What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-06 compared with 2024-08-01 · 72 added, 69 removed, 220 unchanged (39% 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 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 and DME (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 (ALTITUDE) are ongoing along with two corresponding long-term follow-up studies, all utilizing in-office suprachoroidal delivery.

Within the Phase II study in DR, we are also evaluating ABBV-RGX-314 in diabetic macular edema (DME).

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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(Clearside) to deliver gene therapy treatments to the suprachoroidal space of the eye.

Subretinal Delivery for Treatment of Wet AMD

Subretinal Delivery

Enrollment continues to be on track in the ATMOSPHERE ® and ASCENT pivotal trials for the treatment of patients with wet AMD using subretinal delivery.

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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.

In October 2024, we reported positive data from a Phase II fellow eye sub-study at the American Academy of Ophthalmology (AAO) 2024 annual meeting.

The sub-study evaluated subretinal delivery of ABBV-RGX-314 in patients who received ABBV-RGX-314 in the Phase I/IIa or bridging studies and elected to receive treatment in their second eye.

As of September 11, 2024, ABBV-RGX-314 was well tolerated in the treated fellow eye, with no drug-related serious adverse events and no cases of intraocular inflammation observed.

At nine months post-administration, patients saw a 97% reduction in anti-VEGF treatment burden and sustained vision and anatomy.

These data demonstrate the potential of ABBV-RGX-314 to preserve vision long-term for patients with wet AMD as a one-time treatment for both eyes.

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

Suprachoroidal Delivery for Treatment of Wet AMD

Suprachoroidal Delivery

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.

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

Based on positive interim results from this trial, we and AbbVie have accelerated a planned End-of-Phase II (EOP2) meeting with the FDA expected to occur in the fourth quarter of 2024.

We expect 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.

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.

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 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.

AFFINITY DUCHENNE ® is a Phase I/II 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).

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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.

In November 2024, we announced that the last patient has been dosed in the dose level 2 (pivotal dose) expansion cohort for ages 4 to 11 years old and the first patient has been dosed in the cohort for ages 1 to 3 years old.

A clinical trial application for RGX-202 has been authorized by Health Canada, and we expect to initiate sites in Canada in the first half of 2025.

Following a successful EOP2 meeting with the FDA earlier this year, we plan to share a full program update in November 2024, including pivotal trial design and plans for accelerated approval, as well as initial strength and functional assessment data for both dose levels of the AFFINITY DUCHENNE trial.

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

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CAMPSIITE ® is a Phase I/II/III multi-center, open-label trial to evaluate the efficacy, safety, tolerability and pharmacodynamics of RGX-121 in patients with MPS II aged 4 months up to 5 years old.

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 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.

We continue to follow patients in the trial and, in February 2024, reported that the pivotal phase of the CAMPSIITE trial achieved its primary endpoint, a reduction in cerebrospinal fluid Heparan sulfate levels of D2S6, a biomarker indicative of brain disease activity, with statistical significance.

In September 2024, we announced positive data from the pivotal dose level of RGX-121 demonstrating long-term systemic effect.

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 have initiated a rolling biologics license application (BLA) submission using the accelerated approval pathway.

The BLA submission is expected to be complete in the first quarter of 2025.

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 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.

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

As of September 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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Consideration from licensees under our license agreements may include:

(i) up-front and annual fees, (ii) milestone payments based on the achievement of certain development and sales-based milestones, (iii) sublicense fees, (iv) royalties on sales of licensed products and (v) other consideration payable upon optional goods and services purchased by licensees.

(i) up-front and annual fees, (ii) milestone payments based on the achievement of certain development and sales-based milestones, (iii) sublicense fees, (iv) royalties on sales of licensed products, (v) fees for services related to the development of licensed products and (vi) other consideration payable upon optional goods and services purchased by licensees.

Future license and royalty revenues are dependent on the successful development and commercialization of licensed products, which is uncertain, and revenues may fluctuate significantly from period to period.

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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 and six months ended June 30, 2024 and 2023 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

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

Three Months Ended September 30,

Nine Months Ended September 30,

Direct Expenses

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Total research and development

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.

Direct expenses related to the development of ABBV-RGX-314 include net cost reimbursement from AbbVie under our eye care collaboration of $20.1 million and $66.3 million for the three and nine months ended September 30, 2024, respectively, and $19.6 million and $56.3 million for the three and nine months ended September 30, 2023, respectively, 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 Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our consolidated financial statements, which we have prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities for the periods presented.

for the periods presented.

We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities, and other reported amounts, that are not readily apparent from other sources.

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

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended

Nine Months Ended

September 30,

License and royalty revenue

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Impairment of long-lived assets

Other operating expenses (income)

Other operating expenses

Total operating expenses

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Total other income

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

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

License and Royalty Revenue.

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.

License and royalty revenue decreased by $4.7 million, from $28.9 million for the three months ended September 30, 2023 to $24.2 million for the three months ended September 30, 2024.

The decrease was primarily attributable to Zolgensma royalty revenues, which decreased from $28.4 million for the third quarter of 2023 to $23.9 million for the third quarter of 2024.

As reported by Novartis, sales of Zolgensma for the third quarter of 2024 were $308 million, consistent with sales for the third quarter of 2023, and the product continues to treat mainly incident patients in established markets, translating into stable sales for the third quarter of 2024.

The decrease in Zolgensma royalties was primarily attributable to fluctuations in the effective royalty rate under the license agreement with Novartis.

Research and Development Expense.

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.

Research and development expenses decreased by $3.8 million, from $58.2 million for the three months ended September 30, 2023 to $54.4 million for the three months ended September 30, 2024.

The decrease was primarily attributable to the following:

• a decrease of $4.7 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 $3.0 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;

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• a decrease of $1.9 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 $1.6 million in manufacturing expenses and other costs of clinical supply for our lead product candidates.

The decrease in research and development expenses was partially offset by an increase of $5.8 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 $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.

General and administrative expenses decreased by $3.7 million, from $23.1 million for the three months ended September 30, 2023 to $19.4 million for the three months ended September 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

Comparison of the Nine Months Ended September 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.

License and royalty revenue decreased by $5.9 million, from $68.0 million for the nine months ended September 30, 2023 to $62.1 million for the nine months ended September 30, 2024.

The decrease was primarily attributable to non-recurring development milestone revenue recognized in the first nine months of 2023 and Zolgensma royalty revenues, which decreased from $63.5 million for the first nine months of 2023 to $60.8 million for the first nine months of 2024.

As reported by Novartis, sales of Zolgensma for the first nine months of 2024 were $952 million, an increase of 3% from the first nine months of 2023, and the product continues to treat mainly incident patients in established markets.

The decrease in Zolgensma royalties was primarily attributable to fluctuations in the effective royalty rate under the license agreement with Novartis.

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.

Research and development expenses decreased by $18.4 million, from $176.6 million for the nine months ended September 30, 2023 to $158.1 million for the nine months ended September 30, 2024.

The decrease was primarily attributable to the following:

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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.

General and administrative expenses decreased by $12.8 million, from $69.4 million for the nine months ended September 30, 2023 to $56.6 million for the nine months ended September 30, 2024.

The decrease was primarily attributable to the following:

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Sources of Liquidity

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.

As of September 30, 2024, we had cash, cash equivalents and marketable securities of $278.6 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 September 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.

the public offering price per share of the common stock less the $0.0001 exercise price of each pre-funded warrant.

The aggregate net proceeds received from the offering were $131.1 million, net of underwriting discounts and commissions and offering expenses.

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

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

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

Six Months Ended June 30,

Nine Months Ended September 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 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.

Our net cash used in operating activities for the nine months ended September 30, 2024 decreased by $36.1 million from the nine months ended September 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 nine months 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 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.

For the nine months ended September 30, 2024, our net cash used in operating activities of $141.5 million consisted of a net loss of $175.9 million and unfavorable changes in operating assets and liabilities of $6.1 million, offset by adjustments for non-cash items of $40.5 million.

The changes in operating assets and liabilities include a decrease in total accounts payable, accrued expenses and other current liabilities, and other liabilities of $7.5 million, which was driven largely by decreases in accrued personnel costs, sublicense fees payable to licensors and amounts payable to suppliers as of the end of the period.

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 $28.9 million and depreciation and amortization expense of $12.2 million.

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.

For the nine months ended September 30, 2023, our net cash used in operating activities of $177.6 million consisted of a net loss of $200.6 million and unfavorable changes in operating assets and liabilities of $20.1 million, offset by adjustments for non-cash items of $43.1 million.

The changes in operating assets and liabilities include an increase in other current assets of $13.6 million, which was driven primarily by an increase in net cost reimbursement due from AbbVie under our ABBV-RGX-314 collaboration, and a decrease in total accounts payable and accrued expenses and other current liabilities of $5.6 million, which was driven primarily by a decrease in amounts payable to suppliers as of the end of the period.

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

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Cash Flows from Investing Activities

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.

For the nine months ended September 30, 2024, our net cash provided by investing activities consisted of $238.4 million in maturities of marketable debt securities, offset by $173.9 million used to purchase marketable debt securities and $1.4 million used to purchase property and equipment.

For the nine months ended September 30, 2023, our net cash provided by investing activities consisted of $231.8 million in maturities of marketable debt securities and $2.0 million in proceeds received from uniQure N.V.

(uniQure) in connection with the achievement of milestones associated with their acquisition of Corlieve Therapeutics SAS (Corlieve), offset by $67.9 million used to purchase marketable debt securities and $8.8 million used to purchase property and equipment.

Cash Flows from Financing Activities

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 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.

For the nine months ended September 30, 2024, our net cash provided by financing activities primarily consisted of $131.1 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 $2.7 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 $32.2 million of Zolgensma royalties paid, net of imputed interest, under our royalty purchase agreement with HCR.

For the nine months ended September 30, 2023, our net cash used in financing activities primarily consisted of $30.5 million of Zolgensma royalties paid, net of imputed interest, under our royalty purchase agreement with HCR.

Our net cash used in financing activities was partially offset by $4.9 million in net proceeds received from a private placement of our common stock in July 2023 and $3.1 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 $821.4 million as of June 30, 2024.

We have incurred cumulative losses since our inception and had an accumulated deficit of $881.0 million as of September 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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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 six months ended June 30, 2024.

There have been no material changes to our exposure to market risk during the nine months ended September 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