What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-10 compared with 2026-05-12 · 170 added, 184 removed, 151 unchanged (70% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q.

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q.

In addition to historical financial information, this discussion and analysis contains forward-looking statements based upon current expectations that involve risks and uncertainties, such as statements of our plans, objectives, expectations, intentions and beliefs.

Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section titled “Risk Factors” under Part II, Item 1A below.

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.

We believe we have developed a differentiated approach to developing treatments for central nervous system, or CNS, disorders that allows us to select and advance product candidates with a higher probability of technical and regulatory success.

Our lead clinical product candidate, PBFT02, seeks to elevate progranulin levels to enhance lysosomal function and slow disease progression across a variety of neurodegenerative diseases.

PBFT02 is a gene replacement therapy that utilizes an adeno-associated virus serotype 1, or AAV1, capsid to deliver a functional granulin gene, or GRN , encoding progranulin, or PGRN, to the brain via intra cisterna magna, or ICM, administration.

The lead indication for PBFT02 is frontotemporal dementia, or FTD, caused by progranulin deficiency, or FTD- GRN .

We believe this clinical product candidate has the potential to provide patients with significantly improved outcomes given the rigorous capsid and transgene selection process, and our chosen route of ICM administration, which provides the potential for enhanced benefits due to widespread vector delivery to the brain and spinal cord and an improved safety profile compared with systemic administration, due to the lower doses required.

We are currently studying PBFT02 in FTD- GRN , for which there are currently no approved disease-modifying therapies.

In light of the FDA’s recent guidance that a randomized controlled registrational study is required for PBFT02 in FTD- GRN and the associated ethical, logistical, and financial challenges, we are evaluating potential next steps in the clinical development of PBFT02 in FTD- GRN and FTD- C9orf72 .

Third-party preclinical studies have shown that increased PGRN levels reduce the pathologic accumulation of TAR DNA binding protein 43, or TDP-43.

TDP-43 pathology is a hallmark of multiple neurodegenerative conditions, including FTD due to mutations in the C9orf72 gene, or FTD- C9orf72 , approximately 95% of sporadic amyotrophic lateral sclerosis, or ALS, and approximately 50% of sporadic FTD.

Additionally, we believe restoration of PGRN has the potential to modulate Alzheimer’s disease, or AD, in patients who are carriers of the PGRN-lowering GRN rs5848 single nucleotide polymorphism, or SNP.

Individuals with this polymorphism have reduced PGRN levels and are at an increased risk for AD.

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

We have initiated clinical development of PBFT02 in FTD- C9orf72 patients in the upliFT-D trial for this population.

We have a preclinical research program to develop a genetic medicine to treat Huntington’s disease through the Gemma Collaboration Agreement.

Huntington’s disease, or HD, is an adult-onset, progressive neurodegenerative disease characterized by motor, cognitive, and behavioral deterioration, ultimately leading to death within approximately 15 to 20 years after symptom onset.

There are currently no disease-modifying therapies approved for the treatment of HD, and we estimate the prevalence of HD in the United States and Europe is approximately 70,000, based on available literature.

We are also party to a series of sublicense agreements, as amended, with Gemma in connection with the outlicensing of three pediatric programs we had previously advanced to clinical stage development, collectively the Outlicensed Programs, and such agreements, the Amended Gemma Sublicenses.

In addition, we entered into a Transition Services Agreement, as amended, with Gemma.

We refer to the Amended Gemma Sublicenses, the Transition Services Agreement, and the Gemma Collaboration Agreement, collectively, as the Outlicense Transaction Agreements.

Prior to the execution of the Outlicense Transaction Agreements, we advanced our preclinical programs 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.

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.

We have a gene therapy pipeline with the potential to address multiple neurodegenerative diseases.

Our development programs consist of:

† US/EU prevalence per third-party sources

In addition to the indications above, we believe ALS and AD represent future potential pipeline expansion opportunities for PBFT02.

However, as described above, we are currently evaluating potential next steps in the clinical development of PBFT02.

We are a clinical stage genetic medicines company that has historically focused on improving the lives of patients with neurodegenerative diseases through the development and advancement of cutting-edge, one-time gene therapies designed to target critical underlying pathologies in these conditions.

We have determined to wind-down our gene therapy programs and, as described in the section titled “Merger Agreement,” on June 24, 2026, we entered into an Agreement and Plan of Merger and Reorganization, or the Merger Agreement, with Remix Therapeutics, Inc., or Remix, a Delaware corporation.

In connection with the wind-down, we terminated our development services and clinical supply arrangements with Catalent Maryland, Inc., or Catalent, our collaboration agreement with Gemma Biotherapeutics, Inc., or Gemma, and gave notice to terminate our license with the Trustees of the University of Pennsylvania, or Penn, with respect to PBFT02, our former lead product candidate.

Merger Agreement

On June 24, 2026, we including Peregrine Merger Sub, Inc., or the Merger Sub, a Delaware corporation and wholly-owned subsidiary of us, entered into the Merger Agreement with Remix.

Upon the terms and subject to the satisfaction or waiver of the conditions described in the Merger Agreement, Merger Sub will be merged with and into Remix, with Remix surviving as a wholly-owned subsidiary (such transaction, the Merger).

The Merger is intended to qualify as a tax-free reorganization for U.S.

federal income tax purposes and is expected to close in the fourth quarter of 2026.

Concurrently with the execution and delivery of the Merger Agreement, certain investors entered into a subscription agreement with Remix, or the Subscription Agreement, pursuant to which Remix has agreed to sell, and such investors have agreed to purchase, shares of Remix common stock, par value $0.0001 per share, or Remix Common Stock, for an aggregate purchase price of approximately $70.0 million, immediately prior to the Effective Time of the Merger.

The Subscription Agreement, together with the issuance by Remix of approximately $30.0 million of convertible promissory notes, comprises the concurrent financing (such transactions, collectively, the Concurrent Financing), which is expected to result in aggregate gross proceeds of approximately $100.0 million.

The shares of Remix Common Stock that are issued in the Concurrent Financing will be or will have the right to be, respectively, converted into shares of Passage Bio Common Stock in the Merger.

Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, or the Effective Time, (a) each outstanding share of Remix common stock or preferred stock (other than shares issued in the Concurrent Financing and shares held in treasury or owned by us, Merger Sub, or Remix) will be converted into the right to receive a number of shares of Passage Bio Common Stock equal to the Exchange Ratio set forth in the Merger Agreement, or the Exchange Ratio, and (b) each such share issued in the Concurrent Financing will be converted at the Concurrent Financing Exchange Ratio set forth in the Merger Agreement.

Each outstanding option to purchase Remix capital stock will be converted into an option to purchase Passage Bio Common Stock based on the Exchange Ratio and subject to adjustment as set forth in the Merger Agreement.

Under the Exchange Ratio and Concurrent Financing Exchange Ratio formulas in the Merger Agreement, immediately after the Closing, on a pro forma basis and based upon the number of shares of Passage Bio’s Common Stock expected to be issued in connection with the Merger, pre-Merger equity holders of Remix (other than investors in the Concurrent Financing) are expected to own approximately 65% of the combined company, pre-Merger equityholders of the Company are expected to own approximately 6% of the combined company and the investors in the Concurrent

Financing are expected to own approximately 29% of the combined company (assuming proceeds from the Concurrent Financing of $100.0 million), in each case, calculated on a fully diluted basis, using the treasury stock method, and subject to certain assumptions, including (i) a valuation for the Company of approximately $20.0 million (assuming we have net cash of $5.0 million as of the Merger Agreement closing), (ii) an equity value for Remix of $226.0 million, and (iii) the relative capitalization of the Company and Remix.

The percentage of the combined company that each party’s equityholders will own following the Closing is subject to certain adjustments, including the amount of our net cash at the Closing.

At the Effective Time, we expect to enter into a Contingent Value Rights Agreement, or the CVR Agreement, with a rights agent, pursuant to which holders of record of shares of Passage Bio Common Stock as of immediately prior to the Effective Time will receive one contingent value right, or CVR, for each outstanding share of Passage Bio Common Stock held as of that date.

Each CVR entitles the holder to receive its pro rata share of 100% of the Legacy Asset Payments (as defined in the CVR Agreement) actually received by us or our subsidiaries during the applicable CVR period, less Permitted Deductions (as defined in the CVR Agreement).

Legacy Asset Payments consist of certain payments received from Gemma under our MLD and GM1 exclusive license agreements, and the applicable CVR periods end on December 31, 2027 with respect to MLD Payments and July 31, 2028 with respect to GM1 Payments.

On July 21, 2026, we filed with the SEC the Registration Statement, which includes a proxy statement/prospectus relating to the Merger and the related transactions, including the issuance of shares of Passage Bio Common Stock in the Merger and the matters to be submitted to our stockholders for their approval.

The Registration Statement has not been declared effective by the SEC as of the date of this Quarterly Report on Form 10-Q, and the Merger remains subject to approval by our stockholders and the satisfaction or waiver of the other conditions to the closing of the Merger.

We are a clinical-stage genetic medicines company that has historically focused on developing one-time, adeno-associated virus, or AAV, based gene therapies designed to treat neurodegenerative diseases.

Our lead product candidate was PBFT02, and we have also pursued additional preclinical and outlicensed programs.

During the second quarter of 2026, we terminated or began winding-down our principal program, collaboration, license, and manufacturing arrangements.

PBFT02 for the Treatment of FTD-GRN

PBFT02 is a gene replacement therapy which utilizes an AAV1 capsid to deliver a functional copy of GRN encoding for PGRN, for the treatment of FTD- GRN .

FTD- GRN is an inheritable form of FTD caused by reductions in PGRN production due to mutations in the GRN gene.

PGRN is a complex and highly conserved protein with multiple roles in cell homeostasis, neurodevelopment, and inflammation.

In FTD- GRN , PGRN deficiency results in lysosomal dysfunction, neuroinflammation, and neurodegeneration.

Our lead clinical product candidate was PBFT02, a gene replacement therapy that utilizes an adeno-associated virus serotype 1, or AAV1, capsid to deliver a functional granulin gene, or GRN , encoding progranulin, or PGRN, to the brain via intra cisterna magna, or ICM, administration.

PBFT02’s lead indication was frontotemporal dementia, or FTD, caused by progranulin deficiency, or FTD- GRN , an inheritable form of FTD resulting from reduced PGRN production.

Currently, there are no disease-modifying therapies approved for the treatment of FTD- GRN , and we estimate the prevalence of FTD- GRN in the United States and Europe is approximately 18,000, based on available literature.

Supported by findings in preclinical studies, we believe that PBFT02 may provide FTD- GRN patients with significantly improved outcomes.

Supported by findings in preclinical studies, we believed that PBFT02 may provide FTD- GRN patients with significantly improved outcomes.

We selected the AAV1 capsid and ICM administration for PBFT02 because this approach led to extensive and robust vector delivery throughout the brain and spinal cord of non-human primates, or NHPs, and due to the higher PGRN levels in cerebrospinal fluid, or CSF, achieved using AAV1 as compared with other serotypes tested.

ICM administration of AAV1 to NHPs resulted in elevated CSF levels of human PGRN when compared with CSF levels in healthy human subjects, and in excess of levels achieved in NHPs with AAVhu68 or AAV5.

We have an active Investigational New Drug, or IND, application from the U.S.

We had an active Investigational New Drug, or IND, application from the U.S.

Food and Drug Administration, or the FDA, and approved clinical trial authorizations, or CTAs, in multiple countries for PBFT02.

We are conducting our upliFT-D trial, an international, multi-center, open-label, single-arm Phase 1/2 clinical trial of PBFT02 in patients with a diagnosis of symptomatic FTD- GRN .

In April 2026, we reported updated interim biomarker data from patients in our upliFT-D trial.

● CSF and Plasma PGRN:

Dose 1 of PBFT02 (3.3e10 genome copies/g estimated brain weight, or 4.5e13 total genome copies) resulted in robust and durable increases in CSF PGRN levels, with concentrations increasing

from below 3.0 ng/mL at baseline to a mean of 12.4 ng/mL at one month (n=7), 19.4 ng/mL at six months (n=7), 22.8 ng/mL at 12 months (n=6), and 24.2 ng/mL at 18 months (n=3).

These levels of CSF PGRN are higher than the range found in healthy adult controls of 3.3 to 8.2 ng/mL (mean=4.8 ng/mL;

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 8.6 ng/mL at one month (n=2), above the upper limit of the range found in healthy adult controls, and increased to 22.6 ng/mL at six months (n=1), achieving comparable CSF PGRN levels as Dose 1 at the same time point.

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

● Whole Brain Atrophy:

PBFT02-treated patients with a global Clinical Dementia Rating, or CDR, score of 1 at baseline experienced a 64% reduction in whole brain atrophy at 12 months (n=2), on average, as compared to vMRI analysis of untreated global CDR 1 patients from the ALLFTD natural history data.

PBFT02-treated global CDR 1 patients experienced 3.1% atrophy at 12 months (n=2), on average, compared to 8.7% atrophy at 12 months (n=7) in ALLFTD sample of global CDR 1 individuals.

● Frontotemporal Cortex Atrophy:

PBFT02-treated patients with global CDR score of 1 at baseline experienced a 54% reduction in frontotemporal cortex atrophy at 12 months (n=2), on average, as compared to vMRI analysis of untreated global CDR 1 patients from the ALLFTD natural history data.

PBFT02-treated global CDR 1 patients experienced 4.6% atrophy at 12 months (n=2), on average, compared to 9.9% atrophy at 12 months (n=7) in ALLFTD sample of global CDR 1 individuals

● Plasma Neurofilament Light Chain, or NfL:

PBFT02-treated patients showed an average reduction of 1.0 pg/mL in plasma NfL levels at 12-months (n=6) compared to baseline.

In contrast, analysis of untreated symptomatic FTD- GRN patients from the ALLFTD natural history data showed an average increase of 13.5 pg/mL at 12 months (n=7) compared to baseline.

As of our March 2026 data disclosure, interim safety highlights from PBFT02 (n=10 FTD- GRN patients and n=1 FTD- C9orf72 patient) included:

● Eight patients experienced a collective total of 32 treatment emergent adverse events, or TEAEs, considered related to PBFT02.

● Two patients experienced a total of three serious TEAE considered related to PBFT02.

These included venous sinus thrombosis (2 patients) and hepatoxicity (1 patient).

These serious TEAE all occurred at Dose 1, were asymptomatic and responded to treatment.

● One patient experienced one serious TEAE of pulmonary embolism in the setting of a concurrent systemic infection six weeks after receiving PBFT02 considered unrelated to PBFT02.

● No evidence of thrombotic angiopathy, dorsal root ganglion toxicity, and no complications during ICM administration were observed across any of the eleven treated patients.

We have completed the dosing of Cohorts 1 and 2 in the upliFT-D trial in July 2025.

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.

Cohorts 1 and 2 included participants with a global Clinical Dementia Rating, or CDR, plus National Alzheimer’s Coordinating Center with Frontotemporal Lobar Degeneration, or NACC FTLD, score of 1 or 2 at baseline.

The global CDR rating is scored from 0 (normal/asymptomatic) to 3 (severe).

In advance of enrolling Cohort 3, which we expected to consist of 10 FTD- GRN patients receiving Dose 2 of PBFT02, we amended the upliFT-D clinical trial protocol to introduce a short course of low dose prophylactic anticoagulation.

We also amended the protocol to exclude patients with a global CDR score of 2 (moderate) at baseline and include only patients with global CDR scores of 0.5 (prodromal) or 1 (mild) at baseline.

We have initiated enrollment and dosing patients in Cohort 3 across our global trial sites.

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 product manufactured with our high-productivity, suspension-based PBFT02 manufacturing process to the current product being used in our ongoing clinical trial.

In April 2026, we disclosed feedback from a Type C meeting with the FDA regarding key elements of a future registrational trial design of PBFT02 for FTD- GRN in which FDA indicated that a randomized controlled registrational study design is required for PBFT02 in this indication.

In light of the ethical, logistical, and financial challenges posed

by a randomized controlled registrational trial, we are evaluating potential next steps in the clinical development of

PBFT02 in FTD- GRN and FTD- C9orf72 in the upliFT-D trial.

We previously conducted the upliFT-D trial, an international, multi-center, open-label, single-arm Phase 1/2 clinical trial of PBFT02 in patients with a diagnosis of symptomatic FTD- GRN .

PBFT02 for the Treatment of FTD-C9orf72 and ALS

We have initiated an evaluation of PBFT02 for the treatment of additional adult neurodegenerative diseases where we believe elevated PGRN levels could provide benefits.

This approach stems from PGRN’s pleiotropic cellular effects including the regulation of microglial activation and lysosomal function, and in particular its potential to ameliorate TDP-43 pathology.

We also evaluated PBFT02 for the treatment of additional adult neurodegenerative diseases where we believe elevated PGRN levels could provide benefits.

This approach stemmed from PGRN’s pleiotropic cellular effects including the regulation of microglial activation and lysosomal function, and in particular its potential to ameliorate TDP-43 pathology.

TDP-43 is a ribonucleic acid / deoxyribonucleic acid, or RNA/DNA, binding protein that normally resides in the nucleus where it regulates gene expression, RNA splicing, RNA trafficking, and mRNA turnover.

Cytoplasmic TDP-43 pathology is a hallmark of multiple neurodegenerative conditions including FTD- GRN , FTD- C9orf72 , approximately 95% of sporadic ALS, and approximately 50% of sporadic FTD.

Cytoplasmic TDP-43 pathology is a hallmark of multiple neurodegenerative conditions including FTD- GRN , FTD- C9orf72 , approximately 95% of sporadic amyotrophic lateral sclerosis, or ALS, and approximately 50% of sporadic FTD.

In these disorders, hyperphosphorylated TDP-43 accumulates in the cytoplasm of cell bodies and dendritic processes of neurons and glia.

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The potential for benefit of increased PGRN in disorders with TDP-43 pathology has been demonstrated by third-party preclinical studies in mice and zebrafish which showed that increased PGRN levels reduced TDP-43 pathology and associated toxicities.

We anticipate that elevating neuronal PGRN levels in diseases with TDP-43 pathology may provide significant benefits to patients.

We have initiated preclinical studies to extend these initial observations.

We anticipated that elevating neuronal PGRN levels in diseases with TDP-43 pathology may provide significant benefits to patients.

We previously initiated preclinical studies to extend these initial observations.

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

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

We received positive regulatory feedback on the clinical pathway to treating FTD- C9orf72 with PBFT02 in the ongoing upliFT-D trial, and we have planned for Cohorts 4 and 5 of upliFT-D to consist of three to five symptomatic FTD patients with C9orf72 gene mutations who will initially receive Dose 2 PBFT02.

We have initiated enrollment and dosing patients in Cohort 4 across our global trial sites.

Similarly, we received positive regulatory feedback on the clinical pathway to treating ALS with PBFT02 which we believe may represent a future pipeline opportunity.

In April 2026, we determined to wind-down our clinical development programs related to PBFT02.

PBFT02 for the Treatment of AD

We also believe that elevating PGRN levels has the potential to improve the course of AD in patients who carry the GRN rs5848 single nucleotide polymorphism, or GRN SNP.

We also evaluated reduced PGRN levels having the potential to improve the course of Alzheimer’s disease, or AD, in patients who carry the GRN rs5848 single nucleotide polymorphism, or GRN SNP.

The GRN SNP has an allele frequency of approximately 30% and is associated with reduced PGRN levels.

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Third party preclinical studies in animal models have demonstrated that low levels of PGRN may exacerbate AD pathology and, conversely, high levels of PGRN may reduce AD pathology.

This may represent a future pipeline opportunity for PBFT02, however, we are currently evaluating potential next steps in the clinical development of PBFT02 for the treatment of AD.

In April 2026, we decided to wind-down our clinical development programs related to PBFT02.

Clinical Supply

Through our partners, we have manufactured the PBFT02 clinical supply to support completion of the ongoing Phase 1/2 clinical trial in FTD- GRN and FTD- C9orf72 .

We are currently evaluating potential next steps in the clinical development of PBFT02 in FTD- GRN .

Active Research Programs

We have a preclinical research program through the Gemma Collaboration Agreement to develop a genetic medicine to treat HD.

Through our partners, we manufactured the PBFT02 clinical supply to support completion of the Phase 1/2 clinical trial in FTD- GRN and FTD- C9orf72 .

On June 23, 2026, we delivered written notice to Catalent to terminate, the amended and restated development services and clinical supply agreement in its entirety, effective as of June 23, 2026.

We determined to terminate this agreement in connection with the wind-down of our gene therapy programs and the proposed Merger, and we are not obligated to pay Catalent any termination fee in connection with the termination.

Research Programs

We had a preclinical research program through the Gemma Collaboration Agreement to develop a genetic medicine to treat Huntington’s disease, or HD.

HD is an autosomal dominant disorder caused by a mutation in the huntingtin gene, or HTT , in which a CAG trinucleotide repeat tract in the DNA is expanded.

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HTT CAG repeat tracts are unstable and can continue to elongate over time, termed somatic instability.

In neurons, CAG expansion occurs at different rates in different cells, and CAG expansion to above a certain threshold leads to neuronal dysfunction and death.

In neurons, CAG expansion occurs at different rates in different cells, and CAG expansion to above a certain threshold leads

to neuronal dysfunction and death.

DNA repair proteins such as MSH3 play a key role in driving somatic instability in HD, by erroneously incorporating extra CAG repeats into HTT DNA in certain circumstances.

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Further, published human genetic studies have shown that certain genetic MSH3 variants which reduce somatic instability are associated with delayed disease onset and slowed progression in HD patients.

Our approach is to reduce somatic instability and thereby slow neurodegeneration in HD by suppressing MSH3 expression in the brain, via AAV-mediated delivery of a miRNA gene.

Beyond this program, through the Gemma Collaboration Agreement, we also have the option to license programs for four additional new indications in CNS diseases .

Our approach was to reduce somatic instability and thereby slow neurodegeneration in HD by suppressing MSH3 expression in the brain, via AAV-mediated delivery of a miRNA gene.

Beyond this program, through the Gemma Collaboration Agreement, we had the option to license programs for four additional new indications in CNS diseases .

On May 21, 2026, we provided written notice to Gemma to terminate the Gemma Collaboration Agreement, which termination will become effective within 90 days of the written notice in accordance with the terms of the Gemma Collaboration Agreement.

Following the effectiveness of the termination, we will no longer have any rights to the research programs or the options for new CNS indications previously available to it under the Gemma Collaboration Agreement.

Business Overview

We were incorporated in July 2017 under the laws of the State of Delaware.

Since inception, our operations have consisted primarily of conducting preclinical studies, developing licensed technology, conducting clinical trials, and manufacturing clinical supply to support clinical trials.

Since inception, our operations have consisted primarily of conducting preclinical studies, developing licensed technology, conducting clinical trials, and developing and manufacturing clinical supply to support clinical trials.

We have incurred recurring losses, the majority of which are attributable to research and development activities, and negative cash flows from operations.

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

Our net losses were $7.6 million and $15.4 million for the three months ended March 31, 2026 and 2025, respectively.

As of March 31, 2026, we had an accumulated deficit of $712.3 million.

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

Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our current or future product candidates.

We expect to continue to incur significant expenses and operating losses for the foreseeable future as we advance our product candidates through all stages of development and clinical trials and, ultimately, seek regulatory approval.

In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution.

Our net losses may fluctuate significantly from quarter to quarter and year to year, depending on the timing of our clinical trials and our expenditures on other research and development activities.

As of March 31, 2026, we had cash and cash equivalents of $33.3 million, which we do not expect to be sufficient to meet our capital requirements over the next 12 months.

We will need to raise substantial additional capital to support our continuing operations and pursue our growth strategy.

Until such time as we can generate significant revenue from product sales, if ever, we plan to finance our operations through the sale of equity, debt financings or other capital sources, which may include collaborations with other companies or other strategic transactions.

There are no assurances that we will be successful in obtaining an adequate

level of financing as and when needed to finance our operations on terms acceptable to us or at all.

Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies.

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 a result of these factors, there is substantial doubt about our ability to continue as a going concern within one year after the date the interim financial statements included in this Quarterly Report on Form 10-Q are issued.

On April 20, 2026, we announced that we have initiated a review of strategic alternatives to maximize shareholder value.

These strategic alternatives may include, but are not limited to, merger or acquisition transactions, a reverse merger, a sale of assets of the Company, strategic partnerships, licensing opportunities, or other potential paths.

We do not intend to provide updates on the strategic review until our board of directors approves a specific action or otherwise determines that disclosure is appropriate or required.

There can be no assurance that the process will result in any such transaction.

On April 28, 2026, in connection with our review of strategic alternatives, we announced a restructuring of our workforce, or the Restructuring Plan, to decrease operating expenses by reducing the workforce by approximately 75%.

The implementation of the Restructuring Plan should be substantially complete in the second and third quarters of 2026.

We estimate the aggregate severance and related costs for the Restructuring Plan will be approximately $3.3 million, which will be recorded primarily in the second quarter of 2026.

Our net losses were $7.8 million and $9.4 million for the three months ended June 30, 2026 and 2025, respectively, and $15.4 million and $24.8 million for the six months ended June 30, 2026 and 2025, respectively.

As of June 30, 2026, we had an accumulated deficit of $720.1 million.

We expect to continue to incur net losses and negative cash flows from operations for the foreseeable future.

As of June 30, 2026, we had cash and cash equivalents of $24.2 million, which may not be sufficient to fund our operating expenses and capital expenditure requirements for at least twelve months following the date these consolidated financial statements are issued.

We would need additional funds to meet operational needs and capital requirements for clinical trials, other research and development expenditures, and business development activities.

We currently have no credit facility or committed sources of capital.

Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with any future clinical studies.

On April 20, 2026, we announced that we have initiated a review of strategic alternatives to maximize shareholder value and on April 28, 2026, in connection with our review of strategic alternatives, we announced a restructuring of our workforce, or the Restructuring Plan, to decrease operating expenses by reducing the workforce by approximately 75%.

The implementation of the Restructuring Plan was substantially completed in the second quarter of 2026 and will be completed in the third quarter of 2026.

We estimate the aggregate severance and related costs for the Restructuring Plan will be approximately $3.3 million, which was recorded primarily in the second quarter of 2026.

These estimates are subject to a number of assumptions, and actual results may differ materially.

We may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the Restructuring Plan as well as our review of strategic alternatives.

As of June 30, 2026, we paid $2.3 million and have accrued $0.9 million for the remaining severance and related costs associated with the Restructuring Plan

As described above under “Merger Agreement,” on June 24, 2026, we entered into a Merger Agreement with Remix, which is expected to be completed in the fourth quarter of 2026.

If we do not complete the proposed transaction with Remix and until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances, reverse merger or other business combination transactions, and marketing, distribution or licensing arrangements.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, existing stockholders’ ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect existing stockholders’ rights as common stockholders.

Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends.

If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or drug candidates, or grant licenses on terms that may not be favorable to us.

If we pursue another reverse merger or other business combination transaction, we may be subject to significant transaction costs, our stockholders may experience substantial dilution, our management team may change, and we may not achieve the anticipated benefits of such a transaction.

As a result of these factors, there is substantial doubt about our ability to continue as a going concern within one year after the date the interim consolidated financial statements included in this Quarterly Report on Form 10-Q are issued.

Financial Operations Overview

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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.

On June 23, 2026, we delivered written notice to Penn to terminate the Penn License Agreement, solely with respect to its product candidate referred to as PBFT02 for all indications licensed to us thereunder for such product candidate, including frontotemporal dementia with granulin mutations.

This partial termination will become effective on the date

that is 90 days following Penn’s receipt of the notice, after which we will no longer have any rights under the Penn License Agreement to develop or commercialize PBFT02.

The Penn License Agreement will remain in effect with respect to all non-terminated licensed products.

Gemma - Research, Collaboration and License Agreement

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If we were to exercise any of the four options, we would owe Gemma a non-refundable aggregate fee of $1.0 million per product indication, with $0.5 million due upfront and another $0.5 million fee owed upon a further developmental milestone.

On May 21, 2026, we provided written notice to Gemma to terminate the Gemma Collaboration Agreement, which termination will become effective 90 days following such written notice in accordance with the terms of the Gemma Collaboration Agreement.

Gemma - Sublicense Agreements and Transition Services Agreement

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On May 7, 2025, we agreed to amend each of the Gemma Sublicenses to revise certain financial terms related to the Outlicensed Programs, or the Amended Gemma Sublicenses.

Pursuant to the Amended Gemma Sublicenses, we are entitled to receive (i) an aggregate total of $15.0 million in initial payments for licenses and clinical product supply, of which $7.5 million was previously received, $2.5 million of which was due in May 2025, and $5.0 million of which was due in March 2026;

Pursuant to the Amended Gemma Sublicenses, we are entitled to receive (i) an aggregate total of $15.0 million in initial payments for licenses and clinical product supply, of which $10.0 million has been received and $5.0 million of which was due in March 2026, and has not yet been received;

(ii) an additional $5.0 million contingent on Gemma completing certain business milestones;

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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 March 31, 2026, we have collected $7.5 million in initial payments and $4.8 million in transition services payments under these agreements.

As of June 30, 2026, we have collected $10.0 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.

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Collaboration and Manufacturing and Supply Agreements

We have entered into a collaboration agreement, and a development services and clinical supply agreement, or the Amended Catalent Agreements, with Catalent Maryland, a unit of Catalent, Inc.

We had previously entered into a collaboration agreement, and a development services and clinical supply agreement, or the Amended Catalent Agreements, with Catalent Maryland, a unit of Catalent, Inc.

acquired by Novo Holdings A/S, or Catalent, to secure clinical scale manufacturing capacity for batches of active pharmaceutical ingredients for our gene therapy product candidates.

Under the terms of the Amended Catalent Agreements, Catalent agreed to manufacture batches of drug product for our gene therapy product candidates.

The Amended Catalent Agreements remain in effect until November 6, 2030, and establish a limited exclusive relationship between us and Catalent for the manufacture of bulk drug substance and drug product for our adeno-associated virus delivery therapeutic product candidates for the treatment of FTD and GM1.

The limited exclusive relationship under the Amended Catalent Agreements converts to a non-exclusive relationship (i) in the event Catalent fails to meet certain performance standards and (ii) following certain conditional events related to the divestiture by us of either FTD or GM1, in which case, if such events occur, we would pay Catalent certain fees.

The Amended Catalent Agreements were expected to remain in effect until November 6, 2030, and established a limited exclusive relationship between us and Catalent for the manufacture of bulk drug substance and drug product for our adeno-associated virus delivery therapeutic product candidates for the treatment of FTD and GM1.

Under the Amended Catalent Agreements, the limited exclusive relationship would convert to a non-exclusive relationship (i) in the event Catalent failed to meet certain performance standards and (ii) following certain conditional events related to the divestiture by us of either FTD or GM1, in which case we would pay Catalent certain fees.

In the event of certain transactions, we may terminate the Amended Catalent Agreements for convenience with respect to such products, in which case, we would pay Catalent a certain termination fee.

The outlicensed and completed transition of GM1 to Gemma under the Outlicense Transaction Agreements is deemed by Catalent to be a divestiture under the Amended Catalent Agreements.

As such, we are required to make payment of $0.9 million to Catalent which is accrued as of March 31, 2026.

As such, we were required to make payment of $0.9 million to Catalent which was paid as of June 30, 2026.

On June 23, 2026, we delivered written notice to Catalent to terminate the amended and restated development services and clinical supply agreement in its entirety, effective as of June 23, 2026.

Components of Results of Operations

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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.

In April 2026, we announced we are evaluating potential next steps in the clinical development of PBFT02, and in connection with our review of strategic alternatives, we announced a restructuring of our workforce to decrease operating expenses by approximately 75%.

As a result, we expect our research and development expenses to decrease in the near future.

We expect our research and development expenses to decrease in the future due to the winding down of our development programs, reductions in staff and reductions in consulting services as a result of limited remaining operations.

General and Administrative Expenses

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General and administrative expenses also include professional and consulting services, headquarters facility costs, including rent, utilities, depreciation, amortization and maintenance, legal expenses related to intellectual property, litigation and corporate matters, insurance expense, expenses related to contract modifications or terminations, software expenses, expenses incurred to engage with patient advocacy organizations, and recruitment related expenses.

In connection with our review of strategic alternatives, we announced a restructuring of our workforce to decrease operating expenses by approximately 75%.

As a result, we expect our general and administrative expenses to decrease in the near future.

We expect our general and administrative expenses to decrease in the future due to the reduction of leased office facilities and associated asset depreciation, reductions in staff and reductions in professional and consulting services.

We also expect to incur increased legal and professional fees in the near term in connection with the proposed Merger and related transaction activities.

Impairment of Long-Lived Assets

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

During the three months ended March 31, 2026, we did not recognize impairment expenses.

During the three months ended March 31, 2025, we recognized impairment expenses as a result of the announcement in January 2025 to reduce our workforce by 55% and cease our lab operations in Hopewell, New Jersey.

During the three and six months ended June 30, 2026, we did not recognize impairment expenses.

During the six months ended June 30, 2025, we recognized impairment expenses as a result of the announcement in January 2025 to reduce our workforce by 55% and cease our lab operations in Hopewell, New Jersey.

We reassessed asset groups and evaluated such asset groups for impairment.

We determined the laboratory equipment was a separate asset group based on management’s implemented plans to sell the laboratory equipment and estimated the fair value of the laboratory equipment based on the estimated future cash flows from the sale of such equipment.

Net Gain on Lease Termination

The net gain on lease termination was a result of the Hopewell Lease Termination Agreement, for the laboratory lease agreement related to our laboratory facility in Hopewell, New Jersey.

As a result of the Hopewell Lease Termination Agreement, we recognized a net gain on the lease termination comprised of a gain on the write-off of assets and liabilities for operating leases and a loss on the disposal of property and equipment.

Net Gain on Lease Terminations

The net gain on lease terminations was a result of the Hopewell Lease Termination Agreement, for the laboratory lease agreement related to our laboratory facility in Hopewell, New Jersey and the 2005 Market Street Lease Termination Agreement, for our office space located in Philadelphia, Pennsylvania.

As a result of the Hopewell Lease Termination Agreement and the 2005 Market Street Lease Termination Agreement, we recognized a net gain on the lease terminations comprised of a gain on the write-off of assets and liabilities for operating leases and a loss on the disposal of property and equipment.

Other Income (Expense), Net

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Results of Operations

Comparison of the three months ended March 31, 2026 and 2025

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

Comparison of the three months ended June 30, 2026 and 2025

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

Three months ended

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Impairment of long-lived assets

Net gain on lease termination

Net gain on lease terminations

Loss from operations

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Research and Development Expenses

Research and development expenses decreased by $3.6 million to $4.1 million for the three months ended March 31, 2026 from $7.7 million for the three months ended March 31, 2025.

Research and development expenses decreased by $2.5 million to $3.3 million for the three months ended June 30, 2026 from $5.8 million for the three months ended June 30, 2025.

The decrease was primarily due to the following:

● a decrease of $2.1 million in wages and benefits due to a lower headcount following our restructuring in January 2025;

● a decrease of $1.3 million in facility and other expenses related to decreased rent expenses in connection with the Hopewell Lease Termination Agreement;

● a decrease of $0.6 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 $1.1 million in clinical operations expenses due to decreased activity in the FTD and GM1 programs;

● a decrease of $0.2 million in share-based compensation expense related to reductions in headcount;

● a decrease of $0.2 million in chemistry, manufacturing and control expenses primarily related to 2025 costs in connection with the restructuring and ceased use of the lab in Hopewell, New Jersey;

● a decrease of $0.1 million in professional fees;

● a decrease of $0.1 million in preclinical research expenses.

These decreases were partially offset by:

● an increase of $0.2 million in preclinical research expenses related to Huntington’s disease program expenses.

● an increase of $0.5 million in wages and benefits driven by the cost of severance in 2026, partially offset by lower headcount for a portion of the period.

General and Administrative Expenses

General and administrative expenses decreased by $1.3 million to $4.8 million for the three months ended March 31, 2026 from $6.1 million for the three months ended March 31, 2025.

General and administrative expenses increased by $2.4 million to $6.9 million for the three months ended June 30, 2026 from $4.5 million for the three months ended June 30, 2025.

The increase was primarily due to the following:

● an increase of $2.3 million in professional fees primarily to support the Merger;

● an increase of $0.5 million in wages and benefits related to severance costs, partially offset by lower headcount for a portion of the period.

These increases were partially offset by:

● a decrease of $0.2 million in share-based compensation expense, related to reductions in headcount;

● a decrease of $0.2 million in facility and other expenses related to the termination of the 2005 Market Street Lease Agreement.

Net Gain on Lease Terminations

During the three months ended June 30, 2026, we recorded a $1.9 million net gain on the termination of the 2005 Market Street Lease Agreement.

The net gain was comprised of a $2.7 million gain on the write-off of assets and liabilities for operating leases offset by a $0.8 million net loss on disposal of property and equipment.

During the three months ended June 30, 2025, we did not record any lease termination gain or loss.

Other Income (Expense), Net

Other income (expense), net decreased by $0.5 million to $0.5 million for the three months ended June 30, 2026 from $1.0 million for the three months ended June 30, 2025.

The decrease was due to a $0.3 million decrease in interest income and a $0.2 million decrease in sublease income.

Comparison of the six months ended June 30, 2026 and 2025

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

Six months ended

(in thousands)

Operating expenses:

Research and development

General and administrative

Impairment of long-lived assets

Net gain on lease terminations

Loss from operations

Other income (expense), net

Research and Development Expenses

Research and development expenses decreased by $6.1 million to $7.4 million for the six months ended June 30, 2026 from $13.5 million for the six months ended June 30, 2025.

The decrease was primarily due to the following:

● a decrease of $0.9 million and $0.2 million in wages and benefits and share-based compensation expense, respectively, related to reductions in headcount;

● a decrease of $0.3 million in facility and other expenses.

These decreases were partially offset by:

● an increase of $0.1 million in professional fees.

● a decrease of $2.2 million in facility and other expenses related to decreased rent expenses in connection with the Hopewell Lease Termination Agreement;

● a decrease of $1.6 million in clinical operations expenses due to decreased activity in the FTD and GM1 programs;

● a decrease of $1.6 million and $0.3 million in wages and benefits and share-based compensation expense, respectively, due to a lower headcount following our restructuring in January 2025 partially offset by increased severance costs from the May 2026 restructuring;

● a decrease of $0.3 million in chemistry, manufacturing and control expenses primarily related to 2025 costs in connection with the restructuring and ceased use of the lab in Hopewell, New Jersey;

● a decrease of $0.1 million in professional fees.

General and Administrative Expenses

General and administrative expenses increased by $1.1 million to $11.7 million for the six months ended June 30, 2026 from $10.6 million for the six months ended June 30, 2025.

The increase was primarily due to the following:

● an increase of $2.4 million in professional fees primarily to support the Merger.

The increase was partially offset by:

● a decrease of $0.4 million and $0.4 million in wages and benefits and share-based compensation expense, respectively, related to reductions in headcount partially offset by increased severance costs;

● a decrease of $0.5 million in facility and other expenses related to the termination of the 2005 Market Street Lease Agreement.

Impairment of Long-Lived Assets

During the three months ended March 31, 2026, we did not record any impairment expense.

During the three months ended March 31, 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.

Net Gain on Lease Termination

During the three months ended March 31, 2026, we recorded a $0.6 million net gain on the termination of the Hopewell Laboratory Lease Agreement.

During the six months ended June 30, 2026, we did not record any impairment expense.

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.

Net Gain on Lease Terminations

During the six months ended June 30, 2026, we recorded a $2.6 million net gain on the termination of both the Hopewell Laboratory Lease Agreement and 2005 Market Street Lease Agreement.

The net gain was comprised of a $6.6 million gain on the write-off of assets and liabilities for operating leases offset by a $4.0 million net loss on disposal of property and equipment.

During the three months ended March 31, 2025, we did not record any lease termination gain or loss.

During the six months ended June 30, 2025, we did not record any lease termination gain or loss.

Other Income (Expense), Net

Other income (expense), net decreased by $0.4 million to $0.7 million for the three months ended March 31, 2026 from $1.1 million for the three months ended March 31, 2025.

The decrease was due to a $0.4 million decrease in the amortization of premium and discount on our marketable securities.

Other income (expense), net decreased by $0.9 million to $1.1 million for the six months ended June 30, 2026 from $2.0 million for the six months ended June 30, 2025.

The decrease was due to a $0.8 million decrease in interest income and the amortization of premium and discount on our marketable securities and a $0.1 million decrease in sublease income.

Liquidity and Capital Resources

As of March 31, 2026, we had $33.3 million in cash and cash equivalents and had an accumulated deficit of $712.3 million.

As of June 30, 2026, we had $24.2 million in cash and cash equivalents and had an accumulated deficit of $720.1 million.

We expect to continue to incur net losses and negative cash flows from operations for the foreseeable future.

As of June 30, 2026, we had cash and cash equivalents of $24.2 million, which we do not expect will be sufficient to fund our operating expenses and capital expenditure requirements for at least the twelve months following the date our consolidated financial statements are issued.

As a result, substantial doubt exists about our ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.

Our ability to continue as a going concern will depend on our ability to complete the Merger (including the related Concurrent Financing) or otherwise obtain substantial additional funding.

There can be no assurance that we will be able to complete the Merger or Remix’s ability to complete their Concurrent Financing on a timely basis, on acceptable terms, or at all.

Funding Requirements

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Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements.

Our future funding requirements will depend on many factors, including, but not limited to:

● the scope, timing, progress and results of discovery, preclinical development, laboratory testing and clinical trials for our product candidates;

● the expenses of manufacturing our product candidates for clinical trials and in preparation for marketing approval and commercialization;

● the extent to which we enter into collaborations or other arrangements with additional third parties in order to further develop our product candidates;

● the expenses of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;

● the expenses and fees associated with the discovery, acquisition or in-license of additional product candidates or technologies;

● the expenses related to general and administrative functions to support our product candidates;

● our ability to establish additional collaborations on favorable terms, if at all;

● the expenses required to scale up our clinical, regulatory and manufacturing capabilities;

● the expenses of future commercialization activities, if any, including establishing sales, marketing, manufacturing and distribution capabilities, for any of our product candidates for which we receive marketing approval;

● revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval.

We will need additional funds to meet operational needs and capital requirements for clinical trials, other research and development expenditures, and business development activities.

Our future funding requirements will depend primarily on our ability to complete the proposed transaction with Remix.

We would need additional funds to meet operational needs and capital requirements for clinical trials, other research and development expenditures, and business development activities.

We currently have no credit facility or committed sources of capital.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances, reverse merger or other business combination transactions, and marketing, distribution or licensing arrangements.

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If we pursue a reverse merger or other business combination transaction, we may be subject to significant transaction costs, our stockholders may experience substantial dilution, our management team may change, and we may not achieve the anticipated benefits of such a transaction.

If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, further reduce or terminate our research, product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

On March 5, 2021, we entered into a Sales Agreement, or the Sales Agreement, with Cowen and Company, LLC, or Cowen, relating to the applicable terms of at-the-market equity offerings, or the ATM Facility, pursuant to which we may, but are not obligated to, offer and sell, from time to time, shares of our common stock with an aggregate offering price up to $125.0 million through Cowen, as sales agent in the ATM Facility.

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As a result of our public float as of January 9, 2026, we are currently limited to $21.1 million in our capacity to offer and sell shares of our common stock under the Sales Agreement pursuant to our shelf registration statement on Form S-3, filed on March 4, 2024.

As of March 31, 2026, $15.8 million of capacity remains available to be sold under the ATM Facility.

As of June 30, 2026, $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:

Three months ended

Six months ended

(in thousands)

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Net Cash Provided by (Used in) Operating Activities

During the three months ended March 31, 2026, we used $13.0 million of net cash in operating activities.

Cash used in operating activities reflected a net loss of $7.6 million and a decrease in our operating assets of $5.5 million offset by non-cash charges of $0.1 million related to depreciation, amortization, share-based compensation, loss recognized on disposal of long-lived assets, and other non-cash items.

The primary uses of cash were to fund our operations related to the development of our product candidates and the payment of the lease termination fee in connection with the Hopewell Lease Termination Agreement.

During the three months ended March 31, 2025, we used $13.8 million of net cash in operating activities.

During the six months ended June 30, 2026, we used $22.2 million of net cash in operating activities.

Cash used in operating activities reflected a net loss of $15.4 million, a decrease in our operating assets of $5.5 million, and net non-cash adjustments of $1.3 million related to the net gain on lease terminations partially offset by depreciation, amortization, and share-based compensation.

The primary uses of cash were to fund our operations related to the development of our product candidates and the payment of the lease termination fees in connection with the Hopewell Lease Termination Agreement and the 2005 Market Street Lease Termination Agreement.

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.

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Net Cash Provided by (Used in) Investing Activities

During the three months ended March 31, 2026 , we received de minimis cash proceeds related to the sale of property and equipment.

During the three months ended March 31, 2025, we had sales and maturities of $39.0 million in marketable securities and received cash proceeds of $0.6 million related to the sale of property and equipment and certain other assets.

During the six months ended June 30, 2026 , we received de minimis cash proceeds related to the sale of property and equipment.

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.

Net Cash Provided by (Used in) Financing Activities

During the three months ended March 31, 2026 and 2025, we had no gross receipts or outflows of cash related to financing activities .

During the six months ended June 30, 2026, we had no gross receipts or outflows of cash related to financing activities .

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

Contractual Obligations and Other Commitments

We lease approximately 37,000 square feet of office space in Philadelphia, Pennsylvania, or the 2005 Market Street Lease Agreement.

The lease will expire in December 2031.

We have an option to extend the term of the lease by up to two additional five-year terms.

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.

The aggregate estimated rent payments due over the remaining terms of our leases are $7.4 million.

Under the exclusive relationship under the Amended Catalent Agreements, following certain conditional events related to the divestiture by us of either FTD or GM1, we would pay Catalent certain fees.

In the event of certain transactions,

we may terminate the Amended Catalent Agreements for convenience with respect to such products, in which case, we would pay Catalent a certain termination fee.

In the event of certain transactions, we had the option to terminate the Amended Catalent Agreements for convenience with respect to such products, in which case, we would pay Catalent a certain termination fee.

The outlicense and completed transition of GM1 to Gemma under the Outlicense Transaction Agreements, is deemed by Catalent to be a divestiture under the Amended Catalent Agreements.

As such, we are required to make payment of $0.9 million to Catalent which has been accrued as of March 31, 2026.

As such, we were required to make a payment of $0.9 million to Catalent which has been paid as of June 30, 2026.

These contractual obligations and commitments are associated with contracts that are enforceable and legally binding and that specify all significant terms, including fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts.

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Critical Accounting Policies and Estimates

During the three months ended March 31, 2026, 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 2025 Annual Report filed on Form 10-K.

During the six months ended June 30, 2026, 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 2025 Annual Report filed on Form 10-K.

Recent Accounting Pronouncements

See Note 3 to our unaudited interim financial statements included elsewhere in this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements applicable to our financial statements.

See Note 3 to our unaudited interim consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements applicable to our consolidated financial statements.

Quantitative and Qualitative Disclosures About Market Risk.

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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