What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-04 compared with 2026-05-14 · 98 added, 60 removed, 137 unchanged (54% of the section changed)

29 unchanged sentences

A drug is eligible for BTD if preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over available treatments in one or more clinically significant endpoints.

• Additionally, in February 2026, as a result of a START pilot program meeting with the FDA, we announced continued alignment with the FDA to consider the use of skin FXN as a novel surrogate endpoint reasonably likely to predict clinical benefit to support a planned Biologics License Application (“BLA”) submission seeking accelerated approval and that the use of FXN as a novel surrogate endpoint to support accelerated approval.

• In February 2026, as a result of a START pilot program meeting with the FDA, we announced continued alignment with the FDA to consider the use of skin FXN as a novel surrogate endpoint reasonably likely to predict clinical benefit to support a planned Biologics License Application (“BLA”) submission seeking accelerated approval and that the use of FXN as a novel surrogate endpoint to support accelerated approval.

There was also agreement on the type of analyses required to support the exposure response relationships for the nomlabofusp program.

The FDA also stated that the adequacy of the safety database will be a matter of review at the time of BLA submission.

We have scheduled a Type B meeting with the FDA later in the second quarter of 2026.

We plan to provide topline study data from our OL study in the second quarter of 2026 and we plan to initiate a rolling BLA seeking accelerated approval with the submission of nonclinical and clinical modules in June 2026.

We are continuing to focus on the completeness of our chemistry, manufacturing and controls ("CMC") module, and plan to submit the final modules, including the CMC module, in the second half of 2026.

If approved, we are targeting a U.S.

launch in the first half of 2027.

• In June 2026, following minutes from a multidisciplinary Type B pre-BLA meeting and FDA review of the nomlabofusp briefing package, we announced continued agreement with the FDA on key elements of a potential BLA submission including:

o confirmed that the existing data package appears capable of supporting submission and review of a BLA seeking accelerated approval based on data from the OL study;

approval will be a matter of review;

o reaffirmed its willingness to consider FXN as a novel surrogate endpoint and confirmed that our exposure-response analysis linking nomlabofusp exposure to clinical outcomes may support the BLA submission;

o stated that the prospectively collected gene expression and lipid biomarker data may provide an opportunity to further characterize the biological activity of nomlabofusp beyond FXN tissue concentrations;

o agreed to a rolling BLA submission.

• In June 2026, we submitted the first module of our rolling BLA submission and expect that the remaining modules will be submitted in the second half of 2026.

• In June 2026, we reported open label study data.

As of June 2026, 43 adolescent and adult participants in the OL study received at least one dose of nomlabofusp and 22 participants remain in the study with a maximum treatment duration of more than 800 days.

More than 10,000 doses of nomlabofusp have been administered.

o Consistent Long-term Safety Profile:

▪ Longer-term dosing was generally well tolerated with thirteen adults on treatment for one year, seven for 18 months and three for two years;

▪ The most common adverse events remained mild-to-moderate local injection site reactions, which decreased in frequency over time and did not lead to any withdrawals from the study;

▪ Twenty-one participants discontinued since study initiation in January 2024;

• Ten participants experienced anaphylaxis and discontinued the study, including nine participants with prior nomlabofusp exposure;

all participants who experienced

anaphylaxis responded to standard therapy and all returned to their usual state of health with no further sequelae;

• Three participants experienced generalized urticaria and discontinued the study, with no new occurrences observed following initiation of antihistamine therapy;

• Other discontinuations included three associated with other adverse events and five discontinuations unrelated to treatment, primarily due to logistical factors such as the inconvenience of participating in a long-term study;

▪ Of the eleven participants who had previously not been exposed to nomlabofusp, one had anaphylaxis;

o Sustained Increases in Skin FXN Levels Comparable to Asymptomatic Carriers.

Skin FXN levels increased following nomlabofusp administration, with 82% (9/11) of participants achieving levels above those in asymptomatic carriers by six months, 100% (9/9) reaching this threshold at one year, and 100% (3/3) maintaining it through 18 months;

o Improvements in Key Clinical Outcome Measures Relative to FACOMS Natural History Population.

▪ Directional improvement across key clinical endpoints, including the Modified Friedreich Ataxia Rating Scale (mFARS), the Friedreich Ataxia Rating Scale-Activities of Daily Living (FARS-ADL), 9-hole peg test (9-HPT) was sustained following one year of nomlabofusp treatment (n=13) relative to a worsening in those outcomes observed in the FACOMS reference population.

Nomlabofusp led to a 2.6-point benefit in mFARS at one year;

▪ Improvement in clinical outcomes was associated with increased skin FXN levels, supporting the potential for nomlabofusp to provide clinical benefit across a broad spectrum of patients with FA, including those with advanced disease;

For our global confirmatory Phase 3 study, we are planning sites in the U.S., E.U., U.K., Canada and Australia.

We have obtained feedback from both the FDA and the EMA on the study protocol.

We plan to initiate dosing of the first patient in mid-2026.

Financing Activities, including Recent Material Financings

We have funded our operations to date primarily with proceeds from sales of common stock, proceeds from the sale of prefunded warrants for the purchase of common stock, the acquisition in 2020 of cash, cash equivalents, marketable securities, and restricted cash upon the merger with Zafgen, Inc.

(“Zafgen”) and, prior to the 2020 merger with Zafgen, capital contributions from Chondrial Holdings, LLC.

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.

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.

In February 2026, we completed an underwritten public offering in which we issued and sold 23,000,000 shares of our common stock, including the exercise in full of the underwriters' option to purchase additional shares, at a public offering price of $5.00 per share.

We received net proceeds of approximately $107.6 million, after deducting underwriting discounts, commissions, and other offering expenses.

We plan to initiate dosing of the first patient in the third quarter of 2026.

Critical Accounting Policies and Significant Judgments and Estimates

Our condensed, consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles (“GAAP”).

The preparation of our consolidated financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amount of assets, liabilities, costs and

expenses, and related disclosures.

The preparation of our consolidated financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amount of assets, liabilities, costs and expenses, and related disclosures.

We believe that the estimates and assumptions involved in the accounting policies described below may have the greatest potential impact on our consolidated financial statements and, therefore, consider these to be our critical accounting policies.

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Stock Compensation Expense

We measure all stock-based awards granted to employees and directors based on the fair value on the date of grant using the Black-Scholes option-pricing model.

We measure all stock options granted to employees and directors based on the fair value on the date of grant using the Black-Scholes option-pricing model.

The Black-Scholes option-pricing model requires the use of highly subjective assumptions which determine the fair value of stock-based awards.

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If factors change and different assumptions are used, our stock-based compensation expense could be materially different in the future.

We measure restricted stock options and performance-based restricted stock units based on the grant-date fair value of based on the closing price of the Company’s common stock on the date of grant (or, if the grant date is not a business day, the closing price on the preceding business day).

For restricted stock unit awards, we recognize expense over the expected service period of the recipient.

For restricted performance-based restricted stock awards we recognize expense over the estimated period the awards are expected to be earned;

that period is the period once the performance objective is determined to be likely, once the performance goal is achieved.

Prior to May 28, 2020, we were a private company and lacked company-specific historical and implied volatility information for our common stock.

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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 March 31, 2026, 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 March 31, 2026.

As of June 30, 2026, 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 June 30, 2026.

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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Results of Operations

Comparison of three months ended March 31, 2026 and 2025

The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

Comparison of three months ended June 30, 2026 and 2025

The following table summarizes our results of operations for the three months ended June 30, 2026 and 2025:

Three Months Ended June 30,

(in thousands)

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Research and Development Expenses

Research and development expenses for the three months ended March 31, 2026 decreased $1.5 million compared to the three months ended March 31, 2025.

The decrease in research and development expenses was primarily driven by a decrease of $3.1 million in nomlabofusp manufacturing related costs and a decrease of $0.5 million in clinical trial costs primarily related to the completion of the Company’s adolescent run-in study in the first half of 2025, partially offset by an increase of $1.6 million in professional consulting fees predominantly related to BLA preparation and inspection readiness, and an increase of $0.2 million in personnel expenses due to increased headcount.

Research and development expenses for the three months ended June 30, 2026 increased $4.6 million compared to the three months ended June 30, 2025.

The increase in research and development expenses was primarily driven by a $2.3 million increase in process performance qualification, and other drug manufacturing activities at our third-party manufacturers and a $2.0 million increase in professional and consulting fees associated with our ongoing and planned clinical trials, data analysis costs, FDA inspection readiness expenditures, as well as Biologics License Application preparation costs.

General and Administrative expenses

General and administrative expenses for the three months ended March 31, 2026 increased $1.5 million compared to the three months ended March 31, 2025.

The increase in general and administrative expenses was primarily due to an increase of $1.1 million in professional fees related to commercial consulting services performed and an increase of $0.3 million of personnel costs associated with increased headcount.

General and administrative expenses for the three months ended June 30, 2026 increased $1.9 million compared to the three months ended June 30, 2025.

The increase in general and administrative expenses primarily related to the acceleration of commercial activities as we prepare for the planned mid-2027 launch of nomlabofusp, if approved.

This included an increase of $0.7 million of increased compensation costs associated with additional commercial and related headcount, an increase of $0.5 million of market development activities and commercial readiness efforts as well as an increase of $0.5 million in legal fees supporting commercialization and development efforts.

Other Income (expense), net

Other income (expense), net was $1.5 million income in the three months ended March 31, 2026 compared to $1.9 million income in the three months ended March 31, 2025.

Other income (expense), net was $1.6 million in the three months ended June 30, 2026 compared to $1.6 million income in the three months ended June 30, 2025.

Comparison of six months ended June 30, 2026 and 2025

The following table summarizes our results of operations for the six months ended June 30, 2026 and 2025:

Six Months Ended June 30,

(in thousands)

Statement of Operations Data:

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expense), net

Research and Development Expenses

Research and development expenses for the six months ended June 30, 2026 increased $3.1 million compared to the six months ended June 30, 2025.

This increase was driven by a $3.7 million increase in professional and consulting fees associated with our ongoing and planned clinical trials, data analysis costs, inspection readiness expenditures as well as Biologics License Application preparation costs partially offset by lower manufacturing activities and there related costs in the six month period ended June 30, 2026 compared to the six month period ended June 30, 2026.

General and administrative expenses for the six months ended June 30, 2026 increased $3.4 million compared to the six months ended June 30, 2025.

The increase in general and administrative expenses primarily related to the acceleration of commercial activities as we prepare for the planned mid-2027 launch of nomlabofusp, if approved.

This included an increase of $1.6 million in market research, market development and other commercial readiness activities, an increase of $1.0 million of increased compensation costs associated with additional commercial and related headcount,as well as an increase of $0.5 million in legal fees supporting commercialization and development efforts.

Other Income (expense), net

Other income (expense), net was $3.1 million income in the six months ended June 30, 2026 compared to $3.5 million income in the six months ended June 30, 2025.

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

Since our inception, we have not generated any revenue from any sources, including from product sales, and have incurred significant operating losses and negative cash flows from our operations.

We have devoted substantially all of our resources to developing nomlabofusp, building our intellectual property portfolio, developing third-party manufacturing capabilities, business planning, capital raising, and providing general and administrative support for such operations.

Financing Activities, including Recent Material Financings

(“Zafgen”) and, prior to the 2020 merger with Zafgen, capital contributions from Chondrial Holdings, LLC.

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

We received net proceeds of approximately $107.6 million, after deducting underwriting discounts, commissions, and other offering expenses.

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

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

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Net cash used in operating activities

During the three months ended March 31, 2026, operating activities used $44.6 million of cash, resulting from our net loss of $29.6 million, adjusted for noncash expenses of $1.9 million and changes in our operating assets and liabilities resulting in a use of cash of $16.9 million.

During the six months ended June 30, 2026, operating activities used $88.6 million of cash, resulting from our net loss of $62.4 million, adjusted for noncash expenses of $3.7 million and changes in our operating assets and liabilities resulting in a use of cash of $30.0 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.

Noncash expenses primarily relate to stock-based compensation expenses.

The change in operating assets and liabilities was primarily due to an decrease in accrued expenses.

During the three months ended March 31, 2025, operating activities used $26.5 million of cash, resulting from our net loss of $29.3 million, adjusted for noncash expenses of $1.1 million and changes in our operating assets and liabilities resulting in a source of cash of $1.6 million.

The change in operating assets and liabilities was primarily due to decreases in prepaid expenses and accrued expenses, partially offset by an increase in accounts payable.

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.

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.

Noncash expenses are primarily stock-based compensation expenses.

The change in operating assets and liabilities was primarily due to a decrease in prepaid expenses, partially offset by a decrease in accrued expense and accounts payable.

Noncash expenses primarily relate to stock-based compensation expenses.

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

Net cash provided by (used in) investing activities

During the three months ended March 31, 2026, investing activities provided $29.0 million of cash from the maturities of marketable securities.

During the three months ended March 31, 2025, investing activities provided $14.4 million of cash from the maturities of $67.0 million of marketable securities, partially offset by the purchase of $52.5 million in marketable securities.

During the six months ended June 30, 2026, investing activities used $11.9 million.

This use of cash resulted from purchases of $63.3 million of marketable securities, partially offset by the maturities of $51.5 million of marketable securities.

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

This source of cash resulted from the maturities of $113.5 million of marketable securities partially offset by purchases of $80.1 million of marketable securities.

Net cash provided by financing activities

During the three months ended March 31, 2026, financing activities provided $108.1 million of cash flows from an offering of common stock.

During the three months ended March 31, 2025, there were no financing activities.

During the six months ended June 30, 2026, financing activities provided $107.7 million of cash flows from an offering of common stock.

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

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 incurred net losses of approximately $29.6 million and $29.3 million for the three months ended March 31, 2026 and 2025, respectively.

As of March 31, 2026, we had an accumulated deficit of $464.4 million and cash, cash equivalents, and marketable securities of $200.4 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.

Since our inception, we have not generated any revenue from any sources, including from product sales, and have incurred significant operating losses and negative cash flows from our operations.

We have incurred net losses of approximately $62.4 million and $55.5 million for the six months ended June 30, 2026 and 2025, respectively.

As of June 30, 2026, we had an accumulated deficit of $497.2 million.

As of June 30, 2026, we had approximately $156.3 million of cash, cash equivalents and marketable securities.

In accordance with Accounting Standards Update (“ASU”) No.

2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”, we have evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that these unaudited condensed consolidated financial statements are issued.

These cash resources are not sufficient to fund our planned operations for a period of at least one year from the date these

financial statements are issued.

While we expect our cash, cash equivalents and marketable securities will fund our forecasted operating expenses and capital expenditure requirements into the third quarter of 2027, 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.

We expect to incur significant expenses and operating losses for the foreseeable future as we expect to continue to incur expenses in connection with our ongoing activities, if and as we:

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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.

In July 2025, we sold 21,562,500 shares of our common stock, after deducting underwriters' discounts, commissions and other offering expenses and received net proceeds of approximately $65.0 million, after deducting underwriting discounts, commissions, and other offering expenses.

We received net proceeds of approximately $107.6 million, after deducting underwriting discounts, commissions, and other offering expenses.

We anticipate that our current cash, cash equivalents, and marketable securities as of March 31, 2026 will fund operations into the second quarter of 2027.

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 could 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.

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.

There can be no assurance that, if required, we would be able to raise sufficient additional capital on acceptable terms, if at all.

If such additional financing is not available on satisfactory terms, or is not available in sufficient amounts, or we do not have sufficient authorized shares, we may be required to delay, limit, or eliminate the development of business opportunities and our ability to achieve our business objectives, our competitiveness, and our business, financial condition, and results of operations will be materially adversely affected.

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, volatility of capital markets, and other adverse macroeconomic events, including those due to inflationary pressures, rising interest rates, bank instability and the ability of the U.S.

government to manage federal debt limits, as well as the potential impact of health crises on the global financial markets may reduce our ability to access capital, which could negatively affect our liquidity and ability to continue as a going concern.

If we are required to obtain sufficient funding, but are unable to do so, 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.

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 business.

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.

Until we can generate substantial revenue, if ever, we will need to raise additional capital to fund our ongoing operations, and continue to evaluate opportunities to further finance our operating cash needs through a combination of some, or all, of the following:

equity, debt and royalty offerings, collaborations, strategic alliances, and/or marketing, distribution or licensing arrangements.

There is no assurance, however, that additional financing will be available when needed or that we will be able to obtain financing on terms acceptable to us.

If we are unable to obtain funding when required in the future, we could be required to delay, reduce, or eliminate research and development programs, or commercialization efforts, which could adversely affect our business prospects.

These conditions raise substantial doubt about our ability to continue as a going concern.

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.

5 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 2. Management’s Discussion and Analysis