What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-06 compared with 2024-11-06 · 151 added, 275 removed, 213 unchanged (67% of the section changed)

8 unchanged sentences

• our expectation that our partnership with Catalent, Inc.

(“Catalent”) will support our clinical and commercial manufacturing demand for our SRP-9001 Duchenne program and LGMD programs, while also acting as a manufacturing platform for potential future gene therapy programs;

• our expectation that Aldevron LLC (“Aldevron”) will provide Good Manufacturing Processes (“GMP”)-grade plasmid for our SRP-9001 Duchenne program and LGMD programs, as well as plasmid source material for future gene therapy programs;

(“Catalent”) will support our clinical and commercial manufacturing demand for our Duchenne gene therapy program and LGMD programs, while also acting as a manufacturing platform for potential future gene therapy programs;

• our expectation that Aldevron LLC (“Aldevron”) will provide Good Manufacturing Processes (“GMP”)-grade plasmid for our Duchenne gene therapy program and LGMD programs, as well as plasmid source material for future gene therapy programs;

• the possible impact of regulations and regulatory decisions by the Food and Drug Administration (the “FDA”) and other regulatory agencies on our business as well as the development of our product candidates and our financial and contractual obligations;

• estimated timelines and milestones for the remainder of 2024 and beyond;

• estimated timelines and milestones for the remainder of 2025 and beyond, including submitting a SRP-9003 BLA in the second half of 2025;

• our engagement with regulatory authorities outside of the U.S.

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• our ability to further secure long-term supply of our commercial products and our product candidates to satisfy our planned commercial, early access programs (“EAP”) and clinical needs;

• the possible impact of any competing products on the commercial success of our products and our product candidates and our ability to compete against such products;

• the possible impact of any legislation and competing products on the commercial success of our products and our product candidates and our ability to compete against such products;

• our ability to enter into research, development or commercialization alliances with universities, hospitals, independent research centers, non-profit organizations, pharmaceutical and biotechnology companies and other entities for specific molecular targets or selected disease indications and our ability to selectively pursue opportunities to access certain intellectual property rights that complement our internal portfolio through license agreements or other arrangements;

• our expectations regarding the potential benefits of the partnership, licensing and/or collaboration arrangements and other strategic arrangements and transactions we have entered into or may enter into in the future;

our plans and ability to file and progress to issue additional patent applications to enhance and protect our new and existing technologies and programs;

• our estimates regarding our cash runway and statements about our future capital needs;

• the potential benefits of our technologies and programs, including those with strategic partners;

• our estimates regarding how long our currently available cash and cash equivalents will be sufficient to finance our operations and business plans and statements about our future capital needs;

• our estimates regarding future revenues, research and development expenses, other expenses, capital requirements and payments to third parties;

• our expectation regarding the impact of environmental laws and regulations on our business;

and our beliefs and expectations regarding milestone, royalty or other payments that could be due to third parties under existing agreements.

• our beliefs and expectations regarding milestone, royalty or other payments that could be due to third parties under existing agreements.

We undertake no obligation to update any of the forward-looking statements contained in this Quarterly Report on Form 10-Q after the date of this report, except as required by law or the rules and regulations of the U.S.

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Applying our proprietary, highly differentiated and innovative technologies, and through collaborations with our strategic partners, we have developed multiple approved products for the treatment of Duchenne and are developing potential therapeutic candidates for a broad range of diseases and disorders, including Duchenne, LGMDs, and other neuromuscular and central nervous system related disorders.

We commercialized four products, all of which were granted accelerated approval or traditional approval by the FDA:

We commercialized four products that have been approved by the FDA:

• The PMO Products:

o EXONDYS 51 (eteplirsen) Injection (“EXONDYS 51”), granted accelerated approval by the FDA on September 19, 2016, is indicated for the treatment of Duchenne in patients who have a confirmed mutation of the dystrophin gene that is amenable to exon 51 skipping.

EXONDYS 51 uses our phosphorodiamidate morpholino oligomer (“PMO”) chemistry and exon-skipping technology to skip exon 51 of the dystrophin gene.

EXONDYS 51 uses our PMO chemistry and exon-skipping technology to skip exon 51 of the dystrophin gene.

o VYONDYS 53 (golodirsen) Injection (“VYONDYS 53”), granted accelerated approval by the FDA on December 12, 2019, is indicated for the treatment of Duchenne in patients who have a confirmed mutation of the dystrophin gene that is amenable to exon 53 skipping.

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AMONDYS 45 uses our PMO chemistry and exon-skipping technology to skip exon 45 of the dystrophin gene.

• ELEVIDYS (delandistrogene moxeparvovec-rokl), approved by the FDA on June 20, 2024, is an adeno-associated virus-based (“AAV”) gene therapy for the treatment of ambulatory patients at least four years old with Duchenne with a confirmed mutation in the Duchenne gene.

ELEVIDYS is also approved for non-ambulatory patients under the accelerated approval pathway.

• ELEVIDYS (delandistrogene moxeparvovec-rokl), an AAV-based gene therapy, was approved by the FDA on June 20, 2024 for the treatment of ambulatory patients at least four years old with Duchenne with a confirmed mutation in the Duchenne gene as well as non-ambulatory patients under the accelerated approval pathway.

ELEVIDYS was previously granted accelerated approval by the FDA on June 22, 2023 for the treatment of ambulatory patients aged four through five years with Duchenne with a confirmed mutation in the Duchenne gene.

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We are in the process of conducting various clinical trials for our approved products, including studies that are required to comply with our post-marketing FDA requirements/commitments to verify and describe the clinical benefit of these products.

Our pipeline includes programs at various stages of discovery, pre-clinical and clinical development.

Through our collaborations with our strategic partners, we are expanding into adjacent therapeutic areas.

Our pipeline reflects our aspiration to apply our multifaceted approach and expertise in precision genetic medicine to make a profound difference in the lives of patients suffering from rare diseases.

A summary description of our key product candidates, including those in collaboration with our strategic partners, is as follows:

• SRP-9003 (LGMD, gene therapy program).

We are developing gene therapy programs for various forms of LGMDs.

The most advanced of our LGMD product candidates, SRP-9003, is designed to transfer a gene that codes for and restores beta-sarcoglycan protein with the goal of restoring the dystrophin associated protein complex.

It utilizes the AAVrh.74 vector system, the same vector used in our SRP-9001 gene therapy program.

A Phase 1/2a trial of SRP-9003 was commenced in the fourth quarter of 2018.

In February 2019, we announced positive two-month biopsy data from the first three-patient low-dose cohort dosed in the SRP-9003 trial, and in October 2019, we announced positive nine-month functional data from these three patients.

We have dosed one additional cohort of three patients at a higher dose per the study protocol.

We are developing gene therapy programs for various forms of LGMD.

The most advanced of our LGMD product candidates, SRP-9003, aims to treat LGMD2E, also known as beta-sarcoglycanopathy, a severe and debilitating form of LGMD characterized by progressive muscle fiber loss, inflammation and muscle fiber replacement with fat and fibrotic tissue.

SRP-9003 is designed to transfect a gene that codes for and restores beta-sarcoglycan protein with the goal of restoring the dystrophin associated protein complex.

SRP-9003 has generated positive pre-clinical safety and efficacy data utilizing the AAVrh.74 vector, the same vector used in our SRP-9001 gene therapy program.

A Phase 1/2a trial of SRP-9003 commenced in the fourth quarter of 2018.

In June 2020, we announced safety and expression results from three clinical trial participants in the high-dose cohort measured at 60 days, and one-year functional data from three clinical trial participants in the low-dose cohort.

In September 2020, we announced six-month functional data from three clinical

trial participants in the high-dose cohort, and eighteen-month functional data from three clinical trial participants in the low-dose cohort.

In March 2021, we announced 24-month functional and expression data from the three clinical trial participants in the low-dose cohort and twelve-month functional data from the three clinical trial participants in the high-dose cohort.

In March 2022, we announced 36-month functional data from three clinical trial participants in the low-dose cohort and 24-month functional data from two clinical trial participants in the high-dose cohort.

In January 2024, we announced that we had begun screening in Study SRP-9003-301, a Phase 3, multi-national, open-label study of SRP-9003.

• SRP-5051 uses our next-generation chemistry platform, cell-penetrating peptide-conjugated PPMO, and our exon-skipping technology to skip exon 51 of the dystrophin gene.

SRP-5051, a peptide conjugated PMO, is designed to bind to exon 51 of dystrophin pre-mRNA, resulting in exclusion of this exon during mRNA processing in patients with genetic mutations that are amenable to exon 51 skipping.

In 2019, we commenced Study 5051-201.

In November 2024, we announced that we discontinued development of SRP-5051 and our PPMO program for treatment of Duchenne.

Our pipeline includes more than 40 programs in various stages of pre-clinical and clinical development, reflecting our multifaceted approach and expertise in precision genetic medicine to make a profound difference in the lives of patients suffering from rare diseases.

In December 2024, we announced that we had completed enrollment and dosing in EMERGENE (Study SRP-9003-301), a Phase 3 clinical trial of SRP-9003 (bidridistrogene xeboparvovec).

We expect to file a BLA in the second half of 2025.

Manufacturing, Supply and Distribution

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Additionally, we have evaluated, and will continue to evaluate further relationships with additional suppliers to increase overall capacity as well as further reduce risks associated with relying on a limited number of suppliers for manufacturing.

Our gene therapy manufacturing capabilities have been greatly enhanced through partnerships with Aldevron and Catalent.

Our gene therapy manufacturing capabilities have been greatly enhanced through partnerships with Aldevron and Catalent Inc.

(“Catalent”).

We have adopted a hybrid development and manufacturing strategy in which we have built internal expertise relative to all aspects of AAV-based manufacturing, including gene therapy and gene editing, while closely partnering with experienced manufacturing partners to expedite development and commercialization of our gene therapy programs.

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Aldevron provides GMP-grade plasmid for ELEVIDYS and is expected to provide plasmid source material for our LGMD programs and future gene therapy programs.

Manufacturers and suppliers of our commercial products and product candidates are subject to the current GMP (“cGMP”) requirements and other rules and regulations prescribed by FDA and other foreign regulatory authorities.

We depend on our third-party partners for continued compliance with cGMP requirements and applicable foreign standards.

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through a limited network of home infusion specialty pharmacy providers that deliver the medication to patients and a specialty distributor that distributes our products to hospitals and hospital outpatient clinics.

With respect to the pre-commercial distribution of our products to patients outside of the U.S., we have contracted with third party distributors and service providers to distribute our products in certain countries through our EAPs.

With respect to the precommercial distribution of our products to patients outside of the U.S., we have contracted with third-party distributors and service providers to distribute our products in certain countries through our EAPs.

We plan to continue building out our network for commercial distribution in jurisdictions in which our products are approved.

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Cash, Cash Equivalents, Restricted Cash and Investments

As of September 30, 2024, we had approximately $1,395.8 million of cash, cash equivalents, restricted cash and investments, consisting of $197.9 million of cash and cash equivalents, $1,182.3 million of investments, and $15.6 million of restricted cash.

We believe that our balance of cash, cash equivalents and investments is sufficient to fund our current operational plan for at least the next twelve months.

As of March 31, 2025, we had $647.5 million of cash, cash equivalents, restricted cash and investments, consisting of $240.9 million of cash and cash equivalents, $391.0 million of investments and $15.6 million of non-current restricted cash.

We believe that our balance of cash, cash equivalents and investments, along with cash inflows from operations and availability under our Revolving Credit Facility (defined below), is sufficient to fund our current operational plan for at least the next twelve months.

The likelihood of our long-term success must be considered in light of the expenses, difficulties and delays frequently encountered in the development and commercialization of new pharmaceutical products, competitive factors in the marketplace, the risks associated with government sponsored reimbursement programs and the complex regulatory environment in which we operate.

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• income tax.

There have not been significant changes to our critical accounting policies and significant estimates as detailed in our Annual Report on Form 10-K for the year ended December 31, 2023, apart from additional monitoring of our valuation allowance, as noted below.

We follow the asset and liability method of accounting for income taxes, which requires the recognition of deferred tax assets and liabilities for expected future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the differences are expected to reverse.

A valuation allowance is recorded to reduce the net deferred tax asset to zero when it is more likely than not that the net deferred tax asset will not be realized.

As of September 30, 2024, we continued to maintain a full valuation allowance against all of our deferred tax assets, with the exception of deferred tax assets in certain foreign jurisdictions, based on management's evaluation of all available evidence, including our earnings history.

We will continue to monitor the realizability of our deferred tax assets in future periods.

We may release all or a portion of the valuation allowance in the near-term;

however, the release of the valuation allowance, as well as the exact timing and the amount of such release, continue to be subject to, among other things, our level of profitability, revenue growth and expectations regarding future profitability.

If and when we determine the valuation allowance should be released or reduced, the adjustment would result in a benefit to income tax expense for the period the release is recorded, which could have a material impact on net earnings.

We recognize the effect of income tax positions only if those positions are more likely than not of being sustained upon an examination.

The calculation of our tax liabilities (or amount of reduction in our deferred tax assets from net operating loss carryover and research credit carryover) resulting from uncertain tax positions can involve significant judgment.

Further, the calculation may involve the application of complex tax regulations in a foreign jurisdiction.

Any significant impact as a result of changes in underlying facts, law, tax rates, tax audit, or review could lead to adjustments to our deferred tax asset, income tax expense, our effective tax rate, and/or our cash flow.

Although we believe that we have adequately provided for tax liabilities resulting from uncertain tax positions, the actual amounts paid, if any, could have a material impact on our results of operations.

Interest and penalties associated with uncertain tax positions are classified as a component of income tax expense.

Results of Operations for the Three and Nine Months Ended September 30, 2024 and 2023

The following tables set forth selected unaudited condensed consolidated statements of income (loss) data for each of the periods indicated:

There have been no changes to our critical accounting policies and significant estimates as detailed in our Annual Report on Form 10-K for the year ended December 31, 2024.

Results of Operations for the Three Months Ended March 31, 2025 and 2024

The following tables set forth selected unaudited condensed consolidated statements of (loss) income data for each of the periods indicated:

For the Three Months Ended

September 30,

(in thousands, except per share amounts)

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Total cost and expenses

Operating income (loss)

Other income (loss), net:

Other income (expense), net

Total other income (loss), net

Income (loss) before income tax expense

Income tax expense

Net income (loss)

Earnings (loss) per share:

For the Nine Months Ended

September 30,

(in thousands, except per share amounts)

Products, net

Collaboration and other

Total revenues

Cost and expenses:

Cost of sales (excluding amortization of in-licensed rights)

Research and development

Selling, general and administrative

Amortization of in-licensed rights

Total cost and expenses

Operating income (loss)

Other income (loss), net:

Other income, net

Gain from sale of Priority Review Voucher

Loss on debt extinguishment

Total other income (loss), net

Income (loss) before income tax expense

Operating (loss) income

Other (loss) income, net:

Other (expense) income, net

(Loss) income before income tax expense

Income tax expense

Net income (loss)

Earnings (loss) per share:

Net (loss) income

(Loss) earnings per share

not meaningful

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Actual amounts of consideration ultimately received or paid may differ from our estimates.

The following tables summarize the components of our net product revenues, by product, for each of the periods indicated:

The following table summarizes the components of our net product revenues, by product, for each of the periods indicated:

For the Three Months Ended

September 30,

(in thousands)

Products, net

For the Nine Months Ended

September 30,

(in thousands)

Products, net

not meaningful

Net product revenues for our products for the three and nine months ended September 30, 2024 increased by $120.4 million and $370.0 million, respectively, compared with the three and nine months ended September 30, 2023.

The increases primarily reflect additional net product revenues of $111.9 million and $367.5 million, respectively, associated with sales of ELEVIDYS during the three and nine months ended September 30, 2024 due to an increase in demand following its June 2023 FDA approval and launch and expanded label in June 2024.

The following tables summarize the components of our collaboration and other revenues for the periods indicated:

Net product revenues for our products for the three months ended March 31, 2025 increased by $252.0 million compared with the three months ended March 31, 2024.

The increase primarily reflects an increase in net product revenues of ELEVIDYS of $241.0 million in the three months ended March 31, 2025 as a result of its expanded label approval in June 2024.

The following table summarizes the components of our collaboration and other revenues for the periods indicated:

For the Three Months Ended

September 30,

(in thousands)

Contract manufacturing

Royalty revenue

Amortization of performance obligations**

Total collaboration and other

For the Nine Months Ended

September 30,

(in thousands)

Amortization of performance obligations**

Collaboration revenue

Contract manufacturing

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** Related to the recognition of previously deferred revenue under the Roche collaboration agreement as the Company satisfies its performance obligations under the contract.

For more information, please read Note 3, License and Collaboration Agreements .

Collaboration and other revenues primarily relate to our collaboration arrangement with F.

Collaboration and other revenues primarily relate to our collaboration arrangement (the “Roche Collaboration Agreement”) with F.

Hoffman-La Roche Ltd.

For the three months ended September 30, 2024 and 2023, we recognized $37.4 million and $22.5 million of collaboration and other revenues, respectively.

In accordance with the Collaboration Agreement with Roche (the “Collaboration Agreement”), the parties agreed to enter into a supply agreement in order for us to supply Roche with clinical and commercial batches of ELEVIDYS (the “Supply Agreement”).

While the Supply Agreement is in the process of being negotiated, we delivered batches of commercial ELEVIDYS supply to Roche that were agreed upon on a purchase order-by-purchase order basis.

For the three months ended September 30, 2024, we recognized $27.9 million of contract manufacturing revenue, which is related to these Roche shipments, with no similar activity during the three months ended September 30, 2023.

In addition, we recognized $9.5 million of royalty revenue from sales of ELEVIDYS by Roche, with no similar activity for the three months ended September 30, 2023.

This was partially offset by the amortization of the single, combined performance obligation under the Collaboration Agreement during the three months ended September 30, 2023, which was fully amortized as of December 31, 2023.

Please refer to Note 3, License and Collaboration Agreements for further discussion of the Collaboration Agreement.

For the nine months ended September 30, 2024 and 2023, we recognized $93.8 million and $66.8 million of collaboration and other revenues, respectively.

The increase is primarily due to $33.7 million of contract manufacturing revenue related to shipments of ELEVIDYS to Roche and $12.1 million of royalty revenue from sales of ELEVIDYS by Roche recognized in the nine months ended September 30, 2024, with no similar activity for the nine months ended September 30, 2023.

This was partially offset by an $18.8 million decrease in collaboration revenue recognized in the nine months ended September 30, 2024.

This decrease was due to the amortization of the single, combined performance obligation under the Collaboration Agreement recognized during the nine months ended September 30, 2023, which was fully amortized as of December 31, 2023, partially offset by Roche’s declined option to acquire the ex-US rights to a certain external, early stage Duchenne development program during the nine months ended September 30, 2024.

For the three months ended March 31, 2025 and 2024, we recognized $133.3 million and $54.0 million of collaboration and other revenues, respectively.

The increase is primarily due to the $112.0 million of collaboration revenue recognized in the three months ended March 31, 2025 related to the expiration of an option for a certain program, as compared to $48.0 million collaboration revenue in 2024 related to Roche’s declined option to acquire the ex-US rights to a certain external, early stage Duchenne development program.

Please refer to Note 3, License and Collaboration Agreements for further discussion of the Roche Collaboration Agreement.

In addition, in accordance with the Roche Collaboration Agreement, the parties agreed to enter into a supply agreement in order for us to supply Roche with clinical and commercial batches of ELEVIDYS (the “Roche Supply Agreement”).

Roche utilizes the supply for sales of ELEVIDYS in territories outside of the U.S.

where Roche has received certain approvals for ELEVIDYS.

We are eligible to receive royalties on these sales.

While the Roche Supply Agreement is in the process of being negotiated, we delivered commercial ELEVIDYS supply to Roche that was agreed upon on a purchase order-by-purchase order basis.

For the three months ended March 31, 2025 and 2024, we recognized $17.4 million and $5.8 million of contract manufacturing revenue, respectively, which is related to these Roche shipments.

In addition, we recognized $4.0 million and approximately $0.2 million of royalty revenue from sales of ELEVIDYS by Roche for the three months ended March 31, 2025 and 2024, respectively.

Cost of sales (excluding amortization of in-licensed rights)

Our cost of sales (excluding amortization of in-licensed rights) consists of inventory costs that relate to sales of our products and the related overhead costs and royalty payments primarily to BioMarin Pharmaceuticals, Inc.

Our cost of sales (excluding amortization of in-licensed rights) consists of inventory costs that relate to sales of our products and royalty payments primarily to BioMarin Pharmaceuticals, Inc.

(“BioMarin”) and the University of Western Australia (“UWA”) for our PMO Products and to Nationwide Children’s Hospital (“Nationwide”) for ELEVIDYS.

Prior to receiving regulatory approval for our products, we expensed manufacturing and material costs as research and development expenses.

For the PMO Products, all previously expensed manufacturing costs had been fully consumed prior to the three and nine months ended September 30, 2024 and 2023.

For ELEVIDYS sold in the three and nine months ended September 30, 2024, a portion of related manufacturing costs incurred had previously been expensed as research and development expenses, as such costs were incurred prior to FDA approval of the product.

For ELEVIDYS sold in the three and nine months ended September 30, 2023, the majority of related manufacturing costs incurred had previously been expensed as research and development expenses, as such costs were incurred prior to FDA approval of the product.

If product related costs had not previously been expensed as research and development expenses prior to receiving FDA approval, the incremental inventory costs related to ELEVIDYS sold, including products sold to Roche under the Collaboration Agreement, would have been approximately $29.1 million and $68.8 million for the three and nine months ended September 30, 2024, respectively.

For the PMO Products, all previously expensed manufacturing costs had been fully consumed prior to the three months ended March 31, 2025 and 2024.

For ELEVIDYS sold in the three months ended March 31, 2025, a portion of related manufacturing costs incurred had previously been expensed as research and development expenses.

For ELEVIDYS sold in the three months ended March 31, 2024, the majority of related manufacturing costs incurred had previously been expensed as research and development expenses, as such costs were incurred prior to FDA approval of the product.

If product related costs had not previously been expensed as research and development expenses prior to receiving FDA approval, the incremental inventory costs related to ELEVIDYS sold, including products sold to Roche under the Roche Collaboration Agreement, would have been $13.7 million and $23.8 million higher for the three months ended March 31, 2025 and 2024, respectively.

The following table summarizes the components of our cost of sales (excluding amortization of in-licensed rights) for each of the periods indicated:

For the Three Months Ended

September 30,

(in thousands)

Inventory costs related to products sold (excluding products sold to Roche**)

Inventory costs related to products sold to Roche**

Royalty payments

Total cost of sales (excluding amortization of in-licensed rights)

For the Nine Months Ended

September 30,

(in thousands)

Inventory costs related to products sold (excluding products sold to Roche**)

Royalty payments

Inventory costs related to products sold to Roche**

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not meaningful

** See above for further details regarding product supply sold to Roche via contract manufacturing under our Collaboration Agreement.

The cost of sales (excluding amortization of in-licensed rights) for the three and nine months ended September 30, 2024 increased by $54.7 million and $80.6 million, respectively, compared with the same periods in 2023.

The changes primarily reflect an increase in cost of sales related to ELEVIDYS due to an increase in demand following its June 2023 FDA approval and expanded label in June 2024, as well as increases in the write-offs of certain batches of our products not meeting our quality specifications.

For the three and nine months ended September 30, 2024, we recognized $13.7 million and $15.4 million, respectively, of cost of sales related to products sold to Roche under the Collaboration Agreement, with no similar activity for the same periods in 2023.

** See above for further details regarding product supply sold to Roche via contract manufacturing under the Roche Collaboration Agreement .

The cost of sales (excluding amortization of in-licensed rights) for the three months ended March 31, 2025 increased by $87.0 million, or 172%, compared with the same period in 2024.

The change primarily reflects an increase in cost of sales related to

ELEVIDYS as we consume previously expensed inventory, an increase in demand following ELEVIDYS’s expanded label approval in June 2024 as well as an increase in cost of sales related to products sold to Roche under the Roche Collaboration Agreement, partially offset by a decrease in the write-offs of certain batches of our products not meeting our quality specifications for the three months ended March 31, 2025, as compared to the same period of 2024.

Research and development expenses

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We do not maintain or evaluate and, therefore, do not allocate internal research and development costs on a project-by-project basis.

As a result, a

significant portion of our research and development expenses are not tracked on a project-by-project basis, as the costs may benefit multiple projects.

The following tables summarize our research and development expenses by project for each of the periods indicated:

As a result, a significant portion of our research and development expenses are not tracked on a project-by-project basis, as the costs may benefit multiple projects.

The following table summarizes our research and development expenses by project for each of the periods indicated:

For the Three Months Ended

September 30,

(in thousands)

Up-front and milestone expenses

LGMD platform

Eteplirsen (exon 51)

Other gene therapies

PPMO platform

Golodirsen (exon 53)

Casimersen (exon 45)

Other projects

Internal research and development expenses

Roche collaboration reimbursement

Total research and development expenses

For the Nine Months Ended

September 30,

(in thousands)

LGMD platform

Eteplirsen (exon 51)

Other gene therapies

PPMO platform

Casimersen (exon 45)

Golodirsen (exon 53)

PPMO platform

Other projects

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not meaningful

The following tables summarize our research and development expenses by category for each of the periods indicated:

The following table summarizes our research and development expenses by category for each of the periods indicated:

For the Three Months Ended

September 30,

(in thousands)

Up-front and milestone expenses

Manufacturing expenses

Clinical trial expenses

Compensation and other personnel expenses

Clinical trial expenses

Facility- and technology-related expenses

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Total research and development expenses

*Beginning in the period ended March 31, 2024, we implemented an updated manufacturing absorption methodology that allocates the absorption of indirect manufacturing costs to their respective originating categories.

Research and development expenses by category, specifically, manufacturing expenses, compensation and other personnel expenses, facility- and technology-related expenses and professional services, have been reclassified for the period ended September 30, 2023 for comparability.

This reallocation has no impact on the total research and development expenses recognized.

Research and development expenses for the three months ended September 30, 2024 increased by $30.2 million, or 16%, compared with the three months ended September 30, 2023.

not meaningful

Research and development expenses for the three months ended March 31, 2025 increased by $573.1 million compared with the three months ended March 31, 2024.

The increase was primarily driven by the following:

• $73.5 million increase in manufacturing expenses primarily due to $91.9 million of costs associated with the termination of the development, commercial manufacturing and supply agreement (the “Thermo Agreement”) related to Brammer Bio MA, LLC, an affiliate of Thermo Fisher Scientific, Inc.

(“Thermo”) in August 2024, partially offset by a decrease in activity for our PPMO platform and a decrease in clinical batches for our Eteplirsen program.

Please refer to Note 16, Commitments and Contingencies for further discussion of the Thermo Agreement;

• $9.5 million decrease in clinical trial expenses primarily due to a decrease in activity for our PPMO platform and a ramp-down of the ESSENCE studies for AMONDYS 45 and VYONDYS 53;

• $4.3 million decrease in stock-based compensation expense primarily due to an increase in indirect manufacturing costs absorption offset as a result of ELEVIDYS approval in June 2023 and expanded label in June 2024, partially offset by changes in headcount;

• $583.8 million increase in up-front and milestone expenses primarily due to the $583.6 million in payments allocated to the up-front license fee associated with our exclusive global licensing and collaboration agreement and stock purchase agreement (collectively, the “Arrowhead Agreement”) with Arrowhead Pharmaceuticals, Inc.

(“Arrowhead”);

• $2.2 million decrease in manufacturing expenses primarily due to timing of production activity across our programs;

• $5.8 million increase in compensation and other personnel expenses primarily due to changes in headcount;

• $11.0 million decrease in clinical trial expenses primarily due to our decision to discontinue our PPMO programs;

• $2.9 million increase in facility- and technology-related expenses primarily due to our continuing expansion efforts;

• $1.0 million increase in stock-based compensation expense primarily due to changes in headcount;

• $3.0 million increase in professional services primarily due to an increase in reliance on third-party research and development contractors for clinical programs;

• $2.0 million decrease in pre-clinical expenses primarily due to a decrease in toxicology study activity in our PPMO platform;

• $4.1 million decrease in research and other expenses primarily due to milestone achievements in certain research and license agreements during the three months ended September 30, 2023, with no similar milestone activity for the three months ended September 30, 2024;

• $26.6 million increase in the offset to expense associated with a collaboration reimbursement from Roche, primarily due to reimbursable costs associated with the termination of the Thermo Agreement during the three months ended September 30, 2024, with no similar activity for the three months ended September 30, 2023.

This was partially offset by a decrease in clinical supply costs due to timing for our SRP-9001 gene therapy programs.

For the Nine Months Ended

September 30,

(in thousands)

Manufacturing expenses*

Clinical trial expenses

Compensation and other personnel expenses

Facility- and technology-related expenses

Stock-based compensation

Professional services

Pre-clinical expenses

Research and other

Roche collaboration reimbursement

Total research and development expenses

This reallocation has no impact on the total research and development expenses recognized.

Research and development expenses for the nine months ended September 30, 2024 decreased by $77.3 million, or 11%, compared with the nine months ended September 30, 2023.

The decrease was primarily driven by the following:

• $33.2 million decrease in manufacturing expenses primarily due to the capitalization of commercial batches of ELEVIDYS manufactured upon its approval in June 2023, a decrease in clinical batches for our Eteplirsen program and a decrease in activity for our PPMO platform, partially offset by $91.9 million of costs associated with the termination of the Thermo Agreement.

Please refer to Note 16, Commitments and Contingencies for further discussion of the Thermo Agreement;

• $8.8 million decrease in clinical trial expenses primarily due to a ramp-down of the ESSENCE studies for AMONDYS 45 and VYONDYS 53 and our EMBARK study, partially offset by an increased patient enrollment and site activation for our EXPEDITION and EMERGENE studies during the nine months ended September 30, 2024;

• $2.5 million decrease in compensation and other personnel expenses primarily due to an increase in indirect manufacturing costs absorption offset as a result of ELEVIDYS approval in June 2023 and expanded label in June 2024, partially offset by changes in headcount;

• $1.5 million increase in facility- and technology-related expenses primarily due to our continuing expansion efforts, partially offset by an increase in indirect manufacturing costs absorption offset as a result of ELEVIDYS approval in June 2023 and expanded label in June 2024;

• $6.2 million decrease in stock-based compensation expense primarily due to an increase in indirect manufacturing costs absorption offset as a result of ELEVIDYS approval in June 2023 and expanded label in June 2024, partially offset by the achievement of performance conditions related to certain restricted stock units with performance conditions (“PSUs”) during the nine months ended September 30, 2024 and changes in headcount;

• $2.4 million increase in professional services primarily due to an increase in reliance on third-party research and development contractors for clinical programs, partially offset by a decrease in regulatory-related consulting services subsequent to ELEVIDYS approval in June 2023 and expanded label in June 2024;

• $3.3 million decrease in pre-clinical expenses primarily due to a decrease in toxicology study activity in our PPMO platform, partially offset by an increase in toxicology study activity in our LGMD gene therapy programs;

• $9.4 million decrease in research and other expenses primarily due to timing of achievement of certain up-front and milestone payments, partially offset by an increase in sponsored research with certain institutions during the nine months ended September 30, 2024;

• $17.8 million increase in the offset to expense associated with a collaboration reimbursement from Roche due to reimbursable costs associated with the termination of the Thermo Agreement during the nine months ended September 30, 2024, with no similar activity for the nine months ended September 30, 2023.

This was partially offset by a decrease in clinical supply costs due to timing for our SRP-9001 gene therapy programs.

• $1.7 million decrease in pre-clinical expenses primarily due to decreased activity across our gene therapy programs;

• $1.7 million decrease in research and other expenses primarily due to a decrease in collaboration cost-sharing expenses related to our license and collaboration agreement with Genethon, partially offset by $2.3 million of reimbursable development costs incurred by Arrowhead during the three months ended March 31, 2025;

• $6.8 million increase in the offset to expense associated with a collaboration reimbursement from Roche due to continuing development of our SRP-9001 gene therapy program.

Selling, general and administrative expenses

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Other general and administrative expenses include an allocation of our facility- and technology-related costs and professional fees for legal, consulting and accounting services.

The following tables summarize our selling, general and administrative expenses by category for each of the periods indicated:

The following table summarizes our selling, general and administrative expenses by category for each of the periods indicated:

For the Three Months Ended

September 30,

(in thousands)

Professional services

Compensation and other personnel expenses

Stock-based compensation

Facility- and technology-related expenses

Roche collaboration reimbursement

Total selling, general and administrative expenses

Selling, general and administrative expenses for the three months ended September 30, 2024 increased by $7.3 million, or 6%, compared with the three months ended September 30, 2023.

This increase was primarily driven by the following:

• $2.5 million increase in professional service expenses primarily related to the continued efforts to commercialize ELEVIDYS, partially offset by lower expenses related to ongoing litigation matters;

• $2.9 million increase in compensation and other personnel expenses primarily due to changes in headcount;

• $1.6 million increase in facility- and technology-related expenses primarily due to our continuing expansion efforts.

For the Nine Months Ended

September 30,

(in thousands)

Professional services

Compensation and other personnel expenses

Stock-based compensation

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Total selling, general and administrative expenses

Selling, general and administrative expenses for the nine months ended September 30, 2024 increased by $43.8 million, or 13%, compared with the nine months ended September 30, 2023.

Selling, general and administrative expenses for the three months ended March 31, 2025 increased by $6.6 million, or 5%, compared with the three months ended March 31, 2024.

This increase was primarily driven by the following:

• $13.3 million increase in professional service expenses primarily related to the continued efforts to commercialize ELEVIDYS and ongoing litigation matters;

• $3.7 million increase in compensation and other personnel expenses primarily due to changes in headcount;

• $4.1 million increase in stock-based compensation expense primarily related to the achievement of performance conditions related to certain PSUs during the nine months ended September 30, 2024;

• $2.6 million increase in professional service expenses primarily related to our continuing efforts to commercialize ELEVIDYS, partially offset by a decrease in expenses related to ongoing litigation matters;

• $1.1 million increase in facility- and technology-related expenses primarily due to our continuing expansion efforts.

• $12.2 million increase in other expenses primarily due to the timing of charitable contribution activity.

Amortization of in-licensed rights

Amortization of in-licensed rights relates to the agreements we entered into with UWA, Nationwide, BioMarin and Parent Project Muscular Dystrophy in April 2013, December 2016, July 2017 and May 2018, respectively.

Each in-licensed right is being amortized on a straight-line basis over the remaining life of the relevant patent from the date the related fee was incurred, either the regulatory approval of or the first commercial sale of the applicable product.

For the three and nine months ended September 30, 2024, we recorded amortization of in-licensed rights of approximately $0.6 million and $1.8 million, respectively.

For the three and nine months ended September 30, 2023, we recorded amortization of in-licensed rights of approximately $0.4 million and $0.8 million, respectively.

Other income (expense), net

Other income (expense), net primarily consists of interest expense on our debt instruments, interest income on our cash, cash equivalents and investments, amortization of investment premium or accretion of investment discount, unrealized gain or loss from our investment in our strategic investments, the changes in the fair value of the derivative assets associated with the capped call options for our $570.0 million aggregate principal amount of senior convertible notes due on November 15, 2024 (the “2024 Notes”) and the changes in the fair value of contingent consideration related to regulatory-related contingent payments meeting the definition of a derivative liability.

Each in-licensed right is being amortized on a straight-line basis over the remaining life of the relevant patent from the date the related fee was incurred, either the regulatory approval or the first commercial sale of the applicable product.

For both the three months ended March 31, 2025 and 2024, we recorded amortization of in-licensed rights of approximately $0.6 million.

Other (expense) income, net

Other (expense) income, net primarily consists of the unrealized gain or loss from our investments in our strategic equity investments, interest expense on our 1.25% convertible senior notes due on September 15, 2027 (the “2027 Notes”), interest income on our cash, cash equivalents and investments, accretion of investment discount and the change in the fair value of contingent consideration related to regulatory-related contingent payments meeting the definition of a derivative liability.

Our cash equivalents and investments consist of money market funds, corporate bonds, commercial paper, government and government agency debt securities and certificates of deposit.

For the three months ended September 30, 2024, other income, net, was $11.8 million and for the three months ended September 30, 2023, other expense, net was $12.3 million.

The change is primarily due to the impairment of a strategic investment during the three months ended September 30, 2023, with no similar activity during the three months ended September 30, 2024.

For the nine months ended September 30, 2024 and 2023, other income, net was $32.6 million and $17.3 million, respectively.

The change is primarily due to the impairment of a strategic investment during the nine months ended September 30, 2023, with no similar activity during the nine months ended September 30, 2024.

This change was partially offset by a decrease in interest income due to the investment mix of our investment portfolio and an increase in the fair value of derivatives, primarily related to contingent consideration.

For the three months ended March 31, 2025, other (expense) income, net decreased by $89.7 million compared with the three months ended March 31, 2024.

The change is primarily due to a $91.7 million increase in the loss on our strategic investments, which includes the recurring fair value adjustments of investments in publicly-traded companies, including Arrowhead.

Income tax expense

Income tax expense for the three and nine months ended September 30, 2024 was approximately $0.4 million and $12.8 million, respectively.

Income tax expense for the three and nine months ended September 30, 2023 was approximately $7.8 million and $21.2 million, respectively.

Income tax expense for the three and nine months ended September 30, 2024 and 2023 relates to state, federal and foreign income taxes for which available tax losses or credits were not available to offset.

As of September 30, 2024, we continued to maintain a full valuation allowance against our deferred tax assets, with the exception of deferred tax assets in certain foreign jurisdictions.

Income tax expense for the three months ended March 31, 2025 and 2024 was $64.0 million and $5.3 million, respectively.

Income tax expense for both periods presented primarily relates to state, federal and foreign income taxes for which available tax losses or credits were not available to offset.

As of March 31, 2025, we continued to maintain a full valuation allowance against our deferred tax assets, with the exception of deferred tax assets in certain foreign jurisdictions.

We continue to monitor the available evidence relative to recovery of our deferred tax assets and whether such evidence would be sufficient to conclude that it is more likely than not that such deferred tax assets may be partially or fully recoverable.

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Liquidity and Capital Resources

There have been no material changes to our obligations under lease arrangements as reported in our Annual Report on Form 10-K for the year ended December 31, 2023.

There have been no material changes to our obligations under lease or debt arrangements as reported in our Annual Report on Form 10-K for the year ended December 31, 2024, except for the five-year $600.0 million senior secured revolving credit facility entered into in February 2025 (the “Revolving Credit Facility”), as discussed in Note 13, Revolving Credit Facility .

The following table summarizes our financial condition for each of the periods indicated:

September 30, 2024

March 31, 2025

December 31, 2024

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Total working capital

not meaningful

For the periods ended September 30, 2024 and December 31, 2023, our principal sources of liquidity were primarily derived from sales of our products, net proceeds from sale of the ELEVIDYS Priority Review Voucher, net proceeds from our offering of 1.25% convertible senior notes due on September 15, 2027 (“2027 Notes”), proceeds from the partial settlement of capped call options associated with the exchange of a portion of the 2024 Notes for shares of our common stock and our collaboration arrangement with Roche.

Our principal uses of cash are research and development expenses, manufacturing costs, selling, general and administrative expenses, investments, capital expenditures, business development transactions, settlement of long-term debt and other working capital requirements.

The changes in our working capital primarily reflect the use of cash in operating activities.

For the periods ended March 31, 2025 and December 31, 2024, our principal sources of liquidity were primarily derived from the sales of our products, our collaboration arrangement with Roche and proceeds from the settlement of capped call options associated with our convertible senior notes due on November 15, 2024.

Our principal uses of cash are our $583.6 million up-front payment to Arrowhead and $241.4 million equity investment in Arrowhead's common stock (collectively, the “Arrowhead Payments”), research and development expenses, manufacturing costs, selling, general and administrative expenses, investments, capital expenditures, settlement of long-term debt and other working capital requirements.

The changes in our working capital primarily reflect use of cash in operating activities, as well as a reduction in our cash, cash equivalents and investments to fund the Arrowhead Payments, offset by an increase in ELEVIDYS inventory manufacturing to meet increased demand.

While our contractual obligations, commitments and debt service requirements over the next several years are significant, we intend to continue to fund our short-term financing needs and working capital requirements from cash flows of operating activities as well as cash on hand, and such sources are anticipated to be adequate to fund working capital requirements for at least twelve months from the date these unaudited condensed consolidated financial statements were issued.

Beyond September 30, 2025, our cash requirements will depend extensively on our ability to advance our research, development and commercialization of product candidates.

Beyond March 31, 2026, our cash requirements will depend extensively on our ability to advance our research, development and commercialization of product candidates.

We may seek additional financings primarily from, but not limited to, the sale and issuance of equity and debt securities, the licensing or sale of our technologies, and entering into additional government contracts and/or funded research and development agreements.

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• the timing and costs associated with our expansion efforts;

• the timing and costs associated with repurchases of our common stock under our $500.0 million share repurchase program, approved by our Board of Directors in November 2024 and effective for 18 months;

• the timing and costs of building out our manufacturing capabilities;

2 unchanged sentences

• the timing and costs associated with our clinical trials and pre-clinical trials;

• the attainment of milestones and our obligations to make milestone payments to Myonexus Therapeutics, Inc.'s selling shareholders, BioMarin, Nationwide, UWA and other institutions;

• obligations to holders of our convertible notes;

• the attainment of milestones and our obligations to make milestone payments to Arrowhead, Myonexus Therapeutics, Inc.'s selling shareholders, BioMarin, Nationwide, UWA and other institutions;

• the timing and repayment of future borrowings on our Revolving Credit Facility;

• obligations to holders of our 2027 Notes;

• the costs of filing, prosecuting, defending and enforcing patent claims and our other intellectual property rights.

We cannot provide assurances that financing will be available when and as needed or that, if available, the financings will be on favorable or acceptable terms.

If we are unable to obtain additional financing when and if we require, this would have a material adverse effect on our business and the results of operations.

If we are unable to obtain additional financing when and if we require, this would have a material adverse effect on our business and results of operations.

To the extent we issue additional equity securities, our existing stockholders could experience substantial dilution.

We believe that existing cash and cash equivalents, along with future cash generated from operations will be sufficient to meet the capital requirements of our operations for the next 12 months and foreseeable future.

We believe that existing cash and cash equivalents, along with future cash generated from operations and availability under our Revolving Credit Facility will be sufficient to meet the capital requirements of our operations for the next 12 months and foreseeable future.

Additional information regarding our Revolving Credit Facility is provided in Note 13, Revolving Credit Facility to the unaudited condensed consolidated financial statements contained in Item 1.

We have entered into long-term contractual arrangements from time to time for our facilities, the provision of goods and services, and issuance of debt securities, among others.

Additional information regarding our obligations under debt, lease and manufacturing arrangements are provided in Note 10, Indebtedness , Note 13, Leases and Note 16, Commitments and Contingencies to the unaudited condensed consolidated financial statements contained in Item 1.

There have been no material changes to our obligations under leasing arrangements as reported in our Annual Report on Form 10-K for the year ended December 31, 2023.

Additional information regarding our obligations under manufacturing arrangements is provided in Note 16, Commitments and Contingencies to the unaudited condensed consolidated financial statements contained in Item 1.

There have been no material changes to our obligations under debt or leasing arrangements as reported in our Annual Report on Form 10-K for the year ended December 31, 2024.

For products and product candidates that are currently approved or are in various research and development stages, we may be obligated to make up to $12.6 billion of future development, regulatory, up-front royalty and sales milestone payments associated with our license and collaboration agreements.

Payments under these agreements generally become due and payable upon the achievement of certain development, regulatory or commercial milestones.

Because the achievement of these milestones is not probable, and payment is not required as of September 30, 2024, such contingencies have not been recorded in our unaudited condensed consolidated financial statements.

Payments under these agreements generally become due and payable upon achievement of certain development, regulatory or commercial milestones.

Because the achievement of these milestones is not probable, and payment is not required as of March 31, 2025, such contingencies have not been recorded in our unaudited condensed

consolidated financial statements.

Amounts related to contingent milestone payments are not yet considered contractual obligations as they are contingent on the successful achievement of certain development, regulatory approval and commercial milestones.

The following table summarizes our cash flow activity for each of the periods indicated:

For the Nine Months Ended

September 30,

For the Three Months Ended

(in thousands)

3 unchanged sentences

Financing activities

Decrease in cash, cash equivalents and restricted cash

Decrease in cash and cash equivalents

not meaningful

Operating Activities

Cash used in operating activities, which consists of our net income (loss) adjusted for non-cash items and changes in net operating assets and liabilities, totaled $297.8 million and $446.3 million for the nine months ended September 30, 2024 and 2023, respectively.

Cash used in operating activities for the nine months ended September 30, 2024 was primarily driven by the net income of $76.2 million, adjusted for the following non-cash items:

Cash used in operating activities, which consists of our net (loss) income adjusted for non-cash items and changes in net operating assets and liabilities, totaled $583.4 million and $242.1 million for the three months ended March 31, 2025 and 2024, respectively.

Cash used in operating activities for the three months ended March 31, 2025 was primarily driven by the net loss of $447.5 million, adjusted for the following:

• $90.7 million loss on strategic investments;

• $41.4 million in stock-based compensation expense;

• $62.7 million in non-cash termination charges as a result of the Thermo Agreement termination;

• $10.0 million in depreciation and amortization expense;

• $12.3 million reduction in the carrying amount of the right of use assets;

• $8.6 million charge related to the change in the fair value of derivatives;

• $5.6 million in other items.

These amounts were partially offset by $33.5 million in accretion of investment discount, net.

• $5.6 million in other non-cash items.

These non-cash charges were partially offset by $1.9 million in accretion of investment discount, net.

The net cash outflow from changes in our operating assets and liabilities was primarily driven by the following:

• $235.5 million increase in manufacturing-related deposits and prepaids primarily due to an increase in prepaid raw materials and batch fees with Catalent;

• $233.5 million increase in inventory primarily due to capitalized inventory related to ELEVIDYS;

• $39.4 million increase in other assets primarily due to an increase in the collaboration receivable related to Roche;

• $35.4 million decrease in deferred revenue primarily related to the collaboration with Roche;

• $34.2 million increase in accounts receivable due to an increase in payment terms for product sales related to the PMO Products;

• $13.6 million decrease in accounts payable, accrued expenses, lease liabilities and other liabilities, primarily due to the timing and invoicing of payments with our contract research organizations and contract manufacturing organizations.

Cash used in operating activities for the nine months ended September 30, 2023 was primarily driven by the net loss of $581.6 million, adjusted for the following non-cash items:

• $387.3 million in loss on debt extinguishment related to the exchange of 2024 Notes;

• $177.4 million increase in inventory primarily due to a ramp-up of manufacturing corresponding to an increase in demand for ELEVIDYS;

• $85.4 million decrease in deferred revenue primarily related to our collaboration with Roche;

• $57.4 million increase in accounts receivable, net primarily due to an increase in demand for ELEVIDYS;

• $17.7 million decrease in accounts payable, accrued expenses, lease liabilities and other liabilities, primarily due to the timing and invoicing of payments with our contract research organizations and contract manufacturing organizations and payments on accrued employee compensation costs;

• $71.1 million decrease in manufacturing-related deposits and prepaids primarily due to timing of prepaid raw materials with Catalent.

Cash used in operating activities for the three months ended March 31, 2024 was primarily driven by the net income of $36.1 million, adjusted for the following:

• $40.7 million in stock-based compensation expense;

• $10.1 million non-cash change in the fair value of contingent consideration;

• $8.7 million in depreciation and amortization expense;

• $27.8 million in impairments associated with our strategic investments;

• $4.3 million in other non-cash items.

These amounts were partially offset by the gain of $102.0 million recorded from the sale of the ELEVIDYS Priority Review Voucher and $32.8 million in accretion of investment discount, net.

These non-cash charges were partially offset by the $12.4 million in accretion of investment discount, net.

The net cash outflow from changes in our operating assets and liabilities was primarily driven by the following:

• $111.2 million decrease in accounts payable, accrued expenses, lease liabilities and other liabilities, primarily due to the $54.0 million shortfall payment to Thermo made during the nine months ended September 30, 2023, payments to Catalent for raw materials and the overall timing and invoicing of payments;

• $104.2 million increase in accounts receivable due to sales of ELEVIDYS and an increase in the demand of our PMO Products;

• $66.8 million decrease in deferred revenue related to the collaboration with Roche;

• $53.6 million increase in inventory due to the addition of capitalized inventory after the approval of ELEVIDYS in June 2023.

These amounts were partially offset by a $7.9 million decrease in manufacturing-related deposits and prepaids primarily due to the timing and usage of manufacturing prepaids.

• $145.0 million increase in manufacturing-related deposits and prepaids primarily due to an increase in prepaid raw materials with Catalent;

• $92.8 million decrease in accounts payable, accrued expenses, lease liabilities and other liabilities, primarily due to the timing and invoicing of payments with our contract research organizations and contract manufacturing organizations and payments on accrued employee compensation costs;

• $60.5 million increase in inventory primarily due to capitalized inventory related to ELEVIDYS;

• $50.4 million decrease in deferred revenue primarily related to the collaboration with Roche;

• $21.5 million decrease in accounts receivable, net primarily due to a reduction in payment terms for product sales related to ELEVIDYS.

Investing Activities

Cash used in investing activities was $8.6 million and $101.4 million for the nine months ended September 30, 2024 and 2023, respectively.

Cash used in investing activities for the nine months ended September 30, 2024 primarily consisted of $936.7 million of purchases of available-for-sale securities, $98.9 million of purchases of property and equipment and $10.0 million of purchases of intangible assets, partially offset by $1,037.0 million from the maturity and sale of available-for-sale securities.

Cash used in investing activities for the nine months ended September 30, 2023 primarily consisted of $1,475.4 million of purchases of available-for-sale securities, $57.1 million of purchases of property and equipment and $11.2 million of purchases of intangible assets, partially offset by $102.0 million of net proceeds related to the sale of the ELEVIDYS Priority Review Voucher and $1,340.3 million from the maturity of available-for-sale securities.

Cash used in investing activities was $291.2 million for the three months ended March 31, 2025, compared to $218.8 million of cash provided in the three months ended March 31, 2024.

Cash used in investing activities for the three months ended March 31, 2025 primarily consisted of $241.4 million in the acquisition of strategic investments related to Arrowhead, $44.7 million of purchases of available-for-sale securities and $43.7 million of purchases of property and equipment, partially offset by $40.8 million from the maturity of available-for-sale securities.

Cash provided by investing activities for the three months ended March 31, 2024 primarily consisted of $477.7 million from the maturity of available-for-sale securities, partially offset by $216.5 million of purchases of available-for-sale securities and $32.4 million of purchases of property and equipment.

Financing Activities

Cash provided by financing activities was $75.8 million and $123.1 million for the nine months ended September 30, 2024 and 2023, respectively.

Cash provided by financing activities for the nine months ended September 30, 2024 consisted of $75.8 million in proceeds from exercise of options and purchase of stock under our Employee Stock Purchase Program.

Cash provided by financing activities for the nine months ended September 30, 2023 consisted of $80.6 million in partial settlement of capped call share options for the 2024 Notes and $49.3 million in proceeds from exercise of options and purchase of stock under our Employee Stock Purchase Program, partially offset by $6.9 million in third-party debt conversion costs related to the exchange of 2024 Notes.

Cash provided by financing activities was $12.5 million and $22.1 million for the three months ended March 31, 2025 and 2024, respectively.

Cash provided by financing activities for the three months ended March 31, 2025 consisted of $15.7 million in proceeds from exercise of options and purchase of stock under our Employee Stock Purchase Program, partially offset by the $3.2 million in arrangement and up-front fees related to the Revolving Credit Facility.

Cash provided by financing activities for the three months ended March 31, 2024 consisted of $22.1 million in proceeds from exercise of options and purchase of stock under our Employee Stock Purchase Program.

Quantitative and Qualitat ive Disclosures about Market Risk

Interest-Rate-Sensitive Financial Instruments

Our current investment policy is to maintain a diversified investment portfolio consisting of money market investments, commercial paper, certificates of deposit, government and government agency bonds and high-grade corporate bonds with maturities of 24 months or less.

Our cash is primarily deposited in and invested through highly rated financial institutions in the U.S.

As of September 30, 2024, we had approximately $1,395.8 million of cash, cash equivalents, restricted cash and investments, comprised of $197.9 million of cash and cash equivalents, $1,182.3 million of investments, and $15.6 million of restricted cash.

As of March 31, 2025, we had $647.5 million of cash, cash equivalents, restricted cash and investments, comprised of $240.9 million of cash and cash equivalents, $391.0 million of investments and $15.6 million non-current restricted cash.

The Company only holds debt securities classified as available-for-sale.

The fair value of cash equivalents and short-term investments is subject to change as a result of potential changes in market interest rates.

The fair value of cash equivalents and investments is subject to change as a result of potential changes in market interest rates.

Our future investment income may fluctuate due to changes in interest rates or we may suffer losses in principal if we sell securities that decline in market value due to changes in interest rates.

The potential change in fair value for interest rate sensitive instruments has been assessed on a hypothetical 10 basis point adverse movement across all maturities.

As of September 30, 2024, we estimate that

such hypothetical 10 basis point adverse movement would result in a hypothetical loss in fair value of approximately $0.6 million to our interest rate sensitive instruments.

Our $1,150.0 million aggregate principal amount of our 2027 Notes has a fixed interest rate of 1.25% per annum, payable semi-annually in cash on each March 15 and September 15 and our $91.6 million aggregate principal amount of our 2024 Notes has a fixed interest rate of 1.5% per annum, payable semi-annually in cash on each May 15 and November 15, and therefore are not subject to fluctuations in market interest rates.

As of March 31, 2025, we estimate that such hypothetical adverse 10 basis point movement would result in a hypothetical loss in fair value of approximately $0.2 million to our interest rate sensitive instruments.

Our $1,150.0 million aggregate principal amount of our 2027 Notes has a fixed interest rate of 1.25% per annum, payable semi-annually in cash on each March 15 and September 15, and therefore are not subject to fluctuations in market interest rates.

Market-Price-Sensitive Financial Instruments

Our strategic investment portfolio includes investments in equity securities of certain publicly traded biotechnology companies as a result of certain business development transactions.

While we are holding such securities, we are subject to equity price risk and this may increase the volatility of our income in future periods due to changes in the fair value of strategic equity investments.

As of March 31, 2025, strategic equity investments with a fair value of $151.9 million were subject to a contractual sale restriction that expires in August 2025.

Changes in the fair value of these equity securities are impacted by the volatility of the stock

market and changes in general economic conditions, among other factors.

The potential change in fair value for market-price-sensitive instruments has been assessed on a hypothetical 10.0% adverse movement.

As of March 31, 2025, we estimate that such hypothetical adverse 10.0% movement would result in a hypothetical loss in fair value of approximately $15.3 million to our market-price-sensitive financial instruments.

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