599		13,998
Accounts receivable	6,925		9,914
Prepaid expenses and other current assets	6,310		6,474
Total current assets	159,677		144,443
Non-current assets:
Property and equipment, net	2,904		2,142
Right-of-use asset, net	12,056		9,829
Long-term restricted cash	1,600		1,379
Investments	2,000		2,000
Other assets	28		90
Total assets	$	178,265	$	159,883
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	214	$	224
Accrued expenses	12,263		10,533
Loan payable	5,879		5,961
Lease liability	1,552		1,049
Income taxes payable	—		601
Deferred revenue	3,820		53,883

Total current liabilities	23,728		72,251
Non-current liabilities:

Loan payable, net of current portion	20,215		19,673
Lease liability	10,506		8,598
Deferred revenue	5,436		11,417
Warrant liabilities	33,473		25,423

Total liabilities	93,358		137,362
Commitments and contingencies (Note 17)








Stockholders’ equity:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding as of September 30, 2022 and December 31, 2021	—		—
Common stock, $0.0001 par value; 350,000,000 and 200,000,000 shares authorized as of September 30, 2022 and December 31, 2021, respectively; 153,028,822 and 123,622,965 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	15		12
Additional paid-in capital	490,252		457,391

Accumulated deficit	(400,830)		(430,316)
Accumulated other comprehensive loss	(4,530)		(4,566)
Total stockholders’ equity	84,907		22,521
Total liabilities and stockholders’ equity	$	178,265	$	159,883

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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Selecta Biosciences, Inc. and Subsidiaries

Consolidated Statements of Operations and Comprehensive Income (Loss)

(Amounts in thousands, except share and per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Collaboration and license revenue	$	20,710	$	24,427	$	93,982	$	55,140
Operating expenses:
Research and development	16,539		20,951		53,410		48,418
General and administrative	5,770		5,445		17,538		15,397
Total operating expenses	22,309		26,396		70,948		63,815
Operating income (loss)	(1,599)		(1,969)		23,034		(8,675)
Investment income	710		11		932		35

Foreign currency transaction, net	15		2		(61)		(5)
Interest expense	(802)		(711)		(2,224)		(2,133)
Change in fair value of warrant liabilities	(6,539)		592		7,329		(11,335)
Other income, net	1		9		155		15
Income (loss) before income taxes	(8,214)		(2,066)		29,165		(22,098)
Income tax (expense) benefit	321		(15,828)		321		(15,828)
Net income (loss)	$	(7,893)	$	(17,894)	$	29,486	$	(37,926)

Other comprehensive income (loss):
Foreign currency translation adjustment	(21)		(1)		65		5
Unrealized loss on marketable securities	(29)		(1)		(29)		(1)
Total comprehensive income (loss)	$	(7,943)	$	(17,896)	$	29,522	$	(37,922)



Net income (loss) per share:
Basic	$	(0.05)	$	(0.16)	$	0.21	$	(0.34)
Diluted	$	(0.05)	$	(0.16)	$	0.15	$	(0.34)
Weighted average common shares outstanding:
Basic	152,849,992		115,169,949		141,969,449		113,161,622
Diluted	152,849,992		115,169,949		143,792,060		113,161,622

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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Selecta Biosciences, Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

(Amounts in thousands, except share data)


								Accumulated
				Additional				other
	Common stock			paid-in		Accumulated		comprehensive		Stockholders’
	Shares	Amount		capital		deficit		loss		Equity
Balance at December 31, 2021	123,622,965	$	12	$	457,391	$	(430,316)	$	(4,566)	$	22,521
Issuance of common stock under Employee Stock Purchase Plan	81,057	—		127		—		—		127
Issuance of common stock upon exercise of options	11,262	—		21		—		—		21
Issuance of vested restricted stock units	89,142	—		—		—		—		—
Issuance of common stock through at-the-market offering, net	576,418	—		1,675		—		—		1,675
Other financing fees	—	—		(79)		—		—		(79)
Stock-based compensation expense	—	—		2,753		—		—		2,753
Currency translation adjustment	—	—		—		—		(32)		(32)
Net income	—	—		—		28,778		—		28,778
Balance at March 31, 2022	124,380,844	$	12	$	461,888	$	(401,538)	$	(4,598)	$	55,764

Issuance of vested restricted stock units	10,938	—		—		—		—		—
Issuance of common stock and common warrants	27,428,572	3		21,477		—		—		21,480
Issuance of common stock, license agreement	892,857	—		1,000		—		—		1,000
Other financing fees	—	—		79		—		—		79
Stock-based compensation expense	—	—		2,564		—		—		2,564
Currency translation adjustment	—	—		—		—		118		118

Net income	—	—		—		8,601		—		8,601
Balance at June 30, 2022	152,713,211	$	15	$	487,008	$	(392,937)	$	(4,480)	$	89,606
Issuance of common stock under Employee Stock Purchase Plan	39,820	—		62		—		—		62
Issuance of common stock upon exercise of options	59,928	—		135		—		—		135
Issuance of vested restricted stock units	17,737	—		—		—		—		—

Issuance of common stock through at-the-market offering, net	198,126	—		446		—		—		446



Stock-based compensation expense	—	—		2,601		—		—		2,601
Currency translation adjustment	—	—		—		—		(21)		(21)
Unrealized (losses) on marketable securities	—	—		—		—		(29)		(29)
Net loss	—	—		—		(7,893)		—		(7,893)
Balance at September 30, 2022	153,028,822	$	15	$	490,252	$	(400,830)	$	(4,530)	$	84,907

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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Selecta Biosciences, Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders’ (Deficit) Equity

(Amounts in thousands, except share data)



								Accumulated
				Additional				other		Stockholders’
	Common stock			paid-in		Accumulated		comprehensive		(Deficit)
	Shares	Amount		capital		deficit		loss		Equity
Balance at December 31, 2020	108,071,249	$	11	$	391,175	$	(404,629)	$	(4,563)	(18,006)
Issuance of common stock under Employee Stock Purchase Plan	34,696	—		72		—		—		72
Issuance of common stock upon exercise of options	153,278	—		244		—		—		244
Issuance of vested restricted stock units	10,937	—		—		—		—		—
Issuance of common stock through at-the-market offering, net	4,706,844	—		20,943		—		—		20,943
Stock-based compensation expense	—	—		1,780		—		—		1,780
Currency translation adjustment	—	—		—		—		(6)		(6)
Unrealized (losses) on marketable securities	—	—		—		—		(1)		(1)
Net loss	—	—		—		(24,597)		—		(24,597)
Balance at March 31, 2021	112,977,004	$	11	$	414,214	$	(429,226)	$	(4,570)	$	(19,571)
Issuance of common stock upon exercise of options	242,278	—		425		—		—		425
Issuance of vested restricted stock units	10,938	—		—		—		—		—
Issuance of common stock through at-the-market offering, net	1,849,072	1		8,562		—		—		8,563
Stock-based compensation expense	—	—		1,783		—		—		1,783
Currency translation adjustment	—	—		—		—		12		12
Unrealized gain on marketable securities	—	—		—		—		1		1
Net income	—	—		—		4,565		—		4,565
Balance at June 30, 2021	115,079,292	$	12	$	424,984	$	(424,661)	$	(4,557)	$	(4,222)
Issuance of common stock under Employee Stock Purchase Plan	24,098	—		89		—		—		89
Issuance of common stock upon exercise of options	1,936	—		5		—		—		5
Issuance of vested restricted stock units	10,937	—		—		—		—		—
Issuance of common stock through at-the-market offering, net	327,237	—		1,389		—		—		1,389
Stock-based compensation expense	—	—		1,904		—		—		1,904
Currency translation adjustment	—	—		—		—		(1)		(1)
Unrealized (losses) on marketable securities	—	—		—		—		(1)		(1)
Net loss	—	—		—		(17,894)		—		(17,894)
Balance at September 30, 2021	115,443,500	$	12	$	428,371	$	(442,555)	$	(4,559)	$	(18,731)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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Selecta Biosciences, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Amounts in thousands)


	Nine Months Ended September 30,
	2022		2021
Cash flows from operating activities
Net income (loss)	$	29,486	$	(37,926)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,046		851
Amortization of premiums and discounts on marketable securities	(128)		37
Non-cash lease expense	930		832
(Gain) on disposal of property and equipment	(147)		—
Stock-based compensation expense	8,918		5,467
Non-cash interest expense	777		800
Warrant liabilities revaluation	(7,329)		11,335


Changes in operating assets and liabilities:
Accounts receivable	2,989		(100)
Prepaid expenses, deposits and other assets	(304)		(510)
Accounts payable	(10)		1,148
Income taxes payable	(601)		15,828
Deferred revenue	(56,044)		(28,424)

Accrued expenses and other liabilities	635		1,740
Net cash (used in) operating activities	(19,782)		(28,922)
Cash flows from investing activities
Proceeds from maturities of marketable securities	14,000		6,400
Payment made for investments	—		(2,000)
Purchases of marketable securities	(33,501)		(30,455)

Purchases of property and equipment	(990)		(807)


Net cash (used in) investing activities	(20,491)		(26,862)
Cash flows from financing activities





Debt amendment fee included in debt discount	(110)		—

Net proceeds from issuance of common stock- at-the-market offering	2,121		30,906
Net proceeds from issuance of common stock and common warrants	36,859		—



Proceeds from exercise of stock options	156		674
Proceeds from issuance of common stock under Employee Stock Purchase Plan	189		161
Net cash provided by financing activities	39,215		31,741
Effect of exchange rate changes on cash	65		3
Net change in cash, cash equivalents, and restricted cash	(993)		(24,040)
Cash, cash equivalents, and restricted cash at beginning of period	115,436		140,064
Cash, cash equivalents, and restricted cash at end of period	$	114,443	$	116,024
Supplemental cash flow information
Cash paid for interest	$	1,616	$	1,503
Noncash investing and financing activities


Issuance of common stock, license agreement in stock-based compensation expense	$	1,000	$	—
Purchase of property and equipment not yet paid	$	145	$	17
Equity offering costs in accrued liabilities	$	—	$	11
Unrealized gains (losses) on marketable securities	$	(29)	$	(1)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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Selecta Biosciences, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

1. Description of the Business

Selecta Biosciences, Inc., or the Company, was incorporated in Delaware on December 10, 2007, and is based in Watertown, Massachusetts. The Company is a clinical-stage biopharmaceutical company. The Company’s ImmTOR® platform encapsulates rapamycin, also known as sirolimus, an FDA approved immunomodulator, in biodegradable nanoparticles. ImmTOR is designed to induce antigen-specific immune tolerance. The Company believes, by combining ImmTOR with antigens of interest, the Company’s precision immune tolerance platform has the potential to restore self-tolerance to auto-antigens in autoimmune diseases, amplify the efficacy of biologics (including gene therapies) and mitigate the formation of anti-drug antibodies, or ADAs, against biologic drugs.

Since inception, the Company has devoted its efforts principally to research and development of its technology and product candidates, recruiting management and technical staff, acquiring operating assets, and raising capital. The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, new technological innovations, protection of proprietary technology, dependence on key personnel, compliance with government regulations and the need to obtain additional financing. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance-reporting capabilities.

The Company’s product candidates are in development. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained, or maintained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate significant revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees and consultants.

Unaudited Interim Financial Information

The accompanying unaudited consolidated financial statements for the three and nine months ended September 30, 2022 and 2021 have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC, for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, have been condensed or omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K that was filed with the SEC on March 10, 2022. The unaudited interim financial statements have been prepared on the same basis as the audited consolidated financial statements. In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all adjustments that are necessary for a fair statement of the Company’s financial position as of September 30, 2022, the consolidated results of operations for the three and nine months ended September 30, 2022, and cash flows for the nine months ended September 30, 2022. Such adjustments are of a normal and recurring nature. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2022.

Liquidity and Management’s Plan

The future success of the Company is dependent on its ability to develop its product candidates and ultimately upon its ability to attain and sustain profitable operations. The Company is subject to a number of risks similar to other early-stage life science companies, including, but not limited to, successful development of its product candidates, raising additional capital with favorable terms, protection of proprietary technology and market acceptance of any approved future products. The successful development of product candidates requires substantial working capital, which may not be available to the Company on favorable terms or at all.

To date, the Company has financed its operations primarily through the initial public offering of its common stock, private placements of its common stock, issuances of common and preferred stock, debt, research grants, research collaborations and licenses. The Company currently has no source of product revenue, and it does not expect to generate product revenue for the foreseeable future. To date, the Company’s revenue has primarily been from collaboration and license agreements. The Company has devoted substantially all of its financial resources and efforts to developing its ImmTOR platform, identifying potential product candidates and conducting preclinical studies and clinical trials. The Company is in the early stages of development of its product candidates, and it has not completed development of any ImmTOR-enabled therapies.

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As of September 30, 2022, the Company’s cash, cash equivalents, restricted cash and marketable securities were $148.0 million, of which $1.6 million was restricted cash related to lease commitments and $0.2 million was held by its Russian subsidiary designated solely for use in its operations. The Company believes the cash, cash equivalents, restricted cash and marketable securities as of September 30, 2022 will enable it to fund its current planned operations for at least the next twelve months from the date of issuance of these financial statements, though it may realize additional cash resources upon the achievement of certain contingent collaboration milestones or it may pursue additional cash resources through public or private equity or debt financings or by establishing collaborations with other companies. Management’s expectations with respect to its ability to fund current and long term planned operations are based on estimates that are subject to risks and uncertainties. If actual results are different from management’s estimates, the Company may need to seek additional strategic or financing opportunities sooner than would otherwise be expected. However, there is no guarantee that any collaboration milestones will be achieved or that any of these strategic or financing opportunities will be executed on favorable terms, and some could be dilutive to existing stockholders. If the Company is unable to obtain additional funding on a timely basis, it may be forced to significantly curtail, delay, or discontinue one or more of its planned research or development programs or be unable to expand its operations or otherwise capitalize on its commercialization of its product candidates. The Company anticipates operating losses to continue for the foreseeable future due to, among other things, costs related to research and development of its product candidates and its administrative organization.

At this time, any impact of COVID-19 on the Company’s business, revenues, results of operations and financial condition will largely depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the pandemic, the emergence of new virus variants, travel restrictions and social distancing in the United States and other countries, business closures or disruptions, supply chain disruptions, the ultimate impact on financial markets and the global economy, and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.

Guarantees and Indemnifications

As permitted under Delaware law, the Company indemnifies its officers, directors, consultants and employees for certain events or occurrences that happen by reason of the relationship with, or position held at the Company. Through September 30, 2022, the Company had not experienced any losses related to these indemnification obligations, and no claims were outstanding. The Company does not expect significant claims related to these indemnification obligations and, consequently, concluded that the fair value of these obligations is negligible, and no related reserves were established.

2. Summary of Significant Accounting Policies

The Company disclosed its significant accounting policies in Note 2 – Summary of Significant Accounting Policies included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. There have been no material changes during the three months ended September 30, 2022, with the exception of the matters discussed in recent accounting pronouncements.

Recent Accounting Pronouncements

Recently Adopted

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt – Modifications and Extinguishments (Subtopic 470-50), Compensation – Stock Compensation (Topic 718), and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer's Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. ASU 2021-04 provides guidance as to how entities should account for a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option (i.e., a warrant) that remains equity-classified after modification or exchange as an exchange of the original instrument for a new instrument. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date. This new standard was effective for all entities for fiscal years beginning after December 15, 2021. The adoption of ASU 2021-04 did not have an impact on the Company’s financial position or results of operations upon adoption.

Not Yet Adopted

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. This new standard will be effective for smaller reporting companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company is assessing the impact this standard will have on its consolidated financial statements and disclosures.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. Subsequently, in November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses. ASU 2016-13 requires entities to measure all expected credit

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losses for most financial assets held at the reporting date based on an expected loss model which includes historical experience, current conditions, and reasonable and supportable forecasts. ASU 2016-13 also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses. This ASU will be effective for smaller reporting companies for fiscal years beginning after December 15, 2022, with early adoption permitted. The adoption of ASU 2016-13 is not expected to have an impact on the Company’s financial position or results of operations upon adoption.

3. Marketable Securities and Investments

The following table summarizes the marketable securities held as of September 30, 2022 and December 31, 2021 (in thousands):


	Amortized cost		Unrealized gains		Unrealized losses		Fair value
September 30, 2022
U.S. government agency securities and treasuries	$	16,847	$	—	$	(26)	$	16,821
Corporate bonds	1,949		—		(4)		1,945
Commercial paper	14,833		—		—		14,833

Total	$	33,629	$	—	$	(30)	$	33,599

December 31, 2021

Corporate bonds	$	2,007	$	—	$	(1)	$	2,006
Commercial paper	11,992		—		—		11,992

Total	$	13,999	$	—	$	(1)	$	13,998

All marketable securities held at September 30, 2022 and December 31, 2021 had maturities of less than 12 months when purchased and are classified as short-term marketable securities on the accompanying consolidated balance sheet. During the nine months ended September 30, 2022, there were no marketable securities adjusted for other than temporary declines in fair value. The Company does not intend to sell its investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be at maturity.

Investments

As of September 30, 2022 and December 31, 2021, the Company has a $2.0 million investment in Cyrus Biotechnology, Inc., or Cyrus, pursuant to an investment agreement entered into in connection with the Collaboration and License Agreement with Cyrus. The Company’s maximum exposure to loss related to this variable interest entity is limited to the carrying value of the investment.

4. Net Income (Loss) Per Share

The following table sets forth the computation of basic and diluted net income (loss) per share for the three and nine months ended September 30, 2022 and 2021 (in thousands, except share and per-share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Numerator:
Net income (loss)	$	(7,893)	$	(17,894)	$	29,486	$	(37,926)
Less: Change in fair value of liability warrants	—		—		(7,329)		—
Adjusted net income (loss)	$	(7,893)	$	(17,894)	$	22,157	$	(37,926)
Denominator:
Weighted-average common shares outstanding - basic	152,849,992		115,169,949		141,969,449		113,161,622
Dilutive effect of employee equity incentive plans and outstanding warrants	—		—		1,822,611		—
Weighted-average common shares used in per share calculations - diluted	152,849,992		115,169,949		143,792,060		113,161,622
Net income (loss) per share:
Basic	$	(0.05)	$	(0.16)	$	0.21	$	(0.34)
Diluted	$	(0.05)	$	(0.16)	$	0.15	$	(0.34)

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The following table represents the potential dilutive shares of common stock excluded from the computation of the diluted net loss per share for all periods presented, as the effect would have been anti-dilutive:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Options, RSUs and ESPP shares	16,147,192	11,701,844	16,960,983	11,701,844
Warrants to purchase common stock	31,228,279	12,378,016	213,339	12,378,016
Total	47,375,471	24,079,860	17,174,322	24,079,860

5. Fair Value Measurements

The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021 (in thousands):


	September 30, 2022
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds (included in cash equivalents)	$	47,448	$	47,448	$	—	$	—
Marketable securities:
U.S. government agency securities and treasuries	16,821		—		16,821		—
Corporate bonds	1,945		—		1,945		—
Commercial paper	14,833		—		14,833		—

Total assets	$	81,047	$	47,448	$	33,599	$	—

Liabilities:
Warrant liabilities	$	33,473	$	—	$	—	$	33,473
Total liabilities	$	33,473	$	—	$	—	$	33,473


	December 31, 2021
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds (included in cash equivalents)	$	66,563	$	66,563	$	—	$	—
Marketable securities:
Corporate bonds	2,006		—		2,006		—
Commercial paper	11,992		—		11,992		—

Total assets	$	80,561	$	66,563	$	13,998	$	—

Liabilities:
Warrant liabilities	$	25,423	$	—	$	—	$	25,423
Total liabilities	$	25,423	$	—	$	—	$	25,423

There were no transfers within the fair value hierarchy during the nine months ended September 30, 2022 or year ended December 31, 2021.

Cash, Cash Equivalents, and Restricted Cash

As of September 30, 2022 and December 31, 2021, money market funds were classified as cash and cash equivalents on the accompanying consolidated balance sheets as they mature within 90 days from the date of purchase.

As of September 30, 2022, the Company had restricted cash balances relating to a secured letter of credit in connection with its lease for the Company’s headquarters. The Company’s consolidated statements of cash flows include the following as of September 30, 2022 and 2021 (in thousands):


	September 30,
	2022		2021
Cash and cash equivalents	$	112,843	$	114,645

Long-term restricted cash	1,600		1,379
Total cash, cash equivalents, and restricted cash	$	114,443	$	116,024

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Marketable Securities

As of September 30, 2022, marketable securities classified as Level 2 within the valuation hierarchy consist of U.S. government agency securities and treasuries, corporate bonds and commercial paper which are available-for-sale securities in accordance with the Company’s investment policy. The Company estimates the fair value of these marketable securities by taking into consideration valuations that include market pricing based on real-time trade data for the same or similar securities, and other observable inputs. The amortized cost of available-for-sale debt securities is adjusted for amortization of premiums and accretion of discounts to the earliest call date for premiums or to maturity for discounts.

Loans Payable

At September 30, 2022, in light of the issuance of the first tranche under the Company’s term loan pursuant the Loan and Security Agreement, dated August 31, 2020, as amended, among the Company, Oxford Finance LLC, or Oxford, as Collateral Agent and a Lender, and Silicon Valley Bank, or SVB, as a Lender, or the Loan and Security Agreement, the Company believes the carrying value approximates the fair value of the loan.

Warrants

In December 2019, the Company issued warrants in connection with a private placement of shares of common stock, or the 2019 Warrants. Pursuant to the terms of the 2019 Warrants, the Company could be required to settle the 2019 Warrants in cash in the event of an acquisition of the Company under certain circumstances and, as a result, the 2019 Warrants are required to be measured at fair value and reported as a liability on the balance sheet.

In April 2022, the Company issued warrants in connection with an underwritten offering of shares of common stock and warrants to purchase shares of common stock, or the 2022 Warrants. Pursuant to the terms of the 2022 Warrants, the Company could be required to settle the 2022 Warrants in cash in the event of an acquisition of the Company under certain circumstances and, as a result, the 2022 Warrants are required to be measured at fair value and reported as a liability on the balance sheet.

The Company recorded the fair value of the 2019 Warrants and the 2022 Warrants upon issuance using the Black-Scholes valuation model and is required to revalue the 2019 Warrants and the 2022 Warrants at each reporting date, with any changes in fair value recorded in the statement of operations and comprehensive income (loss). The valuations of the 2019 Warrants and the 2022 Warrants are classified as Level 3 of the fair value hierarchy due to the need to use assumptions in the valuations that are both significant to the fair value measurement and unobservable, including the stock price volatility and the expected life of the 2019 Warrants and the 2022 Warrants. Generally, increases (decreases) in the fair value of the underlying stock and estimated term would result in a directionally similar impact to the fair value measurement.

The estimated fair values of the 2019 Warrants and the 2022 Warrants are determined using the following inputs to the Black-Scholes valuation model:

Estimated fair value of the underlying stock. The Company estimates the fair value of the common stock based on the closing stock price at the end of each reporting period.

Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury at the valuation date commensurate with the expected remaining life assumption.

Dividend rate. The dividend rate is based on the historical rate, which the Company anticipates will remain at zero.

Expected life. The expected life of the 2019 Warrants and the 2022 Warrants is assumed to be equivalent to their remaining contractual terms which expire on December 23, 2024 and April 11, 2027, respectively.

Volatility. The Company estimates stock price volatility based on the Company’s historical volatility and the historical volatility of peer companies for a period of time commensurate with the expected remaining life assumption.

A summary of the Black-Scholes valuation model assumptions used to record the fair value of the 2019 Warrants liability is as follows:


	September 30,		December 31,
	2022		2021
Risk-free interest rate	4.22	%	0.97	%
Dividend yield	—		—
Expected life (in years)	2.23		2.98
Expected volatility	83.26	%	96.10	%

A summary of the Black-Scholes valuation model assumptions used to record the fair value of the 2022 Warrants liability is as follows:

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			At Issuance
	September 30,		April 11,
	2022		2022
Risk-free interest rate	4.06	%	2.79	%
Dividend yield	—		—
Expected life (in years)	4.53		5.00
Expected volatility	95.66	%	96.00	%

Changes in Level 3 Liabilities Measured at Fair Value on a Recurring Basis

The following table reflects a roll-forward of fair value for the Company’s Level 3 warrant liabilities (see Note 10), for the nine months ended September 30, 2022 (in thousands):


	Warrant liabilities
Fair value as of December 31, 2021	$	25,423
Issuances	15,379
Exercises	—
Change in fair value	(7,329)
Fair value as of September 30, 2022	$	33,473

6. Property and Equipment

Property and equipment consists of the following (in thousands):


	September 30,		December 31,
	2022		2021
Laboratory equipment	$	6,145	$	5,134
Computer equipment and software	699		731
Leasehold improvements	57		45
Furniture and fixtures	396		332
Office equipment	192		163
Construction in process	434		534
Total property and equipment	7,923		6,939
Less accumulated depreciation	(5,019)		(4,797)
Property and equipment, net	$	2,904	$	2,142

Depreciation expense was $0.2 million and $0.1 million for the three months ended September 30, 2022 and 2021, respectively, and $0.5 million and $0.4 million for the nine months ended September 30, 2022 and 2021, respectively.

7. Accrued Expenses

Accrued expenses consist of the following (in thousands):


	September 30,		December 31,
	2022		2021
Payroll and employee related expenses	$	2,699	$	3,179

Accrued patent fees	460		309
Accrued external research and development costs	7,616		4,339
Accrued professional and consulting services	687		815
Accrued interest	208		170
Other	593		1,721
Accrued expenses	$	12,263	$	10,533

Other accrued expenses as of December 31, 2021 include a $0.9 million estimated liability for the settlement of litigation relating to the two lawsuits described further within Note 17.

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8. Leases

On September 1, 2022, the Company entered into an amendment, or the Lease Agreement Amendment, to its lease agreement with BRE-BMR Grove LLC, originally entered into on July 23, 2019, or the Lease Agreement, to expand the Company’s corporate headquarters located at 65 Grove Street, Watertown, Massachusetts by approximately 7,216 square feet. The lease term began on September 1, 2022, consistent with when the Company took control of the office space and the expected lease term is 5.7 years. The discount rate of 11.3% was determined based on the Company’s incremental borrowing rate adjusted for the lease term including any reasonably certain renewal periods. Rent payments begin in November 2022, and the base rent for the first year is $0.1 million per month. In connection with the Lease Agreement Amendment, the Company entered into an amendment to its Loan and Security Agreement with Oxford, as Collateral Agent and a Lender, and SVB, as a Lender, on September 20, 2022, or the Third Amendment, to provide for an increase of $0.2 million in the letter of credit for a total of $1.6 million which renews automatically each year. The Company recorded the right-of-use asset and operating lease liabilities of $3.2 million during the three months ended September 30, 2022 as control of the premises was transferred to the Company.

For the three and nine months ended September 30, 2022 and 2021, the components of lease costs were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Operating lease cost	$	569	$	457	$	1,580	$	1,355
Variable lease cost	205		182		630		652
Short-term lease cost	3		2		8		7
Total lease cost	$	777	$	641	$	2,218	$	2,014

The maturity of the Company’s operating lease liabilities as of September 30, 2022 were as follows (in thousands):


	September 30,
	2022
2022 (remainder)	$	653
2023	2,656
2024	2,736
2025	2,818
2026	2,902
Thereafter	3,936
Total future minimum lease payments	15,701
Less imputed interest	3,643
Total operating lease liabilities	$	12,058

The supplemental disclosure for the statement of cash flows related to operating leases were as follows (in thousands):


	September 30,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:	$	1,395	$	1,355

Other than the initial recording of the right-of-use asset and lease liability for the Lease Agreement in 2020 and the Lease Agreement Amendment in 2022, which were non-cash, the changes in the Company’s right-of-use assets and lease liabilities for the nine months ended September 30, 2022 and 2021 are reflected in the non-cash lease expense and accrued expenses and other liabilities, respectively, in the consolidated statements of cash flows.

The following summarizes additional information related to operating leases:


	September 30,
	2022		2021
Weighted-average remaining lease term	5.6 years		6.6 years
Weighted-average discount rate	9.6	%	8.9	%

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9. Debt

2020 Term Loan

On March 21, 2022, the Company entered into a Second Amendment to its 2020 Term Loan. The Second Amendment extended the date on which amortization payments in respect of the 2020 Term Loan will commence by twelve months to April 1, 2023. Thereafter, amortization payments will be paid monthly in equal installments of principal and interest to fully amortize the outstanding principal over the remaining term of the 2020 Term Loan, subject to recalculation upon a change in the prime rate. The Second Amendment was determined to be a loan modification, and the $0.1 million fee was recorded as an addition to the debt discount on the effective date. As discussed above in Note 8, the Company entered into the Third Amendment on September 20, 2022, in connection with the expansion of its corporate headquarters to provide for an increase of $0.2 million in the letter of credit for a total of $1.6 million which renews automatically each year.

As of September 30, 2022 and December 31, 2021, the outstanding principal balance under the 2020 Term Loan was $25.0 million.

Total 2020 Term Loan and unamortized debt discount balances as of September 30, 2022 are as follows (in thousands):


Face value	$	25,000
Venture debt termination fee	2,250
Less: Debt discount	(1,156)
Less: Current portion of loan payable	(5,879)
Loan payable, net of current portion	$	20,215

Future minimum principal payments on the 2020 Term Loan as of September 30, 2022 are as follows (in thousands):


Year ended:
2023	$	7,759
2024	10,345
2025	6,896
Total minimum principal payments	$	25,000

10. Equity

On June 17, 2022, at the 2022 Annual Meeting of Stockholders, the Company’s stockholders approved an amendment to the Company’s Restated Certificate of Incorporation, or the Charter, to increase the number of authorized shares of common stock, par value $0.0001 per share, from 200,000,000 to 350,000,000 shares. On June 21, 2022, the Company filed a Certificate of Amendment to the Charter with the Secretary of State of the State of Delaware, which became effective upon filing.

Equity Financings

Underwritten Offering

On April 6, 2022, the Company entered into an underwriting agreement with SVB Securities LLC, as representative of the several underwriters named therein, relating to an underwritten offering of 27,428,572 shares, or the Shares, of the Company’s common stock and warrants to purchase up to 20,571,429 shares of common stock, or the 2022 Warrants. The offering of the Shares and the 2022 Warrants is referred to as the Offering. Each Share and accompanying 2022 Warrant to purchase 0.75 shares of common stock was sold at a combined offering price of $1.41. The exercise price for the 2022 Warrants is $1.55 per share. The Company received net proceeds from the Offering of approximately $36.9 million.

The 2022 Warrants are subject to adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Company’s common stock and also upon any distributions for no consideration of assets to the Company’s stockholders. Each 2022 Warrant is exercisable at any time and from time to time after issuance. In the event of certain corporate transactions, the holders of the 2022 Warrants will be entitled to receive the kind and amount of securities, cash or other property that the holders would have received had they exercised the Warrants immediately prior to such transaction. Therefore, the Company is required to account for the 2022 Warrants as liabilities and record the 2022 Warrants at fair value. The 2022 Warrants do not entitle the holders thereof to any voting rights or any of the other rights or privileges to which holders of Common Stock are entitled.

“At-the-Market” Offerings

On October 25, 2021, the Company entered into a Sales Agreement, or the 2021 Sales Agreement, with SVB Leerink LLC (now known as SVB Securities LLC), or SVB Leerink, pursuant to which the Company may sell shares of the Company’s

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common stock, from time to time, through an “at the market” equity offering program under which SVB Leerink will act as sales agent. The shares of common stock sold pursuant to the 2021 Sales Agreement will be issued pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-241692), aggregate gross sales proceeds of up to $75.0 million.

During the nine months ended September 30, 2022, the Company sold 774,544 shares of its common stock pursuant to the 2021 Sales Agreement for aggregate net proceeds of $2.1 million, after deducting commissions and other transaction costs.

Warrants

During the nine months ended September 30, 2022, there were 20,571,429 warrants issued, no warrants exercised, and 79,130 warrants canceled. Refer to Note 10 to the consolidated financial statements within our 2021 Annual Report on Form 10-K for further discussion of the terms related to the Company’s 2019 Warrants.


	Number of Warrants
	Equity classified	Liability classified	Total	Weighted average exercise price
Outstanding at December 31, 2021	292,469	10,443,511	10,735,980	$	1.62
Issuance	—	20,571,429	20,571,429	1.55

Canceled	(79,130)	—	(79,130)	17.71
Outstanding at September 30, 2022	213,339	31,014,940	31,228,279	$	1.53

Reserved Shares

The Company has authorized shares of common stock for future issuance as follows:


	As of
	September 30, 2022	December 31, 2021
Exercise of warrants	31,228,279	10,735,980
Shares available for future stock incentive awards	6,400,527	6,039,564

Unvested restricted stock units	1,770,896	394,450
Outstanding common stock options	15,172,715	11,039,873
Total	54,572,417	28,209,867

11. Stock Incentive Plans

The Company maintains the 2008 Stock Incentive Plan, or the 2008 Plan, for employees, consultants, advisors, and directors. The 2008 Plan provided for the granting of incentive and non-qualified stock option and restricted stock awards as determined by the Board.

In June 2016, the Company’s stockholders approved the 2016 Incentive Award Plan, or the 2016 Plan, which authorized 1,210,256 shares of common stock for future issuance under the 2016 Plan and the Company ceased granting awards under the 2008 Plan. Upon the effective date of the 2016 Plan, awards issued under the 2008 Plan remain subject to the terms of the 2008 Plan. Awards granted under the 2008 Plan that expire, lapse or terminate become available under the 2016 Plan as shares available for future grants.

Additionally, pursuant to the terms of the 2016 Plan, the Board is authorized to grant awards with respect to common stock, and may delegate to a committee of one or more members of the Board or executive officers of the Company the authority to grant options and restricted stock units. On December 9, 2020, the Board established a Stock Option Committee authorized to grant awards to certain employees and consultants subject to conditions and limitations within the 2016 Plan. In January 2022, the number of shares of common stock that may be issued under the 2016 Plan was increased by 4,944,919 shares. As of September 30, 2022, 1,086,951 shares remain available for future issuance under the 2016 Plan.

In September 2018, the Company’s 2018 Employment Inducement Incentive Award Plan, or the 2018 Inducement Incentive Award Plan was adopted by the Board without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Stock Market LLC listing rules, which authorized 1,175,000 shares of its common stock for issuance. In March 2019, the Board approved the amendment and restatement of the 2018 Inducement Incentive Award Plan to reserve an additional 2,000,000 shares of the Company’s common stock for issuance thereunder. As of September 30, 2022, there are 1,675,858 shares available for future grant under the 2018 Inducement Incentive Award Plan.

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Stock-based Compensation Expense

Stock-based compensation expense by classification included within the consolidated statements of operations and comprehensive income (loss), including $1.0 million recognized as stock-based compensation expense upon the issuance of common stock to Ginkgo Bioworks Holdings, Inc. during the three and nine months ended September 30, 2022 as described in Note 14, was as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Research and development	$	954	$	791	$	3,993	$	2,331
General and administrative	1,647		1,113		4,925		3,136
Total stock-based compensation expense	$	2,601	$	1,904	$	8,918	$	5,467

Stock Options

The estimated grant date fair values of employee stock option awards granted under the 2016 Plan and the 2018 Inducement Incentive Award Plan were calculated using the Black-Scholes option pricing model, based on the following weighted-average assumptions:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Risk-free interest rate	3.86		%	1.01		%	1.79		%	0.79		%
Dividend yield	—			—			—			—
Expected term	5.93			6.06			6.03			6.03
Expected volatility	93.37		%	93.55		%	91.97		%	95.05		%
Weighted-average fair value of common stock	$	1.69		$	4.19		$	2.99		$	3.58

The weighted average grant date fair value of stock options granted to employees was $1.31 and $3.17, during the three months ended September 30, 2022 and 2021, respectively, and $2.26 and $2.73 during the nine months ended September 30, 2022 and 2021, respectively.

As of September 30, 2022, total unrecognized compensation expense related to unvested employee stock options was $18.4 million, which is expected to be recognized over a weighted average period of 2.7 years.

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The following table summarizes the stock option activity under the 2008 Plan, 2016 Plan, and 2018 Inducement Incentive Award Plan:


				Weighted-average
				remaining	Aggregate
	Number of	Weighted-average		contractual term	intrinsic value
	options	exercise price ($)		(in years)	(in thousands)
Employees








Outstanding at December 31, 2021	10,616,800	$	3.99	8.19	$	4,982
Granted	5,274,220	$	2.99
Exercised	(69,928)	$	2.23
Forfeited	(914,616)	$	3.61
Outstanding at September 30, 2022	14,906,476	$	3.67	8.08	$	32

Vested at September 30, 2022	6,496,150	$	4.23	7.08	$	6
Vested and expected to vest at September 30, 2022	13,902,488	$	3.70	8.01	$	28

Non-employee consultants








Outstanding at December 31, 2021	423,073	$	6.34	3.85	$	42
Granted	—	$	—
Exercised	—	$	—
Forfeited	(156,834)	$	3.44
Outstanding at September 30, 2022	266,239	$	8.05	5.33	$	4

Vested at September 30, 2022	266,239	$	8.05	5.33	$	4
Vested and expected to vest at September 30, 2022	266,239	$	8.05	5.33	$	4

Restricted Stock Units

During the nine months ended September 30, 2022, the Company granted 813,200 restricted stock awards with a weighted average fair value of $3.31 per share based on the closing price of the Company’s common stock on the date of grant to employees under the 2016 Plan, which will vest over a four-year term, and 699,500 restricted stock awards with a weighted average fair value of $1.70 per share based on the closing price of the Company’s common stock on the date of grant to employees under the 2016 Plan, which will vest over a two-year term. Forfeitures are estimated at the time of grant and are adjusted, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company has estimated a forfeiture rate of 10% for restricted stock awards to employees based on historical attrition trends.

Unrecognized compensation expense for all restricted stock units was $3.3 million as of September 30, 2022, which is expected to be recognized over a weighted average period of 2.7 years.

The following table summarizes the Company’s restricted stock units under the 2016 Plan and 2018 Inducement Incentive Award Plan:


	Number of shares	Weighted average grant date fair value ($)
Unvested at December 31, 2021	394,450	$	3.45
Granted	1,512,700	2.57
Vested	(120,092)	3.92

Forfeited	(16,162)	3.25
Unvested at September 30, 2022	1,770,896	$	2.66

Employee Stock Purchase Plan

In June 2016, the Company approved the 2016 Employee Stock Purchase Plan, or the ESPP, which authorized 173,076 shares of common stock for future issuance under the ESPP to participating employees. In January 2022, the number of shares of common stock authorized for issuance under the ESPP was increased by 1,236,229 shares. During the nine months ended September 30, 2022, the Company issued 120,877 shares of common stock under the ESPP. As of September 30, 2022, 3,637,718 shares remain available for future issuance under the ESPP.

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For each of the three and nine months ended September 30, 2022 and 2021, the Company recognized less than $0.1 million and $0.1 million of stock-based compensation expense under the ESPP, respectively.

12. Revenue Arrangements

Takeda Pharmaceuticals USA, Inc.

License and Development Agreement

In October 2021, the Company entered into a License Agreement, or the Takeda Agreement, with Takeda Pharmaceuticals USA, Inc., or Takeda. Under the Takeda Agreement, the Company granted Takeda an exclusive license to the Company’s ImmTOR technology initially for two specified disease indications within the field of lysosomal storage disorders. Takeda paid a $3.0 million upfront payment to the Company upon signing of the Takeda Agreement, and the Company is entitled to receive up to $1.124 billion in future additional payments over the course of the partnership that are contingent on the achievement of development or commercial milestones or Takeda’s election to continue its activities at specified development stages. The Company is also eligible for tiered royalties on future commercial sales of any licensed products.

The Company determined the Takeda Agreement represents a service arrangement under the scope of ASC 606, and given the reversion of the rights under the Takeda Agreement represents a penalty in substance for a termination by Takeda, the contract term would remain the stated term of the Takeda Agreement. The Company determined that the research license, the licensed know-how, and the manufactured supply and delivery of materials represent a single promise and performance obligation to be transferred to Takeda over time due to the nature of the promises in the contract. The delivery of the manufactured supply is the predominant promise within the arrangement, as it is essential to the utility of the licensed intellectual property. The material to be supplied by the Company to Takeda is unique to the Company and cannot be obtained by other vendors. As such, consideration in the initial transaction price will be allocated to the single performance obligation and the recognition period would not extend beyond the initial contractual period. The Company will recognize the revenue associated with the upfront payment and combined single performance obligation utilizing the output method over the term that manufactured supply is delivered to Takeda.

In determining the transaction price, the Company concluded the payment associated with all the performance milestones will be fully constrained and only be included in the transaction price when the respective milestone is deemed probable of achievement. Each of these variable consideration items were evaluated under the most likely amount method to determine whether such amounts were probable of occurrence, or whether such amounts should be constrained until they become probable. As part of its evaluation of the constraint, the Company considered numerous factors, including that receipt and timing of such study milestones is outside the control of the Company and probability of success criteria is estimated. The Company will re-evaluate the transaction price in each reporting period, as uncertain events are resolved, or as other changes in circumstances occur. Takeda has the right to exercise covenant release rights on a field-by-field basis. If Takeda exercises its covenant release rights, we could receive exercise payments per indication and would be entitled to significant development and commercial milestone payments and tiered royalties on commercial sales. The Company determined that a significant financing component does not exist in its arrangement with Takeda. The Company also determined the options to negotiate additional fields, pursue other products, enter into a supply agreement explore additional fields, and pursue additional development under the initial fields do not represent material rights under the agreement. Takeda has the right to terminate the Takeda Agreement in its entirety or on a field-by-field basis, upon 90 days’ written notice to the Company.

As of September 30, 2022, the Company recorded $1.0 million as a short-term contract liability, representing deferred revenue associated with this agreement. Revenue of $1.0 million related to the Takeda Agreement was recognized during the nine months ended September 30, 2022. No revenue related to the Takeda Agreement was recognized during the three months ended September 30, 2022. As of December 31, 2021, the Company recorded $1.0 million as a short term contract liability and $1.0 million as a long-term contract liability, respectively, representing deferred revenue associated with this agreement.

Swedish Orphan Biovitrum

License and Development Agreement

In June 2020, the Company and Sobi entered into the Sobi License. Pursuant to the Sobi License, the Company agreed to grant Sobi an exclusive, worldwide (except as to Greater China) license to develop, manufacture and commercialize the Company’s SEL-212 drug candidate, which is currently in development for the treatment of chronic refractory gout. The SEL-212 drug candidate is a pharmaceutical composition containing a combination of SEL-037, or the Compound, and ImmTOR. Pursuant to the Sobi License, in consideration of the license, Sobi agreed to pay the Company a one-time, upfront payment of $75.0 million. Sobi has also agreed to make milestone payments totaling up to $630.0 million to the Company upon the achievement of various development and regulatory milestones and, if commercialized, sales thresholds for annual net sales of SEL-212, and tiered royalty payments ranging from the low double digits on the lowest sales tier to the high teens on the highest sales tier.

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Pursuant to the Sobi License, the Company has agreed to supply (at cost) quantities of the Compound and ImmTOR as necessary for completion of the two Phase 3 clinical trials of SEL-212 (DISSOLVE I and DISSOLVE II) and a 6-month placebo extension. The Company is required to supply quantities of the Compound until all rights to the Compound and any materials needed to manufacture the Compound are transferred to Sobi. Sobi has agreed to reimburse the Company for all budgeted costs incurred to complete development of SEL-212, including but not limited to costs incurred while conducting and completing the Phase 3 DISSOLVE trials, except for any costs of additional development activities required that are related to ImmTOR and that are unrelated to SEL-212. Sobi will have control and responsibility over all regulatory filings, including any investigational drug applications, biologics license applications, and marketing authorization applications relating to the licensed product.

Sobi may terminate the Sobi License for any reason upon 180 days’ written notice to the Company, whereby all rights granted under the Sobi License would revert back to the Company. In addition, if Sobi were to terminate the Sobi License, the Company has the option to obtain a license to all patents and know-how necessary to exploit SEL-212 in existence as of the termination date from Sobi in return for making an equitable royalty payment to Sobi. Additionally, on June 11, 2020, the Company entered into the Sobi Purchase Agreement for the sale of 5,416,390 shares of common stock for aggregate gross proceeds of $25.0 million in connection with the Sobi License. The closing of the Sobi Private Placement occurred on July 31, 2020, following the closing of the transactions contemplated under the Sobi License.

The Company determined that the Sobi License represents a service arrangement under the scope of ASC 606. In addition, given the Sobi License and Sobi Purchase Agreement were executed contemporaneously and negotiated as a package with a single commercial objective, the Company will account for the two agreements as a single contract. The term of the Sobi License commenced upon the effective date of July 28, 2020 and will continue on a product-by-product basis until the royalty terms for each country have expired. The royalty term for a given product begins upon the first commercial sale of the product in a country and ends at the later of ten years from the first commercial sale, expiration of the last valid patent claim covering the product and expiration of all regulatory exclusivity periods for the product in a country. Given the reversion of the rights under the Sobi License represents a penalty in substance for a termination by Sobi, the contract term would remain the stated term of the Sobi License.

The Company determined that the Sobi License contains three distinct performance obligations due to the nature of the promises in the contract, which includes conducting the Phase 3 DISSOLVE trials, Sobi’s option to set-up a second source supplier, and a combined obligation comprised of the delivery of the license to SEL-212, transfer of the know-how and the manufacturing and delivery of SEL-212 supply for development, or the Combined License Obligation. As the set-up of a second source supplier is optional for Sobi and the Company will be reimbursed at cost for its efforts in the subsequent set-up and technology transfer, the option for this future service was determined to be at a significant and incremental discount to its standalone selling price and treated as a material right in the arrangement, namely a distinct performance obligation.

In determining the transaction price, the Company concluded the upfront payment of $75.0 million and the $5.0 million development milestone associated with the dosing of the first patient in the Phase 3 DISSOLVE trials will be included in the transaction price. All other development milestones will be fully constrained and only be included in the transaction price when the respective milestone is deemed probable of achievement. Each of these variable consideration items was evaluated under the most likely amount method to determine whether such amounts were probable of occurrence, or whether such amounts should be constrained until they become probable. As part of the evaluation of the constraint, the Company considered numerous factors, including that receipt of such milestones is outside the control of the Company and probability of success criteria is estimated. The Company will re-evaluate the transaction price in each reporting period, as uncertain events are resolved. In accordance with ASC 606, the Company will only recognize revenue associated with sales-based milestones and royalties when the subsequent sales thresholds are reached and underlying sales occur, respectively. In connection with the Sobi Purchase Agreement, the Company determined that the gross proceeds of $25.0 million from the Sobi Private Placement included a premium to the fair value of the Company’s shares as of July 28, 2020 equal to approximately $14.5 million. The premium amount will be included in the transaction price for revenue recognition. The Company will estimate and include in the transaction price the total reimbursements to be received from Sobi for both the manufacturing and delivery of the Compound and ImmTOR as well as conducting the Phase 3 DISSOLVE trials. The Company determined that a significant financing component does not exist in its arrangement with Sobi.

The Company allocated the transaction price based on the relative standalone selling prices of the three distinct performance obligations. The Company estimated the standalone selling price of conducting the Phase 3 DISSOLVE trials by forecasting its anticipated costs and applying a margin reflective of the industry. The Company determined the standalone selling price of the second source supplier option by determining the discount given to Sobi multiplied by the likelihood that Sobi will exercise the option in the future. Similar to the Phase 3 program estimate, the Company estimated the discount of the option by forecasting the set-up costs and applying a margin that is reflective of the industry. As the Company will be providing the set-up and technology transfer services and the future supply at cost, the discount of the option is equal to the margin amount. The Company considered discussions with Sobi as well as probability of regulatory success of SEL-212 in determining

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the likelihood of exercise. The Company estimated the standalone selling price of the Combined License Obligation by utilizing a discounted cash flow model.

The Company determined that the delivery of the supply to Sobi best represents the pattern of delivery of the Combined License Obligation as the supply is essential to the utility of the license and know-how. The Company will recognize the revenue allocated to the Combined License Obligation by utilizing the output method. The Company estimated the total supply of the Compound and ImmTOR to be required during the clinical trial period and will recognize revenue as this supply is shipped for use in the clinical trials. The Company will recognize the revenue allocated to the conducting of the Phase 3 DISSOLVE trials obligation by utilizing the input method. The Company estimated the total budgeted costs to be incurred over the Phase 3 DISSOLVE trials and will recognize revenue as these costs are incurred. The Company’s costs best represent the pattern of transfer as these will capture all performance of the trials completed to date and can be readily measured. The Company will recognize the revenue allocated to the second source supplier option when the future services and goods are transferred.

On June 29, 2022, the Company completed enrollment of the DISSOLVE II trial. The completion of enrollment of the DISSOLVE II trial has resulted in the achievement of a development milestone and a $10.0 million payment obligation from Sobi to the Company. This amount was added to the overall transaction price and payment was received during the nine months ended September 30, 2022.

As of September 30, 2022 and December 31, 2021, the Company recorded $0.7 million and $37.5 million, respectively, as a short-term contract liability and $0.1 million and $5.1 million, respectively, as a long-term contract liability, representing deferred revenue associated with this agreement. In addition, as of September 30, 2022, the Company has recorded $0.2 million of contract assets related to incremental costs that would not have been incurred if the Sobi License had not been obtained, of which $0.1 million is presented in prepaid expenses and other current assets and less than $0.1 million is presented in other assets in the accompanying unaudited consolidated balance sheets.

As of September 30, 2022 and December 31, 2021, the Company recorded a total outstanding receivable of $6.9 million and $9.9 million, respectively, representing billings for the Phase 3 DISSOLVE program that are subject to reimbursement by Sobi. Revenue of $20.7 million and $73.6 million related to the Sobi License was recognized during the three and nine months ended September 30, 2022, respectively, inclusive of $7.1 million of revenue recognized from performance obligations related to prior periods as a result of the change in transaction price during the three months ended September 30, 2022. Revenue of $24.3 million and $54.8 million related to the Sobi License was recognized during the three and nine months ended September 30, 2021, respectively.

Sarepta Therapeutics, Inc.

Research License and Option Agreement

In June 2020, the Company and Sarepta Therapeutics, Inc., or Sarepta, entered into a Research License and Option Agreement, or the Sarepta Agreement. Pursuant to the Sarepta Agreement, the Company agreed to grant Sarepta a license under the Company’s intellectual property rights covering the Company’s antigen-specific biodegradable nanoparticle encapsulating ImmTOR to research and evaluate ImmTOR in combination with Sarepta’s adeno-associated virus gene therapy technology, or gene editing technology, using viral or non-viral delivery, to treat Duchenne Muscular Dystrophy and certain Limb-Girdle Muscular Dystrophy subtypes, or the Indications. Sarepta will have an option term of 24 months during which it can opt-in to obtain an exclusive license to further develop and commercialize the Product to treat at least one Indication, with a potential to extend the option term for an additional fee. The Company will supply ImmTOR to Sarepta for clinical supply on a cost-plus basis.

Sarepta paid a $2.0 million upfront payment to the Company upon signing of the Sarepta Agreement, and the Company is eligible to receive additional preclinical payments during the option term. If Sarepta opts-in to an exclusive license agreement, the Company could receive option exercise payments per Indication upon execution of the exclusive license, and the Company would be entitled to significant development and commercial milestone payments and tiered royalties ranging from the mid-to-high single digits based on net sales.

Pursuant to the Sarepta Agreement, the Company determined the Sarepta Agreement represents a service arrangement under the scope of ASC 606, with a 24 month contract duration. Given the reversion of the rights under the Sarepta Agreement represents a penalty in substance for a termination by Sarepta, the contract term would remain the stated term of the Sarepta Agreement.

The Company determined that the Sarepta Agreement and supply obligation including the delivery of the research license, the licensed know-how, the manufactured supply and delivery of materials represent a single promise and performance obligation to be transferred to Sarepta over time due to the nature of the promises in the contract. The delivery of the manufactured supply is the predominant promise within the arrangement, as it is essential to the utility of the licensed intellectual property. As such, consideration in the initial transaction price will be allocated to the single performance obligation based on the contractual price.

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The Company also determined the option to enter into a future commercial license agreement and extend the term of the option does not represent a material right since it was not priced at an incremental discount. Sarepta may terminate the Sarepta Agreement for any reason upon 30 days’ written notice to the Company. The Sarepta Agreement contains other customary terms and conditions, including representations and warranties, covenants, termination, and indemnification obligations in favor of each party. During the year ended December 31, 2020, the Company and Sarepta entered into two amendments relating to an additional feasibility study. During the year ended December 31, 2021, the Company and Sarepta entered into a third amendment relating to the additional feasibility study.

On April 13, 2021, the Company was notified by Sarepta of the achievement of the milestone event related to the completion of a non-clinical study for Duchenne muscular dystrophy and certain limb-girdle muscular dystrophies under the Sarepta Agreement. Accordingly, the Company received a milestone payment of $3.0 million during the three months ended June 30, 2021.

On June 10, 2022, the Company was notified by Sarepta that Sarepta would be extending their options under the Sarepta Agreement. In exchange for a nine-month extension to Sarepta’s options to both Duchenne muscular dystrophy and certain limb-girdle muscular dystrophies, the Company received a milestone payment of $2.0 million during the three months ended September 30, 2022.

On June 15, 2022, the Company was notified by Sarepta of the achievement of a milestone event related to certain preclinical study milestones under the Sarepta Agreement. Accordingly, the Company received a milestone payment of $4.0 million during the three months ended September 30, 2022.

As of September 30, 2022, one milestone remained constrained. The Company will re-evaluate the transaction price in each reporting period, as uncertain events are resolved. The Company will recognize the revenue associated with the upfront payment and combined single performance obligation utilizing the output method, over the 33-month term as the manufactured supply is delivered to Sarepta.

No outstanding receivable was recorded as of September 30, 2022 and December 31, 2021. The Company recorded $0.5 million and $4.6 million as a short-term contract liability representing deferred revenue associated with this agreement at September 30, 2022 and December 31, 2021, respectively. Revenue of $10.2 million related to the Sarepta Agreement was recognized during the nine months ended September 30, 2022. No revenue was recognized during the three months ended September 30, 2022. Revenue of $0.2 million related to the Sarepta Agreement was recognized during each of the three and nine months ended September 30, 2021.

Asklepios Biopharmaceutical, Inc.

License Agreement for Pompe Disease

In December 2019, the Company and Asklepios Biopharmaceutical, Inc., or AskBio, entered into a license agreement, or the AskBio License Agreement. Pursuant to the AskBio License Agreement, AskBio has exercised its option to exclusively license the Company’s intellectual property rights covering the Company’s ImmTOR platform to research, develop, and commercialize certain adeno-associated viral, or AAV, gene therapy products utilizing ImmTOR, and targeting the lysosomal alpha-glucosidase, or GAA, gene, or derivatives thereof, to treat Pompe Disease.

Pursuant to the AskBio License Agreement and ancillary documents, AskBio agreed to pay to the Company upfront fees of an aggregate of $7.0 million. Assuming successful development and commercialization, the Company could receive up to an additional $237.0 million in development, regulatory, and sales milestone payments. If commercialized, the Company would be eligible to receive tiered royalties on global net sales at percentages ranging from mid-to-high single digits. Under the terms of the agreement, the Company will be eligible to receive these royalties commencing on the first commercial sale of the licensed product until the expiration of the later of (i) ten years after the first commercial sale and (ii) expiration of the last to expire valid claim on patents covering the licensed product.

Pursuant to the AskBio License Agreement, the Company will supply AskBio with its ImmTOR platform, or the Supply Obligation, and AskBio will be responsible for all preclinical, clinical and commercial manufacture and supply of licensed products (other than ImmTOR) and carry out all other activities related to the research, development, and commercialization of licensed products at its sole expense, including all regulatory activities related thereto.

The Company determined that the AskBio License Agreement and Supply Obligation represent a single promise and performance obligation. This is because AskBio cannot derive benefit from the license without the simultaneous transfer of the

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patent protected ImmTOR supply. Therefore, the License Obligation and Supply Obligation represent the only promise in the arrangement and are combined as a single performance obligation.

In determining the transaction price, the Company concluded that the future development milestones, regulatory milestones, sales milestones, and sales royalties all represent variable consideration. Each of these variable consideration items was evaluated under the most likely amount method to determine whether such amounts were probable of occurrence, or whether such amounts should be constrained until they become probable. As part of its evaluation of the constraint, the Company considered numerous factors, including that receipt of such milestones is outside the control of the Company. Consideration related to sales-based milestones as well as royalties on net sales upon commercialization by AskBio, will be recognized when the related sales occur, as they were determined to relate predominantly to the intellectual property granted to AskBio and, therefore, have also been excluded from the transaction price in accordance with the royalty recognition constraint. As of September 30, 2022 and December 31, 2021, all milestones were constrained. The Company will re-evaluate the transaction price in each reporting period, as uncertain events are resolved, or as other changes in circumstances occur.

The total initial transaction price of the contract on the effective date was $7.0 million, comprised of a $2.0 million initial upfront payment upon agreement of terms, and a $5.0 million initial upfront execution fee.

At each of September 30, 2022 and December 31, 2021, the Company recorded $1.7 million as short-term contract liability and $5.3 million as a long-term contract liability, representing deferred revenue associated with this agreement. Revenue will be recognized over the period in which the particles are delivered. No revenue related to the AskBio License Agreement was recognized during the three and nine months ended September 30, 2022 and 2021 as no deliveries were made during these periods.

Spark Therapeutics, Inc.

Spark License Agreement

In December 2016, the Company entered into a License and Option Agreement, or the Spark License Agreement, with Spark Therapeutics, Inc., or Spark, pursuant to which the Company and Spark agreed to collaborate on the development of gene therapies for certain targets utilizing the ImmTOR platform. The Spark License Agreement provides Spark with certain exclusive, worldwide, royalty bearing licenses to the Company’s intellectual property, allowing Spark to develop and commercialize gene therapies in combination with ImmTOR for Factor VIII, an essential blood clotting protein relevant to the treatment of hemophilia A, the initial target.

On January 18, 2022, both parties agreed to mutually terminate the Spark License Agreement. Therefore, the short-term contract liability of $9.2 million as of December 31, 2021 was recognized as revenue during the nine months ended September 30, 2022. No revenue was recognized during the three months ended September 30, 2022.

Transaction Price Allocated to Future Performance Obligations

Remaining performance obligations represent the transaction price of contracts for which work has not been performed, or has been partially performed. As of September 30, 2022, the aggregate amount of the transaction price allocated to remaining performance obligations was $9.3 million.

Contract Balances from Contracts with Customers (Takeda, Sobi, Sarepta, and AskBio)

The following table presents changes in the Company’s contract liabilities during the nine months ended September 30, 2022 (in thousands):


	Balance at						Balance at
	beginning of period		Additions		Deductions		end of period
Nine Months Ended September 30, 2022
Contract liabilities:
Deferred revenue	$	65,300	$	16,000	$	(72,044)	$	9,256
Total contract liabilities	$	65,300	$	16,000	$	(72,044)	$	9,256

13. Related-party Transactions

April 2022 Offering

During the nine months ended September 30, 2022, the Company completed the Offering as described in Note 10. The following table sets forth the number of shares of Common Stock and 2022 Warrants purchased in the Offering by directors and executive officers, as of the time of the Offering, and related parties thereto:

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Name	Shares of Common Stock purchased	2022 Warrants purchased	Total aggregate purchase price
TAS Partners, LLC (affiliate of Timothy A. Springer, Ph.D.)	6,681,600	5,011,200	$	9,421,056

Consulting Services

The Company incurred expenses for consulting services provided by its founders to serve on its Scientific Advisory Board, totaling less than $0.1 million and $0.1 million during the three and nine months ended September 30, 2021, respectively.

14. Collaboration and License Agreements

Ginkgo Bioworks Holdings, Inc.

Collaboration and License Agreement

On January 3, 2022, the Company entered into a Collaboration and License Agreement, or the Second Ginkgo Agreement, with Ginkgo Bioworks Holdings, Inc., or Ginkgo. Under this agreement, the Company will engage with Ginkgo to develop AAV capsids designed to enhance transduction efficiency and transgene expression. In return, Ginkgo is eligible to earn both upfront research and development fees and milestone payments, including certain milestone payments in the form of shares of the Company’s common stock, clinical and commercial milestone payments of up to $207 million in cash. The Second Ginkgo Agreement was assessed for collaboration components and was determined not to be within the scope of ASC 808 as the risk and rewards are not shared by both parties. The Company will expense costs related to the Second Ginkgo Agreement as incurred until regulatory approval is received in accordance with ASC 730. The Company is accounting for the contingently issuable shares of common stock to be issued in exchange for the license obtained from Ginkgo as a liability-classified, stock-based compensation arrangement with a non-employee which will be recognized when achievement of the milestones is probable. The Company will assess the capitalization of costs incurred after the receipt of regulatory approval and, if applicable, will amortize these payments based on the expected useful life of each asset, typically based on the expected commercial exclusivity period. The Company is also obligated to pay Ginkgo tiered royalties ranging from low-single digit to high-single digit percentages of annual net sales of collaboration products which will be expensed as the commercial sales occur.

In October 2021, the Company entered into a Collaboration and License Agreement, or the First Ginkgo Agreement, with Ginkgo. Under the First Ginkgo Agreement, Ginkgo will design next generation IgA proteases with potentially transformative therapeutic potential. In return, Ginkgo is eligible to earn research and development fees, clinical and commercial milestone payments of up to $85.0 million in cash, as well as certain milestone payments for fixed fair values in the form of shares of the Company’s common stock. The First Ginkgo Agreement was assessed for collaboration components and was determined not to be within the scope of ASC 808 as the risk and rewards are not shared by both parties. The Company will expense costs related to the First Ginkgo Agreement as incurred until regulatory approval is received in accordance with ASC 730. The Company is accounting for the contingently issuable shares of common stock to be issued in exchange for the license obtained from Ginkgo as a liability-classified, stock-based compensation arrangement with a non-employee which will be recognized when achievement of the milestones is probable. The Company will assess the capitalization of costs incurred after the receipt of regulatory approval and, if applicable, will amortize these payments based on the expected useful life of each asset, typically based on the expected commercial exclusivity period. The Company is also obligated to pay Ginkgo tiered royalties ranging from low-single digit to high-single digit percentages of annual net sales of collaboration products which will be expensed as the commercial sales occur.

On June 13, 2022, the Company was notified of the achievement of the midpoint of the technical development plan under the First Ginkgo Agreement by Ginkgo. This milestone resulted in the payment of $0.5 million and issuance of 892,857 shares of the Company’s common stock valued at $1.0 million to Ginkgo during the nine months ended September 30, 2022.

Genovis AB (publ.)

License Agreement

In October 2021, the Company entered into an Exclusive License Agreement, or the Genovis Agreement, with Genovis AB (publ.), or Genovis. Under the Genovis Agreement, the Company paid to Genovis an upfront payment in exchange for an exclusive license to Genovis’ IgG protease, or Xork, enzyme technology across all therapeutic uses in humans, excluding research, preclinical, diagnostic and other potential non-therapeutic applications of the enzyme. Genovis is eligible to earn development and sales-based milestones. The Genovis Agreement was assessed for collaboration components and was determined not to be within the scope of ASC 808 as the risk and rewards are not shared by both parties. The Company will expense costs related to the Genovis Agreement as incurred until regulatory approval is received in accordance with ASC 730. The Company will assess the capitalization of costs incurred after the receipt of regulatory approval and, if applicable, will amortize these payments based on the expected useful life of each asset, typically based on the expected commercial exclusivity

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period. The Company is also obligated to pay Genovis tiered royalties of low double-digit percentages of worldwide annual net sales of collaboration products which will be expensed as the commercial sales occur.

Cyrus Biotechnology, Inc.

Collaboration and License Agreement

In September 2021, the Company and Cyrus entered into a collaboration and license agreement, or the Cyrus Agreement. Pursuant to the Cyrus Agreement, Cyrus agreed to grant the Company an exclusive, worldwide license to certain intellectual property to form a protein engineering collaboration combining the Company’s ImmTOR platform with Cyrus’ ability to redesign protein therapeutics. The lead program is a proprietary interleukin-2, or IL-2, protein agonist designed to selectively promote expansion of regulatory T cells for treatment of patients with autoimmune diseases and other deleterious immune conditions. In return for the licensed intellectual property, the Company made an upfront payment and is obligated to pay certain discovery, development, and sales-based milestones which could total up to approximately $1.5 billion across multiple programs. The Cyrus Agreement was assessed for collaboration components and was determined not to be within the scope of ASC 808 as the risk and rewards are not shared by both parties. The Company will expense costs related to the Cyrus Agreement as incurred until regulatory approval is received in accordance with ASC 730. The Company will assess the capitalization of costs incurred after the receipt of regulatory approval and, if applicable, will amortize these payments based on the expected useful life of each asset, typically based on the expected commercial exclusivity period. The Company is also obligated to pay Cyrus tiered royalties ranging from mid-single digit to low-double digit percentages of annual net sales of collaboration products which will be expensed as the commercial sales occur.

Additionally, on September 7, 2021, the Company entered into a stock purchase agreement, or the Series B Preferred Stock Purchase Agreement, in connection with the Cyrus Agreement. Pursuant to the Series B Preferred Stock Purchase Agreement, the Company purchased 2,326,934 shares of Cyrus’ Series B Preferred Stock, par value $0.0001 per share, at a purchase price of $0.8595 per share for an aggregate purchase price of $2.0 million.

In accordance with ASC 810, the Company has a variable interest in Cyrus resulting from its equity investment. The Company will share in Cyrus’ expected losses or receive a portion of its expected returns and absorb the variability associated with changes in the entity’s net assets. However, the Company is not the primary beneficiary as it does not have the power to direct the activities most significant to Cyrus, and therefore it is not required to consolidate Cyrus. The Company determined its equity interest to be within the scope of ASC 321 and elected to record the $2.0 million investment of Cyrus’ Series B Preferred Stock at cost on the purchase date.

On June 13, 2022, the Company and Cyrus mutually agreed that the preclinical key in-vitro success milestone had been achieved.

As of September 30, 2022, no impairment indicators are present and therefore the carrying value of the investment in Cyrus is $2.0 million on the accompanying consolidated balance sheet. The Company’s maximum exposure to loss related to this variable interest entity is limited to the carrying value of the investment. The Company has not provided financing to Cyrus other than the amount contractually required by the Series B Preferred Stock Purchase Agreement.

Asklepios Biopharmaceutical, Inc.

Feasibility Study and License Agreement

In August 2019, the Company entered into a Feasibility Study and License Agreement with AskBio, or the AskBio Collaboration Agreement. Pursuant to the AskBio Collaboration Agreement, the Company and AskBio agreed to license intellectual property rights to each other as part of a collaboration to research, develop, and commercialize certain AAV gene therapy products utilizing the Company’s ImmTOR platform to enable re-dosing of such AAV gene therapy products to treat serious rare and orphan genetic diseases for which there is a significant unmet medical need.

Pursuant to the AskBio Collaboration Agreement, the Company and AskBio agreed to conduct proof of concept studies to potentially validate the use of ImmTOR in conjunction with AskBio’s AAV gene therapy, or SEL-302 (previously disclosed as MMA-101, in combination with ImmTOR), for the treatment of MMA, to mitigate the formation of neutralizing anti-AAV capsid antibodies, or the POC Studies. On April 29, 2021, the Company was notified by AskBio that it intended to opt-out of development of the MMA indication. The feasibility study and license agreement with AskBio, or AskBio Collaboration Agreement, otherwise remains in effect. Consequently, the Company has assumed all rights to the MMA program and intends to continue to progress the SEL-302 program through clinical development. The Company filed an IND to conduct a Phase 1/2 clinical trial of its SEL-302 product candidate in pediatric patients with methylmalonic acidemia in the third quarter of 2021. On November 23, 2021, this trial was placed on clinical hold by the FDA, with questions specifically relating to chemistry, manufacturing and controls, or CMC, of the AAV vector. On March 9, 2022, the Company received a letter from the FDA indicating the clinical hold was removed and the trial may proceed.

The SEL-399 program combined an empty AAV capsid (EMC-101), which is an AAV capsid containing no transgene, with ImmTOR and was conducted in partnership with AskBio. Building on the preclinical data the Company has generated

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showing ImmTOR’s effect on mitigating or reducing the formation of neutralizing antibodies to AAV gene therapies, the Company completed a clinical trial of SEL-399 in healthy adult volunteers in Belgium. The goal of the SEL-399 clinical trial was to demonstrate the appropriate dose of ImmTOR in humans to mitigate the formation of antibodies to AAV capsids used in gene therapies. The Company believes this promising study in healthy volunteers provides support for the potential use of ImmTOR for the inhibition of neutralizing antibodies to AAV8 in gene therapy clinical trials.

The Company and AskBio will share responsibility for the research and development of products developed under the SEL-399 program collaboration. The parties will also share research, development, and commercialization costs equally for all collaboration products, but with a right of either party to opt out of certain products, and thereby no longer be required to share costs for such products. Each party will receive a percentage of net profits under the collaboration equal to the percentage of shared costs borne by such party in the development of such product. Pursuant to the AskBio Collaboration Agreement, AskBio is responsible for manufacturing the AAV capsids and AAV vectors and the Company is responsible for manufacturing ImmTOR.

The AskBio Collaboration Agreement is considered to be within the scope of ASC 808, as both parties are active participants and exposed to the risks and rewards of the collaborative activity. The Company evaluated the terms of the AskBio Collaboration Agreement and have identified the following promises in the arrangement (1) conducting research and development activities to develop and commercialize products under the collaboration, or the R&D Services, (2) granting a non-exclusive, non-transferable, royalty-free, fully paid up, worldwide license to certain intellectual property of the Company, or the IP Rights, for the purpose of performing the POC Studies, or the Research License, (3) granting an exclusive, nontransferable, worldwide license to the IP Rights for use in certain indications, or the Collaboration License, (4) providing manufactured supply of preclinical and clinical ImmTOR, or the Manufactured Supply, (5) participation on identified steering committees responsible for the oversight of the collaboration, or the JSC Participation, and (6) granting an exclusive option to obtain a license under the IP Rights to research, develop and commercialize Licensed Products. The Company determined that the R&D Services, Research License, Collaboration License, Manufactured Supply, and JSC Participation were not capable of being distinct, and therefore must be combined into a single performance obligation. Therefore, promises (1) through (5) identified above were combined into a single performance obligation. Furthermore, the Company evaluated the Option Agreement and determined that it does not provide AskBio with a material right under ASC 606 as the option was not priced at a discount. The Company noted that AskBio did not meet the definition of a customer within the scope of ASC 606 for any distinct performance obligations as the Company concluded that such items were not an output of the Company’s ordinary activities. As such, the Company determined that the entire arrangement would be accounted for within the scope of ASC 808. In accordance with ASC 808, collaboration expenses are recognized within research and development expense and selling, general and administrative expense on the Company’s condensed consolidated statements of operations.

Under certain collaborative arrangements, the Company is entitled to reimbursement of certain research and development expense. Activities under collaborative arrangements for which the Company is entitled to reimbursement are considered to be collaborative activities under the scope of ASC 808. For these units of account, the Company does not analogize to ASC 606 or recognize revenue. Rather, the Company analogizes to the guidance in ASC 730, which requires that reimbursements from counterparties be recognized as an offset to the related costs. In accordance with ASC 730, the Company records reimbursement payments received from collaborators as reductions to research and development expense.

For the three and nine months ended September 30, 2022, the Company recognized $0.2 million and $0.8 million, respectively, of collaboration expense under the AskBio Collaboration Agreement in which actual costs incurred by both parties approximate a 50% cost share. For the three and nine months ended September 30, 2021, the Company recognized $0.6 million and $2.3 million, respectively, of collaboration expense under the AskBio Collaboration Agreement.

Massachusetts Institute of Technology

In November 2008, the Company entered into an Exclusive Patent License Agreement, or the MIT License, with the Massachusetts Institute of Technology, or MIT, under which the Company received an exclusive royalty-bearing license to utilize patents held by MIT in exchange for upfront consideration and annual license maintenance fees. Such fees are expensed as incurred and have not been material to any period presented.

In June 2020, the Company entered into a Fifth Amendment, or the MIT Amendment, to the MIT License, which is effective as of May 15, 2020. Pursuant to the MIT Amendment, certain of the Company’s diligence obligations were extended. The extension included the obligation to commence a Phase 3 trial for a licensed product by the second quarter of 2021 or to file an IND (or equivalent) with the FDA or comparable European regulatory agency for a licensed product by the second quarter of 2023. Additionally, certain of the Company’s development and regulatory milestones and payments upon achievement of such milestones were adjusted.

As of September 30, 2022, and in connection with the execution of the Spark License Agreement, the Company has made contractual payments pursuant to the MIT License totaling $2.2 million for the sublicense granted to Spark and $0.4 million relative to the calculated premium paid by Spark for the equity investments made under the Spark Purchase Agreement. The Company made no additional payments during the three and nine months ended September 30, 2022.

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Shenyang Sunshine Pharmaceutical Co., Ltd

In May 2014, the Company entered into a license agreement, or the 3SBio License, with Shenyang Sunshine Pharmaceutical Co., Ltd., or 3SBio. The Company has paid to 3SBio an aggregate of $7.0 million in upfront and milestone-based payments under the 3SBio License as of September 30, 2022. The Company is required to make future payments to 3SBio contingent upon the occurrence of events related to the achievement of clinical and regulatory approval milestones of up to an aggregate of $15.0 million for products containing the Company’s ImmTOR platform.

15. Income Taxes

The Company provides for income taxes under ASC 740. Under ASC 740, the Company provides deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the Company’s financial statement carrying amounts and the tax bases of assets and liabilities using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse.

The Company has provided a full valuation allowance against its net deferred tax assets, as the Company believes that it is more likely than not that the deferred tax assets will not be realized.

Effective for tax years beginning on or after January 1, 2022, research and experimental expenditures under IRC Section 174 must be capitalized over five years when performed in the U.S. and 15 years for research and experimental expenditures performed outside of the U.S. As of September 30, 2022, the Company has performed a high-level analysis of the impact of this legislation enactment and determined the projected taxable loss position for 2022 does not result in income tax due. As of December 31, 2021, the Company has $51.1 million of federal net operating losses available, subject to an 80% limitation. The Company also has $1.2 million of federal tax credits, subject to a 75% limitation. The Company maintains its full valuation allowance.

Utilization of the net operating loss and research and development credit carryforwards may be subject to a substantial annual limitation under Section 382 and 383 of the Internal Revenue Code due to ownership change limitations that have occurred previously, or that could occur in the future. These ownership changes may limit the amount of net operating loss and research and development credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. As of December 31, 2021, the Company completed both a Section 382 and R&D tax credit study.

The statute of limitations for assessment by the Internal Revenue Service and Massachusetts tax authorities is open for tax years since inception as the Company claimed research tax credits on its 2020 tax return which remains open for examination for the 2020 year as well as for any year in which a credit has been claimed. The Company files income tax returns in the United States and Massachusetts. There are currently no federal, state or foreign audits in progress.

16. Defined Contribution Plan

The Company maintains a defined contribution plan, or the 401(k) Plan, under Section 401(k) of the Internal Revenue Code. The 401(k) Plan covers all employees who meet defined minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pretax basis. The 401(k) Plan provides for matching contributions on a portion of participant contributions pursuant to the 401(k) Plan’s matching formula. As of January 2022, all matching contributions vest ratably over 2 years and participant contributions vest immediately. Contributions by the Company totaled $0.1 million and less than $0.1 million during the three months ended September 30, 2022 and 2021, respectively, and $0.3 million and $0.1 million during the nine months ended September 30, 2022 and 2021, respectively.

17. Commitments and Contingencies

As of September 30, 2022, the Company was not a party to any litigation that could have a material adverse effect on the Company’s business, financial position, results of operations or cash flows.

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transaction. On April 12, 2021, the Court of Chancery in the State of Delaware granted a motion to stay the litigation pending a review by a Special Committee appointed by the Company’s Board of Directors. While the litigation was stayed, the parties reached an agreement in principle to settle the matter, and on March 18, 2022, they submitted a Stipulation and Agreement of Settlement and other documentation to the Court for its approval of the settlement. On August 1, 2022, the Court entered an Order and Final Judgment which dismissed the action, and all claims contained therein, with prejudice.

Other

As permitted under Delaware law, the Company indemnifies its directors and officers for certain events or occurrences while the director or officer is, or was, serving at the Company’s request in such capacity. The term of the indemnification is for the director’s or officer’s lifetime. The maximum potential amount of future payments the Company could be required to make is unlimited; however, the Company has directors’ and officers’ insurance coverage that limits its exposure and enables it to recover a portion of any future amounts paid. The Company also has indemnification arrangements under certain of its facility leases that require it to indemnify the landlord against certain costs, expenses, fines, suits, claims, demands, liabilities, and actions directly resulting from certain breaches, violations, or non-performance of any covenant or condition of the Company’s lease. The term of the indemnification is for the term of the related lease agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. To date, the Company had not experienced any material losses related to any of its indemnification obligations, and no material claims with respect thereto were outstanding.

The Company is a party in various other contractual disputes and potential claims arising in the ordinary course of business. The Company does not believe that the resolution of these matters will have a material adverse effect the Company’s business, financial position, results of operations or cash flows.

18. Subsequent Events

The Company has evaluated subsequent events through the date on which the consolidated financial statements were issued. The Company has concluded that no subsequent events have occurred that require disclosure to the consolidated financial statements.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes appearing elsewhere in this Quarterly Report and with our audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021, which we filed with the SEC on March 10, 2022. In addition, you should read the “Risk Factors” and “Information Regarding Forward-Looking Statements” sections of this Quarterly Report and our Annual Report on Form 10-K for the year ended December 31, 2021 for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We are a clinical-stage biopharmaceutical company. Our ImmTOR® platform encapsulates rapamycin, also known as sirolimus, an FDA approved immunomodulator, in biodegradable nanoparticles. ImmTOR is designed to induce antigen-specific immune tolerance.

We continually seek to enhance ImmTOR. In recent preclinical studies we have conducted, we have observed that ImmTOR may have synergistic activity with interleukin-2, or IL-2, molecules that have been engineered to be selective for regulatory T cells, or Tregs. Treg-selective IL-2 molecules have been shown to transiently expand all pre-existing Tregs in preclinical and clinical studies conducted by others. We have observed in preclinical studies that the combination of ImmTOR, a Treg-selective IL-2 molecule and an antigen, exhibited substantial synergistic activity in inducing and expanding antigen-specific Tregs beyond ImmTOR alone with evidence of enhanced durability of immune tolerance and the potential for ImmTOR dose sparing. This combination of ImmTOR with a Treg selective IL-2 molecule represents an evolution of the ImmTOR platform, which we call ImmTOR-IL™. We believe this combination has the potential to be a “first-in-class” antigen specific IL-2 therapy for autoimmune disease. We believe ImmTOR and ImmTOR-IL have the potential to enhance both the efficacy and safety of biologic therapies (including gene therapies), improve product candidates under development, and enable novel therapeutic modalities in autoimmune disease.

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Our Product Candidates

Our ImmTOR platform has a broad range of potential applications. Our product development strategy is built on the following three distinct pillars.

Biologic therapies. Biologic therapies are a class of biologic drugs frequently used to treat rare diseases. Through our analysis of biologic drugs, including in our preclinical studies, we have observed that enzymes foreign to the human body, such as enzymes derived from microbes or replacement enzymes in the case of patients that are deficient in the specific enzyme, are especially prone to causing undesired immune responses. Our partnered product candidate, SEL-212, which is currently in Phase 3 clinical development, consists of ImmTOR co-administered with pegadricase, a pegylated uricase enzyme of fungal origin. This is an example of an immunogenic enzyme that we are combining with ImmTOR with the intention of improving the enzyme’s efficacy and safety. We believe that ImmTOR has the potential to enable and expand the use of enzymes derived from microbial sources, such as bacterial immunoglobulin A, or IgA, protease for the treatment of IgA nephropathy and bacterial IgG protease, or Xork, for the treatment of IgG-mediated autoimmune disease flares.

Gene therapies. We believe gene therapies have the potential to address key unmet medical needs for many rare genetic diseases, but undesired immune responses to the viral vectors used for gene replacement, augmentation and editing may be restricting their broader use. AAV immunogenicity and AAV toxicity represent two major challenges for the gene therapy field; in many cases these two issues are inextricably linked. Immunogenicity of AAV vectors is thought to cause or exacerbate many of the adverse events associated with AAV gene therapy. Induction of acute inflammation and capsid-specific CD8 T cells by AAV gene therapy is thought to contribute to observations of hepatotoxicity, which has been associated with loss of transgene expression. The formation of neutralizing antibodies against AAV after initial treatment with AAV mediated gene therapies effectively prevents the possibility of re-dosing in patients who may benefit from additional doses due to either the failure to achieve therapeutic benefit or loss of transgene expression over time. Additionally, a significant number of patients who would benefit from treatment by gene therapies are ineligible due to pre-existing immunity to the AAV vectors from a natural infection. This preexisting immunity could be addressed through an IgG protease pre-treatment to open a dosing window for AAV gene therapies. We believe that the combination of ImmTOR and Xork could simultaneously address the two key issues facing the AAV gene therapy modality and make them more accessible while also making them safer and more durable.

Tolerogenic Therapies for Autoimmune Disease: Autoimmune diseases are caused by a breakdown in natural tolerance to our own self-antigens. With over 24 million Americans afflicted with autoimmune diseases, there is a large unmet medical need. As the ImmTOR platform is designed to induce or expand antigen specific T regulatory cells, we believe the ImmTOR platform has the potential to treat autoimmune diseases by restoring self-tolerance to auto-antigens.

In our preclinical studies, we observed that ImmTOR combined with a Treg-selective IL-2 molecule exhibited substantial synergistic activity in increasing the percentage and durability of total Treg expansion in the spleen. We believe that this combination has the potential to be a best-in-class therapy in diseases where expansion of total Treg may prove beneficial. This antigen specificity differentiates ImmTOR-IL from other IL-2 molecule approaches which do not show an antigen specific T-cell expansion. Thus, we believe that not only is ImmTOR-IL a potentially best in class IL-2 where generalized T cell expansion can be beneficial, but also a “first in class” antigen specific IL-2 therapy.

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Below is a summary of our ongoing discovery, research, and development programs:


Program	Phase of Development	Anticipated Next Steps	Commercial Rights
Biologic Therapies
SEL-212 (Chronic Refractory Gout)	Phase 3 clinical trials (DISSOLVE I / DISSOLVE II)	Top-line data Q1 2023	Sobi
IgA nephropathy	Preclinical	IND enabling studies, 2022	Selecta
Gene Therapies
SEL-302 (Methylmalonic acidemia (MMA))	IND filed / Phase 1	Study commencement, Q4 2022	Selecta
SEL-313 (Ornithine Transcarbamylase (OTC) Deficiency)	IND-enabling	Currently paused	Selecta
SEL-018 (IgG protease (Xork))	Preclinical	IND enabling studies, 2022	Selecta
Pompe disease	Preclinical	Plans to be announced by our collaborator	AskBio
Duchenne muscular dystrophy (DMD)	Preclinical	Plans to be announced by our collaborator	Sarepta
Limb-girdle muscular dystrophy (LGMD)	Preclinical	Plans to be announced by our collaborator	Sarepta
Two indications for lysosomal storage disorders	Preclinical	Plans to be announced by our collaborator	Takeda
Tolerogenic Therapies for Autoimmune Disease
Proprietary IL-2 receptor agonist	Preclinical		Selecta
Primary biliary cholangitis (PBC)	Preclinical		Selecta

Biologic Therapies – Chronic Refractory Gout

SEL-212 consists of ImmTOR co-administered with pegadricase. Our pegadricase consists of a yeast-derived uricase modified with polyethylene glycol moieties. Uricase is an enzyme endogenous to all mammals, except for humans and certain primates, which converts uric acid to the more soluble metabolite, allantoin. There is a natural limit to the amount of uric acid that can be excreted by the kidneys, which decreases with age and can be reduced by some medications. By converting uric acid to allantoin, uricase provides an additional way for the body to reduce uric acid.

Biologic Therapies – IgA Nephropathy

The second indication in our biologic therapies program is IgA nephropathy, an autoimmune kidney disease that occurs when immune complexes of a subclass of antibodies called immunoglobulin A1, or IgA1, accumulates in the kidneys. Previous studies in animal models conducted at independent laboratories demonstrated that bacterial IgA protease has the potential to remove injurious IgA immune complexes from kidneys and reduce inflammation, fibrosis, and hematuria. We believe these results suggest that IgA protease can potentially decrease the rate of disease progression and possibly even reverse the disease. The barrier to IgA protease commercialization has been the bacterial origin of the protease, which makes it highly immunogenic. Based on the learnings of SEL-212, we believe the combination of ImmTOR with an IgA protease will enable repeated dosing to treat IgA nephropathy.

Currently, Ginkgo Bioworks Holdings, Inc. and IGAN Biosciences, Inc. are, independently and under separate agreements, working to identify a suitable IgA protease candidate for our IgA nephropathy program.

Gene Therapies – Methylmalonic Acidemia

Our lead therapeutic gene therapy program, SEL-302, is intended to use ImmTOR to enhance the treatment of methylmalonic acidemia, or MMA, an inherited disorder in which the body is unable to process certain proteins and fats (lipids) properly. This program was previously being conducted under our collaboration with AskBio. In October and November 2020, we received rare pediatric disease designation and orphan drug designation, respectively, from the FDA for MMA-101, for the

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treatment of MMA due to methylmalonyl-CoA mutase, or MMUT gene mutations. See “⸺Licenses and Collaborations⸺AskBio” for more information. In April 2021, we were notified by AskBio that it intended to opt-out of development of the MMA indication. The feasibility study and license agreement with AskBio, or AskBio Collaboration Agreement, otherwise remains in effect. We filed an IND to conduct a Phase 1/2 clinical trial of our SEL-302 product candidate in pediatric patients with methylmalonic acidemia in the third quarter of 2021. On November 23, 2021, this trial was placed on clinical hold by the FDA, with questions specifically relating to CMC of the AAV vector. On February 9, 2022, we submitted a written response to the FDA to answer its questions. On March 9, 2022, we received a letter from the FDA indicating the clinical hold was removed and the trial may proceed. ImmTOR manufacturing, controlled by us, continues to proceed in accordance with our expectations and we have not observed any impact to any of our ImmTOR programs.

Gene Therapies – OTC Deficiency

Our second proprietary gene therapy product candidate, SEL-313, is being developed to treat ornithine transcarbamylase, or OTC deficiency, and is currently in preclinical development. OTC deficiency is a rare genetic disorder that causes ammonia to accumulate in the blood due to mutations in the OTC gene, which is critical for proper function of the urea cycle. The most severe form of the disorder presents within the first few days of life. Severe symptoms include inability to control body temperature and breathing rate, seizures, coma, developmental delays and intellectual disability. Less severe forms of the disorder are characterized by delirium, erratic behavior, aversion to high protein foods, vomiting and seizures. The development of this program is currently paused.

Gene Therapies – IgG Protease (Xork)

We have exclusively licensed Xork, an IgG-specific protease from Genovis, an enzyme technology company. We plan to develop Xork, either alone or in combination with our ImmTOR platform, with the goal of enabling the dosing of transformative gene therapies in patients with pre-existing AAV immunity due to natural exposures to AAV viruses. Currently, significant proportions of the potential patient populations for many gene therapy trials are ineligible for treatment by AAV mediated gene therapies due to pre-existing antibodies which limits transduction efficiency of the therapy and could trigger potentially dangerous immune responses. IgG proteases are derived from bacteria. Xork exhibits low cross-reactivity to antibodies in normal human serum and is differentiated from IgG proteases derived from Streptococcus pyogenes, a common human pathogen.

Tolerogenic Therapies for Autoimmune Disease – ImmTOR & ImmTOR-IL

We intend to apply our ImmTOR platform to treat autoimmune diseases. In preclinical studies, we have observed ImmTOR’s ability to induce antigen-specific T regulatory cells. We believe that ImmTOR, in combination with an autoantigen of interest, could create self-tolerance to auto-antigens and thus be a novel approach to the treatment of autoimmune diseases.

Additionally, in preclinical studies we have observed ImmTOR, in combination with IL-2 molecules, expanding T-regulatory cells beyond IL-2 alone and we intend to pursue a combination of ImmTOR and IL-2 (ImmTOR-IL) in diseases where general T cell expansion has shown a therapeutic benefit. Additionally, we have observed in preclinical studies that the combination of ImmTOR, a Treg-selective IL-2 molecule and an antigen, exhibited substantial synergistic activity in inducing and expanding antigen specific regulatory T cells when ImmTOR and IL-2 is combined with an antigen of interest. We intend to pursue and develop treatments for autoimmune diseases with well-defined antigens using either ImmTOR or ImmTOR-IL.

Cyrus Biotechnology, Inc., a collaboration partner, is engineering a proprietary IL-2 protein to combine with the ImmTOR platform to potentially mitigate unwanted immune responses by reducing the inherent immunogenicity of the protein while also promoting immune tolerance. The IL-2 pathway influences critical aspects of both immune stimulation and immune regulation, through the development and expansion of Treg cells. These Treg cells are a specialized subpopulation of T cells involved in suppressing certain immune responses and maintaining the body’s self-tolerance. In preclinical studies investigating the effects of ImmTOR in combination with a Treg-selective IL-2 molecule we have observed a substantial synergistic activity in increasing the percentage and durability of Treg expansion in the spleen.

Our lead autoimmune diseases indication is PBC, a T cell driven autoimmune disease that causes progressive destruction of the bile ducts. Patients with PBC are in need of a highly targeted, liver-directed approach to treating the root cause of the disorder. We believe PBC has a well-defined target antigen, significant unmet medical need, and is well suited to the application of our ImmTOR immune tolerance platform, as preclinical data suggest that ImmTOR has the potential to enhance the tolerogenic environment in the liver and provide a hepatoprotective benefit.

Licenses and Collaborations

In-licenses

Ginkgo Bioworks Holdings, Inc.

In October 2021, we entered into a Collaboration and License Agreement, or the First Ginkgo Agreement, with Ginkgo Bioworks, Inc. Under the First Ginkgo Agreement, Ginkgo will design next generation IgA proteases with potentially

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transformative therapeutic potential. In return, Ginkgo is eligible to earn both upfront research and development fees and milestone payments, including certain milestone payments in the form of our common stock, clinical and commercial milestone payments of up to $85 million in cash, as well as downstream value in the form of royalties on sales. In June 2022, we paid $0.5 million and issued 892,857 shares of our common stock valued at $1.0 million to Ginkgo for the achievement of certain preclinical milestones.

In January 2022, we entered into a Collaboration and License Agreement, or the Second Ginkgo Agreement, with Ginkgo. Under the Second Ginkgo Agreement, we will engage with Ginkgo to design novel AAV capsids with potentially improved transduction, enhanced tissue tropism and reduced immunogenicity. In return, Ginkgo is eligible to earn both upfront research and development fees and milestone payments, including certain milestone payments in the form of our common stock, clinical and commercial milestone payments of up to $207 million in cash for each of a specified number of products which have the potential to total, in the aggregate, up to $1.1 billion. Ginkgo is also entitled to potential further downstream value in the form of royalties on sales.

Genovis AB (publ.)

In October 2021, we entered into a strategic licensing agreement with Genovis, or the Genovis Agreement. Under the Genovis Agreement, we paid to Genovis an upfront payment in exchange for an exclusive license to Genovis’ Xork enzyme technology for all therapeutic uses in humans, excluding research, preclinical, diagnostic, and other potential non-therapeutic applications of the enzyme. Genovis is eligible to earn development and sales-based milestones, as well as tiered royalties on worldwide sales in the low double digits.

Cyrus Biotechnology, Inc.

In September 2021, we entered into a Collaboration and License Agreement with Cyrus, or the Cyrus Agreement, pursuant to which Cyrus agreed to grant us an exclusive, worldwide license to certain intellectual property in order to form a protein engineering collaboration combining the ImmTOR platform with Cyrus’ engineered protein therapeutics. We expect that novel engineered protein therapeutic candidates from the partnership will be used to expand our proprietary pipeline and further bolster the ImmTOR platform. In return for the licensed intellectual property, we made an upfront payment and will pay certain discovery, development, and sales-based milestones which could potentially total up to approximately $1.5 billion across multiple programs.

In June 2022, we mutually agreed with Cyrus that the preclinical key in-vitro success milestone had been achieved.

IGAN Biosciences, Inc.

In October 2020, we entered into an Option and License Agreement, or the IGAN Agreement, with IGAN Biosciences, Inc., or IGAN. Pursuant to the IGAN Agreement, IGAN granted us an exclusive license to research, evaluate, and conduct preclinical development activities on IGAN’s proprietary IgA proteases. We had an initial option term of 24 months during which we can elect to obtain an exclusive license to further develop and commercialize the product to treat all IgA-mediated diseases, including IgA nephropathy, Linear IgA bullous dermatitis, IgA pemphigus, and Henoch-Schonlein purpura.

Upon execution of the IGAN Agreement, we paid IGAN a one-time upfront payment of $0.5 million and we would owe additional payments to IGAN if we were to opt-in to an exclusive license agreement, as well as upon the achievement of certain development and sales milestones. During the option term, we may terminate the IGAN Agreement immediately for any reason upon written notice to IGAN. If we opt-in to an exclusive license agreement, we may terminate the IGAN Agreement upon 120 days’ written notice.

On May 25, 2022, we entered into Amendment No. 1 to the Option and License Agreement, or the First IGAN Amendment, with IGAN. The First IGAN Amendment provided an extension to the option term of 24 months from the date of the First IGAN Amendment.

Out-licenses

Takeda Pharmaceuticals USA, Inc.

In October 2021, we entered into a strategic licensing agreement with Takeda, or the Takeda Agreement. Under the Takeda Agreement, we granted Takeda an exclusive license to our ImmTOR technology initially for two specified disease indications within the field of lysosomal storage disorders. Under the terms of the Takeda Agreement, we received an upfront payment and are entitled to receive up to $1.124 billion in future additional payments over the course of the partnership that are contingent on the achievement of development or commercial milestones or Takeda’s election to continue its activities at specified development stages. We are also eligible for tiered royalties on future commercial sales of any licensed products.

Swedish Orphan Biovitrum AB (publ.)

In June 2020, we announced that we had entered into the Sobi License, pursuant to which we agreed to grant Sobi an exclusive, worldwide (except as to Greater China) license to develop, manufacture and commercialize SEL-212, which is

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currently in development for the treatment of chronic refractory gout. In September 2020, pursuant to the Sobi License, Sobi paid us a one-time, upfront payment of $75 million. Sobi has also agreed to make milestone payments totaling up to $630 million to us upon the achievement of various development and regulatory milestones and sales thresholds for annual net sales of SEL-212, and tiered royalty payments ranging from the low double digits on the lowest sales tier to the high teens on the highest sales tier.

Additionally, Sobi purchased an aggregate of 5,416,390 shares of our common stock at a purchase price of $4.6156 per share for aggregate gross proceeds of $25 million, which we refer to as the Sobi Private Placement.

Under the Sobi License, we will have operational oversight of the Phase 3 DISSOLVE clinical program of SEL-212 (DISSOLVE I and DISSOLVE II) that commenced in September 2020, at Sobi’s expense.

In July 2022, we received a payment of $10.0 million for the completion of enrollment of the DISSOLVE II trial.

Sarepta Therapeutics, Inc.

In June 2020, we entered into a research license and option agreement with Sarepta, or the Sarepta Agreement. Pursuant to the agreement, we granted Sarepta a license to research and evaluate ImmTOR in combination with Sarepta’s AAV gene therapy or gene editing technology, using viral or non-viral delivery, or the Sarepta Product, to treat Duchenne Muscular Dystrophy and certain Limb-Girdle Muscular Dystrophy subtypes, or the Sarepta Indications. Sarepta will have an option term of 24 months during which it can opt-in to obtain an exclusive license to further develop and commercialize the Sarepta Product to treat at least one Sarepta Indication, with a potential to extend the option term if Sarepta pays an additional fee to us. Sarepta made an upfront payment to us upon signing of the agreement, and we are eligible to receive additional payments under the option term. If Sarepta opts-in to an exclusive license agreement, we could receive option exercise payments per indication and we would be entitled to significant development and commercial milestone payments and tiered royalties ranging from the mid-to-high single digits based on net sales.

In June 2021, we received a payment of $3.0 million for the achievement of certain preclinical milestones. In August 2022, we received a payment of $2.0 million in exchange for a nine-month extension to Sarepta’s options to both Duchenne muscular dystrophy and certain limb-girdle muscular dystrophies and a payment of $4.0 million for the achievement of certain non-clinical milestones

Asklepios Biopharmaceutical, Inc.

Feasibility Study and License Agreement

In August 2019, we entered into a feasibility study and license agreement with AskBio, or the AskBio Collaboration Agreement. The initial product candidate being developed under this collaboration is gene therapy for MMA which can cause severe developmental defects and premature death as a result of an accumulation of toxic metabolites. We previously conducted preclinical studies for this product candidate and will leverage that previous work within the collaboration. In April 2021, we were notified by AskBio that it intended to opt-out of development of the MMA indication. The AskBio Collaboration Agreement otherwise remains in effect.

License Agreement for Pompe Disease

In December 2019, we entered into the AskBio License Agreement which provides AskBio with exclusive worldwide rights to our ImmTOR platform to research, develop and commercialize certain AAV-gene therapy products targeting the GAA gene, or derivatives thereof, to treat Pompe Disease. Pursuant to the AskBio License Agreement, AskBio paid us upfront fees of an aggregate of $7.0 million. Also pursuant to the AskBio License Agreement, AskBio agreed to make additional payments to us based on the achievement of certain development and commercial milestones of up to an aggregate of $237.0 million. AskBio will also be obligated to make tiered royalty payments to us at percentages in the mid-to-high single digits based on achievement of certain sales milestones.

We will supply AskBio with our ImmTOR platform and AskBio will be responsible for all preclinical, clinical and commercial manufacture and supply of products licensed under the AskBio License Agreement (other than ImmTOR) and carry out all other activities related to the research, development, and commercialization of such products at its sole expense, including all regulatory activities related thereto. The AskBio License Agreement contains other customary terms and conditions, including representations and warranties, covenants, termination, and indemnification obligations in favor of each party.

Impact of Global Events

COVID-19

We are closely monitoring how the COVID-19 pandemic is affecting our employees, business, supply chain, preclinical studies and clinical trials. In response to the spread of COVID-19, we have continued to have our administrative employees work outside of our offices to limit the total number of staff in our offices. We began encouraging more onsite employee presence in April 2022. Disruptions caused by the COVID-19 pandemic may result in difficulties or delays in initiating,

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enrolling, conducting or completing our planned and ongoing clinical trials, and the incurrence of unforeseen costs as a result of supply chain, preclinical study or clinical trial delays.

While the COVID-19 pandemic has not had a material impact on our clinical programs as of the date of this Quarterly Report, it could have an impact on our ability to complete the Phase 3 DISSOLVE clinical program of SEL-212, as the pandemic presents the potential inability of certain patients to complete the trial due to suffering from COVID-19, our ability to commence preclinical studies and clinical trials of our IgA nephropathy, gene therapy, and autoimmune disease programs, and our ability to obtain supply of both active drug substances and finished drug product as well as efficient execution of the overall supply chain for SEL-212 and our other programs.

At this time, any impact of COVID-19 on our business, revenues, results of operations and financial condition will largely depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as, for COVID-19, the duration of the pandemic, the emergence of new virus variants, travel restrictions and social distancing in the United States and other countries, business closures, disruptions, mandated stay at home orders or lockdowns, supply chain disruptions, the ultimate impact on financial markets and the global economy, and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.

Ukraine

We are also closely monitoring the ongoing and rapidly evolving geopolitical situation in Ukraine and Russia, and we have proactively undertaken mitigation steps to prioritize the safety of our patients and investigators, as well as address any potential disruptions. We have reserved existing clinical trial supplies in these countries for those already enrolled in the DISSOLVE II trial. In agreement with our study partner, Sobi, we have increased enrollment in DISSOLVE II to 153 subjects to replace subjects enrolled in Russia and Ukraine who may be lost due to operational or other issues arising from instability in the region. As of the filing of this Quarterly Report, we expect to complete the DISSOLVE II trial and report topline results in the first quarter of 2023.

Financial Operations

To date, we have financed our operations primarily through public offerings and private placements of our securities, funding received from research grants, collaboration and license arrangements and our credit facility. We do not have any products approved for sale and have not generated any product sales.

Since inception, we have incurred significant operating losses. We incurred a net income of $29.5 million and net loss of $37.9 million for the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022, we had an accumulated deficit of $400.8 million. We expect to continue to incur significant expenses and operating losses for at least the next several years as we:

•continue the research and development of our other product candidates as well as product candidates that we may be developing jointly with collaboration partners;

•seek to enhance our ImmTOR platform and discover and develop additional product candidates;

•seek to enter into collaboration, licensing and other agreements, including, but not limited to research and development, and/or commercialization agreements;

•seek regulatory approvals for any product candidates that successfully complete clinical trials;

•potentially establish a sales, marketing and distribution infrastructure and scales-up external manufacturing capabilities to commercialize any products for which we may obtain regulatory approval;

•maintain, expand and protect our intellectual property portfolio, including through licensing arrangements; and

•add clinical, scientific, operational, financial and management information systems and personnel, including personnel to support our product development and potential future commercialization efforts and to support our operations as a public company.

Until we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, and license and collaboration agreements. We may be unable to raise capital when needed or on reasonable terms, if at all, which would force us to delay, limit, reduce or terminate our product development or future commercialization efforts. We will need to generate significant revenues to achieve profitability, and we may never do so.

We believe that our existing cash, cash equivalents, restricted cash, and marketable securities as of September 30, 2022, combined with the receivable of $6.9 million from Sobi, will enable us to fund our operating expenses and capital expenditure requirements into mid-2024. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

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The consolidated financial information presented below includes the accounts of Selecta Biosciences, Inc. and our wholly owned subsidiaries, Selecta (RUS) LLC, a Russian limited liability company, or Selecta (RUS), and Selecta Biosciences Security Corporation, a Massachusetts securities corporation. All intercompany accounts and transactions have been eliminated.

Collaboration and license revenue

To date, we have not generated any revenue from product sales. Our revenue consists primarily of collaboration and license revenue, which includes amounts recognized related to upfront and milestone payments for research and development funding under collaboration and license agreements. We expect that any revenue we generate will fluctuate from quarter to quarter because of the timing and amounts of fees, research and development reimbursements and other payments from collaborators. We do not expect to generate revenue from product sales for at least the next several years. If we or our collaborators fail to complete the development of our product candidates in a timely manner or fail to obtain regulatory approval as needed, our ability to generate future revenue will be harmed, and will affect the results of our operations and financial position. For a further description of the agreements underlying our collaboration and license revenue, see Notes 12 and 14 to our consolidated financial statements included elsewhere in this Quarterly Report.

Research and development

Our research and development expenses consist of external research and development costs, which we track on a program-by-program basis and primarily include CMO-related costs, fees paid to CROs and internal research and development costs, which are primarily compensation expenses for our research and development employees, lab supplies, analytical testing, allocated overhead costs and other related expenses. Our internal research and development costs are often devoted to expanding our programs and are not necessarily allocable to a specific target.

We have incurred a total of $417.4 million in research and development expenses from inception through September 30, 2022, with a majority of the expenses being spent on the development of SEL-212 and the remainder being spent on our various discovery and preclinical stage product candidate programs and the general expansion of our technology platform.

We expense research and development costs as incurred. Conducting a significant amount of research and development is central to our business model. Product candidates in clinical development generally have higher development costs than those in earlier stages of development, primarily due to the size, duration and cost of clinical trials. The successful development of our clinical and preclinical product candidates is highly uncertain. Clinical development timelines, the probability of success and development costs can differ materially from our expectations. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those which we currently expect will be required for the completion of clinical development of a product candidate, or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time to complete any clinical development.

In June 2020, we and Sobi entered into the Sobi License. Pursuant to the Sobi License, clinical trial costs incurred to complete development of SEL-212, including but not limited to costs incurred while conducting and completing the Phase 3 DISSOLVE trials, will be reimbursed by Sobi. These costs, when reimbursed, will be recognized as revenue consistent with the revenue recognition methodology disclosed in Note 12 to our unaudited consolidated financial statements included elsewhere in this Quarterly Report. The reimbursable costs exclude any costs of additional development activities required that are related to ImmTOR and that are unrelated to SEL-212.

We believe that our existing cash, cash equivalents, restricted cash, and marketable securities as of September 30, 2022, combined with the receivable of $6.9 million from Sobi, will enable us to fund our current planned operations into mid-2024, though we may realize additional cash resources upon the achievement of certain contingent collaboration milestones or it may pursue additional cash resources through public or private equity or debt financings or by establishing collaborations with other companies. Management’s expectations with respect to our ability to fund current and long-term planned operations are based on estimates that are subject to risks and uncertainties. If actual results are different from management’s estimates, we may need to seek additional strategic or financing opportunities sooner than would otherwise be expected. However, there is no guarantee that any collaboration milestones will be achieved or that any of these strategic or financing opportunities will be executed on favorable terms, and some could be dilutive to existing stockholders. If we are unable to obtain additional funding on a timely basis, we may be forced to significantly curtail, delay, or discontinue one or more of its planned research or development programs or be unable to expand our operations, meet long-term obligations or otherwise capitalize on our commercialization of our product candidates. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

General and administrative

General and administrative expenses consist primarily of salaries and related benefits, including stock-based compensation, related to our executive, finance, business development and support functions. Other general and administrative expenses include facility-related costs not otherwise allocated to research and development expenses, travel expenses for our general and administrative personnel and professional fees for auditing, tax and corporate legal services, including intellectual property-related legal services.

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Investment income

Investment income consists primarily of interest income earned on our cash, cash equivalents and marketable securities.

Interest expense

Interest expense consists of interest expense on amounts borrowed under our credit facilities.

Other income (expense)

Other income (expense) was de minimis during the three and nine months ended September 30, 2022 and 2021.

Change in fair value of warrant liabilities

Common warrants classified as liabilities are remeasured at fair value, utilizing a Black-Scholes valuation methodology, quarterly with the change in fair value recognized as a component of earnings.

Foreign currency transaction gain (loss)

The functional currency of our Russian subsidiary is the Russian ruble. In addition to holding cash denominated in Russian rubles, our Russian bank accounts also hold cash balances denominated in U.S. dollars to facilitate payments to be settled in U.S. dollars or other currencies. As of September 30, 2022 and December 31, 2021, we maintained cash of $0.2 million and $0.3 million, respectively, in Russian banks, all of which was denominated in U.S. dollars. The amounts denominated in U.S. dollars and used in transacting the day-to-day operations of our Russian subsidiary are subject to transaction gains and losses, which are reported as incurred.

Results of Operations

Comparison of the Three Months Ended September 30, 2022 and 2021

Collaboration and license revenue

The following is a comparison of collaboration and license revenue for the three months ended September 30, 2022 and 2021 (in thousands, except percentages):


	Three Months Ended September 30,				Increase
	2022		2021		(decrease)

Collaboration and license revenue	$	20,710	$	24,427	$	(3,717)	(15)	%

During the three months ended September 30, 2022, collaboration revenue was $20.7 million, compared to $24.4 million in 2021. During the three months ended September 30, 2022 and 2021, we recognized $20.7 million and $24.3 million, respectively, under the license agreement with Sobi resulting from the shipment of clinical supply and the reimbursement of costs incurred for the Phase 3 DISSOLVE clinical program.

Research and development

The following is a comparison of research and development expenses for the three months ended September 30, 2022 and 2021 (in thousands, except percentages):


	Three Months Ended September 30,				Increase
	2022		2021			(decrease)
SEL-212	$	6,032	$	10,231		$	(4,199)	(41)	%
AskBio Empty Capsid collaboration (SEL-399)	72		522			(450)		(86)	%
Preclinical stage product candidate programs	3,620		4,180			(560)		(13)	%
Other internal research and development expenses	6,815		6,018			797		13	%
Total research and development expenses	$	16,539	$	20,951		$	(4,412)	(21)	%

Note: Certain prior period expenses have been reclassified to conform to current year presentation.

During the three months ended September 30, 2022, our research and development expenses decreased by $4.4 million, or 21%, as compared to 2021. The decrease in cost was primarily the result of a decrease in expenses incurred for the SEL-212 clinical program, preclinical programs, and the AskBio collaboration.

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General and administrative

The following is a comparison of general and administrative expenses for the three months ended September 30, 2022 and 2021 (in thousands, except percentages):


	Three Months Ended September 30,				Increase
	2022		2021		(decrease)

General and administrative	$	5,770	$	5,445	$	325	6	%

During the three months ended September 30, 2022, our general and administrative expenses increased by $0.3 million, or 6%, as compared to 2021. The increase in costs was primarily the result of expenses incurred for stock compensation and personnel expenses.

Investment income

Investment income was $0.7 million and less than $0.1 million for the three months ended September 30, 2022 and 2021, respectively. The increase in investment income was due to increased investment and higher interest rates.

Foreign currency transaction gain (loss)

We recognized less than $0.1 million foreign currency losses during each of the three months ended September 30, 2022 and 2021.

Interest expense

Interest expense was $0.8 million and $0.7 million for the three months ended September 30, 2022 and 2021, respectively, representing interest expense and amortization of the carrying costs of our credit facilities.

Change in fair value of warrant liabilities

For the three months ended September 30, 2022, we recognized a $6.5 million charge from the increase in the fair value of warrant liabilities utilizing the Black-Scholes valuation methodology. The increase in value was primarily driven by an increase in the Company’s share price and the discount rate. For the three months ended September 30, 2021, we recognized $0.6 million of income from the decrease in the fair value of warrant liabilities primarily driven by a decrease in the Company’s share price.

Other income (expense)

Other income (expense) was de minimis for each of the three months ended September 30, 2022 and 2021.

Income taxes

For the three months ended September 30, 2022, we recognized $0.3 million in income tax benefit primarily related to the abatement of penalties and interest. For the three months ended September 30, 2021, we recognized $15.8 million of expense for the income taxes primarily related to the license agreement with Sobi upon the Company’s election to opt out of the installment sale method of taxation. For income tax purposes, the transfer of trademark and product rights is treated as a sale and the net proceeds from the sale are taxed under the default installment method as cash is received by the Company. During the three and nine-month periods ended September 30, 2021, the Company completed an analysis of future tax obligations under the default installment sale method versus making a timely filed election on its 2020 tax return due October 15, 2021 to elect out of the installment sale method for income tax purposes. As a result, the Company elected out of the default installment sale treatment with the filing of its tax return. In the elect out method, the Company was initially taxed based upon the estimated fair value of all present and future proceeds from the sale and the Company utilized all of its available net operating losses and income tax credits, which served to reduce the federal and state tax liability. As the Company recognizes future revenue under the Sobi license for US GAAP purposes, the Company will exclude revenue up to the originally estimated fair value that was previously taxed from taxable income. We previously disclosed that the Company had prepaid all taxes related to future Sobi License revenue streams as a result of the Company’s election to opt out of the installment sale method on our 2020 tax return. However, based on our updated analysis, we will be obligated to pay taxes related to any future Sobi License revenue received above the then estimated fair value of all present and future proceeds from the sale of SEL-212 when received, but such amounts will not be subject to interest and penalties.

Net income (loss)

Net loss for the three months ended September 30, 2022 was $7.9 million compared to $17.9 million for the three months ended September 30, 2021.

Comparison of the Nine Months Ended September 30, 2022 and 2021

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Collaboration and license revenue

The following is a comparison of collaboration and license revenue for the nine months ended September 30, 2022 and 2021 (in thousands, except percentages):


	Nine Months Ended September 30,				Increase
	2022		2021		(decrease)


Collaboration revenue	$	93,982	$	55,140	$	38,842	70	%

During the nine months ended September 30, 2022 and 2021 we recognized $73.6 million and $54.8 million under the license agreement with Sobi resulting from the shipment of clinical supply and the reimbursement of costs incurred for the Phase 3 DISSOLVE clinical program, all of which began in July 2020. Additionally, during the nine months ended September 30, 2022, $10.2 million was recognized under the Sarepta Agreement, $9.2 million was recognized upon the mutual termination of the Spark License Agreement, and $1.0 million was recognized under the Takeda Agreement.

Research and development

The following is a comparison of research and development expenses for the nine months ended September 30, 2022 and 2021 (in thousands, except percentages):


	Nine Months Ended September 30,	Increase
		2022		2021		(decrease)
SEL-212		$	21,476	$	22,911	$	(1,435)	(6)	%
AskBio Empty Capsid collaboration		568		1,254		(686)		(55)	%
Preclinical stage product candidate programs		10,595		8,017		2,578		32	%
Other internal research and development expenses		20,771		16,236		4,535		28	%
Total research and development expenses		$	53,410	$	48,418	$	4,992	10	%

Note: Certain prior period expenses have been reclassified to conform to current year presentation.

During the nine months ended September 30, 2022, our research and development expenses increased by $5.0 million, or 10%, as compared to 2021. The increase in cost was primarily the result of expenses incurred for the preclinical programs, contract license and milestone payments, increased personnel expenses, and stock compensation expense.

General and administrative

The following is a comparison of general and administrative expenses for the nine months ended September 30, 2022 and 2021 (in thousands, except percentages):


	Nine Months Ended September 30,				Increase
	2022		2021		(decrease)

General and administrative	$	17,538	$	15,397	$	2,141	14	%

During the nine months ended September 30, 2022, our general and administrative expenses increased by $2.1 million, or 14%, as compared to 2021. The increase in costs was primarily driven by expenses incurred for stock compensation and increased personnel expenses.

Investment income

Investment income was $0.9 million and less than $0.1 million, respectively during the nine months ended September 30, 2022 as compared to 2021. The increase in investment income was due to increased investments and higher interest rates.

Foreign currency transaction gain (loss)

We recognized $0.1 million and less than $0.1 million in foreign currency fluctuations during the nine months ended September 30, 2022 and 2021, respectively.

Interest expense

Interest expense was $2.2 million and $2.1 million for the nine months ended September 30, 2022 and 2021, respectively, representing interest expense and amortization of the carrying costs of our credit facilities.

Change in fair value of warrant liabilities

For the nine months ended September 30, 2022, we recognized $7.3 million of income for the decrease in the fair value of warrant liabilities utilizing a Black-Scholes valuation methodology. The decrease in value was primarily driven by a decrease in

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the Company’s share price. For the nine months ended September 30, 2021, we recognized an $11.3 million charge for the increase in the fair value of warrant liabilities utilizing a Black-Scholes valuation methodology. The increase in value was primarily driven by an increase in the Company’s share price and a small increase in the discount rate.

Other income (expense)

Other income was $0.2 million and less than $0.1 million for the nine months ended September 30, 2022 and 2021, respectively. The increase was primarily driven by a gain on disposal of property and equipment.

Income taxes

For the nine months ended September 30, 2022, we recognized $0.3 million in income tax benefit primarily related to the abatement of penalties and interest. For the nine months ended September 30, 2021, we recognized $15.8 million of expense for the income taxes primarily related to the license agreement with Sobi upon the Company’s election to opt out of the installment sale method of taxation. For income tax purposes, the transfer of trademark and product rights is treated as a sale and the net proceeds from the sale are taxed under the default installment method as cash is received by the Company. During the three and nine-month periods ended September 30, 2021, the Company completed an analysis of future tax obligations under the default installment sale method versus making a timely filed election on its 2020 tax return due October 15, 2021 to elect out of the installment sale method for income tax purposes. As a result, the Company elected out of the default installment sale treatment with the filing of its tax return. In the elect out method, the Company was initially taxed based upon the estimated fair value of all present and future proceeds from the sale and the Company utilized all of its available net operating losses and income tax credits, which served to reduce the federal and state tax liability. As the Company recognizes future revenue under the Sobi license for US GAAP purposes, the Company will exclude revenue up to the originally estimated fair value that was previously taxed from taxable income. We previously disclosed that the Company had prepaid all taxes related to future Sobi License revenue streams as a result of the Company’s election to opt out of the installment sale method on our 2020 tax return. However, based on our updated analysis, we will be obligated to pay taxes related to any future Sobi License revenue received above the then estimated fair value of all present and future proceeds from the sale of SEL-212 when received, but such amounts will not be subject to interest and penalties.

Net income (loss)

Net income for the nine months ended September 30, 2022 was $29.5 million compared to a net loss of $37.9 million for the nine months ended September 30, 2021.

Liquidity and Capital Resources

Since our inception, we have incurred recurring net losses. We expect that we will continue to incur losses and that such losses will increase for the foreseeable future. We expect that our research and development and general and administrative expenses will continue to increase and, as a result, we will need additional capital to fund our operations, which we may raise through a combination of equity offerings, debt financings, third-party funding and other collaborations and strategic alliances.

From our inception through September 30, 2022, we have raised an aggregate of $716.4 million to fund our operations, which includes $118.5 million from the sale of preferred stock, $11.1 million in government grant funding, $36.7 million from borrowings under our credit facilities past and present, $243.3 million from our collaborations and license agreements, $64.5 million in combined net proceeds from our initial public offering, $185.2 million in combined net proceeds from private placements and follow-on offerings of our common stock, and, through September 30, 2022, $57.1 million in aggregate net proceeds from “at-the-market” offerings of our common stock.

As of September 30, 2022, our cash, cash equivalents, restricted cash, and marketable securities were $148.0 million, of which $1.6 million was restricted cash related to lease commitments and $0.2 million was held by our Russian subsidiary designated solely for use in its operations. Our Russian subsidiary cash is consolidated for financial reporting purposes.

In addition to our existing cash equivalents, we receive research and development funding pursuant to our collaboration agreements. Currently, funding from payments under our collaboration agreements represent our only source of committed external funds.

Indebtedness

On August 31, 2020, we entered into a term loan of up to $35.0 million, or the 2020 Term Loan, consisting of term loans in an aggregate amount of $25.0 million, or the Term A Loan, and term loans in an aggregate amount of $10.0 million, or the Term B Loan, governed by the Loan and Security Agreement. The Term A Loan was funded in full on August 31, 2020, or the Funding Date. The second draw period expired on September 30, 2021 and the Term B Loan is no longer available to be drawn by the Company in the future.

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On March 21, 2022, we entered into a Second Amendment to Loan and Security Agreement, or the Second Amendment, which amended the Loan and Security Agreement. The Second Amendment extends the date on which amortization payments in respect of the 2020 Term Loan will commence by twelve months to April 1, 2023. Thereafter, amortization payments will be paid monthly in equal installments of principal and interest to fully amortize the outstanding principal over the remaining term of the 2020 Term Loan, subject to recalculation upon a change in the prime rate. The Second Amendment was determined to be a loan modification, and the $0.1 million fee is recorded as an addition to the debt discount on the effective date.

On September 20, 2022, we entered into a Third Amendment to the Loan and Security Agreement or the Third Amendment, which amended the Loan and Security Agreement. The Third Amendment was entered into in connection with the expansion of our corporate headquarters to provide for an increase of $0.2 million in the letter of credit for a total of $1.6 million which renews automatically each year.

The 2020 Term Loan is secured by a lien on substantially all of our assets, other than intellectual property, provided that such lien on substantially all assets includes any rights to payments and proceeds from the sale, licensing or disposition of intellectual property. We also granted Oxford a negative pledge with respect to our intellectual property.

The 2020 Term Loan contains customary covenants and representations, including but not limited to financial reporting obligations and limitations on dividends, indebtedness, collateral, investments, distributions, transfers, mergers or acquisitions, taxes, corporate changes, deposit accounts, and subsidiaries. The 2020 Term Loan also contains other customary provisions, such as expense reimbursement, non-disclosure obligations as well as indemnification rights.

The events of default under the 2020 Term Loan include, but are not limited to, our failure to make any payments of principal or interest under the 2020 Term Loan or other transaction documents, our breach or default in the performance of any covenant under the 2020 Term Loan or other transaction documents, the occurrence of a material adverse event, making a false or misleading representation or warranty in any material respect under the 2020 Term Loan, our insolvency or bankruptcy, any attachment or judgment on our assets of at least approximately $0.5 million, or the occurrence of any default under any of our agreements or obligations involving indebtedness in excess of approximately $0.5 million. If an event of default occurs, Oxford is entitled to take enforcement action, including acceleration of amounts due under the 2020 Term Loan. If we raise any additional debt financing, the terms of such additional debt could further restrict our operating and financial flexibility.

Future funding requirements

As of the date of this Quarterly Report, we have not generated any revenue from product sales. We do not know when, or if, we will generate revenue from product sales. We will not generate significant revenue from product sales unless and until we obtain regulatory approval and commercialize one of our current or future product candidates. Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, third-party clinical research and development services, laboratory and related supplies, clinical costs, legal and other regulatory expenses, and general overhead costs. We expect that we will continue to generate losses for the foreseeable future, and we expect the losses to increase as we continue the development of, and seek regulatory approvals for, our product candidates, and begin to commercialize any approved products. We are subject to risks in the development of our products, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. We expect that we will need substantial additional funding to support our continuing operations.

As of September 30, 2022, we had an accumulated deficit of $400.8 million. We anticipate operating losses to continue for the foreseeable future due to, among other things, costs related to research, development of our product candidates, conducting preclinical studies and clinical trials, and our administrative organization. We will require substantial additional financing to fund our operations and to continue to execute our strategy, and we will pursue a range of options to secure additional capital.

We are continually evaluating various potential sources of additional funding such as strategic collaborations, license agreements and the issuance of equity to fund our operations. If we raise additional funds through strategic collaborations and alliances, which may include existing collaboration partners, we may have to relinquish valuable rights to our technologies or product candidates, or grant licenses on terms that are not favorable to us. To the extent that we raise additional capital through the sale of equity, the ownership interest of our existing shareholders will be diluted, and other preferences may be necessary that adversely affect the rights of existing shareholders.

We believe that our existing cash, cash equivalents, restricted cash, and marketable securities as of September 30, 2022, combined with the receivable of $6.9 million from Sobi, will enable us to fund our current planned operations into mid-2024, though we may realize additional cash resources upon the achievement of certain contingent collaboration milestones or it may pursue additional cash resources through public or private equity or debt financings or by establishing collaborations with other companies. Management’s expectations with respect to our ability to fund current and long-term planned operations are based on estimates that are subject to risks and uncertainties. If actual results are different from management’s estimates, we may need to seek additional strategic or financing opportunities sooner than would otherwise be expected. However, there is no guarantee that any collaboration milestones will be achieved or that any of these strategic or financing opportunities will be executed on favorable terms, and some could be dilutive to existing stockholders. If we are unable to obtain additional funding on a timely basis, we may be forced to significantly curtail, delay, or discontinue one or more of its planned research or development

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programs or be unable to expand our operations, meet long-term obligations or otherwise capitalize on our commercialization of our product candidates. Additionally, while the potential economic impact brought by and the duration of the COVID-19 pandemic may be difficult to assess or predict, the widespread pandemic has resulted in, and may continue to result in, significant disruption of global financial markets, reducing our ability to access capital as and when needed. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

Our future capital requirements will depend on many factors, including:

•the number of product candidates that we pursue;

•our collaboration agreements remaining in effect, our entering into additional collaboration agreements and our ability to achieve milestones under these agreements;

•the cost of manufacturing clinical supplies of our product candidates;

•our headcount growth and associated costs;

•the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our other product candidates;

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

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

•the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval;

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

•the effect of competing technological and market developments; and

•the extent to which we acquire or invest in businesses, products and technologies, including entering into licensing or collaboration arrangements for product candidates.

Summary of Cash Flows


	Nine Months Ended September 30,
(In thousands)		2022		2021
Cash (used in) and provided by:
Operating activities		$	(19,782)	$	(28,922)
Investing activities		(20,491)		(26,862)
Financing activities		39,215		31,741
Effect of exchange rate changes on cash		65		3
Net change in cash, cash equivalents, and restricted cash		$	(993)	$	(24,040)

Operating activities

Cash used in operating activities of $19.8 million for the nine months ended September 30, 2022 included approximately $33.6 million of net income, adjusted for non-cash items, and uses of cash of approximately $53.4 million for changes in operating assets and liabilities.

Cash used in operating activities of $28.9 million for the nine months ended September 30, 2021 included approximately $18.6 million of net losses, adjusted for non-cash items, and uses of cash of approximately $10.3 million for changes in operating assets and liabilities.

Investing activities

Net cash used in investing activities for the nine months ended September 30, 2022 was $20.5 million compared to net cash used in investing activities of $26.9 million in the same period in 2021. The net cash used in investing activities in 2022 was primarily purchases of marketable securities offset by proceeds from maturities of marketable securities.

The net cash used in investing activities for the nine months ended September 30, 2021 was primarily to purchase marketable securities and to invest in Cyrus Biotechnology, offset by proceeds from the maturities of marketable securities.

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Financing activities

Net cash provided by financing activities for the nine months ended September 30, 2022 was $39.2 million compared to net cash provided by financing activities of $31.7 million in the same period in 2021. The net cash provided by financing activities in the nine months ended September 30, 2022 and 2021 was primarily the result of net proceeds from underwritten and “at-the-market” offerings.

Recent Accounting Pronouncements

For a discussion of recently adopted or issued accounting pronouncements please see Note 2 to our unaudited consolidated financial statements included elsewhere in this Quarterly Report.

Off-Balance Sheet Arrangements

As of September 30, 2022, we did not have any off-balance sheet arrangements as defined in the rules and regulations of the SEC.

Critical Accounting Policies and Use of Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgements that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities in our consolidated financial statements. Actual results may differ from these estimates under different assumptions or conditions. During the three and nine months ended September 30, 2022, there were no material changes to our critical accounting policies from those described in our Annual Report on Form 10-K for the year ended December 31, 2021.

Smaller Reporting Company

We qualify as a “smaller reporting company” under the rules of the Securities Act and the Exchange Act. As a result, we may choose to take advantage of certain scaled disclosure requirements available specifically to smaller reporting companies. We will remain a smaller reporting company until the last day of the fiscal year in which the aggregate market value of our common stock held by non-affiliated persons and entities, or our public float, is more than $700 million as of the last business day of our most recently completed second fiscal quarter, or until the fiscal year following the year in which we have at least $100 million in revenue and at least $250 million in public float as of the last business day of our most recently completed second fiscal quarter.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The market risk inherent in our financial instruments and in our financial position represents the potential loss arising from adverse changes in interest rates. As of September 30, 2022 and December 31, 2021, we had cash, cash equivalents, restricted cash and marketable securities of $148.0 million and $129.4 million, respectively, consisting of non-interest and interest-bearing money market accounts. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates. Due to the short-term and the low risk profile of our money market accounts and marketable securities, and our current plan to hold marketable securities to maturity, an immediate 100 basis point change in interest rates would not have a material effect on the fair market value of our cash equivalents or short-term marketable securities.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period covered by this Quarterly Report, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2022.

Inherent Limitations on Effectiveness of Controls

There are inherent limitations to the effectiveness of any system of internal control over financial reporting. Accordingly, even an effective system of internal control over financial reporting can only provide reasonable assurance with respect to financial statement preparation and presentation in accordance with U.S. GAAP. Our internal controls over financial reporting are subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the soundness of our systems, the possibility of human error, and the risk of fraud. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may be inadequate because of changes in conditions and the risk that the degree of compliance with policies or procedures may deteriorate over time.

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Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

On August 3, 2020, a stockholder of Selecta filed a stockholder derivative action, purportedly on behalf of Selecta and against certain current and former members of the Company’s Board of Directors, as well as one affiliated company owned by a current board member, in the Court of Chancery of the State of Delaware, namely Franchi v. Barabe, et al. The complaint alleges that the individual defendants breached their fiduciary duties and committed corporate waste when they authorized a private placement transaction, announced on December 19, 2019, at a price allegedly below fair value. The complaint further alleges that the four defendant directors who participated in the private placement were unjustly enriched in connection with the transaction. On September 25, 2020, the defendants filed a motion to dismiss the lawsuit. On November 6, 2020, the plaintiff filed an amended complaint, and the defendants filed a second motion to dismiss on January 8, 2021. On December 31, 2020, we received a litigation demand letter from two other putative stockholders relating to the same private placement transaction. On April 12, 2021, the Court of Chancery in the State of Delaware granted a motion to stay the litigation pending a review by a Special Committee appointed by the Company’s Board of Directors. While the litigation was stayed, the parties reached an agreement in principle to settle the matter, and on March 18, 2022, they submitted a Stipulation and Agreement of Settlement and other documentation to the Court for its approval of the settlement. On July 21, 2022, the Court held a settlement hearing, at which the settlement was approved. On August 1, 2022, the Court entered an Order and Final Judgment which dismissed the action, and all claims contained therein, with prejudice.

Item 1A. Risk Factors

See the risk factors previously disclosed in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021 and Item 1A of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022. There have been no material changes from the risk factors previously disclosed in such filings.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

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Item 6. Exhibits

EXHIBIT INDEX


		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date
3.1	Restated Certificate of Incorporation of Selecta Biosciences, Inc.	8-K	001-37798	3.1	6/29/2016
3.2	Amended and Restated By-laws of Selecta Biosciences, Inc.	8-K	001-37798	3.2	8/22/2022
10.1	First Amendment to Lease by and between BRE-BMR Grove LLC and Selecta Biosciences, Inc. dated September 1, 2022	-	-	-	Filed herewith
10.2	Third Amendment to Loan and Security Agreement, dated September 20, 2022, between Selecta Biosciences, Inc., Oxford Finance LLC, as Collateral Agent and as a Lender, and Silicon Valley Bank, as a Lender	-	-	-	Filed herewith
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	-	-	-	Filed herewith
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	-	-	-	Filed herewith
32.1	Certification of 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	-	-	-	Furnished herewith
101.INS	Inline XBRL Instance Document (the Instance Document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document)	-	-	-	Filed herewith
101.SCH	Inline XBRL Taxonomy Extension Schema Document	-	-	-	Filed herewith
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	-	-	-	Filed herewith
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	-	-	-	Filed herewith
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	-	-	-	Filed herewith
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	-	-	-	Filed herewith
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)	-	-	-	Filed herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant in the capacities and on the dates indicated.


	SELECTA BIOSCIENCES, INC.

Date: November 3, 2022	By:	/s/ Carsten Brunn, Ph.D.
		Carsten Brunn, Ph.D.
		President and Chief Executive Officer, and Director
		(Principal Executive Officer)


Date: November 3, 2022	By:	/s/ Kevin Tan
		Kevin Tan
		Chief Financial Officer
		(Principal Financial Officer)

Exhibit 10.1

FIRST AMENDMENT TO LEASE

THIS FIRST AMENDMENT TO LEASE (this “Amendment”) is entered into as of this 1st day of September, 2022, by and between BRE-BMR GROVE LLC, a Delaware limited liability company (“Landlord”), and Selecta Biosciences, Inc., a Delaware corporation (“Tenant”).

RECITALS

A.WHEREAS, Landlord and Tenant are parties to that certain Lease dated as of July 23, 2019 (as the same may have been amended, supplemented or modified from time to time, the “Existing Lease”), whereby Tenant leases approximately 25,078 rentable square feet of space on the first (1st) floor (the “Existing Premises”) of the building located at 65 Grove Street in Watertown, Massachusetts (the “Building”), all as more particularly described in the Existing Lease;

B.WHEREAS, Landlord desires to lease to Tenant, and Tenant desires to lease from Landlord, an additional approximately 7,216 rentable square feet of space located on the first (1st) floor of the Building known as Suite 102 (the “Expansion Premises”), as more particularly shown on Exhibit A attached hereto and made a part hereof; and

C.WHEREAS, Landlord and Tenant desire to modify and amend the Existing Lease only in the respects and on the conditions hereinafter stated.

AGREEMENT

NOW, THEREFORE, Landlord and Tenant, in consideration of the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, agree as follows:

1.Definitions. For purposes of this Amendment, capitalized terms shall have the meanings ascribed to them in the Existing Lease unless otherwise defined herein. The Existing Lease, as amended by this Amendment, is referred to collectively herein as the “Lease.” From and after the date hereof, the term “Lease,” as used in the Existing Lease, shall mean the Existing Lease, as amended by this Amendment.

2.Expansion Premises. Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, as of the Expansion Premises Term Commencement Date (as defined below), the Expansion Premises, as shown on Exhibit A attached hereto, for use by Tenant in accordance with the Permitted Use and no other uses without Landlord’s prior written consent. Tenant’s leasing of the Expansion Premises shall be upon all of the same terms and conditions of the Lease applicable to the Existing Premises, except to the extent inconsistent with the provisions of this Amendment. From and after the Expansion Premises Term Commencement Date, all references to the “Premises,” as used in the Lease, shall mean the Existing Premises plus the Expansion Premises.

3.Expansion Premises Term Commencement Date. The term with respect to the Expansion Premises shall commence on the later of (i) date upon which Landlord delivers possession of the Expansion Premises as demised to Tenant, and (ii) September 1, 2022 (the “Expansion Premises Term Commencement Date”). Landlord estimates that the Expansion Premises Term Commencement Date will occur on September 1, 2022 (the “Estimated Term Commencement Date”); provided, however, that Tenant agrees that in the event such actual term commencement date has not occurred on or before such Estimated Term Commencement Date for any reason, then, (a) this Lease with respect to the Expansion Premises shall not be void or voidable, (b) Landlord shall not be liable to Tenant for any loss or damage resulting therefrom, and (c) Tenant shall not be responsible for the payment of any Annual Base Rent or Additional Rent with respect to the Expansion Premises until the actual Expansion Premises Rent

Commencement Date occurs. Tenant shall execute and deliver to Landlord a written acknowledgment of the Expansion Premises Term Commencement Date within ten (10) business days after the Expansion Premises Term Commencement Date, in substantially the form attached as Exhibit C hereto. Failure to execute and deliver such acknowledgment, however, shall not affect the Expansion Premises Term Commencement Date, or Landlord’s or Tenant’s liability hereunder.

4.Expansion Premises Term. The term with respect to the Expansion Premises shall expire on May 24, 2028 (the “Expansion Term Expiration Date”), as the same may be further extended pursuant to the terms hereof (the “Expansion Premises Term”), and shall be coterminous with the term with respect to the Existing Premises. The term “Term” as used in the Lease shall refer to such term as defined under the Existing Lease for the Existing Premises or the Expansion Premises Term for the Expansion Premises, as the context so requires.

5.Base Rent for Expansion Premises. Tenant’s obligation to pay Base Rent for the Expansion Premises shall commence on the later of (i) the date that is two (2) months after the Expansion Premises Term Commencement Date and (ii) November 1, 2022 (such date, the “Expansion Premises Rent Commencement Date”). Monthly and annual installments of Base Rent for the Expansion Premises shall be as set forth in the table below and shall be paid in the same manner as set forth in the Existing Lease. Base Rent for the Expansion Premises shall be subject to an annual upward adjustment of three percent (3%) of the then-current Base Rent. The first such adjustment shall become effective commencing on the first (1st) annual anniversary of the Expansion Premises Rent Commencement Date (the “Expansion Rent Adjustment Date”), and subsequent adjustments shall become effective on every successive annual anniversary of the Expansion Rent Adjustment Date for so long as this Lease with respect to the Expansion Premises continues in effect. The term “Lease Year” as used herein shall refer to a period of twelve (12) calendar months, with the first (1st) Lease Year commencing on the Expansion Premises Rent Commencement Date.


Dates	Square Feet of Rentable Area	Base Rent per Square Foot of Rentable Area	Monthly Base Rent	Annual Base Rent*
Lease Year 1	7,216	$98.00 annually	$58,930.67	$707,168.00
Lease Year 2	7,216	$100.94 annually	$60,698.59	$728,383.04
Lease Year 3	7,216	$103.97 annually	$62,520.63	$750,247.52
Lease Year 4	7,216	$107.09 annually	$64,396.79	$772,761.44
Lease Year 5	7,216	$110.30 annually	$66,327.07	$795924.80
Lease Year 6	7,216	$113.61 annually	$68,317.48	$819,809.76

*To be prorated for partial year.

6.Additional Rent for the Expansion Premises. Except as provided in this Section 6 with respect to Operating Expenses and the Property Management Fee, Tenant’s obligation to pay Additional Rent with respect to the Expansion Premises shall commence on the Expansion Premises Term Commencement Date. Notwithstanding the foregoing, Tenant shall not be responsible to pay Tenant’s Adjusted Share of Operating Expenses for any Operating Expenses or the Property Management Fee applicable solely to the Expansion Premises during the period between the Expansion Premises Term Commencement Date and the Expansion Premises Rent Commencement Date. Tenant’s obligation to pay Additional Rent with respect to the Existing Premises shall continue through the Term in accordance with the Lease.

7.Security Deposit. The Security Deposit set forth in Section 2.6 of the Existing Lease shall be increased by Two Hundred Twenty Thousand Seven Hundred and Ten Dollars ($220,710.00) (the “Additional Security Deposit”) to One Million Six Hundred Thousand Dollars ($1,600,000.00). For the

avoidance of doubt, the Additional Security Deposit shall be considered part of the Security Deposit for all purposes under the Lease. Tenant may deliver the Additional Security Deposit in the form of cash or an amendment to the existing L/C Security or a separate L/C Security, in either case, complying with Section 11.6 of the Existing Lease. Nothing herein shall modify Tenant rights under Section 11.7 of the Existing Lease, subject to Tenant’s compliance with the SD Reduction Obligation, to decrease the Security Deposit as of the third anniversary of the original Rent Commencement Date under the Existing Lease, except that the Reduced Security Deposit shall be One Million Three Hundred Eleven Thousand Three Hundred Eighty-Two Dollars ($1,311,382.00).

8.Pro Rata Shares. Effective as of the Expansion Premises Term Commencement Date, the table in Section 2.2 of the Existing Lease shall be deleted and replaced with the following table:


Definition or Provision			Means the Following (As of the Expansion Premises Term Commencement Date)
Approximate Rentable Area of Premises*			32,294 square feet
Approximate Rentable Area of Expansion Premises only			7,216 square feet
Approximate Rentable Area of Building			124,349 square feet
Tenant’s Pro Rata Share of Building			25.97%

9.Expansion Tenant Improvements. Tenant shall cause the work described in the Expansion TI Work Letter attached hereto as Exhibit B (the “Expansion Tenant Improvements”) to be constructed in the Premises at a cost to Landlord not to exceed Thirty Six Thousand and Eighty Dollars ($36,080.00) (based upon Five Dollars ($5.00) per square foot of Rentable Area of the Expansion Premises) (the “Expansion TI Allowance”). The Expansion TI Allowance may be applied to the costs of (m) construction, (n) project review by Landlord (which fee shall equal three percent (3%) of the Expansion TI Allowance), (o) commissioning of mechanical, electrical and plumbing systems by a licensed, qualified commissioning agent hired by Tenant, and review of such party’s commissioning report by a licensed, qualified commissioning agent hired by Landlord, (p) space planning, architect, engineering and other related services performed by third parties unaffiliated with Tenant, (q) building permits and other taxes, fees, charges and levies by Governmental Authorities for permits or for inspections of the Expansion Tenant Improvements, and (r) costs and expenses for labor, material, equipment and fixtures (including lab casework). In no event shall the Expansion TI Allowance be used for (v) the cost of work that is not authorized by the Approved Plans (as defined in the Expansion TI Work Letter) or otherwise approved in writing by Landlord, (w) payments to Tenant or any affiliates of Tenant, (x) the purchase of any furniture, personal property or other non-building system equipment, (y) costs arising from any default by Tenant of its obligations under this Lease or (z) costs that are recoverable by Tenant from a third party (e.g., insurers, warrantors, or tortfeasors). Tenant shall have until twenty-four (24) months after the Expansion Premises Term Commencement Date (the “Expansion TI Deadline”) to submit Fund Requests (as defined in the Expansion TI Work Letter) to Landlord for disbursement of the unused portion of the Expansion TI Allowance, after which date Landlord’s obligation to fund any such costs for which Tenant has not submitted a Fund Request to Landlord shall expire. In no event shall any unused Expansion TI Allowance entitle Tenant to a credit against Rent payable under this Lease. Landlord shall have the right to review and approve the selection of the architect, engineer, general contractor and major subcontractors, which approval shall not be unreasonably withheld, conditioned or delayed. Landlord may refuse to approve any architects, consultants, contractors, subcontractors or material suppliers that Landlord reasonably believes could cause labor disharmony or may not have sufficient experience, in Landlord’s reasonable opinion, to perform work in an occupied Class “A” laboratory research building and in tenant-occupied lab areas in Watertown, MA or Cambridge, MA.

10.Condition of Expansion Premises. Tenant acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty with respect to the condition of the Expansion Premises, the Building or the Project, or with respect to the suitability of the Expansion Premises, the Building or the Project for the conduct of Tenant’s business, except that the Expansion Premises have been decommissioned by the prior tenant in accordance with American National Standards Institute’s Laboratory Decommissioning guidelines (ANSI/AIHA Z9.11-2008). Tenant acknowledges that (a) it is fully familiar with the condition of the Expansion Premises and, notwithstanding anything contained in the Lease to the contrary, agrees to take the same in its condition “as is” as of the Expansion Premises Term Commencement Date, broom clean and free of any prior occupant(s) and such party’s property and (b) prior to the Expansion Premises Term Commencement Date, and subject to Landlord’s obligations expressly set forth elsewhere in this Amendment, Landlord shall have no obligation to alter, repair or otherwise prepare the Expansion Premises for Tenant’s occupancy or to pay for or construct any improvements to the Expansion Premises. Tenant’s taking of possession of the Expansion Premises shall, except as otherwise agreed to in this Amendment or in a separate writing by Landlord and Tenant, conclusively establish that the Expansion Premises, the Building and the Project were at such time in good, sanitary and satisfactory condition and repair.

11.Option to Extend Term. Landlord and Tenant agree that the existing Option to extend the Term as set forth in Section 42 of the Existing Lease remains in full force and effect. For the avoidance of doubt, the Option shall apply to the entire Premises (and not less than the entire Premises), including the Expansion Premises.

12.Insurance. Notwithstanding anything to the contrary set forth in the Existing Lease, the liability insurance required to be purchased and maintained by Tenant and any of its contractors and subcontractors pursuant to the Lease shall name Landlord, BioMed Realty L.P., and their respective officers, employees, directors, representatives, agents, general partners, members, subsidiaries, affiliates and Lenders (collectively with Landlord, the “Landlord Parties”) as additional insureds on their respective insurance policies.

13.Parking. In addition to the parking rights set forth in Section 13.4 of the Existing Lease, Tenant shall have a non-exclusive, irrevocable right to use an additional eighteen (18) parking spaces in the facilities serving the Building and the Project in common and on an unreserved basis with other tenants of the Building and the Project (i) during the Expansion Premises Term at no additional cost and (ii) upon the commencement of any Option term, at a cost equal to fair market rent, as determined by Landlord from time to time, per parking space per month, which Tenant shall pay simultaneously with payments of Base Rent as Additional Rent. The parking rights granted to Tenant in this Section 13 shall be on the same terms and conditions applicable to reserved and unreserved spaces set forth in the Existing Lease.

14.Broker. The parties represent and warrant to each other that it has not dealt with any broker or agent in the negotiation for or the obtaining of this Amendment, other than CBRE, Inc. (“Broker”), and agrees to reimburse, indemnify, save, defend (at the other party’s option and with counsel reasonably acceptable to it, at the indemnitor’s sole cost and expense) and hold harmless the other party for, from and against any and all cost or liability for compensation claimed by any such broker or agent, other than Broker, employed or engaged by it or claiming to have been employed or engaged by it. Broker is entitled to a leasing commission in connection with the making of this Amendment, and Landlord shall pay such commission to Broker pursuant to a separate agreement between Landlord and Broker.

15.No Default. Tenant represents, warrants and covenants that, to the best of Tenant’s knowledge, Landlord and Tenant are not in default of any of their respective obligations under the Existing Lease and no event has occurred that, with the passage of time or the giving of notice (or both) would constitute a default by either Landlord or Tenant thereunder.

16.Notices. Landlord and Tenant confirm that, notwithstanding anything in the Lease to the contrary, notices delivered to each party pursuant to the Lease should be sent to:

If to Landlord: BRE-BMR Grove LLC

4570 Executive Drive, Suite 400

San Diego, CA 92121

Attn: Legal Department

Email: legalreview@biomedrealty.com

If to Tenant: Selecta Biosciences, Inc.

65 Grove Street

Watertown, MA 02472

Attn: Lloyd Johnston, C.O.O.

With a copy to:

Foley Hoag LLP

155 Seaport Boulevard

Boston, Massachusetts 02210

Attn: Jeffrey L. Quillen, Esq.

17.Effect of Amendment. Except as modified by this Amendment, the Existing Lease and all the covenants, agreements, terms, provisions and conditions thereof shall remain in full force and effect and are hereby ratified and affirmed. In the event of any conflict between the terms contained in this Amendment and the Existing Lease, the terms herein contained shall supersede and control the obligations and liabilities of the parties.

18.Successors and Assigns. Each of the covenants, conditions and agreements contained in this Amendment shall inure to the benefit of and shall apply to and be binding upon the parties hereto and their respective heirs, legatees, devisees, executors, administrators and permitted successors and assigns and sublessees. Nothing in this section shall in any way alter the provisions of the Lease restricting assignment or subletting.

19.Miscellaneous. This Amendment becomes effective only upon execution and delivery hereof by Landlord and Tenant. The captions of the paragraphs and subparagraphs in this Amendment are inserted and included solely for convenience and shall not be considered or given any effect in construing the provisions hereof. All exhibits hereto are incorporated herein by reference. Submission of this instrument for examination or signature by Tenant does not constitute a reservation of or option for a lease, and shall not be effective as a lease, lease amendment or otherwise until execution by and delivery to both Landlord and Tenant.

20.Authority. Each party warrants and represents to the other party that the individual or individuals signing this Amendment have the power, authority and legal capacity to sign this Amendment on behalf of and to bind all entities, corporations, partnerships, limited liability companies, joint venturers or other organizations and entities on whose behalf such individual or individuals have signed.

21.Counterparts; Facsimile and PDF Signatures. This Amendment may be executed in one or more counterparts, each of which, when taken together, shall constitute one and the same document. A facsimile or portable document format (PDF) signature on this Amendment shall be equivalent to, and have the same force and effect as, an original signature. Execution of this Amendment by means of DocuSign is an acceptable form of signature and shall be valid and binding, having the same legal effect as execution with original ink signatures.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as a sealed Massachusetts instrument as of the date and year first above written.


LANDLORD:

BRE-BMR GROVE LLC,
a Delaware limited liability company

By:			/s/ Colleen O'Connor
Name:			Colleen O'Connor
Title:			SVP, Leasing, East Coast & UK Markets


TENANT:

SELECTA BIOSCIENCES INC.,
a Delaware corporation

By:			/s/ Lloyd Johnston
Name:			Lloyd Johnston
Title:			Chief Operating Officer

[Signature Page to First Amendment to Lease]

EXHIBIT A

EXPANSION PREMISES

[see attached]

B-3

EXHIBIT B

WORK LETTER

This Expansion TI Work Letter (this “Expansion TI Work Letter”) is made and entered into as of the 1st day of September, 2022, by and between BRE-BMR Grove LLC, a Delaware limited liability company (“Landlord”), and Selecta Biosciences, Inc., a Delaware corporation (“Tenant”), and is attached to and made a part of that certain Lease dated as of July 23, 2019, as amended by that certain First Amendment to Lease dated as of September 1, 2022 (the “First Amendment”) (as the same may be amended, amended and restated, supplemented or otherwise modified from time to time, the “Lease”), by and between Landlord and Tenant for the Premises located at 65 Grove Street, Watertown, Massachusetts. All capitalized terms used but not otherwise defined herein shall have the meanings given them in the Lease.

1.General Requirements.

1.1 Authorized Representatives.

(a) Landlord designates, as Landlord’s authorized representative (“Landlord’s Authorized Representative”), (i) Edward McDonald (edward.mcdonald@biomedrealty.com) as the person authorized to initial plans, drawings, approvals and to sign change orders pursuant to this Expansion TI Work Letter and (ii) an officer of Landlord as the person authorized to sign any amendments to this Expansion TI Work Letter or the Lease. Tenant shall not be obligated to respond to or act upon any such item until such item has been initialed or signed (as applicable) by the appropriate Landlord’s Authorized Representative. Landlord may change either Landlord’s Authorized Representative upon one (1) business day’s prior written notice to Tenant.

(b) Tenant designates Lloyd Johnston (ljohnston@selectabio.com) (“Tenant’s Authorized Representative”) as the person authorized to initial and sign all plans, drawings, change orders and approvals pursuant to this Expansion TI Work Letter. Landlord shall not be obligated to respond to or act upon any such item until such item has been initialed or signed (as applicable) by Tenant’s Authorized Representative. Tenant may change Tenant’s Authorized Representative upon one (1) business day’s prior written notice to Landlord.

1.2 Schedule. The schedule for design and development of the Expansion Tenant Improvements, including the time periods for preparation and review of construction documents, approvals and performance, shall be in accordance with a schedule to be prepared by Tenant (the “Schedule”). Tenant shall prepare the Schedule so that it is a reasonable schedule for the completion of the Expansion Tenant Improvements. The Schedule shall clearly identify all activities requiring Landlord participation, including specific dates and time periods when Tenant’s contractor will require access to areas of the Project outside of the Premises. As soon as the Schedule is completed, Tenant shall deliver the same to Landlord for Landlord’s approval, which approval shall not be unreasonably withheld, conditioned or delayed. Such Schedule shall be approved or disapproved by Landlord within ten (10) business days after delivery to Landlord. Landlord’s failure to respond within such ten (10) business day period shall be deemed approval by Landlord. If Landlord disapproves the Schedule, then Landlord shall notify Tenant in writing of its objections to such Schedule, and the parties shall confer and negotiate in good faith to reach agreement on the Schedule. The Schedule shall be subject to adjustment as mutually agreed upon in writing by the parties, or as provided in this Work Letter.

1.3 Tenant’s Architects, Contractors and Consultants. The architect, engineering consultants, design team, general contractor and subcontractors responsible for the construction of the Expansion Tenant Improvements shall be selected by Tenant and approved by Landlord, which approval Landlord shall not unreasonably withhold, condition or delay. Landlord may refuse to use any architects,

B-1

consultants, contractors, subcontractors or material suppliers that Landlord reasonably believes could cause labor disharmony or may not have sufficient experience, in Landlord’s reasonable opinion, to perform work in an occupied Class “A” laboratory research building and in tenant-occupied lab areas in Watertown, MA or Cambridge, MA. All Tenant contracts related to the Expansion Tenant Improvements shall provide that Tenant may assign such contracts and any warranties with respect to the Expansion Tenant Improvements to Landlord at any time.

2.Expansion Tenant Improvements. All Expansion Tenant Improvements shall be performed by Tenant’s contractor, at Tenant’s sole cost and expense (subject to Landlord’s obligations with respect to any portion of the Expansion TI Allowance), in a good and workmanlike manner in compliance with all Applicable Laws, and in substantial accordance with the Approved Plans (as defined below), the Lease and this Expansion TI Work Letter. To the extent that the total projected cost of the Expansion Tenant Improvements (as projected by Landlord) exceeds the Expansion TI Allowance (such excess, the “Excess Expansion TI Costs”), Tenant shall pay the costs of the Expansion Tenant Improvements as such costs become due, and Landlord shall reimburse Tenant (or pay directly to Tenant’s contractor) on a pari passu basis, in the proportion of Excess Expansion TI Costs payable by Tenant to the Expansion TI Allowance payable by Landlord. If the cost of the Expansion Tenant Improvements (as projected by Landlord) increases over Landlord’s initial projection, Tenant shall promptly notify Landlord, and Landlord’s payment of the Expansion TI Allowance shall be on an adjusted pari passu basis based on the additional Excess Expansion TI Costs. All material and equipment furnished by Tenant or its contractors as the Expansion Tenant Improvements shall be new or “like new,” and the Expansion Tenant Improvements shall be performed in a first-class, workmanlike manner; and the quality of the Expansion Tenant Improvements shall be of a nature and character not less than the Building Standard. Tenant shall take, and shall require its contractors to take, commercially reasonable steps to protect the Premises during the performance of any Expansion Tenant Improvements, including covering or temporarily removing any window coverings so as to guard against dust, debris or damage. All Expansion Tenant Improvements shall be performed in accordance with Article 17 of the Lease; provided that, notwithstanding anything in the Lease or this Expansion TI Work Letter to the contrary, in the event of a conflict between this Expansion TI Work Letter and Article 17 of the Lease, the terms of this Expansion TI Work Letter shall govern.

2.1 [Intentionally Omitted].

2.2 Work Plans. Tenant shall prepare and submit to Landlord for approval schematics covering the Expansion Tenant Improvements prepared in conformity with the applicable provisions of this Expansion TI Work Letter (the “Draft Schematic Plans”). The Draft Schematic Plans shall contain sufficient information and detail to accurately describe the proposed design to Landlord and such other information as Landlord may reasonably request. Landlord shall notify Tenant in writing within ten (10) business days after receipt of the Draft Schematic Plans whether Landlord approves or objects to the Draft Schematic Plans and of the manner, if any, in which the Draft Schematic Plans are unacceptable. Landlord’s failure to respond within such ten (10) business day period shall be deemed approval by Landlord. If Landlord reasonably objects to the Draft Schematic Plans, then Tenant shall revise the Draft Schematic Plans and cause Landlord’s objections to be remedied in the revised Draft Schematic Plans. Tenant shall then resubmit the revised Draft Schematic Plans to Landlord for approval, such approval not to be unreasonably withheld, conditioned or delayed. Landlord’s approval of or objection to revised Draft Schematic Plans and Tenant’s correction of the same shall be in accordance with this Section until Landlord has approved the Draft Schematic Plans in writing or been deemed to have approved them. The iteration of the Draft Schematic Plans that is approved or deemed approved by Landlord without objection shall be referred to herein as the “Approved Schematic Plans.”

2.3 Construction Plans. Tenant shall prepare final plans and specifications for the Expansion Tenant Improvements that (a) are consistent with and are logical evolutions of the Approved Schematic Plans and (b) incorporate any other Tenant-requested (and Landlord-approved) Changes (as defined

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below). As soon as such final plans and specifications (“Construction Plans”) are completed, Tenant shall deliver the same to Landlord for Landlord’s approval, which approval shall not be unreasonably withheld, conditioned or delayed. All such Construction Plans shall be submitted by Tenant to Landlord in electronic .pdf, and CADD format, and shall be approved or disapproved by Landlord within ten (10) business days after delivery to Landlord. Landlord’s failure to respond within such ten (10) business day period shall be deemed approval by Landlord. If the Construction Plans are disapproved by Landlord, then Landlord shall notify Tenant in writing of its objections to such Construction Plans, and the parties shall confer and negotiate in good faith to reach agreement on the Construction Plans. Promptly after the Construction Plans are approved by Landlord and Tenant, two (2) copies of such Construction Plans shall be initialed and dated by Landlord and Tenant, and Tenant shall promptly submit such Construction Plans to all appropriate Governmental Authorities for approval. The Construction Plans so approved, and all change orders specifically permitted by this Work Letter, are referred to herein as the “Approved Plans.”

2.4 Changes to the Expansion Tenant Improvements. Any changes to the Approved Plans (each, a “Change”) shall be requested and instituted in accordance with the provisions of this Article 2 and shall be subject to the written approval of the non-requesting party in accordance with this Expansion TI Work Letter.

(a) Change Request. Either Landlord or Tenant may request Changes after Landlord approves the Approved Plans by notifying the other party thereof in writing in substantially the same form as the AIA standard change order form (a “Change Request”), which Change Request shall detail the nature and extent of any requested Changes, including (a) the Change, (b) the party required to perform the Change and (c) any modification of the Approved Plans and the Schedule, as applicable, necessitated by the Change. If the nature of a Change requires revisions to the Approved Plans, then the requesting party shall be solely responsible for the cost and expense of such revisions and any increases in the cost of the Expansion Tenant Improvements as a result of such Change. Change Requests shall be signed by the requesting party’s Authorized Representative.

(b) Approval of Changes. All Change Requests shall be subject to the other party’s prior written approval, which approval shall not be unreasonably withheld, conditioned or delayed. The non-requesting party shall have five (5) business days after receipt of a Change Request to notify the requesting party in writing of the non-requesting party’s decision either to approve or object to the Change Request. The non-requesting party’s failure to respond within such five (5) business day period shall be deemed approval by the non-requesting party.

2.5 Preparation of Estimates. Tenant shall, before proceeding with any Change, using its best efforts, prepare as soon as is reasonably practicable (but in no event more than five (5) business days after delivering a Change Request to Landlord or receipt of a Change Request) an estimate of the increased costs or savings that would result from such Change, as well as an estimate of such Change’s effects on the Schedule. Landlord shall have five (5) business days after receipt of such information from Tenant to (a) in the case of a Tenant-initiated Change Request, approve or reject such Change Request in writing, or (b) in the case of a Landlord-initiated Change Request, notify Tenant in writing of Landlord’s decision either to proceed with or abandon the Landlord-initiated Change Request.

2.6 Quality Control Program; Coordination. Tenant shall provide Landlord with information regarding the following (together, the “QCP”): (a) Tenant’s general contractor’s quality control program and (b) evidence of subsequent monitoring and action plans. The QCP shall be subject to Landlord’s reasonable review and approval and shall specifically address the Expansion Tenant Improvements. Tenant shall ensure that the QCP is regularly implemented on a scheduled basis and shall provide Landlord with reasonable prior notice and access to attend all inspections and meetings between Tenant and its general contractor. At the conclusion of the Expansion Tenant Improvements, Tenant shall deliver the quality control log to Landlord, which shall include all records of quality control meetings and testing

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and of inspections held in the field, including inspections relating to concrete, steel roofing, piping pressure testing and system commissioning.

3.Completion of Expansion Tenant Improvements. Tenant, at its sole cost and expense (except for the Expansion TI Allowance), shall perform and complete the Expansion Tenant Improvements in all respects (a) in substantial conformance with the Approved Plans, (b) otherwise in compliance with provisions of the Lease and this Expansion TI Work Letter and (c) in accordance with Applicable Laws, the requirements of Tenant’s insurance carriers, the requirements of Landlord’s insurance carriers (to the extent Landlord provides its insurance carriers’ requirements to Tenant) and the board of fire underwriters having jurisdiction over the Premises. The Expansion Tenant Improvements shall be deemed completed at such time as Tenant shall furnish to Landlord (t) evidence reasonably satisfactory to Landlord that (i) all Expansion Tenant Improvements have been completed and paid for in full (which shall be evidenced by the architect’s certificate of completion and the general contractor’s and each subcontractor’s and material supplier’s final unconditional waivers and releases of liens, each in a form reasonably acceptable to Landlord and complying with Applicable Laws, and a Certificate of Substantial Completion in the form of the American Institute of Architects document G704, executed by the project architect and the general contractor, together with a statutory notice of substantial completion from the general contractor), (ii) all Expansion Tenant Improvements have been constructed in accordance with the Approved Plans, (iii) any and all liens related to the Expansion Tenant Improvements have either been discharged of record (by payment, bond, order of a court of competent jurisdiction or otherwise) or waived by the party filing such lien and (iv) no security interests relating to the Expansion Tenant Improvements are outstanding, (u) all certifications and approvals with respect to the Expansion Tenant Improvements that may be required from any Governmental Authority and any board of fire underwriters or similar body for the use and occupancy of the Expansion Premises (including a certificate of occupancy (or its substantial equivalent) for the Expansion Premises for the Permitted Use), (v) certificates of insurance required by the Lease to be purchased and maintained by Tenant, (w) an affidavit from Tenant’s architect certifying that all work performed in, on or about the Premises is in accordance with the Approved Plans, (x) complete “as built” drawing print sets, project specifications and shop drawings and electronic CADD files on disc (showing the Expansion Tenant Improvements as an overlay on the Building “as built” plans (provided that Landlord provides the Building “as-built” plans provided to Tenant) of all contract documents for work performed by their architect and engineers in relation to the Expansion Tenant Improvements, (y) a commissioning report prepared by a licensed, qualified commissioning agent hired by Tenant and approved by Landlord for all new or affected mechanical, electrical and plumbing systems (which report Landlord may hire a licensed, qualified commissioning agent to peer review, and whose reasonable recommendations Tenant’s commissioning agent shall perform and incorporate into a revised report) and (z) such other “close out” materials as Landlord reasonably requests consistent with Landlord’s own requirements for its contractors, such as copies of manufacturers’ warranties, operation and maintenance manuals and the like.

4.Insurance.

4.1 Property Insurance. At all times during the period beginning with commencement of construction of the Expansion Tenant Improvements and ending with final completion of the Expansion Tenant Improvements, Tenant shall maintain, or cause to be maintained (in addition to the insurance required of Tenant pursuant to the Lease), property insurance insuring Landlord and the Landlord Parties, as their interests may appear. Such policy shall, on a completed replacement cost basis for the full insurable value at all times, insure against loss or damage by fire, vandalism and malicious mischief and other such risks as are customarily covered by the so-called “broad form extended coverage endorsement” upon all Expansion Tenant Improvements and the general contractor’s and any subcontractors’ machinery, tools and equipment, all while each forms a part of, or is contained in, the Expansion Tenant Improvements or any temporary structures on the Premises, or is adjacent thereto; provided that, for the avoidance of doubt, insurance coverage with respect to the general contractor’s and any subcontractors’ machinery, tools and equipment shall be carried on a primary basis by such general contractor or the

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applicable subcontractor(s). Tenant agrees to pay any deductible, and Landlord is not responsible for any deductible, for a claim under such insurance.

4.2 Workers’ Compensation Insurance. At all times during the period of construction of the Expansion Tenant Improvements, Tenant shall, or shall cause its contractors or subcontractors to, maintain statutory workers’ compensation insurance as required by Applicable Laws.

4.3 Waivers of Subrogation. Any insurance provided pursuant to this Article shall waive subrogation against the Landlord Parties and Tenant shall hold harmless and indemnify the Landlord Parties for any loss or expense incurred as a result of a failure to obtain such waivers of subrogation from insurers.

5.Liability. Tenant assumes sole responsibility and liability for any and all injuries or the death of any persons, including Tenant’s contractors and subcontractors and their respective employees, agents and invitees, and for any and all damages to property arising from any act or omission on the part of Tenant, Tenant’s contractors or subcontractors, or their respective employees, agents and invitees in the prosecution of the Expansion Tenant Improvements. Tenant agrees to Indemnify the Landlord Indemnitees from and against all Claims due to, because of or arising from any and all such injuries, death or damage, whether real or alleged, and Tenant and Tenant’s contractors and subcontractors shall assume and defend at their sole cost and expense all such Claims; provided, however, that nothing contained in this Work Letter shall be deemed to Indemnify Landlord from or against liability to the extent arising directly from Landlord’s negligence or willful misconduct. Any deficiency in design or construction of the Expansion Tenant Improvements shall be solely the responsibility of Tenant, notwithstanding the fact that Landlord may have approved of the same in writing.

6.Expansion TI Allowance.

6.1 Application of Expansion TI Allowance. Landlord shall contribute the Expansion TI Allowance towards the costs and expenses incurred in connection with the performance of the Expansion Tenant Improvements, in accordance with Section 9 of the First Amendment. If the entire Expansion TI Allowance is not applied toward or reserved for the costs of the Expansion Tenant Improvements, then Tenant shall not be entitled to a credit of such unused portion of the Expansion TI Allowance. Tenant may apply the Expansion TI Allowance for the payment of construction and other costs in accordance with the terms and provisions of the Lease.

6.2 Approval of Budget for the Expansion Tenant Improvements. Notwithstanding anything to the contrary set forth elsewhere in this Expansion TI Work Letter or the Lease, Landlord shall not have any obligation to expend any portion of the Expansion TI Allowance until Landlord and Tenant shall have approved in writing the budget for the Expansion Tenant Improvements (the “Approved Budget”). Prior to Landlord’s approval of the Approved Budget, Tenant shall pay all of the costs and expenses incurred in connection with the Expansion Tenant Improvements as they become due. Landlord shall not be obligated to reimburse Tenant for costs or expenses relating to the Expansion Tenant Improvements that exceed the amount of the Expansion TI Allowance. Landlord shall not unreasonably withhold, condition or delay its approval of any budget for Expansion Tenant Improvements that is proposed by Tenant.

6.3 Fund Requests. Upon submission by Tenant to Landlord as of or prior to the Expansion TI Deadline of (a) a statement (a “Fund Request”) setting forth the total amount of the Expansion TI Allowance requested, (b) a summary of the Expansion Tenant Improvements performed using AIA standard form Application for Payment (G 702) executed by the general contractor and by the architect, (c) invoices from the general contractor, the architect, and any subcontractors, material suppliers and other parties requesting payment with respect to the amount of the Expansion TI Allowance then being requested, and (d) except with respect to the final Fund Request, conditional lien releases from the general contractor and each subcontractor and material supplier with respect to the Expansion Tenant

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Improvements performed that correspond to the Fund Request each in a form acceptable to Landlord and complying with Applicable Laws, then Landlord shall, within thirty (30) days following receipt by Landlord of a Fund Request and the accompanying materials required by this Section, pay to Tenant (for reimbursement for payments made by Tenant to the applicable contractors, subcontractors and material suppliers either prior to Landlord’s approval of the Approved TI Budget or as a result of Tenant’s decision to pay for the Expansion Tenant Improvements itself and later seek reimbursement from Landlord in the form of one lump sum payment in accordance with the Lease and this Expansion TI Work Letter), the amount of Expansion Tenant Improvement costs set forth in such Fund Request or Landlord’s pari passu share thereof if Excess Expansion TI Costs exist based on the Approved Budget; provided, however, that Landlord shall not be obligated to make any payments under this Section until the budget for the Expansion Tenant Improvements is approved in accordance with Section 6.2, and any Fund Request under this Section shall be submitted as of or prior to the Expansion TI Deadline and shall be subject to the payment limits set forth in Section 6.2 above and Section 9 of the First Amendment. Notwithstanding anything in this Section to the contrary, Tenant shall not submit a Fund Request after the Expansion TI Deadline or more often than every thirty (30) days. Any additional Fund Requests submitted by Tenant after the Expansion TI Deadline or more often than every thirty (30) days shall be void and of no force or effect.

6.4 Accrual Information. In addition to the other requirements of this Section 6, Tenant shall, no later than the second (2nd) business day of each month until the Expansion Tenant Improvements are complete, provide Landlord with an estimate of (a) the percentage of design and other soft cost work that has been completed, (b) design and other soft costs spent through the end of the previous month, both from commencement of the Expansion Tenant Improvements and solely for the previous month, (c) the percentage of construction and other hard cost work that has been completed, (d) construction and other hard costs spent through the end of the previous month, both from commencement of the Expansion Tenant Improvements and solely for the previous month, and (e) the date of Substantial Completion of the Expansion Tenant Improvements.

7.Miscellaneous.

7.1 Incorporation of Lease Provisions. Sections 40.6 through 40.19 of the Lease are incorporated into this Expansion TI Work Letter by reference, and shall apply to this Expansion TI Work Letter in the same way that they apply to the Lease.

7.2 General. Except as otherwise set forth in the Lease or this Expansion TI Work Letter, this Expansion TI Work Letter shall not apply to improvements performed in any additional premises added to the Premises at any time or from time to time, whether by any options under the Lease or otherwise; or to any portion of the Premises or any additions to the Premises in the event of a renewal or extension of the original Term, whether by any options under the Lease or otherwise, unless the Lease or any amendment or supplement to the Lease expressly provides that such additional premises are to be delivered to Tenant in the same condition as the initial Premises.

7.3 Notices. Notwithstanding anything to the contrary set forth in the Lease, for the purposes of delivering notices, requests and responses related to the Expansion Tenant Improvements under this Expansion TI Work Letter, delivery by electronic mail to Landlord’s Authorized Representative and Tenant’s Authorized Representative shall be deemed sufficient.

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Expansion TI Work Letter as a sealed Massachusetts instrument to be effective on the date first above written.


LANDLORD:

BRE-BMR GROVE LLC,
a Delaware limited liability company

By:
Name:
Title:


TENANT:

SELECTA BIOSCIENCES INC.,
a Delaware corporation

By:
Name:
Title:

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EXHIBIT C

ACKNOWLEDGEMENT OF EXPANSION PREMISES

TERM COMMENCEMENT DATE AND LEASE EXPIRATION DATE

This acknowledgement of EXPANSION PREMISES TERM commencement date AND LEASE EXPIRATION DATE is entered into as of _____________, 2022, with reference to that certain First Amendment to Lease (the “First Amendment”) dated as of ____________, 202__, by SELECTA BIOSCIENCES, INC., a Delaware corporation (“Tenant”), in favor of BRE-BMR GROVE LLC, a Delaware limited liability company (“Landlord”), which amends that certain Lease dated as of July 23, 2019 by and between Landlord and Tenant (as amended and modified, the “Lease”). All capitalized terms used herein without definition shall have the meanings ascribed to them in the Lease.

Tenant hereby confirms the following:

1.Tenant accepted possession of the Expansion Premises for construction of improvements or the installation of personal or other property on [_______], 20[__]. Tenant first occupied the Expansion Premises for the Permitted Use on [_______], 20[__].

2.The Expansion Premises are in good order, condition and repair.

3.[Intentionally Omitted].

4.All conditions of the First Amendment to be performed by Landlord as a condition to the full effectiveness of the First Amendment have been satisfied, and Landlord has fulfilled all of its duties in the nature of inducements offered to Tenant to lease the Expansion Premises, except [_____].

5.In accordance with the provisions of Section 3 of the First Amendment, the Expansion Premises Term Commencement Date is [_______], 20[__], and, unless the Lease is terminated prior to the Expansion Term Expiration Date pursuant to its terms, the Expansion Term Expiration Date is May 24, 2028.

6.The Lease is in full force and effect, and the same represents the entire agreement between Landlord and Tenant concerning the Expansion Premises , except [_______].

7.Tenant has no existing defenses against the enforcement of the Lease by Landlord, and there exist no offsets or credits against Rent owed or to be owed by Tenant.

8.The obligation to pay Rent with respect to the Expansion Premises is presently in effect and all Rent obligations with respect to the Expansion Premises on the part of Tenant under the Lease commence to accrue on [_____________] (the “Expansion Premises Rent Commencement Date”), with Base Rent payable on the dates and amounts set forth in the chart below. Base Rent shall be subject to an annual upward adjustment of three percent (3%) of the then-current Base Rent during the Expansion Premises Term. The first such adjustment shall become effective commencing on the Expansion Rent Adjustment Date, and subsequent adjustments shall become effective on every successive annual anniversary for so long as this Lease continues in effect with respect to the Expansion Premises. The Expansion Rent Adjustment Date is _______ [insert first anniversary of Expansion Premises Rent Commencement Date]].

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Dates	Square Feet of Rentable Area	Base Rent per Square Foot of Rentable Area	Monthly Base Rent	Annual Base Rent*
__/__/__ [insert Expansion Premises Rent Commencement Date] – Expansion Rent Adjustment Date [or insert Expansion Rent Adjustment Date if occurred]	7,216	$98.00 annually	$58,930.67	$707,168.00
___/___/2023 - ___/___/2024	7,216	$100.94 annually	$60,698.59	$728,383.04
___/___/2024 - ___/___/2025	7,216	$103.97 annually	$62,520.63	$750,247.52
___/___/2025 - ___/___/2026	7,216	$107.09 annually	$64,396.79	$772,761.44
___/___/2026 - ___/___/2027	7,216	$110.30 annually	$66,327.07	$795924.80
___/___/2027 - ___/___/2028 (Lease Expiration Date)	7,216	$113.61 annually	$68,317.48	$819,809.76

9.The undersigned Tenant has not made any prior assignment, transfer, hypothecation or pledge of the Lease or of the rents thereunder or sublease of the Expansion Premises or any portion thereof.

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IN WITNESS WHEREOF, Tenant has executed this Acknowledgment of Expansion Premises Term Commencement Date as of the date first written above.


TENANT:

SELECTA BIOSCIENCES INC.,
a Delaware corporation

By:
Name:
Title:

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Exhibit 10.2

THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT

THIS THIRD AMENDMENT to Loan and Security Agreement (this “Amendment”) is entered into as of September 20, 2022, by and among OXFORD FINANCE LLC, a Delaware limited liability company with an office located at 115 South Union Street, Suite 300, Alexandria, Virginia 22314 (“Oxford”), as collateral agent (in such capacity, “Collateral Agent”), the Lenders listed on Schedule 1.1 to the Loan Agreement (as defined below) or otherwise a party thereto from time to time including Oxford in its capacity as a Lender and SILICON VALLEY BANK, a California corporation with an office located at 3003 Tasman Drive, Santa Clara, CA 95054 (“Bank” or “SVB”) (each a “Lender” and collectively, the “Lenders”), and SELECTA BIOSCIENCES, INC., a Delaware corporation with offices located at 65 Grove Street, Suite 101, Watertown, MA 02472 (“Borrower”).

A.WHEREAS, Collateral Agent, Borrower and Lenders have entered into that certain Loan and Security Agreement dated as of August 31, 2020 (as amended by that certain First Amendment to Loan and Security Agreement dated as of September 7, 2021, as amended by that certain Second Amendment to Loan and Security Agreement dated as of March 21, 2022, and as further amended, supplemented or otherwise modified from time to time, the “Loan Agreement”) pursuant to which Lenders have provided to Borrower certain loans in accordance with the terms and conditions thereof; and

B.WHEREAS, Borrower has requested that Collateral Agent and Lenders make certain revisions to the Loan Agreement as more fully set forth herein; and

C.WHEREAS, Borrower, the Lenders party to this Amendment (constituting the Required Lenders) and Collateral Agent desire to amend certain provisions of the Loan Agreement as provided herein and subject to the terms and conditions set forth herein.

AGREEMENT

NOW, THEREFORE, in consideration of the promises, covenants and agreements contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Borrower, Lenders and Collateral Agent hereby agree as follows:

1.Definitions. Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Loan Agreement.

2.Amendments to Loan Agreement.

2.1 Section 6.6 (Operating Accounts). The last sentence of Section 6.6(c) of the Loan Agreement is hereby amended and restated as follows:

“The provisions of the previous sentence shall not apply to deposit accounts exclusively used for payroll, payroll taxes and other employee wage benefit payments to or for the benefit of Borrower’s, or any of its Subsidiaries’, employees or deposit accounts exclusively used as cash collateral to secure letters of credit permitted by clause (l) of the definition of “Permitted Liens”, in each case identified to Collateral Agent by Borrower as such in the Perfection Certificates.”

2.2 Definition of Permitted Indebtedness. The definition of “Permitted Indebtedness” in Section 13.1 of the Loan Agreement is hereby amended by deleting “and” from the end of clause (i) and replacing clause (j) and adding new clause (k) as follows:

“(j) Indebtedness in respect of letters of credit in an aggregate amount not to exceed One Million Six Hundred Twenty-Five Thousand Dollars ($1,625,000) issued to landlords as credit support for Borrower’s real property leases; and

(k) extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (a) through (j) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose more burdensome terms upon Borrower, or its Subsidiary, as the case may be.”

2.3 Definition of Permitted Liens. The definition of “Permitted Liens” in Section 13.1 of Loan Agreement is hereby amended by deleting “and” from the end of clause (j) and replacing clause (k) and adding new clause (l) as follows:

“(k) Liens consisting of Permitted Licenses; and

(l) deposits of cash collateral to secure letters of credit permitted by clause (j) of the definition of “Permitted Indebtedness” and in an amount not to exceed One Million Six Hundred Twenty-Five Thousand Dollars ($1,625,000).”

3.Limitation of Amendment.

3.1 The amendments set forth above are effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right, remedy or obligation which Lenders or Borrower may now have or may have in the future under or in connection with any Loan Document, as amended hereby.

3.2 This Amendment shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents are hereby ratified and confirmed and shall remain in full force and effect.

4.Representations and Warranties. To induce Collateral Agent and Lenders to enter into this Amendment, Borrower hereby represents and warrants to Collateral Agent and Lenders as follows:

4.1 Immediately after giving effect to this Amendment (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date) and (b) no Event of Default has occurred and is continuing;

4.2 Borrower has the power and due authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment;

4.3 The organizational documents of Borrower delivered to Collateral Agent on the Effective Date, and updated pursuant to subsequent deliveries by or on behalf of the Borrower to the Collateral Agent, remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;

4.4 The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not contravene (i) any material law or regulation binding on or affecting Borrower, (ii) any material contractual restriction with a Person binding on Borrower, (iii) any material order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (iv) the organizational documents of Borrower;

4.5 The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision thereof, binding on Borrower, except as already has been obtained or made;

4.6 This Amendment has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights.

5.Effectiveness. This Amendment shall be deemed effective as of the date hereof upon the due execution of this Amendment by the parties thereto.

6.Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, and all of which, taken together, shall constitute one and the same instrument. Delivery by electronic transmission (e.g. “.pdf”) of an executed counterpart of this Amendment shall be effective as a manually executed counterpart signature thereof.

7.Governing Law. This Amendment and the rights and obligations of the parties hereto shall be governed by and construed in accordance with the laws of the State of California.

[Balance of Page Intentionally Left Blank]

IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to Loan and Security Agreement to be executed as of the date first set forth above.


BORROWER:

SELECTA BIOSCIENCES, INC.

By:			/s/ Kevin Tan
Name:			Kevin Tan
Title:			Chief Financial Officer


COLLATERAL AGENT AND LENDER:

OXFORD FINANCE LLC

By:			/s/ Colette H. Featherly
Name:			Colette H. Featherly
Title:			Senior Vice President


LENDER:

SILICON VALLEY BANK

By:			/s/ Lauren Cole
Name:			Lauren Cole
Title:			Director

[Signature Page to Third Amendment to Loan and Security Agreement]

Exhibit 31.1

CERTIFICATIONS

I, Carsten Brunn, Ph.D. certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Selecta Biosciences, Inc.;

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 registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer 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 registrant 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 registrant, 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 registrant’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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’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 registrant’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 registrant’s internal control over financial reporting.



November 3, 2022						/s/ Carsten Brunn, Ph.D.
						Carsten Brunn, Ph.D.
						President and Chief Executive Officer, and Director
						(Principal Executive Officer)

Exhibit 31.2

CERTIFICATIONS

I, Kevin Tan, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Selecta Biosciences, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



November 3, 2022						/s/ Kevin Tan
						Kevin Tan
						Chief Financial Officer
						(Principal Financial Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Selecta Biosciences, Inc. (the “Company”) for the period ended September 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company hereby certifies, pursuant to 18 U.S.C. Section 1350, that to his knowledge:

1. The Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2022 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



November 3, 2022						/s/ Carsten Brunn, Ph.D.
						Carsten Brunn, Ph.D.
						President and Chief Executive Officer, and Director
						(Principal Executive Officer)



November 3, 2022						/s/ Kevin Tan
						Kevin Tan
						Chief Financial Officer
						(Principal Financial Officer)