What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-05 compared with 2025-08-14 · 67 added, 63 removed, 183 unchanged (42% of the section changed)

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We initiated human clinical studies of nomlabofusp in 2019.

Since then, we have completed two Phase 1 clinical studies, a Phase 2 dose exploration study and a PK run-in study in adolescents (12-17 years old).

Since then, we have completed four clinical studies:

(i) two Phase 1 clinical studies, (ii) a Phase 2 dose exploration study and (iii) a PK run-in study in adolescents (12-17 years old).

In 2024, we initiated our open label extension study in patients with FA.

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In 2025, we changed the name of the open label extension study to the open label study, due to the inclusion of patients who had not participated in prior nomlabofusp clinical studies.

Our ongoing open label study is currently screening and enrolling eligible adolescents that completed dosing in the recently completed PK run-in study into the open label study.

In addition, we are also screening and enrolling patients with FA who have not participated in prior nomlabofusp clinical studies.

We are also planning to enroll children (2-11 years of age) directly into the open label study.

We have engaged in multiple discussions and interactions with the U.S.

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We have received Orphan Drug Designation and Fast Track Designation from the FDA.

We have been granted orphan drug designation in the European Union (the ”EU”) and access to the EU’s Priority Medicines Program (“PRIME”) Scheme.

We have been granted orphan drug designation in the European Union (the “EU”) and access to the EU’s Priority Medicines

Program (“PRIME”) Scheme.

We have also received access to the EMA’s Innovative Licensing and Access Pathway (“ILAP”).

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All newly enrolled participants will start dosing at 50 mg of nomlabofusp daily.

In March 2025, we announced that our Safety Monitoring Team has deemed anaphylaxis as an adverse drug reaction likely associated with nomlabofusp and therefore, we expect to see additional reactions.

To reduce the risk of allergic reactions, including anaphylaxis, we amended the open label study protocol to administer premedication with antihistamines for the first month of dosing.

In March 2025, we announced that our Safety Monitoring Team had identified anaphylaxis as an adverse drug reaction likely associated with nomlabofusp.

• In January 2025, we initiated dosing of adolescents (12-17 years old) in our PK run-in study for patients with FA.

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The frozen solution is the dosage form currently being used in the open label study.

In May 2025, we began to introduce the lyophilized product formulation, which is intended for commercialization, into the open label study with new study participants.

In July 2025, we began to introduce the lyophilized product formulation, which is intended for commercialization, into the open label study with new study participants.

• In March 2025, we announced that FDA stated as part of a START pilot program that it is open to considering the use of FXN concentration as a reasonably likely surrogate endpoint (“RLSE”) and the acceptability of FXN concentration as an RLSE to support accelerated approval will be a matter of review in a future marketing application.

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• In June 2025, the FDA provided safety database recommendations for a Biologics License Application, (“BLA”) seeking accelerated approval, which included evaluating safety in at least 30 participants with continuous study drug exposure for six months and a subset of at least 10 of those participants with continuous study drug exposure for one year, with the large majority of data coming from participants receiving the 50 mg dose.

In a prior communication received in March, FDA stated that it is open to the use of skin FXN concentrations as a RLSE and acknowledged the submitted data appear to support a relationship between increased skin FXN and relevant tissues such as the heart, dorsal root ganglion, and skeletal muscle.

Acceptability of increases in skin FXN for accelerated approval will be decided during future BLA review.

• In July 2025, we announced the publication of nonclinical data evaluating the mechanism of action, pharmacodynamics and pharmacology of nomlabofusp as a novel FXN protein replacement therapy designed to address the underlying cause of FA in two peer-reviewed articles.

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FDA in support of using skin FXN concentrations as a RLSE for our registrational program seeking accelerated approval for nomlabofusp.

Nomlabofusp plans and milestones include the following:

• The ongoing open label study continues to enroll, and active study participants are currently receiving the 50 mg dose of nomlabofusp.

We plan to provide an update in September 2025 on open label data on at least 30 to 40 study participants who received at least one dose of nomlabofusp.

Safety and PK data from the recently completed adolescent PK run-in study are also expected as part of the September 2025 update.

• Adolescent participants from the PK run-in study are currently screening and enrolling in the open label study.

We are also screening and enrolling into the open label study patients with FA who have not participated in prior nomlabofusp clinical studies.

In addition, we plan to enroll children (2 to 11 years of age) directly into the open label study.

• In the second quarter of 2026, we plan to submit a BLA seeking accelerated approval.

• Following feedback from FDA and EMA on the study protocol, global Phase 3 study sites in the U.S., European Union, U.K., Canada, and Australia were identified and are currently being qualified and initiated.

We expect to begin patient recruitment later this year.

• In September 2025, we announced positive data from our ongoing long-term open label study:

o In four completed studies and the ongoing open label study, 65 participants received at least one dose of nomlabofusp, including 39 in the open label study, with 14 on treatment for at least six months and eight for over one year in the open label study.

o Consistent directional improvements across four key clinical outcomes observed in the open label study relative to a Friedreich’s Ataxia Clinical Outcomes Measure Study (FACOMS) reference population and the observed increase in skin FXN levels.

We believe these new data, as well as the improvement in abnormal lipid profiles observed in prior completed studies, provide support that nomlabofusp increases FXN in patients with FA and that the strategy of FXN replacement has the potential to result in a clinical benefit.

o Changes observed in skin FXN levels, and clinical outcomes after nomlabofusp administration across diverse participants with FA, including individuals with advanced disease are all directionally consistent and suggest a potential treatment effect.

o Of the 39 participants in the open label study (and of 65 total participants who received at least 1 dose in all nomlabofusp studies), 7 experienced anaphylaxis in the first 6 weeks of dosing and returned to their usual state of health after standard treatment.

Anaphylaxis is more common upon re-exposure to a drug after a gap in dosing;

in the open label study, of the 10 participants who had not had prior exposure to nomlabofusp only 1 experienced anaphylaxis (this reaction was one of the 7 events discussed above).

Excluding these events, long term dosing of nomlabofusp was generally well tolerated including 14 on treatment for at least 6 months and 8 on treatment for over 1 year.

Our nomlabofusp plans and milestones include the following:

• We amended the open label study protocol to include adolescent and adult patients who have not previously participated in a prior nomlabofusp study.

After the anaphylaxis events discussed above, we introduced a new dosing regimen that the FDA accepted.

Participants will initially receive a 5 mg test dose followed by a 25 mg dose one hour later under observation.

Nomlabofusp 25 mg will then be administered once daily through Day 30 and then the dose will be increased to 50 mg once daily.

• We plan to provide an update on regulatory discussions and an open label study update in the first quarter of 2026.

• We plan to submit a BLA seeking accelerated approval in the second quarter of 2026.

• The modified starting dose regimen is also being incorporated into the global phase 3 protocol.

We continue to qualify sites globally and prepare for study initiation and patient enrollment.

Financing Activities, including Recent Material Financings

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We received net proceeds of approximately $161.8 million after deducting underwriting discounts, commissions and other offering expenses.

In May 2024, we entered into a Sales Agreement (the "2024 ATM Agreement") with Guggenheim Securities, LLC in connection with the establishment of an “at-the-market” offering program providing for the sale of up to an aggregate of $100 million of shares of our common stock from time to time.

In May 2024, we entered into a Sales Agreement (“2024 ATM Agreement”) with Guggenheim Securities, LLC in connection with the establishment of an “at-the-market” offering program providing for the sale of up to an aggregate of $100 million of shares of our common stock from time to time.

To date, we have made no sales under the 2024 ATM agreement.

Subsequent to June 30, 2025, we completed an underwritten public offering in which we issued and sold 21,562,500 shares of our common stock, including the exercise in full of the underwriters' option to purchase additional shares, at a public offering price of $3.20 per share.

We received net proceeds of approximately $65.1 million.

In July 2025, we completed an underwritten public offering in which we issued and sold 21,562,500 shares of our common stock, including the exercise in full of the underwriters' option to purchase additional shares, at a public offering price of $3.20 per share.

We received net proceeds of approximately $65.0 million, after deducting underwriting discounts, commissions and other offering expenses .

Critical Accounting Policies and Significant Judgments and Estimates

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The Board established specified performance criteria and a corresponding performance period over which such performance criteria must be achieved, the satisfaction of which are conditions to earning the January 2025 PSU Awards, and vesting of the underlying RSUs.

As of June 30, 2025, the underlying performance criteria of the January 2025 PSU Awards were determined to be not probable of achievement, and no stock-based compensation expense was recognized for the three months ended June 30, 2025.

As of September 30, 2025, the underlying performance criteria of the January 2025 PSU Awards were determined to be not probable of achievement for accounting purposes and no stock-based compensation expense was recognized for the three months ended September 30, 2025.

We classify stock-based compensation expense in our consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.

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• payments made under our third-party licensing agreements;

• sponsored research agreements;

• laboratory consumables;

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A change in the outcome of one or more of these variables with respect to the development of a product candidate could significantly change the costs, timing, and viability associated with the development of that product candidate.

For example, if the FDA or another regulatory authority were to require us to conduct additional non-clinical or clinical trials beyond those that we currently anticipate 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 on the completion of clinical development.

we could be required to expend significant additional financial resources and time on the completion of clinical development.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel costs, consisting of salaries, related benefits and stock-based compensation, costs related to our executive, finance, information technology, and costs related to other administrative functions.

General and administrative expenses also include insurance expenses and professional fees for auditing, tax, and legal services, including legal expenses to pursue patent protection for our intellectual property.

General and administrative expenses consist primarily of personnel costs, consisting of salaries, related benefits and stock-based compensation, costs related to our executive, finance, commercial, information technology, and costs related to other administrative functions.

General and administrative expenses also include insurance expenses and professional fees for auditing, commercial readiness costs, tax, and legal services, including legal expenses to pursue patent protection for our intellectual property as well as reimbursability and related costs.

We expect that our general and administrative expenses will increase in the foreseeable future as we hire additional employees to implement, improve, and scale our operational, financial, commercial and management systems.

Results of Operations

Comparison of three months ended June 30, 2025 and 2024

The following table summarizes our results of operations for the three months ended June 30, 2025 and 2024:

Three Months Ended June 30,

Comparison of three months ended September 30, 2025 and 2024

The following table summarizes our results of operations for the three months ended September 30, 2025 and 2024:

Three Months Ended September 30,

(in thousands)

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Research and Development Expenses

Research and development expenses for the three months ended June 30, 2025 increased $3.7 million compared to the three months ended June 30, 2024.

The increase in research and development expenses was primarily attributable to an increase of $2.4 million in professional consulting fees associated with ongoing clinical studies and worldwide regulatory activities, an increase of $1.3 million in personnel costs associated with increased headcount, an increase of $0.6 million in clinical costs primarily associated with the start of an anticipated confirmatory study that would be required as part of an accelerated approval of our planned BLA submission expected in the second quarter of 2026, partially offset by a decrease of $0.8 million in costs incurred under related to the Friedreich’s Ataxia Research Alliance (FARA) TRACK-FA program (a neuroimaging consortium that includes pharmaceutical, biotechnology, academic and clinical partners.

The consortium will conduct a natural history study designed to establish disease-specific neuroimaging biomarkers to track disease progression in the brain and spinal cord and provide a basis for utilizing these biomarkers in clinical trials).

Research and development expenses for the three months ended September 30, 2025 increased $31.0 million compared to the three months ended September 30, 2024.

The increase in research and development expenses was primarily attributable to an increase of $25.8 million in nomlabofusp manufacturing costs, an increase of $1.8 million in professional and consulting fees associated with ongoing clinical studies and increasing worldwide regulatory activities, an increase of $1.5 million in clinical costs primarily associated with the start of an anticipated confirmatory study that are required as part of an accelerated approval of our planned BLA submission expected in the second quarter of 2026, an increase of $1.0 million in personnel costs associated with increased headcount, and an increase of $0.9 million in non-clinical costs related to assay development.

General and Administrative expenses

General and administrative expenses for the three months ended June 30, 2025 decreased $0.5 million compared to the three months ended June 30, 2024.

The decrease in general and administrative expenses was primarily due to a decrease of $0.4 million in stock compensation costs related to the full vesting of stock options granted at higher value stock options and a decrease of $0.3 million in professional service expenses primarily related to legal services performed, partially offset by an increase of $0.1 million of personnel costs associated with increased headcount.

General and administrative expenses for the three months ended September 30, 2025 increased $0.2 million compared to the three months ended September 30, 2024.

The increase in general and administrative expenses was primarily due to an increase of $0.3 million of personnel costs associated with increased headcount and an increase of $0.2 million in professional fees primarily related to legal services performed.

The increase was largely offset by a decrease of $0.2 million in stock compensation costs related to the full vesting of previously issued stock options granted at higher value stock options.

Other Income (expense), net

Other income (expense), net was $1.6 million income in the three months ended June 30, 2025 compared to $3.0 million income in the three months ended June 30, 2024.

The decrease relates to a lower levels of investable cash, cash equivalents and marketable securities.

Comparison of six months ended June 30, 2025 and 2024

The following table summarizes our results of operations for the six months ended June 30, 2025 and 2024:

Six Months Ended June 30,

Other income (expense), net was $1.8 million income in the three months ended September 30, 2025 compared to $2.8 million income in the three months ended September 30, 2024.

The decrease was primarily driven by lower interest and accretion income due to lower interest yields and lower average investable cash, cash equivalents, and marketable securities balances.

Comparison of nine months ended September 30, 2025 and 2024

The following table summarizes our results of operations for the nine months ended September 30, 2025 and 2024:

Nine Months Ended September 30,

(in thousands)

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Research and Development Expenses

Research and development expenses for the six months ended June 30, 2025 increased $17.3 million compared to the six months ended June 30, 2024.

The increase in research and development expenses was primarily attributable to an increase of $7.1 million in nomlabofusp manufacturing costs, an increase of $3.5 million in professional consulting fees associated with increasing clinical, regulatory and quality operations, an increase of $3.4 million in clinical costs primarily associated with the start of an anticipated confirmatory study that would be required as part of an accelerated approval of our planned BLA submission expected in the second quarter of 2026, an increase of $2.9 million in personnel costs, an increase of $0.8 million in nonclinical costs related to assay development, and partially offset by a decrease of $0.8 million in costs incurred under the TRACK-FA program discussed above.

Research and development expenses for the nine months ended September 30, 2025 increased $48.3 million compared to the nine months ended September 30, 2024.

The increase in research and development expenses was primarily attributable to an increase of $32.9 million in nomlabofusp manufacturing costs, an increase of $5.4 million in professional consulting fees associated with ongoing clinical studies and worldwide regulatory activities, an increase of $4.8 million in clinical costs primarily associated with initiating the anticipated confirmatory study required as part of an accelerated approval of our planned BLA submission expected in the second quarter of 2026, an increase of $3.9 million in personnel costs associated with increased quality and regulatory headcount and an increase of $1.7 million in nonclinical costs related to assay development, and partially offset by a decrease of $0.8 million in costs incurred under the TRACK-FA program.

General and Administrative expenses

General and administrative expenses for the six months ended June 30, 2025 increased $0.3 million compared to the six months ended June 30, 2024.

The increase in general and administrative expenses was primarily due to an increase of $0.8 million in personnel costs and an increase of $0.3 million in professional services primarily related to consulting fees associated with ongoing pre-commercial pre-launch activities, partially offset by a decrease of $0.7 million in stock compensation costs related to the full vesting of stock options granted at higher value stock options higher value stock options than those that have recently been granted.

General and administrative expenses for the nine months ended September 30, 2025 increased $0.6 million compared to the nine months ended September 30, 2024.

The increase in general and administrative expenses was primarily due to an increase of $1.1 million of personnel costs associated with increased headcount (primarily commercial) and an increase of $0.5 million in professional service expenses primarily related to commercial start-up activities, partially offset by a decrease of $0.8 million in stock compensation costs related to the full vesting of previously issued stock options granted at higher value stock options.

Other Income (expense), net

Other income (expense), net was $3.5 million income in the six months ended June 30, 2025 compared to $5.1 million income in the six months ended June 30, 2024.

The decrease primarily relates to a lower levels of investable cash, cash equivalents and marketable securities.

Other income (expense), net was $5.3 million income in the nine months ended September 30, 2025 compared to $7.8 million income in the nine months ended September 30, 2024.

The decrease was primarily driven by lower interest and accretion income due to lower interest yields and lower average investable cash, cash equivalents, and marketable securities balances.

Liquidity and Capital Resources

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The following table summarizes our sources and uses of cash for each of the periods presented below:

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

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Net cash used in operating activities

During the six months ended June 30, 2025, operating activities used $45.9 million of cash, resulting from our net loss of $55.5 million, adjusted for noncash expenses of $2.5 million and changes in our operating assets and liabilities resulting in a source of cash of $7.1 million.

During the nine months ended September 30, 2025, operating activities used $74.7 million of cash, resulting from our net loss of $103.2 million, adjusted for noncash expenses of $4.0 million and changes in our operating assets and liabilities resulting in a source of cash of $24.5 million.

Our net loss was primarily attributed to research and development activities related to our nomlabofusp program and our general and administrative expenses as described above.

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The change in operating assets and liabilities was primarily due to a increases in prepaid expenses, accounts payable, and accrued expenses.

During the six months ended June 30, 2024, operating activities used $24.4 million of cash, resulting from our net loss of $36.3 million, adjusted for noncash expenses of $2.1 million and changes in our operating assets and liabilities resulting in a source of cash of $9.7 million.

During the nine months ended September 30, 2024, operating activities used $48.9 million of cash, resulting from our net loss of $51.8 million, adjusted for noncash expenses of $2.4 million and changes in our operating assets and liabilities resulting in a source of cash of $0.4 million.

Our net loss was primarily attributed to research and development activities related to our nomlabofusp program and our general and administrative expenses as described above.

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Net cash provided by (used in) investing activities

During the six months ended June 30, 2025, investing activities provided $33.3 million.

During the nine months ended September 30, 2025, investing activities provided $66.3 million.

This source of cash resulted from the maturities of $150.0 million of marketable securities partially offset by purchases of $83.6 million of marketable securities.

During the six months ended June 30, 2024, investing activities used $131.9 million of cash.

During the nine months ended September 30, 2024, investing activities used $104.6 million.

This net use of cash was due to the purchase of $189.2 million of marketable securities, partially offset by $85.0 million of cash provided by maturities of marketable securities.

Net cash provided by financing activities

During the six months ended June 30, 2025, there were no financing activities.

During the six months ended June 30, 2024, financing activities provided $161.8 million of cash flows primarily from an offering of common stock.

During the nine months ended September 30, 2025, financing activities provided $65.3 million of cash flows from an offering of common stock.

During the nine months ended September 30, 2024, financing activities provided $161.8 million of cash flows primarily from an offering of common stock.

Operating Capital Requirements

We have not yet commercialized any products and do not expect to generate revenue from the commercial sale of any products for several years, if at all.

We have to date incurred net losses.

We incurred net losses of approximately $55.5 million and $36.3 million for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, we had an accumulated deficit of $324.6 million and cash cash equivalents and marketable securities of $138.5 million, excluding restricted cash of $0.6 million.

We have incurred net losses of approximately $103.2 million and $51.8 million for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, we had an accumulated deficit of $372.3 million and cash, cash equivalents, and marketable securities of $175.4 million, excluding restricted cash of $0.6 million.

Losses have resulted principally from costs incurred in connection with research and development activities, and general and administrative costs associated with the development of nomlabofusp and our operations.

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• expand our operational, financial, commercial and management systems and personnel, including personnel to support our clinical development and future commercialization efforts and our operations as a public company.

We anticipate that current cash, cash equivalents and marketable securities as of June 30, 2025,combined with the net proceeds of $65.1 million from our July, 2025 underwritten public offering, will fund operations into the fourth quarter of 2026.

We anticipate that current cash, cash equivalents, and marketable securities as of September 30, 2025 will fund operations into the fourth quarter of 2026.

If we encounter unexpected delays in our clinical trials or if there are other unanticipated changes to our operating plan from our current assumptions that negatively impact our operations, we may reduce expenditures in order to further extend our existing cash resources.

Until we can generate substantial revenue, if ever, we expect to seek additional funding through a combination of public or private equity offerings, debt/royalty financings, collaborations, strategic alliances and licensing arrangements or other sources.

The incurrence of indebtedness would result in increased fixed payment obligations and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, minimum cash balances, limitations on our ability to acquire, sell or license intellectual property rights, and other operating restrictions that could adversely impact our ability to conduct our business.

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We could also be required to seek funds through arrangements with collaborative partners, strategic alliances, or otherwise at an earlier stage than otherwise would be desirable and we may be required to relinquish rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects.

In addition, geopolitical tensions including regional conflicts around the world, adverse macroeconomic events, including those due to inflationary pressures, rising interest rates, banking instability, monetary policy changes, changes in trade policies, including tariffs (including tariffs and trade protection measures that have been or may in the future be imposed by the U.S.

Government shutdown, tariffs (including tariffs and trade protection measures that have been or may in the future be imposed by the U.S.

or other countries), new laws and regulations, including, but not limited to the recently enacted Public Law 119-21, economic slowdowns or recessions, health epidemics, unforeseen emergencies and other outbreaks of communicable diseases could disrupt our operations, the operations of third parties on which we rely, or the operations of regulatory agencies we interact with in the development of nomlabofusp and any other product candidates that we may develop which may reduce our ability to access capital, which could negatively affect our liquidity and ability to continue as a going concern.

If we are unable to obtain sufficient funding when needed and/or on acceptable terms, we may be required to significantly curtail, delay or discontinue one or more of our research and development programs, the manufacture of clinical and commercial supplies, product portfolio expansion and/or pre commercialization efforts, which could adversely affect our business prospects, or we may be unable to continue operations.

If we are unable to obtain sufficient funding when needed and/or on acceptable terms, we may be required to significantly curtail, delay or discontinue one or more of our research and development programs, the manufacture of clinical and commercial supplies, product portfolio expansion and/or commercialization efforts, which could adversely affect our business prospects, or we may be unable to continue operations.

Certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell, or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our

Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates.

Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our capability to develop and commercialize our product candidates.

Off-Balance Sheet Arrangements

During the periods presented we did not have, and we currently do not have, any off-balance sheet arrangements, as defined under applicable SEC rules, such as relationships with unconsolidated entities or financial partnerships, which are often referred to as structured finance or special purpose entities, established for the purpose of facilitating financing transactions that are not required to be reflected on our balance sheets.

During the periods presented, and through the date of this filing, we do not have any off-balance sheet arrangements, as defined under applicable SEC rules, such as relationships with unconsolidated entities or financial partnerships, which are often referred to as structured finance or special purpose entities established for the purpose of facilitating financing transactions that are not required to be reflected on our balance sheets.

Recently Issued Accounting Pronouncements

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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 2. Management’s Discussion and Analysis