What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-01 compared with 2024-05-08 · 90 added, 52 removed, 199 unchanged (42% of the section changed)

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• ABBV-RGX-314:

We are developing ABBV-RGX-314 in collaboration with AbbVie as a potential one-time treatment for wet age-related macular degeneration (wet AMD), diabetic retinopathy (DR) and other additional chronic retinal conditions which cause total or partial vision loss.

We are developing ABBV-RGX-314 in collaboration with AbbVie as a potential one-time treatment for chronic retinal conditions which cause total or partial vision loss, including wet age-related macular degeneration (wet AMD), diabetic retinopathy (DR) and diabetic macular edema (DME).

ABBV-RGX-314 is currently being evaluated in multiple ongoing clinical trials, including two pivotal trials (ATMOSPHERE and ASCENT), one Phase II bridging study, one Long-term Follow-up study, and a Fellow Eye Treatment study in patients with wet AMD, all utilizing subretinal delivery.

Additionally, two Phase II clinical trials in patients with wet AMD (AAVIATE) and DR (ALTITUDE) are also ongoing along with two corresponding Long-term Follow-up studies, all utilizing in-office suprachoroidal delivery.

Additionally, two Phase II clinical trials in patients with wet AMD (AAVIATE) and DR and DME (ALTITUDE) are also ongoing along with two corresponding Long-term Follow-up studies, all utilizing in-office suprachoroidal delivery.

ABBV-RGX-314 uses the NAV ® AAV8 vector to deliver a gene encoding a therapeutic antibody fragment to inhibit vascular endothelial growth factor (VEGF).

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Food and Drug Administration (FDA) and the European Medicines Agency (EMA) in the first half of 2026.

The open label fellow eye study evaluating ABBV-RGX-314 in patients treated in the subretinal Phase I/IIa study is now fully enrolled.

This study is designed to monitor safety, immune responses, and efficacy of ABBV-RGX-314 treatment in the fellow eye and these study data are intended to support the inclusion of bilateral use in the product label.

Bilateral disease impacts a significant number of patients with wet AMD.

Suprachoroidal Delivery for Treatment of Wet AMD

The AAVIATE ® trial is a multi-center, open label, randomized, controlled, dose-escalation Phase II trial to evaluate the efficacy, safety and tolerability of suprachoroidal delivery of ABBV-RGX-314 for the treatment of wet AMD.

In January 2024, we presented data from the trial demonstrating that, at six months, patients treated with ABBV-RGX-314 continue to demonstrate stable vision and retinal anatomy while a meaningful reduction in anti-VEGF treatment burden was observed.

The highest reduction was seen in dose level 3, demonstrating an 80% reduction in annualized injection rate with 50% of patients remaining injection-free.

We expect to share new program and data updates for the AAVIATE trial in the third quarter of 2024.

Suprachoroidal Delivery for Treatment of DR :

As of July 29, 2024, ABBV-RGX-314 at dose level 3 with short course prophylactic steroid eye drops continues to be well tolerated with no drug-related serious adverse events (SAEs) and no cases of intraocular inflammation, endophthalmitis, vasculitis, retinal artery occlusion, choroidal effusion, or hypotony.

Mild episcleritis occurred in three patients, all resolved and completed treatment with topical steroids.

There were no cases of elevated intraocular pressure.

Based on this favorable safety profile, the Phase II AAVIATE trial is initiating enrollment in a new cohort to evaluate ABBV-RGX-314 at dose level 4 (1.5x10e12 GC/eye).

Patients in this cohort will also receive short course prophylactic steroid eye drops.

Suprachoroidal Delivery for Treatment of DR and DME

The ALTITUDE ® trial is a multi-center, open label, randomized, controlled, dose-escalation Phase II trial to evaluate the efficacy, safety and tolerability of ABBV-RGX-314 for the treatment of DR.

Based on positive interim results from the trial to date, design and evaluation of two pivotal trials is on-going and in support of further discussion with the FDA at an end-of-Phase II (EOP2) meeting anticipated in the first quarter of 2025 that can enable rapid acceleration towards pivotal development.

We expect to initiate the first pivotal trial in the first half of 2025.

Based on positive interim results from this

trial to date, the design and evaluation of two pivotal trials is on-going.

With AbbVie, we have accelerated a planned End-of-Phase II (EOP2) meeting with the FDA, now expected in the fourth quarter of 2024.

The Company expects to initiate the first global pivotal trial in the first half of 2025.

The ALTITUDE trial is now enrolling a new cohort of patients with center-involved DME.

Patients will receive a one-time, in-office injection of ABBV-RGX-314 at dose level 4 (1.5x10e12 GC/eye) with short course prophylactic steroid eye drops.

DME is a vision-threatening complication of DR;

an estimated 34 million people globally have DME.

We are developing RGX-202 as an investigational one-time AAV therapeutic for the treatment of Duchenne muscular dystrophy (Duchenne), using the NAV AAV8 vector to deliver a transgene for a novel microdystrophin that includes the functional elements of the C-Terminal (CT) domain as well as a muscle-specific promoter to support a targeted therapy for improved resistance to muscle damage associated with Duchenne.

AFFINITY DUCHENNE ® is a multicenter, open-label dose evaluation and dose expansion clinical trial to evaluate the safety, tolerability and clinical efficacy of a one-time intravenous (IV) dose of RGX-202 in patients with Duchenne.

In March 2024, we reported additional interim safety and efficacy data from the trial in patients ages 4 to 11 years old, including RGX-202 microdystrophin from dose level 2.

As of May 3, 2024, RGX-202 continues to be well tolerated in all patients with no serious adverse events.

In new data from the second patient, aged 8.1 years, who received RGX-202 at dose level 2, RGX-202 microdystrophin expression was measured to be 20.9% compared to control at three months.

A reduction from baseline in serum creatinine kinase (CK) levels of 90% was observed at 10 weeks.

Dose level 2 has been selected as the pivotal dose and the positive interim results enable rapid acceleration into pivotal development.

We are now enrolling patients in an expedited dose level 2 expansion phase of the AFFINITY DUCHENNE trial accepted by the FDA, and recently dosed two additional boys aged 5.8 and 8.5 years old.

We expect to enroll up to a total of seven patients at the pivotal dose through early third quarter 2024.

An EOP2 meeting with the FDA in early third quarter 2024 is expected to support a final pivotal trial design.

We plan to use RGX-202 microdystrophin expression as a surrogate endpoint likely to predict clinical benefit to support a Biologics License Application (BLA) filing using the accelerated approval pathway.

Initiation of the pivotal trial is expected in late third quarter 2024 to early fourth quarter 2024.

We also continue to expect to share initial strength and functional assessment data for both dose levels of the AFFINITY DUCHENNE trial in the second half of 2024.

AFFINITY DUCHENNE ® is a multicenter, open-label dose escalation and dose expansion clinical study to evaluate the safety, tolerability and clinical efficacy of a one-time intravenous (IV) dose of RGX-202 in patients with Duchenne aged 1 to 11 years old.

In March 2024 and May 2024, we reported interim safety and efficacy data from the trial, including RGX-202 microdystrophin expression for the first two patients who received RGX-202 at dose level 2 (DL2).

In August 2024, we announced new data from two patients, aged 5.8 and 8.5 years, who received RGX-202 at DL2.

RGX-202 microdystrophin expression in these patients was measured to be 77.2% and 46.5%, respectively, compared to control at three months.

As of July 8, 2024, RGX-202 has been well tolerated with no SAEs.

Data from all seven patients who completed three-month trial assessments indicate meaningful increases in expression of RGX-202 microdystrophin and reduction from baseline in serum creatinine kinase levels, supporting evidence of clinical improvement.

We expect to complete enrollment in the DL2 expansion cohort in early third quarter 2024 and have initiated enrollment in the cohort for boys aged 1 to 3 years old.

We remain on track to share initial strength and functional assessment data for both dose levels of the AFFINITY DUCHENNE trial in the second half of 2024.

We recently held a successful EOP2 meeting with the FDA and are moving forward with plans to initiate a pivotal trial in the fourth quarter of 2024.

Discussions with the FDA continue to support use of microdystrophin as a surrogate endpoint reasonably likely to predict clinical benefit for accelerated approval.

We expect to share the pivotal trial design in late third quarter to early fourth quarter 2024.

RGX-202 is manufactured using our proprietary, high-yielding NAVXpress platform process.

This suspension-based manufacturing process has demonstrated scalability up to 2,000 liters with consistent yield and product purity.

Our Manufacturing Innovation Center has the capacity and yields to produce up to 2,500 doses of RGX-202 per year to support future commercialization.

We are developing RGX-121 as an investigational one-time AAV therapeutic for the treatment of Mucopolysaccharidosis Type II (MPS II), also known as Hunter syndrome, using the NAV AAV9 vector to deliver the gene that encodes the iduronate-2-sulfatase enzyme.

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We continue to follow patients in the trial, and in February 2024, we reported that the pivotal phase of the CAMPSIITE trial achieved its primary endpoint.

We plan to use levels of cerebrospinal fluid D2S6 as a surrogate endpoint for accelerated approval and we are completing remaining activities in order to support a BLA submission in 2024.

We plan to use levels of cerebrospinal fluid Heparan sulfate D2S6 as a surrogate endpoint reasonably likely to predict clinical benefit for accelerated approval and we are completing remaining activities in order to support a biologics license application (BLA) submission in 2024.

We believe that RGX-121 is likely to be eligible for priority review, especially if no other gene therapy product for MPS II is approved before submission of a BLA for RGX-121, and potential approval of the Company's planned BLA for RGX-121 could result in receipt of a Rare Pediatric Disease Priority Review Voucher in 2025, assuming the statutory criteria are met.

We completed a successful pre-BLA meeting with the FDA and will initiate a rolling BLA submission using the accelerated approval pathway in the third quarter of 2024, potentially making RGX-121 the first approved gene therapy and one-time treatment for MPS II.

We expect to share additional safety and efficacy data from the Phase I/II/III CAMPSIITE trial in the second half of 2024.

Overview of Our NAV Technology Platform

In addition to our internal product development efforts, we also selectively license the NAV Technology Platform to other leading biotechnology and pharmaceutical companies, which we refer to as NAV Technology Licensees.

As of March 31, 2024, our NAV Technology Platform was being applied in one commercial product, Zolgensma ® , and the preclinical and clinical development of a number of other licensed products.

As of June 30, 2024, our NAV Technology Platform was being applied in one commercial product, Zolgensma ® , and the preclinical and clinical development of a number of other licensed products.

Licensing the NAV Technology Platform allows us to maintain our internal product development focus on our core disease indications and therapeutic areas while still expanding the NAV gene therapy pipeline, developing a greater breadth of treatments for patients, providing additional technological and potential clinical proof-of-concept for our NAV Technology Platform and creating potential additional revenue opportunities.

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We expect to continue to incur significant research and development expenses for the foreseeable future as we continue the development of our product candidates and engage in early research and development for prospective product candidates and new technologies.

The following table summarizes our research and development expenses incurred during the three months ended March 31, 2024 and 2023 (in thousands):

Three Months Ended March 31,

The following table summarizes our research and development expenses incurred during the three and six months ended June 30, 2024 and 2023 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Direct Expenses

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Total research and development

Direct expenses related to the development of ABBV-RGX-314 for the three months ended March 31, 2024 and 2023 include $25.0 million and $18.5 million, respectively, in net cost reimbursement from AbbVie under our eye care collaboration which were recorded as a reduction of research and development expenses.

Direct expenses related to the development of ABBV-RGX-314 include $21.3 million and $46.2 million for the three and six months ended June 30, 2024, respectively, and $18.2 million and $36.7 million for the three and six months ended June 30, 2023, respectively, in net cost reimbursement from AbbVie under our eye care collaboration which were recorded as a reduction of research and development expenses.

Net cost reimbursement from AbbVie includes reimbursement of personnel and overhead costs attributable to the development of ABBV-RGX-314, the underlying costs of which are reported as unallocated expenses in the table above.

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This includes certain personnel in executive, commercial, corporate development, finance, legal, human resources, information technology, facilities and administrative support functions.

Additionally, general and administrative expenses include facility-related and overhead costs not otherwise allocated to research and development expense, professional fees for accounting, legal, commercial and other advisory services, expenses associated with obtaining and maintaining patents, insurance costs, costs of our information systems and other general corporate activities.

Additionally, general and administrative expenses include costs associated with accounting, legal, commercial and other corporate advisory services, obtaining and maintaining patents, insurance, information systems and other general corporate activities, as well as facility-related costs and other corporate overhead costs not otherwise allocated to research and development expense.

We expect that our general and administrative expenses will increase as we continue to develop, and potentially commercialize, our product candidates.

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Our consolidated results of operations were as follows (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

License and royalty revenue

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Interest expense

Total other income (expense)

Comparison of the Three Months Ended March 31, 2024 and 2023

Total other income

Comparison of the Three Months Ended June 30, 2024 and 2023

License and Royalty Revenue.

License and royalty revenue decreased by $3.5 million, from $19.1 million for the three months ended March 31, 2023 to $15.6 million for the three months ended March 31, 2024.

The decrease was primarily attributable to non-recurring development milestone revenue recognized in the first quarter of 2023 and Zolgensma royalty revenues, which decreased by $0.9 million, from $16.1 million for the first quarter of 2023 to $15.2 million for the first quarter of 2024.

As reported by Novartis, sales of Zolgensma in the first quarter of 2024 were $295 million, a decrease of 5% from the first quarter of 2023, and established markets continue to treat mainly incident patients.

License and royalty revenue increased by $2.3 million, from $20.0 million for the three months ended June 30, 2023 to $22.3 million for the three months ended June 30, 2024.

The increase was primarily attributable to Zolgensma royalty revenues, which increased by $2.8 million, from $19.0 million for the second quarter of 2023 to $21.8 million for the second quarter of 2024.

Novartis reported Zolgensma sales of $349 million for the second quarter of 2024, an increase of 12% from the second quarter of 2023.

As reported by Novartis, Zolgensma sales grew particularly in the U.S.

and established markets continue to treat mainly incident patients.

Research and Development Expense.

Research and development expenses decreased by $3.7 million, from $58.5 million for the three months ended March 31, 2023 to $54.8 million for the three months ended March 31, 2024.

Research and development expenses decreased by $11.0 million, from $59.9 million for the three months ended June 30, 2023 to $48.9 million for the three months ended June 30, 2024.

The decrease was primarily attributable to the following:

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• a decrease of $3.1 million in personnel-related costs for research and development personnel, including a $0.8 million decrease in stock-based compensation expense, largely driven by the reduction in workforce associated with our corporate restructuring implemented in the fourth quarter of 2023;

• a decrease of $2.0 million in costs for laboratories and facilities used by research and development personnel, primarily driven by a decrease in laboratory supplies and consumables.

The decrease in research and development expenses was partially offset by an increase of $9.2 million in costs associated with clinical trial activities, largely driven by clinical trial expenses for ABBV-RGX-314, RGX-202 and RGX-121.

• a decrease of $3.1 million in preclinical activities and other early stage research and development;

• a decrease of $2.2 million in costs for laboratories and facilities used by research and development personnel, including a $0.4 million decrease in depreciation expense allocated to research and development functions, primarily driven by a decrease in laboratory supplies and consumables.

The decrease in research and development expenses was partially offset by an increase of $2.6 million in costs associated with clinical trial activities, largely driven by clinical trial expenses for ABBV-RGX-314 and RGX-202.

General and Administrative Expense.

General and administrative expenses decreased by $4.3 million, from $22.6 million for the three months ended March 31, 2023 to $18.3 million for the three months ended March 31, 2024.

General and administrative expenses decreased by $4.8 million, from $23.7 million for the three months ended June 30, 2023 to $18.9 million for the three months ended June 30, 2024.

The decrease was primarily attributable to professional services and consulting fees, including legal and other corporate advisory services.

Comparison of the Six Months Ended June 30, 2024 and 2023

License and Royalty Revenue.

License and royalty revenue decreased by $1.2 million, from $39.1 million for the six months ended June 30, 2023 to $37.9 million for the six months ended June 30, 2024.

The decrease was primarily attributable to non-recurring development milestone revenue recognized in the first half of 2023.

The decrease was partially offset by Zolgensma royalty revenues, which increased by $1.9 million, from $35.1 million for the first half of 2023 to $37.0 million for the first half of 2024.

As reported by Novartis, sales of Zolgensma for the first half of 2024 were $644 million, an increase of 4% from the first half of 2023, and established markets continue to treat mainly incident patients.

Research and Development Expense.

Research and development expenses decreased by $14.7 million, from $118.4 million for the six months ended June 30, 2023 to $103.7 million for the six months ended June 30, 2024.

The decrease was primarily attributable to the following:

• a decrease of $11.8 million in manufacturing expenses and other costs of clinical supply for our lead product candidates, largely driven by ABBV-RGX-314 and RGX-202 clinical supply costs;

• a decrease of $6.4 million in personnel-related costs for research and development personnel, including a $1.9 million decrease in stock-based compensation expense, largely driven by the reduction in workforce associated with our corporate restructuring implemented in the fourth quarter of 2023;

• a decrease of $4.2 million in costs for laboratories and facilities used by research and development personnel, including a $0.4 million decrease in depreciation expense allocated to research and development functions, primarily driven by a decrease in laboratory supplies and consumables;

• a decrease of $3.1 million in preclinical activities and other early stage research and development.

The decrease in research and development expenses was partially offset by an increase of $11.8 million in costs associated with clinical trial activities, largely driven by clinical trial expenses for ABBV-RGX-314 and RGX-202.

General and Administrative Expense.

General and administrative expenses decreased by $9.2 million, from $46.3 million for the six months ended June 30, 2023 to $37.1 million for the six months ended June 30, 2024.

The decrease was primarily attributable to the following:

• a decrease of $7.0 million in professional services and consulting fees, including legal and other corporate advisory services;

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Sources of Liquidity

As of March 31, 2024, we had cash, cash equivalents and marketable securities of $380.5 million, which were primarily derived from the sale of our common stock and pre-funded warrants described below and license fees received under the AbbVie Collaboration Agreement.

We expect that our cash, cash equivalents and marketable securities as of March 31, 2024, will enable us to fund our operating expenses and capital expenditure requirements, and are sufficient to meet our financial commitments and obligations, for at least the next 12 months from the date of this report based on our current business plan.

As of June 30, 2024, we had cash, cash equivalents and marketable securities of $327.3 million, which were primarily derived from the sale of our common stock and pre-funded warrants described below and license fees received under the AbbVie Collaboration Agreement.

We expect that our cash, cash equivalents and marketable securities as of June 30, 2024 will enable us to fund our operating expenses and capital expenditure requirements, and are sufficient to meet our financial commitments and obligations, for at least the next 12 months from the date of this report based on our current business plan.

In March 2024, we completed a public offering of 4,565,260 shares of our common stock at a price of $23.00 per share and 1,521,740 pre-funded warrants to purchase shares of our common stock at a price of $22.9999 per pre-funded warrant, which equaled the public offering price per share of the common stock less the $0.0001 exercise price of each pre-funded warrant.

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We intend to use proceeds obtained from the sale of shares under the ATM Program, if any, for general corporate purposes.

As of March 31, 2024, no shares of common stock had been sold under the ATM Program.

As of June 30, 2024, no shares of common stock had been sold under the ATM Program.

Our consolidated cash flows were as follows (in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Net cash used in operating activities

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Cash Flows from Operating Activities

Our net cash used in operating activities for the three months ended March 31, 2024 decreased by $25.5 million from the three months ended March 31, 2023, largely as a result of lower operating expenses and increased cost reimbursement received from AbbVie under our ABBV-RGX-314 collaboration in the first quarter of 2024.

Our net cash used in operating activities for the six months ended June 30, 2024 decreased by $27.3 million from the six months ended June 30, 2023, largely as a result of lower operating expenses and increased cost reimbursement received from AbbVie under our ABBV-RGX-314 collaboration in the first half of 2024.

We expect to continue to incur regular net cash outflows from operations for the foreseeable future as we continue the development and advancement of our product candidates and other research programs.

For the three months ended March 31, 2024, our net cash used in operating activities of $55.5 million consisted of a net loss of $63.3 million and unfavorable changes in operating assets and liabilities of $8.2 million, offset by adjustments for non-cash items of $16.0 million.

The changes in operating assets and liabilities include a net decrease in total accounts payable and accrued expenses and other current liabilities of $8.6 million, which were driven primarily by decreases in accrued sublicense fees, royalties and personnel-related expenses, and an increase in other current assets of $6.8 million, which was driven primarily by an increase in net cost reimbursement due from AbbVie under our ABBV-RGX-314 collaboration.

For the six months ended June 30, 2024, our net cash used in operating activities of $101.0 million consisted of a net loss of $116.3 million and unfavorable changes in operating assets and liabilities of $12.2 million, offset by adjustments for non-cash items of $27.6 million.

The changes in operating assets and liabilities include a decrease in total accounts payable and accrued expenses and other current liabilities of $14.0 million, which was driven largely by decreases in accrued sublicense fees, royalties and personnel-related expenses.

Other changes in operating working capital occurred in the normal course of business.

Adjustments for non-cash items primarily consisted of stock-based compensation expense of $19.0 million and depreciation and amortization expense of $8.2 million.

For the three months ended March 31, 2023, our net cash used in operating activities of $80.9 million consisted of a net loss of $66.7 million and unfavorable changes in operating assets and liabilities of $29.6 million, offset by adjustments for non-cash items of $15.4 million.

The changes in operating assets and liabilities include a decrease in total accounts payable and accrued expenses and other current liabilities of $18.5 million, which were driven primarily by decreases in accrued sublicense fees, royalties and personnel-related expenses, and an increase in total prepaid expenses and other current assets of $15.3 million, which was driven primarily by an increase in net cost reimbursement due from AbbVie under our ABBV-RGX-314 collaboration.

For the six months ended June 30, 2023, our net cash used in operating activities of $128.2 million consisted of a net loss of $138.7 million and unfavorable changes in operating assets and liabilities of $19.5 million, offset by adjustments for non-cash items of $30.0 million.

The changes in operating assets and liabilities include a net decrease in total accounts payable and accrued expenses and other current liabilities of $10.6 million, which was driven primarily by the timing of invoices from suppliers and associated payments made by the Company as of the end of the period, and an increase in total prepaid expenses and other current assets of $14.1 million, which was driven primarily by an increase in net cost reimbursement due from AbbVie under our ABBV-RGX-314 collaboration.

The unfavorable changes in operating assets and liabilities were partially offset by a decrease in accounts receivable of $7.1 million, which was driven primarily by a reduction in Zolgensma royalties receivable.

Other changes in operating working capital occurred in the normal course of business.

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Cash Flows from Investing Activities

For the three months ended March 31, 2024, our net cash provided by investing activities consisted of $68.9 million in maturities of marketable debt securities, offset by $55.2 million to purchase marketable debt securities and $0.6 million to purchase property and equipment.

For the three months ended March 31, 2023, our net cash provided by investing activities consisted of $67.9 million in maturities of marketable debt securities, offset by $4.8 million to purchase property and equipment.

For the six months ended June 30, 2024, our net cash provided by investing activities consisted of $151.7 million in maturities of marketable debt securities, offset by $137.7 million used to purchase marketable debt securities and $1.0 million used to purchase property and equipment.

For the six months ended June 30, 2023, our net cash provided by investing activities consisted of $175.5 million in maturities of marketable debt securities, offset by $49.8 million used to purchase marketable debt securities and $7.4 million used to purchase property and equipment.

Cash Flows from Financing Activities

For the three months ended March 31, 2024, our net cash provided by financing activities primarily consisted of $131.6 million in net proceeds received from the public offering of common stock and pre-funded warrants completed in March 2024, net of underwriting discounts and commissions and other offering expenses paid during the period, and $1.3 million in proceeds received from the exercise of stock options and issuance of common stock under our employee stock purchase plan.

For the six months ended June 30, 2024, our net cash provided by financing activities primarily consisted of $131.4 million in net proceeds received from the public offering of common stock and pre-funded warrants completed in March 2024, net of underwriting discounts and commissions and other offering expenses paid during the period, and $1.5 million in proceeds received from the exercise of stock options and issuance of common stock under our employee stock purchase plan.

Our net cash provided by financing activities was partially offset by $20.5 million of Zolgensma royalties paid to HCR, net of imputed interest, under our royalty purchase agreement.

For the three months ended March 31, 2023, our net cash used in financing activities primarily consisted of $9.7 million of Zolgensma royalties paid to HCR, net of imputed interest, under our royalty purchase agreement, and was partially offset by $1.1 million in proceeds received from the exercise of stock options and issuance of common stock under our employee stock purchase plan.

For the six months ended June 30, 2023, our net cash used in financing activities primarily consisted of $19.6 million of Zolgensma royalties paid to HCR, net of imputed interest, under our royalty purchase agreement, and was partially offset by $1.8 million in proceeds received from the exercise of stock options and issuance of common stock under our employee stock purchase plan.

Additional Capital Requirements

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Future Funding Requirements

We have incurred cumulative losses since our inception and had an accumulated deficit of $768.4 million as of March 31, 2024.

We have incurred cumulative losses since our inception and had an accumulated deficit of $821.4 million as of June 30, 2024.

Our transition to recurring profitability is dependent upon achieving a level of revenues adequate to support our cost structure, which depends heavily on the successful development, approval and commercialization of our product candidates.

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Adequate additional financing may not be available to us on acceptable terms, or at all.

We also could be required to seek funds through arrangements with partners or otherwise that may require us to relinquish rights to our intellectual property, our product candidates or otherwise agree to terms unfavorable to us.

We also could be required to seek funds through arrangements with partners or others that may require us to relinquish rights to our intellectual property, our product candidates or otherwise agree to terms unfavorable to us.

Off-Balance Sheet Arrangements

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For information regarding market risk, refer to Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” included in our Annual Report on Form 10-K for the year ended December 31, 2023.

There have been no material changes to our exposure to market risk during the three months ended March 31, 2024.

There have been no material changes to our exposure to market risk during the six months ended June 30, 2024.

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