What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-10 compared with 2025-08-12 · 70 added, 74 removed, 287 unchanged (33% of the section changed)

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Overview and Pipeline

We are a clinical stage genetic medicines company on a mission to improve the lives of patients with neurodegenerative diseases.

We are a clinical stage genetic medicines company focused on improving the lives of patients with neurodegenerative diseases.

Our primary focus is the development and advancement of cutting-edge, one-time gene therapies designed to target critical underlying pathologies in these conditions.

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We have received positive regulatory feedback on the clinical pathway to treating FTD- C9orf72 patients and ALS patients with PBFT02.

We are proceeding with clinical development of PBFT02 in FTD- C9orf72 patients, and plan to begin patient enrollment upon site review and acceptance of the amended upliFT-D clinical trial protocol.

We are proceeding with clinical development of PBFT02 in FTD- C9orf72 patients, and have opened enrollment in the upliFT-D study for this population.

We are party to a series of sublicense agreements, as amended, with Gemma Biotherapeutics, Inc., or Gemma, a newly formed genetic medicines company co-founded by Dr.

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Prior to the execution of the Outlicense Transaction Agreements, we progressed four product candidates from preclinical to clinical stage development and had one active preclinical program in Huntington’s disease through our research collaboration with the Trustees of the University of Pennsylvania’s, or Penn’s, Gene Therapy Program, or GTP.

This collaboration provided access to differentiated scientific expertise for the conduct of rigorous preclinical studies to

generate promising product candidates.

This collaboration provided access to differentiated scientific expertise for the conduct of rigorous preclinical studies to generate promising product candidates.

Gemma is comprised of a core research team from GTP and is continuing the same approach to preclinical development to support the continued development of our preclinical Huntington’s disease program.

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CSF PGRN levels for the first patient treated with Dose 2 of PBFT02 (1.6e10 genome copies/g estimated brain weight, or 2.2e13 total genome copies) increased substantially from 1.5 ng/mL at baseline to 7.6 ng/mL at one month, approaching the upper limit of the range found in healthy adult controls.

In contrast, following PBFT02 administration, plasma PGRN levels were unaltered, remaining similar to baseline concentrations and below mean levels found in healthy adult

In contrast, following PBFT02 administration, plasma PGRN levels were unaltered, remaining similar to baseline concentrations and below mean levels found in healthy adult controls.

Dose 1 of PBFT02 resulted in an average 4% increase in plasma neurofilament light chain, or NfL, levels, a biomarker associated with disease progression, compared to baseline at 12 months post-treatment (n=4).

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● In five of eight patients, all treatment emergent adverse events were mild to moderate in severity.

● Three of eight patients experienced a total of four serious adverse events, or SAE.

● Three of eight patients experienced a total of four serious adverse events, or SAEs.

Patient 1 experienced the asymptomatic SAEs of venous sinus thrombosis, or VST, and hepatotoxicity.

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● No evidence of dorsal root ganglion toxicity, as measured by nerve conduction studies, and no complications during ICM administration were observed across any of the eight treated patients.

As of August 2025, we have completed dosing of Cohorts 1 and 2 in the upliFT-D study.

As of November 2025, we have completed dosing of Cohorts 1 and 2 in the upliFT-D study.

Cohort 1 consists of 5 patients who received Dose 1 of PBFT02, and Cohort 2 consists of 4 patients, split equally between Dose 1 and Dose 2 of PBFT02.

We have amended the upliFT-D clinical trial protocol to introduce a short course of low dose prophylactic anticoagulation, a decision supported by study investigators and the Independent Data Monitoring Committee, or IDMC.

Upon review and acceptance of the amended protocol at study sites, we plan to begin enrollment in Cohort 3, which is expected to consist of five to 10 FTD- GRN patients.

We have implemented the amended protocol at initial trial sites and are currently enrolling Cohort 3, which is expected to consist of five to ten FTD-GRN patients receiving Dose 2 of PBFT02.

In September 2025, we completed a Type D Chemistry, Manufacturing, and Controls meeting with the FDA and aligned on key elements of the analytical plan to establish comparability of our high-productivity, suspension-based PBFT02 manufacturing process.

We expect to deliver on the following related to our upliFT-D trial for PBFT02 for the treatment of FTD- GRN :

● Seek regulatory feedback on suspension-based manufacturing process comparability in the second half of 2025;

● Report updated interim safety and biomarker data from Dose 2 in the first half of 2026;

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There are no disease modifying therapies approved for the treatment of FTD- C9orf72 .

Based on available literature, we estimate the prevalence of FTD-

C9orf72 in the United States and Europe is approximately 21,000.

We plan to begin enrolling FTD- C9orf72 patients upon review and acceptance of the amended upliFT-D protocol at study sites.

Based on available literature, we estimate the prevalence of FTD- C9orf72 in the United States and Europe is approximately 21,000.

We have implemented the amended protocol at initial trial sites and are currently enrolling Cohort 4.

Similarly, we received positive regulatory feedback on the clinical pathway to treating ALS with PBFT02.

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Paused Research Programs

We also have a research program through the Gemma Collaboration Agreement for TLE, which was previously conducted under the research, collaboration and licensing agreement with Penn, as amended, previously the Penn Agreement and now referred to as the Penn License Agreement.

We also have a research program through the Gemma Collaboration Agreement for Temporal Lobe Epilepsy, or TLE, which was previously conducted under the research, collaboration and licensing agreement with Penn, as amended, previously the Penn Agreement and now referred to as the Penn License Agreement.

In order to reduce operating expenses, we have paused development of this program.

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Historically, we have funded our operations through the sale of convertible preferred stock and public offerings of common stock.

Our net losses were $9.4 million and $16.0 million for the three months ended June 30, 2025 and 2024, respectively, and $24.8 million and $32.7 million for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, we had

an accumulated deficit of $684.0 million.

Our net losses were $7.7 million and $19.3 million for the three months ended September 30, 2025 and 2024, respectively, and $32.5 million and $52.0 million for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, we had an accumulated deficit of $691.8 million.

Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, general and administrative expenditures.

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If we are unable to secure adequate additional funding, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more product candidates or delay our pursuit of potential in-licenses or acquisitions.

As of June 30, 2025, we had cash and cash equivalents of $57.6 million.

As of September 30, 2025, we had cash and cash equivalents of $52.8 million.

We expect our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2027.

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In addition, other than the Amended Gemma Sublicenses, we are obligated to pay to Penn a percentage of sublicensing income, ranging from the mid-single digits to low double digits, for sublicenses under the Penn License Agreement.

The agreement will expire on a licensed product-by-licensed product and country-by-country basis upon the later of (i) the expiration of the last valid claim of the licensed patent rights that covers the exploitation of such licensed product in such country, and (ii) the

expiration of the royalty period.

Pursuant to the Amended Gemma Sublicenses, Gemma is responsible for the payments to Penn related to the Outlicensed Programs.

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In addition, we entered into the Transition Services Agreement, as amended by the First Amendment to the Transition Services Agreement, dated January 31, 2025, pursuant to which, we provided transitional services at cost to Gemma through May 31, 2025, and are entitled to reimbursement for transitional services performed retroactively from March 1, 2024, related to the transfer of the Outlicensed Programs.

As of June 30, 2025, we have collected $5.0 million in initial payments and $4.7 million in transition services payments under these agreements.

Subsequent to June 30, 2025, we have applied $0.7 million in amounts owed to Gemma for the Huntington’s disease program against amounts due to us for transition services.

As of September 30, 2025, we have collected $7.5 million in initial payments and $4.8 million in transition services payments under these agreements.

In addition, we have applied $1.5 million in amounts owed to Gemma for the Huntington’s disease program against amounts due to us for transition services.

Collaboration and Manufacturing and Supply Agreements

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Product candidates in later stages of clinical development generally have higher development expenses than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

We expect our research and development expenses to decrease in the near future as a result of the reduction of our overall workforce by 55% and cessation of our lab operations in Hopewell, New Jersey in January 2025.

We expect that the reduction of expenses related to the Outlicensed Programs pursuant to the Outlicense Transaction Agreements will offset the increased expenses of advancing our remaining product candidates in the near future.

If our product candidate

portfolio progresses into later-stage clinical trials, we expect that our research and development expenses will increase in the future to support our continued research and development activities and production of clinical supply.

As such, we expect our research and development expenses to remain consistent in the near future.

If our product candidate portfolio progresses into later-stage clinical trials, we expect that our research and development expenses will increase in the future to support continued research and development activities and production of clinical supply.

General and Administrative Expenses

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We review long-lived assets, such as the right of use assets, or ROU assets, or property and equipment, for impairments when events or changes in circumstances indicate the carrying amount of the assets may not be recoverable.

During the six months ended June 30, 2025, we recognized impairment expenses related to property and equipment and certain other assets in connection with the announcement to reduce our workforce by 55% and cease our lab operations in Hopewell, New Jersey.

During the nine months ended September 30, 2025, we recognized impairment expenses related to property and equipment and certain other assets in connection with the announcement to reduce our workforce by 55% and cease our lab operations in Hopewell, New Jersey.

We reassessed asset groups at the lab in Hopewell, New Jersey, and evaluated such asset groups for impairment.

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Results of Operations

Comparison of the three months ended June 30, 2025 and 2024

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

Comparison of the three months ended September 30, 2025 and 2024

The following table sets forth 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 decreased by $4.6 million to $5.8 million for the three months ended June 30, 2025 from $10.4 million for the three months ended June 30, 2024.

Research and development expenses decreased by $4.4 million to $4.3 million for the three months ended September 30, 2025 from $8.7 million for the three months ended September 30, 2024.

The decrease was primarily due to the following:

● a decrease of $1.8 million in preclinical research expenses primarily related to the termination of our discovery research obligation under the Penn Agreement and reduced Huntington’s disease program expenses;

● a decrease of $1.6 million in wages and benefits due to a lower headcount from the restructuring in January 2025;

● a decrease of $1.8 million in wages and benefits due to a lower headcount following our restructuring in January 2025;

● a decrease of $0.8 million in facility and other expenses related to decreased depreciation expenses in connection with the disposal of our laboratory equipment;

● a decrease of $0.4 million in clinical operations expenses due to decreased activity in the GM1 program partially offset by increased activity supporting the FTD program;

● a decrease of $0.4 million in share-based compensation expense related to reductions in headcount;

● a decrease of $0.4 million in chemistry, manufacturing and control expenses primarily related to reduced costs in connection with the restructuring and ceased use of the lab in Hopewell, New Jersey;

● a decrease of $0.4 million in professional fees;

These decreases were partially offset by:

● an increase of $0.6 million in clinical operations expenses driven by increased activity supporting the FTD program and closing out the GM1 program.

● a decrease of $0.3 million in chemistry, manufacturing and control expenses primarily related to reduced costs in connection with the restructuring and ceased operations of the lab in Hopewell, New Jersey;

● a decrease of $0.3 million in preclinical research expenses primarily related to reduced Huntington’s disease program expenses.

General and Administrative Expenses

General and administrative expenses decreased by $2.0 million to $4.5 million for the three months ended June 30, 2025 from $6.5 million for the three months ended June 30, 2024.

General and administrative expenses decreased by $3.0 million to $4.3 million for the three months ended September 30, 2025 from $7.3 million for the three months ended September 30, 2024.

The decrease was primarily due to the following:

● a decrease of $1.3 million in professional fees;

● a decrease of $1.3 million in facility and other expenses primarily due to accruals for litigation matters in the three months ended September 30, 2024 which were subsequently reversed;

● a decrease of $1.0 million and $0.4 million in wages and benefits and share-based compensation expense, respectively, related to reductions in headcount;

● a decrease of $0.1 million in facility and other expenses.

● a decrease of $0.3 million in professional fees.

Impairment of Long-Lived Assets

During the three months ended June 30, 2025, we did not record any impairment expense.

During the three months ended June 30, 2024, we recorded $0.4 million of impairment expenses related to property and equipment for a construction in progress asset.

During the three months ended September 30, 2025, we did not record any impairment expense.

During the three months ended September 30, 2024, we recorded $4.8 million of impairment expense related to the Hopewell Laboratory Space.

The impairment charges consisted of $2.5 million and $2.3 million recorded to the ROU assets and property and equipment, net, respectively.

Other Income (Expense), Net

Other income (expense), net decreased by $0.4 million to $1.0 million for the three months ended June 30, 2025 from $1.4 million for the three months ended June 30, 2024.

Other income (expense), net decreased by $0.5 million to $0.9 million for the three months ended September 30, 2025 from $1.4 million for the three months ended September 30, 2024.

The decrease was primarily due to the following:

● a decrease of $0.6 million attributable to interest income and the amortization of premium and discount on our marketable securities.

● a decrease of $0.6 million in the amortization of premium and discount on our marketable securities.

The decrease was partially offset by:

● an increase of $0.1 million attributable to income from subleases.

Comparison of the six months ended June 30, 2025 and 2024

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

Six months ended

Comparison of the nine months ended September 30, 2025 and 2024

The following table sets forth 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 decreased by $8.4 million to $13.6 million for the six months ended June 30, 2025 from $22.0 million for the six months ended June 30, 2024.

Research and development expenses decreased by $12.7 million to $17.9 million for the nine months ended September 30, 2025 from $30.6 million for the nine months ended September 30, 2024.

The decrease was primarily due to the following:

● a decrease of $3.7 million in preclinical research expenses primarily related to the termination of our discovery research obligation under the Penn Agreement and reduced Huntington’s disease program expenses;

● a decrease of $1.5 million in wages and benefits due to a lower headcount from the restructuring in January 2025;

● a decrease of $3.3 million in wages and benefits due to a lower headcount from our restructuring in January 2025;

● a decrease of $1.9 million in facility and other expenses related to decreased depreciation expenses in connection with the disposal of our laboratory equipment;

● a decrease of $1.4 million in share-based compensation expense related to reductions in headcount;

● a decrease of $0.9 million in chemistry, manufacturing and control expenses primarily related to reduced costs in connection with the restructuring and ceased use of the lab in Hopewell, New Jersey;

● a decrease of $1.2 million in chemistry, manufacturing and control expenses primarily related to reduced costs in connection with the restructuring and ceased operations of the lab in Hopewell, New Jersey;

● a decrease of $1.1 million in professional fees;

These decreases were partially offset by:

● an increase of $0.3 million in clinical operations expenses driven by increased activity for the FTD program, partially offset by decreased activity in supporting the GM1 program.

● a decrease of $0.1 million in clinical operations expenses due to decreased activity in the GM1 program partially offset by increased activity supporting the FTD program.

General and Administrative Expenses

General and administrative expenses decreased by $2.4 million to $10.6 million for the six months ended June 30, 2025 from $13.0 million for the six months ended June 30, 2024.

General and administrative expenses decreased by $5.3 million to $15.0 million for the nine months ended September 30, 2025 from $20.3 million for the nine months ended September 30, 2024.

The decrease was primarily due to the following:

● a decrease of $2.1 million in professional fees;

● a decrease of $0.3 million in share-based compensation expense related to reductions in headcount;

● a decrease of $0.2 million in facility and other expenses.

● a decrease of $1.5 million in facility and other expenses primarily due to accruals for litigation matters in the nine months ended September 30, 2024 which were subsequently reversed;

● a decrease of $0.9 million and $0.8 million in wages and benefits and share-based compensation expense, respectively, related to reductions in headcount.

Impairment of Long-Lived Assets

During the six months ended June 30, 2025, we recorded $2.6 million of impairment expense related to laboratory equipment and certain other assets which were revalued and subsequently sold from the Hopewell Laboratory Space.

During the six months ended June 30, 2024, we recorded $0.4 million of impairment expenses related to property and equipment for a construction in progress asset.

During the nine months ended September 30, 2025, we recorded $2.6 million of impairment expense related to laboratory equipment and certain other assets which were revalued and subsequently sold from the Hopewell Laboratory Space.

During the nine months ended September 30, 2024, we recorded $5.2 million of impairment expense primarily consisting of $2.5 million and $2.3 million recorded to the ROU assets and property and equipment, net, respectively, related to the Hopewell Laboratory Space.

In addition, we recorded $0.4 million of impairment expenses related to property and equipment for a construction in progress asset we no longer planned to deploy.

Other Income (Expense), Net

Other income (expense), net decreased by $0.7 million to $2.0 million for the six months ended June 30, 2025 from $2.7 million for the six months ended June 30, 2024.

Other income (expense), net decreased by $1.2 million to $2.9 million for the nine months ended September 30, 2025 from $4.1 million for the nine months ended September 30, 2024.

The decrease was primarily due to the following:

● a decrease of $1.1 million attributable to interest income and the amortization of premium and discount on our marketable securities.

● a decrease of $1.7 million in the amortization of premium and discount on our marketable securities.

The decrease was partially offset by:

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Liquidity and Capital Resources

As of June 30, 2025, we had $57.6 million in cash and cash equivalents and had an accumulated deficit of $684.0 million.

As of September 30, 2025, we had $52.8 million in cash and cash equivalents and had an accumulated deficit of $691.8 million.

We expect our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2027.

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We are limited in our capacity to offer and sell shares of our common stock under this sales agreement pursuant to the prospectus supplement to our shelf registration statement on Form S-3, filed on March 5, 2025.

As of June 30, 2025, $15.8 million of capacity remains available to be sold under the ATM Facility.

As of September 30, 2025, $15.8 million of capacity remains available to be sold under the ATM Facility.

The following table shows a summary of our cash flows for the periods indicated:

Six months ended

Nine months ended

September 30,

(in thousands)

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Net Cash Provided by (Used in) Operating Activities

During the six months ended June 30, 2025, we used $20.2 million of net cash in operating activities.

Cash used in operating activities reflected a net loss of $24.8 million and a decrease in our operating assets of $0.3 million, partially offset by non-cash charges of $4.9 million related to depreciation, amortization, share-based compensation, amortization of premium and discount, net, and impairment of long-lived assets.

During the nine months ended September 30, 2025, we used $25.0 million of net cash in operating activities.

Cash used in operating activities reflected a net loss of $32.5 million and a decrease in our operating assets of $1.8 million and non-cash charges of $5.7 million related to depreciation, amortization, share-based compensation, amortization of premium and discount, net, impairment of long-lived assets, and other non-cash items.

The primary use of cash was to fund our operations related to the development of our product candidates.

During the six months ended June 30, 2024, we used $32.1 million of net cash in operating activities.

Cash used in operating activities reflected a net loss of $32.7 million and a net increase in our operating assets of $3.8 million, partially offset by non-cash charges of $4.4 million related to depreciation, amortization, share-based compensation, and amortization of premium and discount, net, and impairment of long-lived assets.

During the nine months ended September 30, 2024, we used $39.5 million of net cash in operating activities.

Cash used in operating activities reflected a net loss of $52.0 million, partially offset by a net decrease in our operating assets of $1.5 million, and net non-cash charges of $11.0 million related to depreciation, amortization, share-based compensation, amortization of premium and discount, net, and impairment of long-lived assets.

The primary use of cash was to fund our operations related to the development of our product candidates.

Net Cash Provided by (Used in) Investing Activities

During the six months ended June 30, 2025 , we had sales and maturities of $39.0 million in marketable securities and received cash proceeds of $1.2 million related to the sale of property and equipment and certain other assets.

During the six months ended June 30, 2024, we purchased $50.8 million in marketable securities, and had sales and maturities of $77.1 million in marketable securities.

We did not make any purchases of property and equipment for the six months ended June 30, 2025 and 2024.

During the nine months ended September 30, 2025 , we had sales and maturities of $39.0 million in marketable securities and received cash proceeds of $1.2 million related to the sale of property and equipment and certain other assets.

We did not make any purchases of property and equipment for the nine months ended September 30, 2025.

During the nine months ended September 30, 2024, we purchased $72.6 million in marketable securities, and had sales and maturities of $113.9 million in marketable securities.

Purchases of property and equipment were de minimis for the nine months ended September 30, 2024.

Net Cash Provided by (Used in) Financing Activities

During the six months ended June 30, 2025, we received de minimis proceeds from the issuance of common stock under the ESPP.

During the six months ended June 30, 2024, we received $8.7 million in net proceeds from the issuance of common stock under the ATM Facility.

We also received gross proceeds of $9.0 million, net of offering costs of $0.3 million.

During the nine months ended September 30, 2025, we received de minimis proceeds from the issuance of common stock under the ESPP.

During the nine months ended September 30, 2024, we received $8.7 million in net proceeds from the issuance of common stock under the ATM Facility.

We received gross proceeds of $9.0 million, net of offering costs of $0.3 million.

We received $0.1 million in proceeds from the issuance of common stock under the ESPP and exercises of employee stock options.

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Our sublease agreements do not relieve us from our primary obligations under the 2005 Market Street Lease Agreement, however, we do expect cash inflows from the agreements to partially offset our future obligations for the duration of the sublease agreements.

We sublease approximately 16,000 square feet of office space in Philadelphia, Pennsylvania, or the 1835 Market Street Sublease Agreement.

The sublease will expire in August 2025.

We have an option to extend the term of the sublease by three and a half years through February 2029.

We lease approximately 62,000 square feet of laboratory space in Hopewell, New Jersey, or the Laboratory Lease Agreement.

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Critical Accounting Policies and Estimates

During the six months ended June 30, 2025, there were no material changes to our critical accounting policies and estimates from those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in our 2024 Annual Report filed on Form 10-K.

During the nine months ended September 30, 2025, there were no material changes to our critical accounting policies and estimates from those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in our 2024 Annual Report filed on Form 10-K.

JOBS Act Accounting Election

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As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

We will remain an emerging growth company until the earliest of (1) the last day of our first fiscal year (a) in which we have total annual gross revenues of at least $1.235 billion or (b) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the prior June 30 th , (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period and (3) December 31, 2025.

We will remain an emerging growth company until December 31, 2025.

We are also a “smaller reporting company,” meaning that the market value of our stock held by non-affiliates is less than $700.0 million and our annual revenue is less than $100.0 million during the most recently completed fiscal year.

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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