What changed in this filing

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Item 1A. Risk Factors

2024-08-01 compared with 2024-05-07 · 27 added, 18 removed, 1277 unchanged (3% of the section changed)

77 unchanged sentences

We have incurred significant net losses since our inception.

Our net losses were $101.8 million and $109.8 million for the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024 , we had an accumulated deficit of $1.22 billion .

Our net losses were $99.0 million and $200.8 million for the three and six months ended June 30, 2024, respectively.

We had net income of $183.4 million and $73.6 million for the three and six months ended June 30, 2023, respectively.

As of June 30, 2024 , we had an accumulated deficit of $1.32 billion .

We have invested significant financial resources in research and development activities, including for our preclinical and clinical product candidates and our TV platform.

54 unchanged sentences

Our operations have required substantial amounts of cash since inception.

We currently fund our operations primarily with the proceeds from our follow-on offerings completed in January 2020 and October 2022, payments received from our collaboration agreements with Biogen, Sanofi, and Takeda, and a PIPE transaction completed in February 2024.

We currently fund our operations primarily with the proceeds from our follow-on offering completed in October 2022, payments received from our collaboration agreements with Biogen, Sanofi, and Takeda, and a PIPE transaction completed in February 2024.

We have a diversified portfolio with numerous programs at various stages of research, discovery, preclinical, and clinical development .

1 unchanged sentence

Even if we are successful in developing our product candidates, obtaining regulatory approvals and launching and commercializing any product candidate will require substantial additional funding.

As of March 31, 2024, we had $1.43 billion in cash, cash equivalents and marketable securities.

As of June 30, 2024, we had $1.35 billion in cash, cash equivalents and marketable securities.

We believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our projected operations through at least the next twelve months.

182 unchanged sentences

The development and commercialization of new drug products is highly competitive.

Moreover, the neurodegenerative and lysosomal storage ("LS") fields are characterized by strong and increasing competition.

Moreover, the neurodegenerative and lysosomal storage fields are characterized by strong and increasing competition.

Our potential competitors include pharmaceutical companies, biotechnology companies, academic institutions, government agencies, and other public and private research organizations that conduct research.

154 unchanged sentences

In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions, which may cause delays in the approval or the decision not to approve an application.

For example, if the Supreme Court reverses or curtails the Chevron doctrine, which gives deference to regulatory agencies in litigation against the FDA and other agencies, more companies may bring lawsuits against the FDA to challenge longstanding decisions and policies of the FDA, which could undermine the FDA's authority, lead to uncertainties in the industry, and disrupt the FDA's normal operations, which could delay the FDA's review of our marketing applications.

Recently, the U.S.

Supreme Court overruled the Chevron doctrine, which gives deference to regulatory agencies' statutory interpretations in litigation against federal government agencies, such as the FDA, where the law is ambiguous.

This landmark Supreme Court decision may invite more companies and other stakeholders to bring lawsuits against the FDA to challenge longstanding decisions and policies of the FDA, including the FDA's statutory interpretations of market exclusivities and the "substantial evidence" requirements for drug approvals, which could undermine the FDA's authority, lead to uncertainties in the industry, and disrupt the FDA's normal operations, any of which could delay the FDA's review of our regulatory submissions.

We cannot predict the full impact of this decision, future judicial challenges brought against the FDA, or the nature or extent of government regulation that may arise from future legislation or administrative action.

Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that our data are insufficient for approval and require additional preclinical, clinical or other studies.

93 unchanged sentences

Chamber of Commerce, and the Pharmaceutical Research and Manufacturers of America, have initiated lawsuits against the federal government asserting that the price negotiation provisions of the Inflation Reduction Act ("IRA") are unconstitutional.

The impact of these judicial changes, legislative, executive, and administrative actions and any future healthcare measures and agency rules implemented by the government on us and the pharmaceutical industry as a whole is unclear.

The impact of these judicial changes, future litigation brought in view of

the Supreme Court’s overrule of the Chevron doctrine, legislative, executive, and administrative actions and any future healthcare measures and agency rules implemented by the government on us and the pharmaceutical industry as a whole is unclear.

At the state level, a number of states are considering or have recently enacted state drug price transparency and reporting laws that could substantially increase our compliance burdens and expose us to greater liability under such state laws once we begin commercialization after obtaining regulatory approval for any of our products.

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Given that the development of our technology and product candidates is at an early stage, our intellectual property portfolio with respect to certain aspects of our technology and product candidates is also at an early stage.

In addition, we cannot be certain that any patents we own or in-license in the United States adequately cover the Fc domain portion of our BBB platform technology that binds to transferrin receptor, or adequately cover the antibodies, enzymes or proteins being developed in our ATV:TREM2, ETV:IDS, ETV:SGSH, ETV:IDUA, PTV:PGRN, ATV:Abeta, OTV, or other TV-enabled programs.

We have filed or intend to file patent applications on these aspects of our technology and product candidates;

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Filing, prosecuting, and defending patents on our BBB platform technology, product candidates and other technologies in all countries throughout the world would be prohibitively expensive, and the laws of foreign countries may not protect our rights to the same extent as the laws of the United States.

Further, our ability to pursue patents throughout the world may be delayed or affected due to the COVID-19 global pandemic.

Further, our ability to pursue patents throughout the world may be delayed or affected due to a public health crisis such as the COVID-19 global pandemic.

Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions.

3 unchanged sentences

The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets, and other intellectual property protection, particularly those relating to biotechnology products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our intellectual property and proprietary rights generally.

European applications will soon have the option, upon grant of a patent, of becoming a Unitary Patent which will be subject to the jurisdiction of the Unitary Patent Court ("UPC").

This will be a significant change in European patent practice.

In Europe, as of June 1, 2023, the Unitary Patent Court (UPC) has exclusive jurisdiction over Unitary Patents and offers a uniform and specialized framework for patent litigation at the European level.

Furthermore, European applications have the option, upon grant of a patent, of becoming a Unitary Patent and therefore subject to UPC.

As the UPC is a new court system, there is no precedent for the court, increasing the uncertainty.

55 unchanged sentences

Congress or the USPTO may impact the value of our patents.

For example, the Inflation Reduction Act (IRA) passed by Congress authorizes the Secretary of the Department of Health and Human Services (HHS) to negotiate prices directly with participating manufacturers for selected medicines covered by Medicare even if these medicines are protected by an existing patent.

For small molecule medicines, the process begins seven years after initial approval by the FDA.

While we do not believe that the IRA or its effects will impact our ability to obtain patents in the near future, we cannot be certain whether it will affect our patent strategy in the long run.

Issued patents covering our BBB platform technology, product candidates and other technologies could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad.

132 unchanged sentences

We will need to grow the size and capabilities of our organization, and we may experience difficulties in managing this growth.

As of March 31, 2024, we had approximately 375 emplo yees, all of whom were full-time.

As of June 30, 2024, we had approximately 364 emplo yees, all of whom were full-time.

As our development plans and strategies develop, we must add a significant number of additional managerial, operational, financial, and other personnel.

51 unchanged sentences

Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses.

Our operations, and those of our third-party research institution collaborators, CROs, CDMOs, suppliers, and other contractors and consultants, could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, health epidemics such as COVID-19, and other natural or man-made disasters or business interruptions, for which we are partly uninsured.

Our operations, and those of our third-party research institution collaborators, CROs, CDMOs, suppliers, and other contractors and consultants, could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, public health crises such as COVID-19, and other natural or man-made disasters or business interruptions, for which we are partly uninsured.

In addition, we rely on our third-party research institution collaborators for conducting research and development of our product candidates, and they may be affected by bank failures or instability in the financial services sector, government shutdowns, or withdrawn funding.

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We have experienced ownership changes in the past, and we may also experience ownership changes in the future as a result of subsequent shifts in our stock ownership, including in connection with our October 2022 offering, some of which are outside our control.

As a result, our ability to use our pre-change net operating loss carryforwards and other pre-change tax attributes to offset post-change taxable income or taxes may be subject to limitation.

Limitations may also apply under state law.

For example, recently enacted California legislation limits the use of state net operating loss carryforwards for tax years beginning on or after January 1, 2024 and before January 1, 2027.

As a result of this legislation or other unforeseen reasons, we may not be able to utilize some or all of our net operating loss carryforwards, even if we attain profitability.

We may be subject to adverse legislative or regulatory tax changes that could negatively impact our financial condition.

The rules dealing with U.S.

federal, state and local income taxation are constantly under review by legislators and by the IRS and the U.S.

federal, state and local income taxation are constantly under review by legislators and by the Internal Revenue Service and the U.S.

Treasury Department.

1 unchanged sentence

For example, in August 2022, the United States enacted the Inflation Reduction Act, which implemented a 15% minimum tax on book income for certain companies and introduced a 1% excise tax on stock buybacks.

In addition, the current tax administration has proposed changes to the orphan drug tax credit.

Changes in tax laws, regulation, or enforcement could adversely affect our stockholders or require us to implement changes to minimize increases in our tax liability.

23 unchanged sentences

• market conditions in the pharmaceutical and biotechnology sectors;

• other events or factors affecting general economic, industry, and market conditions, including bank failures or instability in the financial services sector, geopolitical events such as war and armed conflict, and outbreaks of pandemic diseases such as COVID-19.

In recent years, the stock market in general, and the market for pharmaceutical and biotechnology companies in particular, has experienced significant price and volume fluctuations that have often been unrelated or disproportionate to changes in the operating performance of the companies whose stock is experiencing those price and volume fluctuations.

25 unchanged sentences

LLC, SVB Securities LLC, and Cantor Fitzgerald & Co., as sales agents, to establish an at-the-market facility pursuant to which we may offer and sell from time to time up to $400.0 million in shares of our common stock.

On February 27, 2024, we announced a PIPE financing in which we sold 3,244,689 shares of our common stock and pre-funded warrants to purchase 26,046,065 shares of our common stock, resulting in gross proceeds of approximately $499.7 million.

Our decision to issue debt or equity securities in any future offering will depend on market conditions and other factors beyond our control, and therefore we cannot predict or estimate the amount, timing, or nature of any future offerings.

57 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors