Beam Therapeutics Inc. Fair Value Disclosure

4. fair value of financial instruments

The Company’s financial instruments that are measured at fair value on a recurring basis consist of cash equivalents, marketable securities, corporate equity securities, contingent consideration liabilities related to acquisitions, and success payment derivative liabilities pursuant to the Harvard and Broad License Agreements.

Cash equivalents – Money market funds included within cash equivalents are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets and repurchase agreements backed by U.S. Treasury securities that are classified within Level 2 of the fair value hierarchy because pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through using models or other valuation methodologies.

Marketable securities – Marketable securities, excluding corporate equity securities, are classified within Level 2 of the fair value hierarchy because pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined using models or other valuation methodologies.

During the year ended December 31, 2025, Eli Lilly and Company, or Lilly, completed its acquisition of Verve Therapeutics, Inc., or Verve. As a result of the acquisition, the Company received total proceeds of $5.7 million as consideration for its 546,970 shares of Verve's common stock and recorded a realized loss of $0.4 million during the year ended December 31, 2025, presented in "Interest and other income (expense), net" in the consolidated statements of operations and other comprehensive loss. The shares were previously classified as marketable securities on the Company's consolidated balance sheet and measured at fair value. There were no other realized gains or losses from the sale of marketable securities during the year ended December 31, 2025. Proceeds from the sale are reflected in investing activities on the consolidated statements of cash flows. The Company recognized $3.1 million of other income during the year ended December 31, 2025 and $4.5 million and $3.0 million of other expense during the years ended December 31, 2024 and 2023, respectively, associated with changes in the fair value of Verve's common stock.

As of December 31, 2025 and 2024, the Company owned 1,608,337 shares of Prime's common stock valued at $5.6 million and $4.7 million, respectively. The Company recognized $0.9 million of other income and $9.6 million of other expense during the years ended December 31, 2025 and 2024, respectively, associated with changes in the fair value of Prime's common stock.

Success Payment Liability – As discussed further in Note 9, the Company is required to make payments to Harvard and Broad Institute based upon the achievement of specified multiples of the initial weighted average value of the Company’s Series A Preferred or, subsequent to the IPO, the market value of the Company's common stock, at specified valuation dates. The Company’s liability for the share-based success payments under the Harvard and Broad License Agreements are carried at fair value. To determine the estimated fair value of the success payment liability, the Company uses a Monte Carlo simulation methodology, which models the future movement of stock prices based on several key variables.

The computation of expected volatility was estimated using the Company's historical volatility along with available information about the historical volatility of stocks of similar publicly traded companies for a period matching the expected term assumption. In addition, the Company incorporated the estimated number, timing, and probability of valuation measurement dates in the calculation of the success payment liability.

Contingent consideration liabilities – On July 1, 2025, the Company acquired an early-stage life sciences company, which was consolidated by the Company under ASC 810, Consolidation, as the Company determined that the acquiree is a variable interest entity and that the Company is the primary beneficiary through its 100% ownership interest. The total consideration paid was $14.5 million, which is comprised of an upfront payment of 403,128 shares of the Company’s common stock valued at $6.7 million, contingent consideration payments based on the achievement of certain development, clinical and commercial milestones valued at $7.7 million and $0.1 million of seller transaction expenses. The maximum amount of the milestone payments is $89.0 million. The primary asset acquired included in-process research and development valued at $14.5 million upon acquisition. As no alternative future use was identified for the acquired in-process research and development, the Company expensed the full fair value of the asset as research and development expense upon acquisition.

Milestone payments are payable at the Company’s sole discretion in cash or in shares of the Company's common stock (valued using a volume-weighted average price). As these milestones are payable with a variable number of shares of the Company’s common stock, the milestone payments result in liability classification under ASC 480, Distinguishing Liabilities from Equity. These contingent consideration liabilities are carried at fair value which was estimated by applying a probability-based model, which utilized inputs based on timing of achievement that were unobservable in the market. These contingent consideration liabilities are classified within Level 3 of the fair value hierarchy and had a fair value of $7.7 million as of the acquisition date.

Under the Agreement and Plan of Merger, dated February 23, 2021, between the Company and Guide Therapeutics, Inc., or Guide, Guide’s former stockholders and optionholders were eligible to receive up to an additional $100.0 million in technology milestone

payments and $220.0 million in product milestone payments, payable in the Company’s common stock valued using the volume-weighted average price of the Company’s stock over the ten-day trading period ending two trading days prior to the date on which the applicable milestone is achieved. During the year ended December 31, 2025, the Company assessed the fair value of the contingent consideration liabilities related to potential technology and product milestone payments from its prior acquisition of Guide and determined that the fair value of the underlying technology and product milestones was zero. The milestones were removed from the Company's balance sheet as of December 31, 2025. The fair value of the contingent consideration liabilities related to Guide as of December 31, 2024 was $1.1 million and was classified within Level 3 of the fair value hierarchy as of December 31, 2024. During the years ended December 31, 2025, 2024 and 2023, the Company recognized $1.1 million, $1.6 million and $9.7 million of other income, respectively, related to the change in fair value of the Guide technology and product contingent consideration liabilities.