Overview

We are a clinical stage genetic medicines company focused on developing cutting-edge, one-time therapies to treat neurodegenerative diseases. Since our inception in 2017, our operations have primarily involved conducting preclinical studies, developing licensed technology, running clinical trials, and manufacturing clinical supply.

We have incurred recurring losses and negative cash flows from operations as we have invested heavily in research and development. As of December 31, 2024, we had an accumulated deficit of $659.2 million. Our primary use of cash is to fund operating expenses, particularly research and development.

We will need to raise substantial additional capital to support our continuing operations and pursue our growth strategy. Our existing cash, cash equivalents and marketable securities are expected to fund our operations into the first quarter of 2027. However, we may need to seek additional financing through equity offerings, debt financings, collaborations, or other means. Failure to secure adequate funding could significantly delay, scale back or discontinue our development programs.

Financial Operations Overview

License Agreements

Our key license agreements are with the University of Pennsylvania (Penn) and Gemma Biotherapeutics. In 2024, we restructured our agreement with Penn, terminating certain programs while retaining licenses for frontotemporal dementia (FTD), GM1 gangliosidosis, Krabbe disease, and metachromatic leukodystrophy. We also entered into a new research, collaboration and license agreement with Gemma to advance certain programs.

Under these agreements, we are required to make milestone payments of up to $16.5 million per product candidate, as well as sales-based milestone payments of up to $55 million per product. We also owe tiered royalties in the mid-single digit percentages on net sales.

Collaboration and Manufacturing Agreements

In 2019, we entered into a collaboration and manufacturing agreement with Catalent. In 2023, we amended these agreements to eliminate minimum purchase commitments, in exchange for $6 million in aggregate payments to Catalent. The amended agreements extend the term to 2030 and establish a limited exclusive relationship for manufacturing of certain product candidates.

Components of Results of Operations

Research and Development Expenses: These consist primarily of costs for personnel, facilities, preclinical studies, clinical trials, contract manufacturing, and other external research expenses. We expect R&D expenses to decrease in the near-term due to the restructuring of certain programs, but increase in the future as our remaining candidates advance.

General and Administrative Expenses: These include personnel costs, professional fees, facilities, and other administrative expenses. We also expect G&A expenses to decrease in the near-term due to the restructuring.

Impairment of Long-Lived Assets: We have recognized impairment charges related to our leased laboratory space in Hopewell, New Jersey.

Other Income (Expense), Net: This includes interest income, sublease income, and the sale of tax credits.

Results of Operations

Comparison of 2024 and 2023:

• Research and development expenses decreased by $21.2 million, primarily due to reductions in headcount, preclinical/discovery work, clinical operations, and manufacturing costs.

• General and administrative expenses decreased by $16.6 million, driven by lower personnel costs, professional fees, and expenses related to the Catalent agreements.

• Impairment charges of $5.2 million and $5.4 million were recorded in 2024 and 2023, respectively, related to our leased laboratory space.

• Other income (expense), net decreased by $0.7 million, mainly due to lower interest income.

Liquidity and Capital Resources

As of December 31, 2024, we had $76.8 million in cash, cash equivalents and marketable securities. We expect this will fund our operations into the first quarter of 2027.

Our future funding requirements will depend on the scope and progress of our research and development activities, as well as potential commercialization expenses. We will likely need to raise additional capital through equity offerings, debt financing, collaborations or other means to support our ongoing operations and future growth.

Critical Accounting Policies

Key areas of judgment and estimation include:

• Impairment of long-lived assets: We assess long-lived assets for impairment when events indicate the carrying value may not be recoverable. This involves estimating future cash flows and fair values.

• Research and development expenses: We accrue for external R&D costs based on an estimate of work completed under service agreements.

• Revenue recognition: For license and collaboration agreements, we must estimate the transaction price, including the likelihood of achieving milestones, to allocate revenue to performance obligations.

Overall, we remain focused on advancing our genetic medicine pipeline while carefully managing our resources through the restructuring of certain programs. Securing additional financing will be crucial to funding our future growth and development activities.