SecProbe.io

CORRESP
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CORRESP

 SMITH, ANDERSON, BLOUNT,

DORSETT, MITCHELL, & JERNIGAN, L.L.P.

LAWYERS

 OFFICES

Wells Fargo Capitol Center

150 Fayetteville Street, Suite 2300

Raleigh, North Carolina 27601

 HEYWARD D. ARMSTRONG

DIRECT DIAL: (919) 821-6619

E-Mail: harmstrong@smithlaw.com

March 8, 2019

 MAILING ADDRESS

P.O. Box 2611

 Raleigh,
North Carolina

 27602-2611

 TELEPHONE: (919)
821-1220

 FACSIMILE: (919)
821-6800

FOIA Confidential Treatment Request

Under 17 C.F.R. § 200.83

 Certain confidential information in this letter has been omitted and provided separately to the Securities and Exchange
Commission. Confidential treatment has been requested by Precision BioSciences, Inc. with respect to the omitted portions, which are identified in this letter by the mark “[***].”

VIA EDGAR AND HAND DELIVERY

 Mr. Jeffrey
Gabor

 United States Securities and Exchange Commission

Division of Corporation Finance

 Office of Healthcare &
Insurance

 100 F Street, N.E.

 Mail Stop 4720

Washington, D.C. 20549-6010

        Re:

Precision BioSciences, Inc.

Anticipated Price Range and Stock-Based Compensation

Registration Statement on Form S-1 (File No. 333-230034)

 Dear Mr. Gabor:

On behalf of Precision BioSciences, Inc. (the “Company”), we submit this letter (this “Letter”) to the staff
(the “Staff”) of the Division of Corporation Finance of the Securities and Exchange Commission (the “Commission”). The Company originally submitted the above-referenced Registration Statement on Form S-1 (the “Registration Statement”) to the Commission on October 18, 2018, resubmitted to the Commission on December 28, 2018 and February 21, 2019 and subsequently filed the
Registration Statement with the Commission on March 1, 2019.

 The purpose of this Letter is to provide supplemental information to
the Staff with respect to the accounting treatment for stock-based compensation for its consideration. In particular, the Company references Comment #9 of the Staff’s letter dated November 15, 2018 with respect to providing an explanation
for the determination of the fair value of the common stock underlying the Company’s equity issuances and the reasons for any differences between the recent valuations of its common stock and the estimated offering price.

We are respectfully requesting confidential treatment for certain portions of this Letter pursuant to Rule 83 of the Commission’s Rules
on Information and Requests, 17 C.F.R. § 200.83. This Letter is accompanied by such request for confidential treatment because of the commercially sensitive nature of the information discussed in this Letter. A redacted letter has been filed on
EDGAR, omitting the confidential information contained in this Letter.

 CONFIDENTIAL TREATMENT
REQUESTED BY

 PRECISION BIOSCIENCES, INC.

PBS-1

 SMITH, ANDERSON, BLOUNT, DORSETT,
MITCHELL, & JERNIGAN, L.L.P.

 March 8, 2019

 Page
 2

 For the convenience of the Staff, we are providing to the Staff copies of this Letter by hand
delivery. In this Letter, we have recited the prior comment from the Staff in italicized, bold type and have followed the comment with the Company’s response.

9. Once you have an estimated offering price or range, please explain to us how you determined the fair value of the common stock
underlying your equity issuances and the reasons for any differences between the recent valuations of your common stock leading up to this offering and the estimated offering price. This information will help facilitate our review of your accounting
for equity issuances including stock compensation and beneficial conversion features.

 The Company advises the Staff that, while
not reflected in the Registration Statement, based on discussions with the Company’s Board of Directors (the “Board of Directors”) and reflecting the input from the lead underwriters (the “Underwriters”) of the
Company’s proposed initial public offering of its common stock (“IPO”), if the Company were to commence marketing of the transaction today, the Company currently anticipates that the estimated price range would be approximately
$[***] to $[***] per share (the “Preliminary IPO Price Range”), with a midpoint of approximately $[***] per share (the “Preliminary Assumed IPO Price”). The Preliminary IPO Price Range and Preliminary Assumed IPO
Price do not reflect any stock split of the Company’s common stock that may occur prior to the Commission’s declaration of effectiveness of the Registration Statement. The Company advises the Staff that the final range to be included in a pre-effective amendment to the Registration Statement will include a price range of no more than $2.00, if the maximum price is $10.00 per share or less, or 20% of the high end of the range, if the maximum price is
greater than $10.00 per share, unless otherwise approved by the Staff.

 The Company’s final range to be included in a pre-effective amendment to the Registration Statement remains under discussion between the Company and the Underwriters, and a bona fide price range will be included in an amendment to the Registration Statement
prior to any distribution of the preliminary prospectus in connection with the Company’s road show.

 Stock Option Grants During the Preceding 12
Months

 The following table summarizes by grant date the number of shares of common stock underlying stock options granted during the
past year, as well as the associated per share exercise price, equal to the estimated fair value per share of the Company’s common stock on the date of option grant, and the estimated fair value of options per share used to determine
stock-based compensation expense for financial reporting purposes.

 Grant Date

Number of Shares
Underlying Option Grants

Exercise Price Per Share

Estimated Fair Value of
Shares

 April 20, 2018

720,000

$
4.21

$
4.21

 July 23, 2018

626,250

$
4.76

$
4.76

 October 12, 2018

4,484,750

$
5.61

$
5.61

 December 5, 2018

915,000

$
6.18

$
6.18

 February 19, 2019

1,175,000

$
6.46

$
6.46

 CONFIDENTIAL TREATMENT
REQUESTED BY

 PRECISION BIOSCIENCES, INC.

PBS-2

 SMITH, ANDERSON, BLOUNT, DORSETT,
MITCHELL, & JERNIGAN, L.L.P.

 March 8, 2019

 Page
 3

 Historical Fair Value Determination and Methodology

As there has been no public market for the Company’s common stock to date, the estimated fair value of the Company’s common stock has
been determined by the Board of Directors as of the date of each option grant, with input from management, taking into account (i) the most recent third-party valuations of the common stock and (ii) the Board of Directors’ assessment
of any additional objective and subjective factors that it believed were relevant and that may have changed from the date of the most recent third-party valuation through the date of the grant.

Third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’
Accounting and Valuation Guide, Valuation of Privately-Held Company Equity Securities Issued as Compensation. As described in further detail in the section of the Registration Statement entitled “Management’s Discussion and Analysis
of Financial Condition and Results of Operations—Critical Accounting Policies and Use of Estimates—Stock-Based Compensation” and under “Discussion of Common Stock Valuations and Option Grants” below, the third-party
valuation reports were prepared by determining the Company’s total equity value using from appropriate valuation methodologies and then allocating the value across the Company’s various outstanding securities at the time of valuation using
one of the following valuation methods:

•

 OPM. The option pricing allocation method (“OPM”) treats common stock and
preferred stock as call options on the total equity value of a company, with exercise prices based on the value thresholds at which the allocation among the various holders of a company’s securities changes. The Company factored into the
valuations the likelihood of which the Company would seek an IPO based on the Company’s status as of each valuation date. A discount for lack of marketability of the shares of common stock is then applied to arrive at an indication of value for
the shares of common stock.

•

 PWERM. Under the probability-weighted expected return method (“PWERM”) methodology, the
fair value of common stock is estimated based upon an analysis of future values for the Company, assuming various outcomes. The common stock value is based on the probability-weighted present value of expected future investment returns considering
each of the possible outcomes available as well as the rights of each class of stock. The future value of the common stock under each outcome is discounted back to the valuation date at an appropriate risk-adjusted discount rate and probability
weighted to arrive at an indication of value for the common stock.

•

 Hybrid. The hybrid method is a PWERM where the equity value in one of the scenarios is calculated using an
OPM.

 CONFIDENTIAL TREATMENT
REQUESTED BY

 PRECISION BIOSCIENCES, INC.

PBS-3

 SMITH, ANDERSON, BLOUNT, DORSETT,
MITCHELL, & JERNIGAN, L.L.P.

 March 8, 2019

 Page
 4

 At each grant date, the Board of Directors considered whether any events had occurred that
would trigger any material changes to the business or would require adjustment to the estimated fair value from the previous valuation date. Additional objective and subjective factors considered by the Company’s Board of Directors included the
following:

•

 the prices at which the Company sold any shares of preferred stock and the superior rights and preferences of the
preferred stock relative to the Company’s common stock at the time of each grant;

•

 the progress of the Company’s research and development programs, including the status and results of
preclinical studies for the Company’s product candidates;

•

 the Company’s stage of development and commercialization and its business strategy;

•

 external market conditions affecting the life sciences industry and trends within the life sciences industry;

•

 the Company’s financial position, including cash on hand, and the Company’s historical and forecasted
performance and operating results;

•

 the lack of an active public market for the Company’s common stock and the Company’s preferred stock;

•

 the likelihood of achieving a liquidity event, such as an initial public offering or sale of the Company in light
of prevailing market conditions; and

•

 the analysis of initial public offerings and the market performance of similar companies in the life sciences
industry.

 Discussion of Common Stock Valuations and Stock Option Grants

April 2018 and July 2018

 At the close of
the first and second fiscal quarters of 2018, the Company received independent third-party valuation reports of the Company’s common stock as of March 31, 2018, at $4.21 per share, and June 30, 2018, at $4.76 per share (the
“March 2018 Valuation” and “June 2018 Valuation,” respectively). The March 2018 Valuation determined the equity value of the Company using guideline M&A transactions and prior sales of company stock valuation
approaches. The June 2018 Valuation determined the equity value of the Company using a prior sales of company stock valuation approach, taking into account the Company’s arm’s-length May 2018 through
July 2018 sales of Series B Convertible Preferred Stock for a total of approximately $110.0 million. Each of the March 2018 Valuation and June 2018 Valuation allocated total equity value using OPM.

On April 20, 2018, the Company granted options to purchase a total of 720,000 shares of common stock at an exercise price of $4.21 per
share. After consideration of various factors, the Board of Directors determined that the March 2018 Valuation represented the fair market value of the Company’s common stock as of April 20, 2018. Similarly, on July 23, 2018, the
Company granted options to purchase a total of 626,250 shares of common stock at an exercise price of $4.76 per share, and after consideration of various factors, the Board of Directors determined that the June 2018 Valuation represented the fair
market value of the Company’s common stock as of July 23, 2018.

 CONFIDENTIAL TREATMENT
REQUESTED BY

 PRECISION BIOSCIENCES, INC.

PBS-4

 SMITH, ANDERSON, BLOUNT, DORSETT,
MITCHELL, & JERNIGAN, L.L.P.

 March 8, 2019

 Page
 5

 October 2018

The Company received an independent third-party valuation of the Company’s common stock as of September 12, 2018 at $5.61 per share
(the “September 2018 Valuation”). The September 2018 Valuation used a hybrid valuation method.

 In determining the equity
value of the Company, the September 2018 Valuation assigned different probabilities to four future scenarios as follows: (i) the Company completing an IPO in February 2019 was assigned a probability of [***]%; (ii) the Company completing an IPO
in September 2019 was assigned a probability of [***]%; (iii) the Company completing an IPO in December 2019 was assigned a probability of [***]%; and (iv) the Company not completing an IPO was assigned a probability of [***]%.

For each of scenarios (i) through (iii), the equity value of the Company was determined using the PWERM based on an analysis of the post-IPO market capitalizations of comparable public companies that had completed IPOs during the two years prior to the valuation date using guideline public company IPOs and guideline public companies market
approaches. These values were determined based on a qualitative analysis of the Company as of the valuation date relative to the guideline public companies, as of each of their IPO dates, with respect to size, risk, total number of drugs in
development and development progress of those drugs, considering conditions in the overall biopharmaceutical IPO market during the last two years, the expected positioning of the Company at each potential IPO date, and the potential market
environment at each potential IPO date and then discounted to present value.

 For scenario (iv), the equity value of the Company was
determined using the OPM based on a prior sales of company stock market approach. This value considered the Company’s arm’s-length June 2018 sale of Series B Convertible Preferred Stock for a total
of approximately $110.0 million and used the backsolve method to account for share class rights and preferences. The backsolve method is a market approach that derives an implied total equity value from the sale price of the Company’s
equity securities in a recent arm’s-length transaction.

 The September 2018 Valuation
allocated the equity value of the Company using the hybrid method described above and applied a discount for the lack of marketability of the Company’s common stock. The discount for lack of marketability was determined using two methods: a
group of transactions from a pre-IPO study and a put option analysis, which calculates the cost of put option to protect an investor against risk of an extended holding period. As the Company approaches a
liquidity event that would result in a ready and liquid market for its stock, the discount for lack of marketability decreases.

 The
following table displays the summary calculation for the September 2018 Valuation’s determination of weighted average per share value on a minority, non-marketable basis:

 Scenario

Present Per
Share Value
– Marketable

Lack of
Marketability
Discount

Present Per
Share Value

Probability

Weighted
Per Share
Value

 (i) IPO completed in February 2019

$
6.55

10.0
%

$
5.89

[***]
%

$
4.12

 (ii)  IPO completed in September 2019

6.04

12.5
%

5.28

[***]
%

0.53

 (iii)  IPO completed in December 2019

5.87

15.0
%

4.99

[***]
%

0.50

 (iv) no IPO completed

4.88

5.0
%

4.63

[***]
%

0.46

5.61

 CONFIDENTIAL TREATMENT
REQUESTED BY

 PRECISION BIOSCIENCES, INC.

PBS-5

 SMITH, ANDERSON, BLOUNT, DORSETT,
MITCHELL, & JERNIGAN, L.L.P.

 March 8, 201