UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~March 3031, ~~2024~~2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number: 001-38360

Solid Biosciences Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware		90-0943402
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

500 Rutherford Avenue, Third Floor Charlestown, MA		02129
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (617) 337-4680

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of exchange on which registered
Common Stock, $0.001 par value per share	SLDB	The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~November~~May 112, ~~2024~~2025, the registrant had 3977,~~954~~515,~~607~~377 shares of common stock, $0.001 par value per share, outstanding.

~~Table~~SOLID ofBIOSCIENCES ~~Contents~~INC.

		Page
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA		1
PART I.	FINANCIAL INFORMATION	3
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets at September 30, 2024 and December 31, 2023	3
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023	4
	Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2024 and 2023	5
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2024 and 2023	6
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023	8
	Notes to the Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28
PART II.	OTHER INFORMATION	30
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	82
Item 5.	Other Information	82
Item 6.	Exhibits	84
SIGNATURES		85

TABLE OF CONTENTS


		Page
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA		1

PART I.	FINANCIAL INFORMATION	3
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets at March 31, 2025 and December 31, 2024	3
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2025 and 2024	4
	Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2025 and 2024	5
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2025 and 2024	6
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024	7
	Notes to the Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28

PART II.	OTHER INFORMATION	30
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	82
Item 5.	Other Information	82
Item 6.	Exhibits	83

SIGNATURES		84

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA

This Quarterly Report on Form 10-Q includes forward-looking statements, which involve risks and uncertainties. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believe,” “estimate,” “project,” “anticipate,” “expect,” “seek,” “predict,” “aim,” “continue,” “possible,” “intend,” “may,” “might,” “will,” “could,” “would” or “should” or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Quarterly Report on Form 10-Q. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results. All forward-looking statements are based upon information available to us on the date of this Quarterly Report on Form 10-Q.

The forward-looking statements in this Quarterly Report on Form 10-Q include, among other things, statements about:

•

the timing, progress, design and results of ongoing and planned preclinical studies and clinical trials for our neuromuscular (e.g., SGT-003, ~~AVB~~SGT-~~202-TT~~212), cardiac (e.g., ~~AVB~~SGT-401, SGT-501, SGT-601) or other future candidates;

•

our ability to establish or maintain collaborations or strategic relationships~~, including our collaboration with Ultragenyx Pharmaceutical Inc., or Ultragenyx~~;

•

our ability to obtain and maintain U.S. and foreign regulatory approval of our neuromuscular (e.g., SGT-003, ~~AVB‑202‑TT~~SGT-212), cardiac (e.g., ~~AVB~~SGT-401, SGT-501, SGT-601) or other future candidates, and the timing and scope thereof;

•

the ~~size~~timing ~~of the patient populations~~ and ~~potential~~outcomes ~~market~~of ~~opportunity~~regulatory ~~for our neuromuscular (e.g., SGT-003, AVB‑202-TT), cardiac (e.g., AVB-401, SGT-501) or other future candidates, if approved for commercial use~~interactions;

•

the size of the patient populations and potential market opportunity for our neuromuscular (e.g., SGT-003, SGT-212), cardiac (e.g., SGT-401, SGT-501, SGT-601) or other future candidates, if approved for commercial use;

•

our manufacturing capabilities and strategy, including capacity constraints and the scalability and commercial viability of our manufacturing methods and processes;

•

our plans to develop and commercialize our neuromuscular (e.g., SGT-003, ~~AVB~~SGT-~~202-TT~~212), cardiac (e.g., ~~AVB~~SGT-401, SGT-501, SGT-601) or other future candidates, if approved;

•

the pricing and reimbursement of our neuromuscular (e.g., SGT-003, ~~AVB~~SGT-~~202-TT~~212), cardiac (e.g., ~~AVB~~SGT-401, SGT‑-501, SGT-601) or other future candidates we may develop, if approved;

•

the establishment of sales, marketing and distribution capabilities and entry into agreements with third parties to market and sell our neuromuscular (e.g., SGT-003, ~~AVB~~SGT-~~202-TT~~212), cardiac (e.g., ~~AVB~~SGT-401, SGT-501, SGT-601) or other future candidates, if approved;

•

the rate and degree of market acceptance and clinical utility of our neuromuscular (e.g., SGT-003, ~~AVB~~SGT-~~202-TT~~212), cardiac (e.g., ~~AVB~~SGT-401, SGT-501, SGT-601) or other future candidates, if approved;

•

our plans to develop our platform technologies;

•

our expectations related to our use of capital resources;

•

our estimates regarding expenses, ongoing losses, future revenue, capital requirements, and need for and ability to obtain additional financing;

•

our intellectual property position;

•

our competitive and market position;

•

developments relating to our competitors and our industry;

•

our ability to continue as a going concern; and

•

the impact of laws, regulations, and global political and economic developments, including the imposition of tariffs or other trade restrictions, on our business, operations, strategy and goals.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition, business and prospects may differ materially from those made in or suggested by the forward-looking statements contained in this Quarterly Report on Form 10-Q. In addition, even if our results of operations, financial condition, business and prospects are consistent with the forward-looking statements contained in this Quarterly Report on Form 10-Q, those results may not be indicative of results to be expected in subsequent periods.

You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. The forward-looking statements contained in this Quarterly Report on Form 10-Q are made as of the date of this Quarterly Report on Form 10-Q, and we do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

This Quarterly Report on Form 10-Q includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties as well as our own estimates of potential market opportunities based on our analysis of these data, research, surveys and studies. All of the market data used in this Quarterly Report on Form 10-Q involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such data. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. Our estimates of the potential market opportunities for our candidates include a number of key assumptions based on our industry knowledge, industry publications and third-party research, surveys and studies, which may be based on a small sample size and fail to accurately reflect market opportunities. While we believe that our internal assumptions are reasonable, no independent source has verified such assumptions.

As used in this Quarterly Report on Form 10-Q, the terms “Solid,” “the Company,” “we,” “us” and “our” refer to Solid Biosciences Inc., and its consolidated subsidiaries, unless the context indicates otherwise.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

SOLID BIOSCIENCES INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except share and per share data)

	September 30,			December 31,
	March 31,			December 31,
	2024			2023
	2025			2024
Assets
Current assets:
Cash and cash equivalents	$	64210,~~394~~629		$	7480,~~015~~235
Available-for-sale securities		~~106~~96,~~723~~289			4968,~~625~~685
Prepaid expenses and other current assets		86,~~377~~491			68,~~094~~382
Total current assets		~~179~~313,~~494~~409			~~129~~157,~~734~~302
Non-current assets:
Operating lease, right-of-use assets		2423,~~859~~720			2624,~~539~~295
Property and equipment, net		54,~~067~~483			64,~~624~~747
Other non-current assets		~~475~~319			~~209~~366
Restricted cash		1,~~931~~973			1,~~833~~952
Total non-current assets		3230,~~332~~495			3531,~~205~~360
Total assets	$	~~211~~343,~~826~~904		$	~~164~~188,~~939~~662
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	36,~~458~~439		$	24,~~032~~237
Accrued expenses and other current liabilities		1314,~~227~~576			1019,~~161~~852
Operating lease liabilities		1,~~718~~868			1,~~855~~787
Finance lease liabilities		1,~~051~~096			~~469~~1,231
Derivative liabilities		34,~~400~~800			—3,150
Total current liabilities		2228,~~854~~779			1430,~~517~~257
Non-current liabilities:
Operating lease liabilities, excluding current portion		2120,~~643~~662			2221,~~707~~159
Finance lease liabilities, excluding current portion		307			1,234
Total non-current liabilities		20,662			21,159
Total non-current liabilities		21,950			23,941
Total liabilities		49,441			51,416
Total liabilities		44,804			38,458
Commitments and contingencies (Note 9)
Commitments and contingencies (Note 10)
Stockholders' equity:
Preferred stock, $0.001 par value — 10,000,000 shares authorized; no shares issued and outstanding at September 30, 2024 and December 31, 2023		—			—
Preferred stock, $0.001 par value — 10,000,000 shares authorized; no shares issued or outstanding at March 31, 2025 and December 31, 2024		—			—
Common stock, $0.001 par value — 120,000,000 and 60,000,000 shares authorized at September 30, 2024 and December 31, 2023, respectively; 38,930,203 and 20,386,606 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively		39			20
Common stock, $0.001 par value — 120,000,000 shares authorized; 77,492,959 and 40,468,141 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively		77			40
Additional paid-in capital		~~907~~1,~~720~~117,116			~~785~~920,~~199~~609
Accumulated other comprehensive income		~~116~~2			1547
Accumulated deficit		(~~740~~822,~~853~~732	)		(~~658~~783,~~753~~450	)
Total stockholders’ equity		~~167~~294,~~022~~463			~~126~~137,~~481~~246
Total liabilities and stockholders’ equity	$	~~211~~343,~~826~~904		$	~~164~~188,~~939~~662

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

SOLID BIOSCIENCES INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except share and per share data)

	Three Months EndedSeptember 30,						Nine Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2024			2023			2024			2023
	2025			2024
Operating expenses:
Research and development	$	2730,~~327~~914		$	1618,~~702~~873		$	~~65,661~~		$	~~61,110~~
General and administrative		79,~~855~~138			67,~~412~~989			~~24,171~~			~~20,940~~
Restructuring charges		—			—			—			(63	)
Total operating expenses		40,052			26,862
Total operating expenses		35,182			23,114			89,832			81,987
Loss from operations		(40,052	)		(26,862	)
Loss from operations		(35,182	)		(23,114	)		(89,832	)		(81,987	)
Other income, net:
Other income, net:
Interest income		2,300			2,651
Interest income		2,328			1,962			7,544			5,822
Interest expense		(68	)		(95	)
Interest expense		(82	)		(106	)		(265	)		(339	)
Change in fair value of derivative liabilities		(1,650	)		—
Other income, net		~~211~~188			~~278~~3			~~453~~			~~825~~
Total other income, net		~~2,457~~770			2,~~134~~559			~~7,732~~			~~6,308~~
Net loss	$	(3239,~~725~~282	)	$	(2024,~~980~~303	)	$	~~(82,100~~	)	$	~~(75,679~~	)
Net loss per share, basic and diluted	$	(0.7959	)	$	(10.0564	)	$	~~(2.04~~	)	$	~~(3.83~~	)
Weighted average shares of common stock outstanding, basic and diluted		41,443,317			20,059,641			40,182,303			19,767,174
Weighted average shares of common stock outstanding, used to compute basic and diluted net loss per share		66,341,305			38,155,373

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

SOLID BIOSCIENCES INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

(in thousands)

	Three Months EndedSeptember 30,						Nine Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2024			2023			2024			2023
	2025			2024
Net loss	$	(3239,~~725~~282	)	$	(2024,~~980~~303	)	$	~~(82,100~~	)	$	~~(75,679~~	)
Other comprehensive income (loss):
Other comprehensive loss:
Unrealized gain (loss) on available-for-sale securities		131			(12	)		101			70
Unrealized loss on available-for-sale securities		(45	)		(19	)
Comprehensive loss	$	(3239,~~594~~327	)	$	(2024,~~992~~322	)	$	~~(81,999~~	)	$	~~(75,609~~	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

SOLID BIOSCIENCES INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

(in thousands, except share data)

	Nine Months Ended September 30, 2024
	Three Months Ended March 31, 2025
	CommonStock				AdditionalPaid-in		AccumulatedOtherComprehensive			Accumulated			TotalStockholders'
	Shares		Amount		in Capital		Income (Loss)			Deficit			Equity
Balance at January 1, 2024		20,386,606	$	20	$	785,199	$	15		$	(658,753	)	$	126,481
Balance at January 1, 2025		40,468,141	$	40	$	920,609	$	47		$	(783,450	)	$	137,246
Issuance of common stock in private placement, net of issuance costs of $4,407		16,973,103		17		89,437		—			—			89,454
Issuance of common stock in public offering, net of issuance costs of $8,665		35,739,810		36		135,331		—			—			135,367
Issuance of pre-funded warrants in private placement, net of issuance costs of $704		—		—		14,293		—			—			14,293
Issuance of pre-funded warrants in public offering, net of issuance costs of $3,366		—		—		52,590		—			—			52,590
Issuance of common stock in public offering, net of sales commissions of $78		350,664		1		3,055		—			—			3,056
Issuance of common stock in private placement for payment of developmental milestone consideration		975,496		1		4,999		—			—			5,000
Vesting of restricted stock units		98,677		—		—		—			—			—
Issuance of common stock in at-the-market public offering net of sales commissions of $6		61,542		—		246		—			—			246
Exercises of common stock options		24,639		—		151		—			—			151
Vesting of restricted stock units		247,970		—		—		—			—			—
Unrealized loss on available-for-sale securities		—		—		—		(1945	)		—			(1945	)
Equity-based compensation		—		—		1,611		—			—			1,611
Equity-based compensation expense		—		—		3,341		—			—			3,341
Net loss		—		—		—		—			(2439,~~303~~282	)		(2439,~~303~~282	)
Balance at March 31, 2024		37,833,689		38		893,746		(4	)		(683,056	)		210,724
Balance at March 31, 2025		77,492,959	$	77	$	1,117,116	$	2		$	(822,732	)	$	294,463
Issuance of common stock in public offering, net of sales commissions of $138		526,953		1		5,356		—			—			5,357
Vesting of restricted stock units		131,859		—		—		—			—			—
Issuance of common stock under employee stock purchase plan		56,855		—		145		—			—			145
Exercises of common stock options		1,703		—		10		—			—			10
Unrealized loss on available-for-sale securities		—		—		—		(11	)		—			(11	)
Equity-based compensation		—		—		2,092		—			—			2,092
Net loss		—		—		—		—			(25,072	)		(25,072	)
Balance at June 30, 2024		38,551,059		39		901,349		(15	)		(708,128	)		193,245
Issuance of common stock in public offering, net of sales commissions of $79		330,670		—		3,099		—			—			3,099
Vesting of restricted stock units		6,874		—		—		—			—			—
Exercises of common stock options		41,600		—		277		—			—			277
Unrealized gain on available-for-sale securities		—		—		—		131			—			131
Equity-based compensation		—		—		2,995		—			—			2,995
Net loss		—		—		—		—			(32,725	)		(32,725	)
Balance at September 30, 2024		38,930,203	$	39	$	907,720	$	116		$	(740,853	)	$	167,022


	Three Months Ended March 31, 2024
	Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders'
	Shares		Amount		Capital		Income (Loss)			Deficit			Equity
Balance at January 1, 2024		20,386,606	$	20	$	785,199	$	15		$	(658,753	)	$	126,481
Issuance of common stock in private placement, net of issuance costs of $4,407		16,973,103		17		89,437		—			—			89,454
Issuance of pre-funded warrants in private placement, net of issuance costs of $704		—		—		14,293		—			—			14,293
Issuance of common stock in at-the-market public offering net of sales commissions of $78		350,664		1		3,055		—			—			3,056
Vesting of restricted stock units		98,677		—		—		—			—			—
Exercises of common stock options		24,639		—		151		—			—			151
Unrealized loss on available-for-sale securities		—		—		—		(19	)		—			(19	)
Equity-based compensation expense		—		—		1,611		—			—			1,611
Net loss		—		—		—		—			(24,303	)		(24,303	)
Balance at March 31, 2024		37,833,689	$	38	$	893,746	$	(4	)	$	(683,056	)	$	210,724

	Nine Months Ended September 30, 2023
	CommonStock				AdditionalPaid		AccumulatedOtherComprehensive			Accumulated			TotalStockholders'
	Shares		Amount		in Capital		Income (Loss)			Deficit			Equity
Balance at January 1, 2023		19,556,732	$	20	$	774,452	$	(68	)	$	(562,738	)	$	211,666
Vesting of restricted stock units		16,400		—		—		—			—			—
Unrealized gain on available-for-sale securities		—		—		—		73			—			73
Equity-based compensation		—		—		2,118		—			—			2,118
Net loss		—		—		—		—			(30,070	)		(30,070	)
Balance at March 31, 2023		19,573,132		20		776,570		5			(592,808	)		183,787
Issuance of common stock in public offering, net of sales commissions of $65		420,000		—		2,539		—			—			2,539
Vesting of restricted stock units		36,321		—		—		—			—			—
Issuance of common stock under employee stock purchase plan		14,936		—		78		—			—			78
Unrealized gain on available-for-sale securities		—		—		—		9			—			9
Equity-based compensation		—		—		1,944		—			—			1,944
Net loss		—		—		—		—			(24,629	)		(24,629	)
Balance at June 30, 2023		20,044,389		20		781,131		14			(617,437	)		163,728
Vesting of restricted stock units		17,362		—		—		—			—			—
Unrealized loss on available-for-sale securities		—		—		—		(12	)		—			(12	)
Equity-based compensation		—		—		1,625		—			—			1,625
Net loss		—		—		—		—			(20,980	)		(20,980	)
Balance at September 30, 2023		20,061,751	$	20	$	782,756	$	2		$	(638,417	)	$	144,361

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

SOLID BIOSCIENCES INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

	Nine Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2024			2023
	2025			2024
Cash flows from operating activities:
Net loss	$	(8239,~~100~~282	)	$	(7524,~~679~~303	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of discount on available-for-sale securities		(~~2,789~~312	)		(~~1,257~~540	)
Equity-based compensation expense		63,~~698~~341			51,~~687~~611
Depreciation, impairment, and amortization expense		1,967			2,368
Depreciation and amortization expense		407			327
Non-cash lease expense		~~1,826~~575			~~1,881~~661
Non-cash acquired in-process research and development		3,400			—
Change in fair value of derivative liabilities		1,650			—
Other		(9022	)		—(94	)
Changes in operating assets and liabilities:
Prepaid expenses and other assets		(2,~~549~~023	)		(1,~~124~~998	)
Accounts payable		~~1,390~~461			(~~898~~596	)
Operating lease liabilities		(~~1,262~~416	)		(~~1,261~~473	)
Accrued expenses and other liabilities		~~3,142~~(275	)		~~(5,322~~213	)
Net cash used in operating activities		(7031,~~367~~850	)		(7325,~~357~~192	)
Cash flows from investing activities:
Purchases of property and equipment		(~~450~~126	)		(~~1,425~~149	)
Proceeds from maturities of available-for-sale securities		~~134~~38,~~800~~000			6845,~~632~~000
Purchases of available-for-sale securities		(~~189~~65,~~008~~337	)		(~~102~~83,~~814~~346	)
Other		5—			—5
Net cash used in investing activities		(5427,~~653~~463	)		(3538,~~607~~490	)
Cash flows from financing activities:
Proceeds from issuance of common stock and pre-funded warrants in private placement		108,858			—
Proceeds from issuance of common stock and pre-funded warrants in public offering, net of underwriting discounts and commissions		189,637			—
Payments of common stock and pre-funded warrants issuance costs in private placement		(5,111	)		—
Payments of common stock and pre-funded warrants issuance costs in public offering		(20	)		—
Proceeds from issuance of common stock in public offering, net of sales commissions		11,512			2,539
Proceeds from issuance of common stock and pre-funded warrants in private placement		—			108,859
Proceeds from exercises of common stock options		438			—
Payments of common stock and pre-funded warrants issuance costs in private placement		—			(4,825	)
Employee stock purchase plan purchases		145			78
Proceeds from issuance of common stock in at-the-market public offering, net of sales commissions		246			3,056
Payments of principal portion of finance lease obligations		(345	)		—
Proceeds from exercises of common stock options		—			151
Net cash provided by financing activities		115,497			2,617
Payments of principal portion of finance lease obligations		(135	)		—
Net decrease in cash, cash equivalents, and restricted cash		(9,523	)		(106,347	)
Net cash provided by financing activities		189,728			107,241
Cash, cash equivalents, and restricted cash at beginning of period		75,848			157,217
Net increase in cash, cash equivalents, and restricted cash		130,415			43,559
Cash, cash equivalents, and restricted cash at end of period	$	66,325		$	50,870
Cash, cash equivalents, and restricted cash at beginning of period		82,187			75,848
Supplemental disclosure of cash flow information:
Cash, cash equivalents, and restricted cash at end of period	$	212,602		$	119,407
Cash paid for interest	$	(265	)	$	—
Supplemental disclosure of non-cash investing and operating activities:
Right-of-use assets acquired through operating leases	$	407		$	121
Decrease in right-of-use assets due to lease termination	$	(261	)	$	(252	)
Decrease in property and equipment due to asset exchange	$	—		$	(950	)
Property and equipment purchases included in accounts payable and accrued expenses	$	36		$	—


	Three Months Ended March 31,
	2025		2024
Supplemental disclosure of cash flow information:
Cash paid for interest	$	68	$	—
Supplemental disclosure of non-cash investing and operating activities:
Common stock issued as payment for developmental milestone consideration	$	5,000	$	—
Right-of-use assets acquired through operating leases	$	—	$	417
Decrease in right-of-use assets due to lease termination	$	—	$	(197	)
Property and equipment purchases included in accounts payable and accrued expenses	$	80	$	20

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the amounts reported in the condensed consolidated statements of cash flows:

	September 30,
	March 31,
	2024		2023
	2025		2024
Cash and cash equivalents	$	64210,~~394~~629	$	49117,~~037~~574
Restricted cash, non-current		1,~~931~~973		1,833
Total cash and cash equivalents, and restricted cash, as reported in the condensed consolidated statements of cash flows	$	66,325	$	50,870
Total cash, cash equivalents, and restricted cash, as reported in the condensed consolidated statements of cash flows	$	212,602	$	119,407

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

SOLID BIOSCIENCES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(amounts in thousands, except share and per share data and where otherwise noted)

1. Nature of the Business and Basis of Presentation

Nature of business

Solid Biosciences Inc. was organized in March 2013 under the name SOLID Ventures Management, LLC and operated as a Delaware limited liability company until immediately prior to the effectiveness of its registration statement on Form S-1 on January 25, 2018, at which time it completed a statutory corporate conversion into a Delaware corporation and changed its name to Solid Biosciences Inc. (the “"Company”"). On December 2, 2022, the Company completed its acquisition of AavantiBio, Inc. (“"AavantiBio”"), a privately held gene therapy company focused on transforming the lives of patients with Friedreich’s ataxia (“"FA”"), and rare cardiomyopathies (the “"Acquisition”"). Upon the consummation of the Acquisition, the Company acquired AavantiBio’s gene therapy programs, ~~AVB‑202‑TT~~ for FA and ~~AVB‑401 for~~ BAG3 -mediated dilated cardiomyopathy, as well as additional assets for the treatment of other cardiac diseases, platform technologies and know-how related thereto. AavantiBio is a wholly owned subsidiary of the Company.

The Company is a life sciences company focused on advancing a portfolio of current and future gene therapy candidates (collectively, “"Candidates”"), including SGT-003 for the treatment of Duchenne muscular dystrophy (“"Duchenne”"), SGT-212 for the treatment of FA, SGT-501 for the treatment of catecholaminergic polymorphic ventricular tachycardia, SGT-601 for the treatment of TNNT2-mediated dilated cardiomyopathy, and additional assets for the treatment of genetic cardiac and ~~other~~neuromuscular diseases, at different stages of development with varying levels of investment. The Company is advancing its diverse pipeline across rare neuromuscular and cardiac diseases, bringing together experts in science, technology, disease management and care. Patient-focused and founded by those directly impacted by Duchenne, the Company’s mission is to improve the daily lives of patients living with these devastating diseases.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on licenses, protection of proprietary technology, dependence on key personnel, compliance with government regulations and the need to obtain additional financing to fund operations. Candidates currently under development will require significant additional research and development efforts, including extensive preclinical studies and clinical trials and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance and reporting capabilities.

The Company’s Candidates are in development. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate significant revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from, among others, other pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees, partners, and consultants.

Liquidity

~~The~~Based ~~accompanying~~upon ~~condensed~~its ~~consolidated~~current ~~financial~~operating ~~statements~~plan, ~~have~~the ~~been~~Company ~~prepared~~expects ~~on a basis~~ that ~~assumes~~its ~~the~~cash, ~~Company~~cash ~~will~~equivalents ~~continue~~and asavailable-for-sale asecurities ~~going~~of ~~concern~~$306.9 ~~and~~million ~~which~~excluding ~~contemplates~~restricted ~~the~~cash ~~realization~~ of ~~assets~~$2.0 ~~and~~million, ~~satisfaction~~as of ~~liabilities~~March ~~and~~31, ~~commitments~~2025, inwill ~~the~~be ~~ordinary~~sufficient ~~course~~to offund ~~business.~~its ~~Through~~operating ~~September~~expenses ~~30,~~and ~~2024,~~capital ~~the~~expenditure ~~Company~~requirements ~~has~~for ~~funded~~at ~~its~~least ~~operations~~twelve ~~primarily~~months ~~with~~from the ~~proceeds~~date ~~from~~of ~~the~~issuance ~~sale~~ of ~~redeemable~~these ~~preferred~~condensed ~~units~~consolidated ~~and~~financial ~~member~~statements. ~~units~~However, asthe ~~well~~Company ashas ~~the~~based ~~sale~~this ofestimate ~~common~~on ~~stock~~assumptions ~~and~~that ~~pre-funded~~may ~~warrants~~prove to ~~purchase~~be ~~shares~~wrong, ofand its ~~common~~operating ~~stock~~plan inmay ~~private~~change ~~placements~~as ~~and~~a ~~the~~result ~~sale~~ of ~~common~~many ~~stock~~factors incurrently ~~its~~unknown ~~initial~~to ~~public~~it. ~~offering~~As a result, ~~follow-on~~the ~~public~~Company ~~offering~~could indeplete ~~March~~its ~~2021~~capital ~~and~~resources ~~under~~sooner ~~its~~than ~~at-the-market~~it ~~sales~~currently ~~agreement~~expects.

OnThrough ~~January~~March 1131, ~~2024~~2025, the Company ~~issued~~has ~~and~~funded ~~sold~~its inoperations aprimarily ~~private~~with ~~placement~~the ~~16,973,103~~proceeds ~~shares~~from of the ~~Company’s~~sale ~~common~~of ~~stock~~redeemable atpreferred aunits ~~price per share of $5.53~~ and, tomember ~~one~~units ~~investor~~as inwell ~~lieu~~as ofthe ~~shares~~sale of common stock, and pre-funded warrants to purchase ~~2,712,478~~ shares of its common stock atin aprivate ~~price~~placements ofand ~~$5.529 per pre-funded warrant (~~the ~~“January~~sale ~~2024~~of ~~Private~~common ~~Placement”).~~stock ~~The~~in ~~Company~~its ~~received~~initial ~~$103.7~~public ~~million~~offering, offollow-on ~~net~~public ~~proceeds~~offerings ~~from~~in ~~the~~March ~~January~~2021 ~~2024~~and ~~Private~~February ~~Placement~~2025 ~~after~~and ~~deducting~~under ~~offering~~its ~~costs. No warrants were exercised during~~ at-the-market ~~nine~~sales ~~months ended September 30, 2024~~agreement.

~~During~~The ~~the~~Company ~~three~~expects ~~and~~to ~~nine~~continue ~~months~~to ~~ended~~generate ~~September~~operating ~~30,~~losses ~~2024,~~for the ~~Company~~foreseeable ~~issued~~future and ~~sold~~to ~~330,670~~finance ~~and~~its ~~1,208,287~~future ~~shares~~cash ofneeds ~~its~~through ~~common~~a ~~stock,~~combination ~~respectively,~~of ~~pursuant~~equity toofferings, ~~the~~debt ~~Company's~~financings, ~~“at-the-market-offering”~~collaborations, ~~sales~~strategic ~~agreement~~partnerships ~~(the~~and ~~“ATM~~alliances ~~Sales~~or ~~Agreement”),~~licensing ~~between~~arrangements. If the Company ~~and~~is ~~Jefferies~~unable ~~LLC.~~to ~~During~~obtain funding, the ~~three~~Company ~~and~~would ~~nine~~be ~~months~~forced ~~ended~~to ~~September 30~~delay, ~~2024,~~reduce ~~the~~or ~~Company~~eliminate ~~received~~some ~~net~~or ~~proceeds~~all of ~~$3.1~~its ~~million~~research and ~~$11.5~~development ~~million~~programs, ~~respectively,~~preclinical ~~from~~and ~~sales~~clinical ~~pursuant~~testing toor ~~the~~commercialization ~~ATM~~efforts, ~~Sales~~which ~~Agreement~~could adversely affect its business prospects.

The Company has evaluated whether there are conditions and events that, considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued. As of

September 30, 2024, the Company had an accumulated deficit of $740.9 million. During the three and nine months ended September 30, 2024, the Company incurred a net loss of $32.7 million and $82.1 million, respectively, and used $70.4 million of cash in operations for the nine months ended September 30, 2024. The Company expects to continue to generate operating losses for the foreseeable future. Based upon its current operating plan, the Company expects that its cash, cash equivalents and available-for-sale securities of $171.1 million excluding restricted cash of $1.9 million, as of September 30, 2024, will be sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months from the date of issuance of these condensed consolidated financial statements. However, the Company has based this estimate on assumptions that may prove to be wrong, and its operating plan may change as a result of many factors currently unknown to it. As a result, the Company could deplete its capital resources sooner than it currently expects. The Company expects to finance its future cash needs through a combination of equity offerings, debt financings, collaborations, strategic partnerships and alliances, or licensing arrangements. If the Company is unable to obtain funding, the Company would be forced to delay, reduce or eliminate some or all of its research and development programs, preclinical and clinical testing, or commercialization efforts, which could adversely affect its business prospects.

Basis of presentation

These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“"GAAP”") along with the rules and regulations of the Securities and Exchange Commission for interim financial information and include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The year-end condensed consolidated balance sheet data presented for comparative purposes was derived from the Company’s audited financial statements but does not include all disclosures required by GAAP to constitute a complete set of financial statements. These condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary for a fair statement of the Company’s financial position at ~~September~~March 3031, ~~2024~~2025 and its results of operations, changes in stockholders’ equity, and cash flows for the interim periods ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024.

These unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2023~~2024. The results of operations for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 are not necessarily indicative of the operating results to be expected for the year ending December 31, ~~2024~~2025, for any other interim period, or for any other future year.

Reclassifications

Certain amounts reported within cash flows from operating activities in the condensed consolidated statement of cash flows for the prior period have been reclassified to conform to current period presentation. These reclassifications are not material and had no effect on the previously reported net cash used in operations.

Significant judgments and estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, estimates related to the recognition of research and development expenses, equity-based compensation, and derivative liabilities. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ materially from the Company’s estimates.

Summary of significant accounting policies

~~Except~~There ~~as otherwise noted below, there~~ have been no changes to the significant accounting policies disclosed in the Company's most recent Annual Report on Form 10-‑K.

Equity-based compensation

The Company measures all stock options and other stock-based awards granted to employees, directors, and non-employees based on the fair value on the date of the grant and recognizes compensation expense of those awards, over the requisite service period, which is generally the vesting period of the respective award. Forfeitures are accounted for as they occur. The Company applies the straight-line method of expense recognition to all awards with only service-based vesting conditions.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company historically has been a private company and lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. For options with service-based vesting conditions and options granted to non-employees, the expected term of the Company's stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

The fair values of restricted stock units and performance-based restricted stock units are measured at the grant date based on the closing price of the Company’s common stock on the date of grant. For restricted stock units, the fair value of the award is recognized on a straight-line basis over the requisite service periods. For performance-based restricted stock unit awards, which are subject to the achievement of performance milestones, the fair value is recognized as expense over the requisite service periods when the achievement of such performance milestones determined to be probable. If a performance milestone is not determined to be probable or is not met, no equity-based compensation expense is recognized, and any previously recognized expense is reversed.

Forfeitures are recognized as a reduction of equity-based compensation expense as they occur.

The Company classifies stock-based compensation expense in its consolidated statement of operations in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.

The Company does not currently hold any treasury shares. Upon the exercise of stock options and the vesting of restricted stock units and performance stock units, the Company issues new shares of common stock and delivers them to the participant.

Asset acquisition

Acquisitions of assets or a group of assets that do not meet the definition of a business are accounted as asset acquisitions using the cost accumulation method, whereby the cost of the acquisition, including certain transaction costs, is allocated to the assets acquired on the basis of relative fair values. No goodwill is recognized in an asset acquisition. Intangible assets that are acquired in an asset acquisition for use in research and development activities which have an alternative future use are capitalized as in-process research and development ("IPR&D"). Acquired IPR&D which has no alternative future use is recognized as research and development expense at acquisition. Contingent milestone payments associated with asset acquisitions are recognized when probable and estimable. These amounts are expensed to research and development if there is no alternative future use associated with the asset or capitalized as an intangible asset if an alternative future use of the asset exists.

Derivative liabilities

Derivative liabilities are recorded at fair value based on the probability weighted present value of the estimated cash flows pursuant to the contractual terms of each agreement. The derivative liabilities are remeasured quarterly with changes in fair value recorded in other expense in the condensed consolidated statements of operations.

Recently issued accounting pronouncements

In ~~November~~December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-0709, ~~Segment~~Income ~~Reporting~~Taxes (Topic ~~280~~740): Improvements to ~~Reportable~~Income ~~Segment~~Tax Disclosures,. ~~which~~This ~~requires~~ASU ~~public~~updates ~~entities,~~income ~~including~~tax ~~those~~disclosure ~~with~~requirements aprimarily ~~single~~by ~~reportable~~requiring ~~segment~~specific ~~to:~~categories ~~(i) provide disclosures of significant segment expenses~~ and ~~other~~greater ~~segment~~disaggregation ~~items~~within ~~if they are regularly provided to~~ the ~~chief~~rate ~~operating~~reconciliation ~~decision maker (the CODM)~~ and ~~included~~disaggregation ~~in each reported measure~~ of ~~segment~~income ~~profit~~taxes orpaid ~~loss; (ii) provide all annual disclosures about a reportable segment’s profit or loss and assets currently required~~ by Accounting Standards Codification 280, Segment Reporting, in interim periods; and (iii) disclose the CODM’s title and position, as well as an explanation of how the CODM uses the reported measures and other disclosuresjurisdiction. ~~ASU~~This ~~2023-07 does not change how a public entity identifies its operating segments, aggregates those operating segments or applies the quantitative thresholds to determine its reportable segments.~~ ASU ~~2023-07~~ is ~~required to be applied retrospectively and is~~ effective for ~~fiscal~~annual ~~years~~periods beginning after December 15, ~~2023,~~2024 and ~~interim~~is ~~periods~~applicable ~~within~~to the Company’s fiscal ~~years~~year beginning ~~after~~January ~~December 15~~1, ~~2024~~2025, with early ~~adoption~~application permitted. WeThe ~~expect~~Company tois ~~include~~currently ~~additional~~evaluating ~~disclosures~~the asimpact ~~a result~~ of ~~the~~adopting ~~implementation~~this ASU ~~2023-07, however, these changes are not expected to have a material effect~~ on ~~our~~its consolidated financial statements and disclosures.

In ~~December~~November ~~2023~~2024, the FASB issued ASU ~~2023~~2024-0903, Disaggregation of Income ~~Taxes~~Statement Expenses (Topic ~~740~~220): ~~Improvements~~requiring that public business entities disclose additional information about specific expense categories in the notes to ~~Income~~financial ~~Tax~~statements ~~Disclosures~~at interim and annual reporting periods. ~~This~~The amendments in this ASU ~~updates~~are ~~income~~effective ~~tax~~for ~~disclosure~~annual ~~requirements~~reporting ~~primarily~~periods bybeginning ~~requiring~~after ~~specific~~December ~~categories~~15, 2026, and ~~greater~~interim ~~disaggregation~~reporting ~~within~~periods beginning after December 15, 2027. The requirements in this ASU may be applied either prospectively to financial statements issued for reporting periods after the ~~rate~~effective ~~reconciliation~~date ~~and~~or ~~disaggregation~~retrospectively ofto ~~income~~any ~~taxes~~or ~~paid~~all byprior ~~jurisdiction~~periods presented in the financial statements. ~~This~~The ~~ASU~~Company is ~~effective~~currently ~~for~~evaluating ~~annual~~the ~~periods~~impact ~~beginning~~of ~~after~~adopting this ASU on its consolidated financial statements and disclosures.

December 15, 2024 and is applicable to the Company’s fiscal year beginning January 1, 2025, with early application permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (Topic 220) requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The requirements in this ASC may be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

2. FA212 Asset Acquisition

On September 19, 2024, the Company entered into an asset purchase agreement with FA212 LLC ("FA212") for the purchase of certain intellectual property, including patents and assigned licenses related to a pre-clinical drug candidate, ~~assigned~~which ~~manufacturing~~the ~~contracts~~Company asnow ~~well as research and development materials such as manufactured materials and samples.~~

The Company paid FA212 an upfront payment of $1.0 million. Additionally, the Company agreed to pay FA212 development milestone payments of up to $34.0 million, cumulative sales milestone payments of up to $21.0 million, and tiered royalties on net sales in the low-single-digits. The Company also assumed contingent development milestone payments of up to $4.2 million, regulatory milestone payments of up to $13.0 million, cumulative sales milestone payments of up to $27.5 million, and tiered royalties on worldwide net sales in the mid-single digits with the University of Pennsylvania, who is the IP owner. 10

~~Certain~~refers ~~development milestone payments~~ to ~~FA212~~as ~~are payable in either cash~~SGT-212, ~~equity,~~assigned ormanufacturing acontracts ~~combination~~as ofwell ~~both~~as atresearch ~~the~~and ~~companies~~development ~~discretion.~~materials ~~Such~~such ~~contingent~~as ~~payments~~manufactured ~~were~~materials ~~determined to be derivative liabilities~~ and ~~were initially recorded at their fair value of $3~~samples.4 ~~million, see Note 4 - Fair Value Measurements, which is included in the aggregate acquisition cost below.~~

The Company ~~determined~~paid ~~that the~~ FA212 ~~Agreement represented~~ an ~~asset~~upfront ~~acquisition~~payment of ~~IPR&D~~$1.0 ~~assets~~million ~~with~~in nothe ~~alternative~~third ~~future~~quarter ~~use~~of ~~and~~2024. ~~recognized~~Additionally, the ~~aggregate~~Company ~~acquisition~~agreed ~~cost~~to pay FA212 development milestone payments of up to $534.10 million, ascumulative ~~research~~sales milestone payments of up to $21.0 million, and ~~development~~tiered ~~expense~~royalties on net sales in the ~~condensed~~low-single-digits. ~~consolidated~~The ~~statement~~Company also assumed from FA212 contingent development milestone payments of ~~operations~~up to $4.2 ~~The~~million, ~~acquisition~~regulatory ~~did~~milestone ~~not~~payments ~~qualify~~of asup ato ~~business~~$13.0 ~~combination~~million, ascumulative ~~the~~sales ~~acquisition~~milestone ~~did~~payments ~~not~~of ~~include~~up ~~both~~to an$27.5 ~~input~~million, and ~~substantive~~tiered ~~processes,~~royalties ~~including~~on anworldwide ~~assembled~~net ~~workforce,~~sales ~~that~~in ~~together~~the ~~contribute~~mid-single digits payable to the ~~ability~~University toof ~~create outputs~~Pennsylvania.

3Certain development milestone payments to FA212 are payable in either cash, equity, or a combination of both, at the Company's discretion. ~~License~~Such contingent payments were determined to be derivative liabilities and ~~Research~~were ~~Agreements~~initially recorded at their fair value of $3.4 million.

OnThe ~~June~~Company ~~29,~~determined ~~2023,~~that the ~~Company~~FA212 ~~entered into a license~~ agreement ~~(the~~represented “Agreement”) with ICS Maugeri S.p.A. SB (“Maugeri”) to focus on the development and commercialization of cardiac-related products by the Company based on Maugeri's inventions. Pursuant to the Agreement, Maugeri granted the Company an ~~exclusive~~asset ~~worldwide~~acquisition ~~sublicensable license for certain Maugeri patent rights, including existing patent rights, and those in any improvements or know-how made in performance~~ of ~~the~~IPR&D ~~Agreement,~~assets ~~and~~with ano ~~non-exclusive~~alternative ~~worldwide~~future ~~sublicensable~~use ~~license in certain Maugeri know-how, including existing know-how,~~ and onrecognized ~~any improvement thereto, in each case, subject to certain conditions, that is necessary or reasonably useful to develop~~ the ~~licensed~~aggregate ~~products~~acquisition ~~under~~cost ~~the terms~~ of ~~the Agreement~~$5.1 ~~The~~million ~~Company~~as ~~will conduct certain activities agreed to by the parties with respect to the~~ research and development ofexpense ~~licensed~~in ~~products. A condition precedent to~~ the ~~effectiveness~~third quarter of ~~the Agreement was regulatory review in Italy~~2024, which ~~was~~included ~~completed in~~ the ~~third~~upfront ~~quarter of 2023 and~~payment, ~~upon~~initial ~~the~~recognition ~~completion~~ of the ~~condition~~derivative ~~precedent,~~liability ~~the~~and ~~Agreement~~$0.7 ~~became~~million ~~effective~~in transaction costs.

The Company ~~paid~~submitted ~~Maugeri~~ an ~~upfront~~investigational ~~license~~new ~~fee~~drug application ("IND") for SGT-212 for the treatment of €1FA to the U.5S. ~~million~~Food and Drug Administration ("FDA"), which was ~~recorded~~cleared asin ~~research~~December ~~and~~2024. ~~development~~Upon ~~expense~~clearance ~~during~~of the ~~second~~IND, ~~quarter~~the first development milestone of ~~2023~~$5.0 ~~Additionally,~~million became payable to FA212. The $5.0 million milestone payment is included in Accrued expenses and other current liabilities in the ~~Company~~accompanying ~~agreed~~condensed toconsolidated ~~cumulative~~balance ~~developmental~~sheet as of December 31, ~~regulatory~~2024. On February 28, ~~and~~2025, ~~commercial~~the Company made the first development milestone ~~payments~~payment in the form of up975,496 toshares ~~€15~~of its common stock.0 ~~million,~~The ~~cumulative~~derivative ~~sales~~liabilities ~~milestone~~for the remaining contingent payments ofwere uprecorded toat ~~€15~~a fair value of $4.08 million, ~~upon~~and ~~achievement~~$3.2 ofmillion ~~specified~~as ~~milestone~~of ~~events~~March 31, 2025 and ~~tiered~~December ~~royalties~~31, on2024, ~~worldwide~~respectively. ~~net~~See ~~sales~~Note in3 ~~the low~~-~~to-mid-single-digits~~ Fair Value Measurements.

~~The Agreement continues until the latest expiry of (i) the last valid claim (as defined in the Agreement), (ii) regulatory exclusivity, and (iii) all payment obligations~~3. ~~Either~~Fair ~~party~~Value may terminate the Agreement for the other party’s uncured material breach. The Company may also terminate the Agreement in its sole discretion upon 60 days’ prior written notice to Maugeri and payment of a fee.Measurements

4. Fair Value Measurements

Fair value is an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. Valuation techniques used to measure fair value are performed in a manner to maximize the use of observable inputs and minimize the use of unobservable inputs. As a basis for considering such assumptions, the accounting literature establishes a three-tier value hierarchy which prioritizes the inputs used in measuring fair value as follows:

Level 1—Observable inputs, such as quoted prices in active markets for identical assets or liabilities.

Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities or other inputs that are observable or can be corroborated by observable market data.

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The following tables present information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis:

	September 30, 2024
	March 31, 2025
	Level 1		Level 2		Level 3		Total
Financial assets
Cash equivalents:
Money market funds	$	—	$	19194,~~622~~192	$	—	$	19194,~~622~~192
Treasury bills		—		49,~~991~~937		—		49,~~991~~937
Government bonds		—		1,298		—		1,298
Total cash equivalents		—		204,129		—		204,129
Total cash equivalents		—		25,911		—		25,911
Available-for-sale securities (Note 4):
Available-for-sale securities (Note 5):
Treasury bills		—		12,326		—		12,326
Treasury bills		—		63,635		—		63,635
Government bonds		—		83,963		—		83,963
Government bonds		—		43,088		—		43,088
Total available-for-sale securities		—		96,289		—		96,289
Total available-for-sale securities		—		106,723		—		106,723
Total financial assets	$	—	$	300,418	$	—	$	300,418
Total financial assets	$	—	$	132,634	$	—	$	132,634
Financial liabilities
Derivative liabilities	$	—	$	—	$	3,400	$	3,400
Derivative liabilities (Note 2):	$	—	$	—	$	4,800	$	4,800
Total financial liabilities	$	—	$	—	$	34,~~400~~800	$	34,~~400~~800

	December 31, 2023
	Level 1		Level 2		Level 3		Total
Financial assets
Cash equivalents:
Money market funds	$	—	$	62,141	$	—	$	62,141
Certificates of deposit		—		257		—		257
Total cash equivalents		—		62,398		—		62,398
Available-for-sale securities (Note 5):
Treasury bills		—		49,625		—		49,625
Total available-for-sale securities		—		49,625		—		49,625
Total financial assets	$	—	$	112,023	$	—	$	112,023

As of September 30, 2024 and December 31, 2023, the fair values of the Company’s cash equivalents and available-for-sale securities were determined using Level 2 inputs.


	December 31, 2024
	Level 1		Level 2		Level 3		Total
Financial assets
Cash equivalents:
Money market funds	$	—	$	18,088	$	—	$	18,088
Treasury bills		—		17,434		—		17,434
Total cash equivalents		—		35,522		—		35,522
Available-for-sale securities (Note 4):
Treasury bills		—		27,895		—		27,895
Government bonds		—		40,790		—		40,790
Total available-for-sale securities		—		68,685		—		68,685
Total financial assets	$	—	$	104,207	$	—	$	104,207
Financial liabilities
Derivative liabilities (Note 2):	$	—	$	—	$	3,150	$	3,150
Total financial liabilities	$	—	$	—	$	3,150	$	3,150

~~The~~As ~~Company estimated the fair value~~ of ~~the~~March ~~derivative~~31, ~~liabilities~~2025 ~~by using a Monte Carlo simulation forecasting the timing~~ and ~~likelihood~~December of31, ~~certain~~2024, ~~development milestone events being achieved and discounting~~ the ~~probability adjusted payments using an appropriate discount rate based on market interest rates. The main assumptions when determining the~~ fair ~~value~~values of the ~~derivative liabilities are the timing of and probability of achieving certain milestones, the estimated volatility of the~~ Company’s ~~common~~cash ~~stock,~~equivalents and ~~the~~available-for-sale ~~discount~~securities ~~rate.~~were ~~The~~determined ~~estimated~~using ~~fair~~Level ~~value~~2 ~~presented is not necessarily indicative of an amount that could be realized in a current market exchange. The use of alternative~~ inputs ~~and estimation methodologies could have a material effect on these estimates of fair value~~.

13The Company estimated the fair value of the derivative liabilities by using a Monte Carlo simulation forecasting the timing and likelihood of certain development milestone events being achieved and discounting the probability adjusted payments using an appropriate discount rate based on market interest rates. The main assumptions when determining the fair value of the derivative liabilities are the timing and probability of achieving certain milestones, the estimated volatility of the Company’s common stock, and the discount rate. The estimated fair value presented is not necessarily indicative of an amount that could be realized in a current market exchange. The use of alternative inputs and estimation methodologies could have a material effect on these estimates of fair value.

~~Significant~~The significant unobservable inputs ~~for~~used in valuing the developmental milestone derivative liabilities at each measurement date are as follows:

Derivative Liabilities	Fair Values at September 30, 2024	Valuation Technique	Unobservable Input	Range	Average
	March 31, 2025		December 31, 2024
Development Milestones	$3,400	Monte Carlo Simulation	Probability of achieving certain development milestones	2.0% - 80.0%	28.6%
Unobservable Input	Range	Average	Range	Average
			Volatility	114.0%	114.0%
Probability of achieving certain development milestones	28.0% - 70.0%	49.0%	28.0% - 70.0%	49.0%
			Discount Rate	3.5% - 4.8%	3.8%
Volatility	90.0%	90.0%	85.0%	85.0%
			Timing of achieving certain development milestones	0.3 to 5.5 years	2.4 years
Discount Rate	3.9% - 4.1%	4.0%	4.2% - 4.3%	4.3%
Timing of achieving certain development milestones	0.8 - 3.4 years	2.1 years	1.0 - 3.7 years	2.3 years

AsThe offollowing ~~the~~table ~~acquisition~~presents ~~date,~~a ~~see~~roll ~~Note~~forward 2of -activity ~~FA212~~associated ~~Asset~~with ~~Acquisition,~~ the Company’s derivative liabilities ~~were~~measured ~~recorded~~using atLevel ~~a fair value of $~~3.4 ~~million and there has been no gain or loss recorded for a change in fair value for the three and nine months ended September 30, 2024.~~inputs:

As of September 30, 2024, the fair values of the Company’s derivative liabilities were determined using Level 3 inputs. During the nine months ended September 30, 2024 and the year ended December 31, 2023, there were no transfers between Level 1, Level 2, and Level 3.


	Developmental Milestone Derivative Liabilities
Fair value of derivative liabilities as of January 1, 2025	$	3,150
Change in fair value of derivative liabilities		1,650
Fair value of derivative liabilities as of March 31, 2025	$	4,800

AsThe Company recognized a loss of ~~September~~$1.7 ~~30,~~million ~~2024~~for ~~and~~the ~~December~~change ~~31,~~in ~~2023,~~fair value of the ~~Company’s~~derivative ~~accounts~~liabilities ~~payable,~~during ~~accrued~~the ~~expenses,~~three ~~and~~months ~~other~~ended ~~current~~March ~~liabilities~~31, ~~approximated~~2025. ~~their~~No ~~estimated~~gain ~~fair~~or ~~values~~loss ~~due~~was torecognized during the ~~short~~three ~~term~~months ~~nature~~ended ofMarch ~~these~~31, ~~financial instruments~~2024.

5It is the Company's policy to recognize transfers between levels of the fair value hierarchy, if any, at the end of the reporting period. ~~Available-for-Sale~~During ~~Securities~~the three months ended March 31, 2025 and the year ended December 31, 2024, there were no transfers between Level 1, Level 2, and Level 3.

As of March 31, 2025 and December 31, 2024, the Company's accounts payable, accrued expenses, and other current liabilities approximated their estimated fair values due to the short term nature of these financial instruments.

4. Available-for-Sale Securities

A summary of the Company's available-for-sale securities is presented below:

	September 30, 2024
	March 31, 2025
Description	AmortizedCost		~~GrossUnrealizedGain~~	GrossUnrealizedGain		~~GrossUnrealizedLoss~~	Gross Unrealized Loss			~~FairValue~~	FairValue
Treasury bills maturing in one year or less	$	6312,~~580~~326	$	55$	—	$	—$	—		$	~~63,635~~$	12,326
Government bonds maturing in one year or less		4383,~~028~~961		60	6		—	(4	)	$	~~43,088~~$	83,963
Total available-for-sale securities	$	~~106~~96,~~608~~287	$	~~115~~$	6	$	—$	(4	)	$	~~106,723~~$	96,289

	December 31, 2023
	December 31, 2024
Description	AmortizedCost		GrossUnrealizedGain		GrossUnrealizedLoss		FairValue
Treasury bills maturing in one year or less	$	4927,~~610~~879	$	1516	$	—	$	4927,~~625~~895
Total available-for sale securities	$	49,610	$	15	$	—	$	49,625
Government bonds maturing in one year or less		40,759		31		—		40,790
Total available-for sale securities	$	68,638	$	47	$	—	$	68,685

The weighted average contractual maturity of the Company’s available-for-sale securities was approximately 0.57 years and 0.45 years as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, respectively.

65. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:

	September 30, 2024		December 31, 2023
	March 31, 2025		December 31,2024
Prepaid research and development expenses	$	63,~~768~~128	$	36,~~980~~731
Prepaid other and other current assets		13,~~609~~363		21,~~114~~651
Total	$	86,~~377~~491	$	68,~~094~~382

146. Accrued Expenses and Other Current Liabilities

7. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:

	September 30, 2024		December 31, 2023
	March 31, 2025		December 31,2024
Accrued research and development expense	$	6,643	$	2,614
Accrued research and development expenses	$	9,422	$	7,268
Accrued compensation		53,~~117~~365		56,~~948~~221
Accrued other and other current liabilities		1,467		1,599
Accrued milestone payment (Note 2)		—		5,000
Total	$	13,227	$	10,161
Accrued other and other current liabilities		1,789		1,363
Total	$	14,576	$	19,852

7. Stockholders' Equity

On January 11, 2024, the Company issued and sold in a private placement 16,973,103 shares of the Company’s common stock at a price per share of $5.53 and, to one investor in lieu of shares of common stock, pre-funded warrants to purchase 2,712,478 shares of common stock at a price of $5.529 per pre-funded warrant, or the January 2024 Private Placement. The Company received $103.7 million of net proceeds from the January 2024 Private Placement after deducting offering costs.

On February 19, 2025, the Company issued and sold 35,739,810 shares of its common stock at a price per share of $4.03 and, to certain investors in lieu of shares of common stock, pre-funded warrants to purchase 13,888,340 shares of common stock at a price of $4.029 per pre-funded warrant (the "February 2025 Offering"). The Company received approximately $188.0 million of net proceeds from the February 2025 Offering after deducting underwriting discounts and commissions and offering costs.

The Company determined the pre-funded warrants met the criteria for equity classification. No warrants were exercised during the three months ended March 31, 2025.

8. Equity-Based Compensation

Equity-~~based~~Based ~~compensation~~Compensation ~~expense~~Expense

The Company has classified equity-based compensation expense in its condensed consolidated statements of operations as follows:

	Three Months EndedSeptember 30,				Nine Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2024		2023		2024		2023
	2025		2024
Research and development	$	~~934~~1,102	$	~~677~~548	$	~~2,314~~	$	~~2,285~~
General and administrative		2,~~061~~239		~~948~~1,063		~~4,384~~		~~3,402~~
Total	$	23,~~995~~341	$	1,~~625~~611	$	~~6,698~~	$	~~5,687~~

Equity ~~incentive~~Incentive ~~plans~~Plans

As of ~~September~~March 3031, ~~2024~~2025, the Company’s approved equity incentive plans include: the 2018 Omnibus Incentive Plan (the “"2018 Plan”"); Amended and Restated 2020 Equity Incentive Plan, as amended (the “"2020 Plan”"); the Amended and Restated 2021 Employee Stock Purchase Plan; and the 2024 Inducement Stock Incentive Plan (the "2024 ~~Inducement~~ Plan"). These plans are administered by the Board of Directors (the "Board") and permit the granting of stock options, stock appreciation rights, restricted stock, restricted stock units (the "RSUs"), performance awards, and other stock‑based or cash-based awards. Upon the adoption of the 2020 Plan, the Company no longer grants new equity awards under its 2018 Plan.

Amended and Restated 2020 Equity Incentive Plan

On June 11, 2024, the Company's stockholders approved an amendment to the 2020 Plan to increase the number of shares of common stock reserved for issuance under the plan by 2,000,000 shares. As of ~~September~~March 3031, ~~2024~~2025, there were 21,~~007~~953,~~144~~279 stock options outstanding, 12,~~007~~637,~~794~~437 RSUs outstanding, 2,165,325 performance stock units outstanding, and ~~171~~384,~~622~~858 shares remained available for future issuance under the 2020 Plan.

2024 Inducement Stock Incentive Plan

In March 2024, the Board approved the 2024 ~~Inducement~~ Plan, which provides for the reservation of 1,000,000 shares of common stock for equity granted as an inducement material to the individual’s entering into employment with the Company and in accordance with the requirements of Nasdaq Stock Market Rule 5635(c)(4). As of ~~September~~March 3031, ~~2024~~2025, there were 100,000 stock options outstanding, ~~227~~354,~~141~~965 RSUs outstanding, and ~~672~~545,~~859~~035 shares remained available for future issuance under the 2024 ~~Inducement~~ Plan.

15Stock Options

~~Stock~~The table below summarizes the activity with respect to stock options for the three months ended March 31, 2025:

The table below summarizes the activity with respect to stock options for the nine months ended September 30, 2024:


	Number of Options			Weighted Average Exercise Price		Remaining Contractual Life (in years)		Aggregate Intrinsic Value
Outstanding at January 1, 2025		2,927,937		$	18.22		8.01	$	193
Granted		22,148		$	4.10
Exercised		—		$	—
Expired		(70,538	)	$	114.73
Forfeitures		(29,106	)	$	4.99
Outstanding at March 31, 2025		2,850,441		$	15.86		7.93	$	140
Vested and expected to vest as of March 31, 2025		2,850,441		$	15.86		7.93	$	140
Exercisable at March 31, 2025		1,339,029		$	25.71		7.19	$	51

	Number ofOptions			WeightedAverageExercisePrice		Remaining Contractual Life (in years)
Outstanding at January 1, 2024		2,259,672		$	21.93
Granted		1,219,522		$	7.81
Exercised		(67,942	)	$	6.44
Expired		(41,659	)	$	24.77
Forfeitures		(428,550	)	$	8.95
Outstanding at September 30, 2024		2,941,043		$	18.29		8.26
Vested and expected to vest as of September 30, 2024		2,941,043		$	18.29		8.26
Exercisable at September 30, 2024		1,029,832		$	38.16		6.88

The assumptions used in the Black-Scholes option-pricing model for all stock options granted during each period presented are as follows:

	Three Months EndedSeptember 30,		Nine Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2024	2023	2024	2023
	2025	2024
Common stock price	$84.6410	$35.6276-$47.1385	~~$5.76-$8.64~~	~~$3.62-$7.33~~
Expected volatility	~~119~~112.71%	~~121~~123.8% -~~121~~ 128.97%	~~119.7%-128.7%~~	~~121.8%-129.6%~~
Expected dividends	0.0%	0.0%	~~0.0%~~	~~0.0%~~
Expected term (in years)	65.0831	5.31 - 6.25	~~5.31-6.25~~	~~5.31-6.25~~
Risk-free rate	34.74%	43.28% - 4.3%	~~3.7%-4.4%~~	~~3.5%-4.3%~~

The weighted average grant date fair values of stock options granted during the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 were $~~7.56 and $~~3.~~28,~~39 and ~~the weighted average grant date fair values of stock options granted during the nine months ended September 30, 2024 and 2023 were~~ $67.~~96 and $5.04~~03, respectively.

The Company recognized $1.63 million and $0.9 million of equity-based compensation expense in connection with stock options during the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023, respectively. During the nine months ended September 30,~~ 2024 ~~and 2023~~, ~~the Company recognized equity-based compensation expense in connection with stock options of $3.6 million and $4.0 million,~~ respectively. As of ~~September~~March 3031, ~~2024~~2025, there was $107.56 million of total unrecognized equity-based compensation ~~cost~~expense related to unvested stock options., ~~This~~which ~~cost~~ is expected to be recognized over a weighted average period of 2.560 years.

Restricted ~~stock~~Stock ~~units~~Units

The following table summarizes activity with respect to RSUs during the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025:

	Units			Weighted-AverageGrant DateFair Value
Nonvested RSUs at January 1, 2024		877,181		$	6.37
Nonvested RSUs at January 1, 2025		1,480,272		$	7.50
Granted		12,~~124~~029,~~028~~332		$	83.0320
Vested		(~~237~~247,~~315~~970	)	$	67.6972
Forfeitures		(~~244~~86,~~607~~966	)	$	65.8802
Nonvested RSUs at September 30, 2024		1,519,287		$	7.47
Nonvested RSUs at March 31, 2025		3,174,668		$	4.81

The Company recognized $01.80 million and $0.7 million of equity-based compensation expense in connection with RSUs during the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023, respectively. During the nine months ended September 30,~~ 2024 ~~and 2023~~, ~~the Company recognized equity-based compensation expense in connection with RSUs of $2.2 million and $1.6 million,~~ respectively. As of ~~September~~March 3031, ~~2024~~2025, there was $914.40 million of total unrecognized equity-based compensation ~~cost~~expense related to nonvested RSUs., ~~This~~which ~~cost~~ is expected to be recognized over a weighted average period of 3.084 years.

16Performance Stock Units

In June 2024, the Board approved a grant of performance-based restricted stock unit awards ("PSUs" or "Performance Awards") to the Company’s executive team. Each PSU represents the contingent right to receive one share of the Company’s common stock. ~~units~~These Performance Awards provide for the vesting of 25% of the target number of underlying RSUs granted upon the achievement of each of four independent performance milestones predetermined by the Board ("Performance Milestones"), subject to the grantee’s continued service with the Company (the "Approval Conditions").

In June 2024, the Board approved a grant of performance-based restricted stock unit awards (“PSUs" or “Performance Awards”) to the Company’s executive team. Each PSU represents the contingent right to receive one share of the Company’s common stock. These Performance Awards provide for the vesting of 25% of the target number of underlying RSUs granted upon the achievement of each of four independent performance milestones predetermined by the Board (“Performance Milestones”), subject to the grantee’s continued service with the Company (the “Approval Conditions”).

The Performance Milestones are tied to the achievement of certain business objectives and are non-market and non-financial in nature. The Board will determine that all Approval Conditions have been satisfied and the number of units that will ultimately vest on the 2026 Evaluation Date, which will occur in the first quarter of 2026, and the 2027 Evaluation Date, which will occur in the first quarter of 2027. A maximum of 25% of the target number of RSUs may vest at the 2026 Evaluation Date and the percentage of the target number of RSUs allocable to any Performance Milestone that has not been achieved on or prior to the 2027 Evaluation Date shall be cancelled.

The Company granted 2,165,325 PSUs during the nine months ended September 30, 2024 with a weighted average grant date fair value of $7.51 per unit. There were no PSUs granted during the three months ended September 30, 2024. During the three and nine months ended September 30, 2024, the Company recognized $0.6 million and $0.7 million in expense for these grants, respectively.15

AsThe offollowing ~~September~~table ~~30,~~summarizes ~~2024,~~activity ~~there~~with ~~was~~respect ~~$3.3 million of unrecognized equity-based compensation cost related~~ to ~~nonvested~~ PSUs ~~based~~during on the ~~achievement~~three ofmonths ~~all~~ended ~~Performance~~March ~~Milestones.~~31, ~~The Company expects to recognize this cost over a weighted average period of 2.13 years.~~2025:

9. Leases


	Units		Weighted- Average Grant Date Fair Value
Nonvested PSUs at January 1, 2025		2,165,325	$	7.51
Granted		—	$	—
Vested		—	$	—
Forfeitures		—	$	—
Nonvested PSUs at March 31, 2025		2,165,325	$	7.51

OnThe ~~December 22, 2022, the~~ Company ~~entered~~recognized ~~into a sub-lease agreement (the "Sub-Lease") with Arkea Bio Corp ("Arkea")~~$1.0 ~~The~~million ~~Sub-Lease permits use by Arkea~~ of aequity-based ~~portion~~compensation ofexpense ~~the space leased by the Company at 500 Rutherford Avenue~~ in ~~Charlestown,~~connection ~~Massachusetts.~~with ~~The~~PSUs ~~Company~~during ~~subleased approximately 12,461 square feet of~~ the ~~49,869~~three ~~square~~months ~~foot building interior space. The Sub‑Lease term originally~~ ended onMarch ~~February 28~~31, 2025. ~~The~~No ~~Sub-Lease~~equity ~~was subsequently amended by the Sub~~based-~~Lease~~compensation ~~Amendment,~~expense bywas ~~and~~recognized ~~between~~in ~~Arkea~~connection ~~and~~with ~~the~~PSUs ~~Company,~~during ~~dated May 10, 2024, to increase~~ the ~~subleased~~three ~~area~~months toended ~~approximately~~March 1331,~~714~~ ~~square feet and extend the term to February 29, 2028~~2024.

~~During~~As ~~the~~of ~~three~~March ~~and nine months ended September 30~~31, ~~2024~~2025, ~~the~~there ~~Company~~was ~~recorded sublease income of~~ $05.20 million ~~and~~of ~~$0.8~~unrecognized ~~million,~~equity-based ~~respectively,~~compensation ~~within~~expense ~~other~~related ~~income,~~to ~~net.~~nonvested ~~During~~PSUs ~~the~~based ~~three~~on ~~and~~the ~~nine~~achievement ~~months~~of ~~ended~~all ~~September~~Performance 30Milestones, ~~2023,~~which ~~the~~is ~~Company~~expected ~~recorded~~to ~~sublease~~be ~~income~~recognized ofover ~~$0.3~~a ~~million~~weighted ~~and~~average ~~$0.8~~period ~~million,~~of ~~respectively~~1.6 years.

109. Commitments and Contingencies

Letter of ~~credit~~Credit

The Company had an outstanding letter of credit in the amount of $12.90 million ~~and $1.8 million~~ at ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, ~~respectively,~~ which is required as a condition of the Company’s office and laboratory lease.

Indemnification ~~agreements~~Agreements

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with its executive officers and members of its Board that require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as executive officers or directors of the Company. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnification arrangements.

The Company does not believe that the outcome of any claims under indemnification arrangements will have a material effect on its financial position, results of operations or cash flows, and it has not accrued any liabilities related to such obligations in its condensed consolidated financial statements as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024.

Legal ~~proceedings~~Proceedings

The Company may periodically become subject to legal proceedings and claims arising in connection with ongoing business activities, including claims or disputes related to patents that have been issued or that are pending in the field of research on which the Company is focused. The Company is not aware of any material legal proceedings or claims as of ~~September~~March 3031, ~~2024~~2025.

1716

1110. Net Loss per Share

The following table sets forth the computation of the Company's basic and diluted net loss per share:

	Three Months EndedSeptember 30,						Nine Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2024			2023			2024			2023
	2025			2024
Numerator:
Net loss	$	(3239,~~725~~282	)	$	(2024,~~980~~303	)	$	~~(82,100~~	)	$	~~(75,679~~	)
Denominator:
Shares used to compute net loss per share, basic and diluted
Weighted average shares of common stock outstanding		3857,~~730~~301,~~839~~916			2035,~~059~~740,~~641~~970			~~37,568,821~~			~~19,767,174~~
Weighted average shares of pre-funded warrants to purchase common stock		29,~~712~~039,~~478~~389			—2,414,403			~~2,613,482~~			—
Weighted average shares of common stock outstanding used to compute basic and diluted net loss per share		4166,~~443~~341,~~317~~305			2038,~~059~~155,~~641~~373			~~40,182,303~~			~~19,767,174~~
Net loss per share, basic and diluted	$	(0.7959	)	$	(10.0564	)	$	~~(2.04~~	)	$	~~(3.83~~	)

Included within weighted average shares of common stock outstanding for the three ~~and nine~~ months ended ~~September~~March 3031, 2025 and 2024 are 16,600,818 and 2,712,478 shares of common stock issuable upon the exercise of the pre-funded warrants, respectively, as the pre-funded warrants are exercisable at any time for nominal consideration, and as such, the shares are considered outstanding for the purpose of calculating basic and diluted net loss per share. ~~There were no pre-funded warrants issued and outstanding during the three and nine months ended September 30, 2023.~~

The outstanding securities presented below were excluded from the calculation of net loss per share because the inclusion of such securities would have been anti-dilutive due to the Company’s net loss per share during the periods presented.

	Three and Nine Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2024		2023
	2025		2024
Options to purchase common stock		2,~~941~~850,~~043~~441		2,~~189~~864,~~102~~672
Nonvested restricted stock units		13,~~519~~174,~~192~~668		~~946~~1,~~182~~576,230
Nonvested performance stock units		2,165,325		—
Shares subject to employee stock purchase plan		~~244~~234,~~302~~154		—
Warrants		92,~~230~~563		—
Total		68,~~879~~427,~~092~~151		34,~~135~~440,~~284~~902

11. Segment Reporting

The Company has one reportable and one operating segment and manages its business activities primarily in North America and on a consolidated basis. The Company’s singular focus is on developing treatments through gene therapy and other means for patients with neuromuscular and cardiac diseases. All of the Company’s tangible assets are held in the United States.

The accounting policies of the Company are the same as those described in the summary of significant accounting policies.

The Company’s chief operating decision maker ("CODM") is its chief executive officer. The CODM assesses performance for the Company and decides how to allocate resources based on net loss as reported on the condensed consolidated statements of operations. The annual budgeting process is the primary mechanism used to make these decisions. The financial information also helps in making performance assessments using budgeted versus actual results.

The following table presents segment expenses, other segment items, and segment net loss for the periods presented:


	Three Months Ended March 31,
	2025			2024
Segment expenses:
SGT-003		9,166			1,906
SGT-501		4,466			3,807
External R&D other		2,770			2,728
Internal R&D expense(1)		6,843			5,377
External G&A expense		4,877			5,434
Internal G&A expense(1)		3,463			2,966
Other segment items(2)		8,467			4,644
Other income, net		(770	)		(2,559	)
Condensed consolidated net loss		(39,282	)		(24,303	)


(1)	Internal expenses consisted primarily of payroll and related costs, temporary services, and travel and entertainment.
(2)	Other segment items primarily included equity-based compensation expense, other program costs, and depreciation and amortization expense.

The measure of segment assets is reported on the balance sheet as total condensed consolidated assets.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this quarterly report on Form 10-Q and our audited financial statements and related notes for the year ended December 31, ~~2023~~2024 included in our annual report filed on Form 10-K on March 136, ~~2024~~2025.

Some of the statements contained in this discussion and analysis or set forth elsewhere in this quarterly report on Form 10-Q, including information with respect to our plans and strategy for our business, constitute forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We have based these forward-looking statements on our current expectations and projections about future events. The following information and any forward-looking statements should be considered in light of factors discussed elsewhere in this quarterly report on Form 10-Q particularly including those risks identified in Part II, Item 1A “Risk Factors” and our other filings with the Securities and Exchange Commission, or (the "SEC").

Our actual results and timing of certain events may differ materially from the results discussed, projected, anticipated, or indicated in any forward-looking statements. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained in this quarterly report on Form 10-Q. Statements made herein are made as of the date of the filing of this Form 10-Q with the SEC and should not be relied upon as of any subsequent date. Even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this quarterly report on Form 10-Q, they may not be predictive of results or developments in future periods. We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

We caution readers not to place undue reliance on any forward-looking statements made by us, which speak only as of the date they are made.

Overview

~~Solid~~We ~~Biosciences~~are ~~Inc. (we, us, our, the Company, or Solid) is~~ a life sciences company focused on advancing a portfolio of current and future gene therapy candidates, which we refer to collectively as our Candidates, including SGT-003 for the treatment of Duchenne muscular dystrophy ("Duchenne"), orSGT-212 ~~Duchenne~~for the treatment of Friedreich's ataxia ("FA"), SGT-501 for the treatment of ~~catecholaminergic~~Catecholaminergic polymorphic ventricular tachycardia ("CPVT"), orSGT-601 ~~CPVT~~for the treatment of TNNT2-mediated dilated cardiomyopathy ("TNNT2 DCM"), and additional assets for the treatment of genetic cardiac and ~~other~~neuromuscular diseases, at different stages of development, with varying levels of investment. We are advancing our diverse pipeline across rare neuromuscular and cardiac diseases, bringing together experts in science, technology, disease management and care. Patient-focused and founded by those directly impacted by Duchenne, our mission is to improve the daily lives of patients living with these devastating diseases.

Solid was purpose-built to advance the best science and accelerate the discovery and development of treatments that may benefit all patients with Duchenne. As ~~Solid~~we ~~expands~~expand to bring meaningful treatments to patients living with other neuromuscular and cardiac diseases, the values and guiding principles that drive us continue. Our corporate vision is to build an innovation platform enabling the discovery and development of high-value genetic medicines for neuromuscular and cardiac diseases by integrating internal capabilities, including a vector core, use of validated animal models, optimized expression cassettes, novel capsids and regulatory expertise, and collaborations with leaders in related clinical and research fields. Our mission, which guides our operations, is to treat and change the course of neuromuscular and cardiac diseases at all stages. Underscoring this mission, our disease-focused business model is founded on the following fundamental principles:

•

identify and develop meaningful therapies for underserved patients with sometimes fatal neuromuscular and cardiac diseases;

•

build innovative libraries of delivery capsids and other enabling technologies with the potential to have broad impact on the gene therapy field at large;

•

bring together the leading experts in neuromuscular and cardiac diseases, science, technology, disease management and care; and

•

be guided by the needs of these patients.

On December 2, 2022, we completed our acquisition of AavantiBio, Inc., or AavantiBio, a privately held gene therapy company focused on transforming the lives of patients with Friedreich’s ataxia, or FA, and rare cardiomyopathies, or the Acquisition. Upon the consummation of the Acquisition, we acquired AavantiBio’s gene therapy programs, AVB-202-TT for the treatment of FA and AVB‑401 for the treatment of BAG3-mediated dilated cardiomyopathy, or BAG3, additional assets for the treatment of cardiac diseases, platform technologies and know-how related thereto.

We are continuing to advance our pipeline of Candidates. The U.S. Food and Drug Administration, or the FDA, has granted orphan drug designation to SGT-003 for the treatment of Duchenne, and the FDA and the European Medicines Agency, or EMA, have granted orphan drug designation to SGT-501 for the treatment of CPVT. We expect to submit an Investigational New Drug, or IND,

~~application~~We are continuing to advance our pipeline of Candidates. The U.S. Food and Drug Administration (the "FDA") has granted orphan drug designation, Rare Pediatric Disease designation and Fast Track designation for SGT-~~501~~003 for Duchenne. The FDA has granted Fast Track Designation for SGT-212 for the treatment of ~~CPVT~~FA. inThe FDA and the ~~first~~European ~~half~~Medicines Agency (the "EMA") have granted orphan drug designation to SGT-501 for the treatment of ~~2025.~~CPVT ~~The~~and the FDA has ~~also~~ granted Rare Pediatric Disease ~~and~~Designation ~~fast track designation~~ for SGT-~~003~~501.

~~Patient~~As ~~dosing~~we incontinue ~~the~~to ~~Phase~~pursue ~~1/2~~opportunities ~~INSPIRE DUCHENNE multicenter clinical trial of SGT-003 began~~ in both the ~~second~~U.S. ~~quarter of 2024,~~ and atinternational ~~the time of filing~~markets, ~~SGT-003~~we ~~has~~remain ~~been~~attentive ~~well~~to ~~tolerated~~evolving ~~and~~global noeconomic ~~Serious Adverse Events (SAEs) were observed in the patients dosed. In September 2024~~conditions, weincluding ~~amended~~uncertainties ~~the~~related ~~INSPIRE DUCHENNE clinical trial protocol~~ to ~~increase~~international ~~the~~trade ~~anticipated participant enrollment size~~policies, ~~expand the participant cohort age groups~~tariffs, and ~~extend~~supply ~~the~~chain ~~timepoints~~dynamics. ofAlthough ~~certain~~these ~~secondary~~factors ~~objective~~have ~~measurements.~~not Inhad ~~the~~a ~~first~~material ~~quarter~~impact ofon ~~2025,~~our weoperations ~~anticipate~~to ~~reporting initial safety~~date, ~~expression~~future ~~and~~changes ~~biomarker~~in ~~data~~trade ~~from the first patients dosed~~regulations, ~~and~~tariff ~~provide a trial update~~structures, inor ~~first~~logistical ~~quarter~~constraints ofcould ~~2025~~influence ~~following~~ the ~~completion~~cost, ~~and~~availability, ~~collective~~or ~~assessment~~timing of ~~90-day~~materials ~~muscle biopsies. We plan to expand clinical development of SGT-003 in the United States~~ and incomponents ~~Canada~~used ~~and Europe. A Clinical Trial Application for INSPIRE DUCHENNE was authorized~~ in ~~Canada~~our inmanufacturing ~~the second quarter of 2024~~processes. InWe ~~anticipation~~continue ofto anmonitor ~~expanded~~these ~~clinical~~developments ~~trial, we have initiated work for additional GMP batches of SGT-003~~closely.

~~AAV-SLB101, Solid’s proprietary capsid used in~~ SGT-003, was well tolerated in the first patients dosed in the INSPIRE DUCHENNE trial, and was well tolerated in NHP and mouse studies. We have also transitioned our BAG3 and TNNT2 cardiac programs to AAV-SLB101.

~~Our~~Patient ~~operations~~dosing in the Phase 1/2 INSPIRE DUCHENNE trial of SGT-003 began in the second quarter of 2024. The INSPIRE DUCHENNE trial is a Phase 1/2 first-in-human, open-label, single-dose, multicenter trial designed to evaluate the safety, tolerability and efficacy of SGT-003 in pediatric patients with Duchenne at a dose of 1E14vg/kg. SGT-003 is administered as a one-time intravenous infusion. In September 2024, we amended the INSPIRE DUCHENNE clinical trial protocol to increase the anticipated participant enrollment size, expand the participant cohort age groups, and extend the timepoints of certain secondary objective measurements. In connection with the expanded clinical trial, we have initiated work for additional GMP batches of SGT-003.

WeOn ~~are~~February focused on developing transformative treatments to improve the lives of patients with rare neuromuscular and cardiac diseases. Our current programs are all designed to treat these diseases with gene transfer products. Gene transfer18, ~~a type of gene therapy~~2025, iswe ~~designed~~announced topositive ~~address~~initial ~~diseases~~data ~~caused~~from bythe ~~mutated~~Phase ~~genes~~1/2 ~~through~~INSPIRE ~~the~~DUCHENNE ~~delivery~~trial ofas ~~functional versions~~ of ~~genes, called transgenes. The transgenes are then utilized by~~ the ~~body~~data tocutoff ~~produce~~date ~~desired~~of ~~proteins~~February ~~to compensate for mutated genes~~11, ~~potentially offering long-lasting clinical benefit~~2025. InInterim ~~addition~~biopsy todata areported ~~transgene, our gene transfer Candidates include a viral capsid or vector (a protein shell utilized as a vehicle to deliver a transgene to cells~~ in the ~~body)~~first ~~and~~three aparticipants ~~promoter~~showed (aan ~~specialized~~average ~~DNA~~microdystrophin ~~sequence~~expression ~~that~~of directs cells to produce the protein in specific tissues). The capsid is modified to no longer self-replicate yet still retain its ability to introduce new genetic material directly into patients’ cells. Adeno-associated virus110%, oras ~~AAV,~~measured ~~capsids~~by ~~have~~western ~~been approved for use to deliver transgenes to patients~~blot, ~~including~~and ~~via~~improvements ~~systemic delivery. The use of AAV capsids to deliver gene therapies has also been extensively studied by third parties~~ in ~~human clinical trials for~~ multiple ~~disease~~biomarkers ~~indications,~~that ~~and~~are inindicators ~~certain~~ of ~~these~~muscle ~~trials~~integrity, ~~AAV~~health ~~was~~and ~~delivered systemically to the patient~~resilience.

~~Due~~SGT-003 tohas ~~our~~been ~~significant~~well-tolerated ~~research~~in ~~and~~the ~~development~~first ~~expenditure,~~six ~~licensing~~participants ~~and~~dosed ~~patent~~as ~~investment,~~of ~~and~~February ~~general administrative costs associated with our operations~~17, ~~we have generated substantial operating losses in each period since our inception~~2025. ~~Our~~For ~~net~~a ~~losses~~full ~~were~~description ~~$32.7~~of ~~million~~the ~~and~~initial ~~$82.1~~results ~~million~~from ~~for~~ the ~~three~~INSPIRE ~~and~~DUCHENNE ~~nine~~trial, ~~months~~see ~~ended~~Part ~~September 30~~I, ~~2024~~Item ~~and~~I, ~~$21.0~~“Business” ~~million~~appearing ~~and~~in ~~$75.7~~our ~~million~~Annual ~~for~~Report ~~the~~on ~~three~~Form ~~and~~10-K ~~nine~~for ~~months~~the year ended ~~September~~December 3031, ~~2023, respectively. As of September 30,~~ 2024~~, we had an accumulated deficit of $740~~.~~9 million. We expect to incur significant expenses and operating losses for the foreseeable future.~~

AsEnrollment wein ~~seek~~the toINSPIRE ~~develop~~DUCHENNE ~~and~~trial ~~commercialize~~is ~~our Candidates~~ongoing, wewith ~~anticipate~~approximately ~~that~~20 ~~our~~total ~~expenses~~participants ~~will~~anticipated ~~increase significantly and that we will need substantial additional funding~~ to support our continuing operations. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of public or private equity financings, debt financings or other sources, which may include licensing agreements or strategic collaborations. We may be ~~unable~~dosed toby ~~raise~~year-end ~~additional funds or enter into such agreements or arrangements when needed on favorable terms, if at all~~2025. ~~If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, scale back or discontinue the development or commercialization of our Candidates.~~

~~Because~~INSPIRE ofDUCHENNE ~~the~~currently ~~numerous~~has ~~risks~~a ~~and~~total ~~uncertainties~~of ~~associated~~eight ~~with~~active ~~product~~clinical ~~development,~~sites wein ~~are~~the ~~unable~~United toStates, ~~predict~~Canada ~~the~~and ~~timing~~Italy, orand ~~amount~~has ofan ~~increased~~approved ~~expenses~~clinical ortrial ~~determine~~application ~~when~~in orthe ifUnited weKingdom. ~~will~~We beexpect ~~able~~ to ~~achieve~~activate oradditional ~~maintain~~trial ~~profitability.~~sites ~~Even~~by ifthe weend ~~are~~of ~~able~~2025. toIn ~~generate revenue from product sales~~mid-2025, we ~~may~~plan ~~not~~to ~~become~~submit ~~profitable.~~a Ifmeeting werequest ~~fail~~ to ~~become~~the ~~profitable~~FDA ~~or are unable~~ to ~~sustain~~discuss ~~profitability~~the onpotential afor ~~continuing~~accelerated ~~basis,~~regulatory ~~then~~pathways wefor ~~may~~SGT-003. beWe ~~unable~~anticipate tothat ~~continue~~the ~~our~~meeting ~~operations~~with atthe ~~planned~~FDA ~~levels~~could ~~and~~occur beas ~~forced~~early toas ~~reduce~~the orfourth ~~terminate~~quarter ~~our~~of ~~operations~~2025.

SGT-212

In January 2025, we announced that the FDA cleared our investigational new drug ("IND") for SGT-212 for the treatment of FA. We anticipate initiating an open-label, multi-center Phase 1b clinical trial of SGT-212 in non-ambulatory and ambulatory adult patients living with FA in the second half of 2025. The FDA has granted Fast Track designation to SGT-212 for the treatment of FA.

SGT-501

We have conducted preclinical studies of SGT-501, including three-and six-month good laboratory practices ("GLP") toxicology studies. IND-enabling GLP toxicology studies of SGT-501 in non-human primates, including the in-life portion of the six-month toxicology, were completed in the first quarter of 2025. We expect to submit an IND to the FDA for SGT-501 for the treatment of patients with RYR2-mediated CPVT in the first half of 2025.

Other Cardiac Programs

We are currently developing a preclinical stage product candidate, SGT-601, for the treatment of TNNT2 DCM. Efficacy studies in mice suggest that SGT-601 treatment resulted in a restoration of ejection fraction function and a stabilization in cardiac function over time. We anticipate submitting an IND to the FDA for SGT-601 for the treatment of TNNT2 DCM in the second half of 2026.

Capsid

Solid's proprietary capsid used in SGT-003, AAV-SLB101, was well tolerated in the first patients dosed in the INSPIRE DUCHENNE trial as well as in non-human primates ("NHP") and mouse studies.

We are focused on developing transformative treatments to improve the lives of patients with rare neuromuscular and cardiac diseases. The majority of our current programs are designed to treat these diseases with gene transfer products. Gene transfer, a type of gene

Astherapy, ofis ~~September~~designed ~~30,~~to ~~2024,~~address wediseases ~~had~~caused ~~cash,~~by ~~cash~~mutated ~~equivalents,~~genes ~~and~~through ~~available-for-sale~~the ~~securities~~delivery of ~~$171.1~~functional ~~million~~versions of genes, ~~excluding~~called ~~restricted~~transgenes. ~~cash~~The oftransgenes ~~$1.9~~are ~~million.~~then Weutilized ~~believe~~by the body to produce desired proteins that ~~our~~act ~~cash,~~therapeutically ~~cash~~to ~~equivalents,~~treat ~~and~~the ~~available-for-sale~~condition. ~~securities~~In asaddition ofto ~~September~~a 30transgene, ~~2024~~our ~~will~~gene ~~enable~~transfer usCandidates include a viral capsid or vector (a protein shell utilized as a vehicle to ~~fund~~deliver ~~our~~a ~~operating~~transgene ~~expenses~~to cells in the body) and ~~capital~~a ~~expenditure~~promoter ~~requirements~~(a specialized DNA sequence that directs cells to produce the protein in specific tissues). The capsid is modified to no longer self-replicate yet still retain its ability to introduce new genetic material directly into ~~2026~~patients’ cells. WeAdeno-associated virus ("AAV") capsids have ~~based~~been ~~this~~approved ~~estimate~~for onuse ~~assumptions~~to ~~that~~deliver ~~may~~transgenes ~~prove~~to patients, including via systemic delivery as well as stereotactic neurosurgical administration to bethe ~~wrong~~brain. The use of AAV capsids to deliver gene therapies has also been extensively studied by third parties in human clinical trials for multiple disease indications, and wein ~~could~~certain ~~use~~of ~~our~~these ~~available~~trials ~~capital~~AAV ~~resources~~was ~~sooner~~delivered ~~than~~systemically weto ~~currently~~the ~~anticipate~~patient.

Our Operations

Due to our significant research and development expenditure, licensing and patent investment, and general and administrative costs associated with our operations, we have generated substantial operating losses in each period since our inception. Our net losses were $39.3 million and $24.3 million for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, we had an accumulated deficit of $822.7 million. We expect to incur significant expenses and operating losses for the foreseeable future.

As we seek to develop and commercialize our Candidates, we anticipate that our expenses will increase significantly and that we will need substantial additional funding to support our continuing operations. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of public or private equity financings, debt financings or other sources, which may include licensing agreements or strategic collaborations. We may be unable to raise additional funds or enter into such agreements or arrangements when needed on favorable terms, if at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, scale back or discontinue the development or commercialization of our Candidates.

Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or determine when or if we will be able to achieve or maintain profitability. Even if we are able to generate revenue from product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

As of March 31, 2025, we had cash, cash equivalents, and available-for-sale securities of $306.9 million, excluding restricted cash of $2.0 million. We believe that our cash, cash equivalents, and available-for-sale securities as of March 31, 2025 will enable us to fund our operating expenses and capital expenditure requirements into the first half of 2027. We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently anticipate.

Financial Operations Overview

Revenue

We have not generated any commercial product revenue to date and do not expect to generate any product revenue from the sale of our products for the foreseeable future, if ever. If our development efforts for our Candidates are successful and result in marketing approval, we may generate commercial product revenue in the future from product sales.

Operating ~~expenses~~Expenses

We classify our operating expenses into two categories: research and development and general and administrative expenses. Personnel costs, including salaries, benefits, bonuses, and equity-based compensation expense comprise a significant component of both expense categories. We allocate expenses associated with personnel costs based on the nature of work associated with these resources.

Research and ~~development~~Development ~~expenses~~Expenses

Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts, and clinical and preclinical development activities for our Candidates and include:

•

expenses incurred under agreements with third parties, including contract research organizations, or ("CROs,") that conduct research, preclinical and clinical activities on our behalf, as well as contract manufacturing organizations, or ("CMOs,") that manufacture SGT-003, SGT-501, SGT-212, and other Candidates for use in our preclinical studies and clinical trials;

•

salaries, benefits and other related costs, including equity-based compensation expense, for personnel engaged in research and development functions;

•

costs of outside consultants, engaged to assist in our research and development activities, including their fees, equity-based compensation and related travel expenses;

•

costs of laboratory supplies and acquiring, developing and manufacturing preclinical study and clinical trial materials;

•

costs incurred in seeking regulatory approval of our Candidates;

•

expenses incurred under our intellectual property licenses; and

•

facility-related research and development expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.

Research and development activities are central to our business model. We are still in the early stages of development of our Candidates. Candidates in later stages of clinical development generally have higher development costs than those in preclinical development or in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect that our research and development expenses will continue to increase for the foreseeable future if and as we conduct clinical trials for SGT-003, initiate clinical trials for our other Candidates, including our planned Phase 1b clinical trial of SGT-212, and continue to identify and develop additional Candidates.

We typically use our employee and infrastructure resources across our Candidates. We track outsourced development costs and milestone payments made under our licensing arrangements by Candidate, but we do not allocate personnel costs, license payments made under our licensing arrangements or other internal costs to Candidates on a program-specific basis. These costs are included in unallocated research and development expenses in the table below.

The following table summarizes our research and development expenses by Candidate for the respective periods (in thousands):

	Three Months EndedSeptember 30,				Nine Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2024		2023		2024		2023
	2025		2024
Allocated research and development expenses:
SGT-001	$	74158	$	~~174~~257	$	~~568~~	$	~~3,245~~
SGT-003		59,~~288~~298		41,~~735~~906		~~9,629~~		~~19,642~~
SGT-501		34,~~299~~466		~~174~~3,807		~~10,529~~		~~1,824~~
Other development programs		7,053		1,227		12,229		4,409
SGT-212		825		49
Total allocated research and development expenses		15,714		6,310		32,955		29,120
Other development programs		3,481		2,205
Unallocated research and development expenses:
Total allocated research and development expenses		18,228		8,224
Personnel related expenses		6,270		6,175		18,187		19,100
Unallocated research and development expenses:
External expenses		5,343		4,217		14,519		12,890
Personnel related expenses		7,990		6,066
Total unallocated research and development expenses		11,613		10,392		32,706		31,990
External expenses		4,696		4,583
Total research and development expenses	$	27,327	$	16,702	$	65,661	$	61,110
Total unallocated research and development expenses		12,686		10,649
Total research and development expenses	$	30,914	$	18,873

We cannot determine with certainty the duration, costs, and timing of ongoing and planned clinical trials of SGT-003, SGT-212, SGT-501, or our other Candidates, or if, when, or to what extent we will generate revenue from the commercialization and sale of any of our Candidates for which we obtain marketing approval or our other research and development expenses. We may never succeed in obtaining marketing approval for any of our Candidates. The duration, costs, and timing of clinical trials and development of our Candidates will depend on a variety of factors, including:

•

the scope, rate of progress, expense, and results of any clinical trials of our Candidates and other research and development activities that we may conduct;

•

the imposition of regulatory restrictions on clinical trials, including full and partial clinical holds and the time and activities required to lift any such holds;

•

uncertainties in clinical trial design and patient enrollment or drop out or discontinuation rates;

•

significant and changing government regulation and regulatory guidance;

•

potential additional studies or clinical trials requested by regulatory agencies;

•

the timing and receipt of any marketing approvals; and

•

the expense of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights.

General and administrative expenses

General and administrative expenses consist primarily of salaries and other related costs, including equity-based compensation, for personnel in our executive, finance, business development, and administrative functions. General and administrative expenses also include legal fees relating to patent and corporate matters, professional fees for accounting, auditing, tax and consulting services, insurance costs, travel expenses, and facility-related expenses.

We expect that our general and administrative expenses will increase in the future as we support our research and development activities, and activities related to our INSPIRE DUCHENNE trial, and any planned or future clinical trials for, and potential commercialization of, our Candidates.

Other income, net

Other income, net consists primarily of interest income. Interest income consists of income earned on our cash and cash equivalents, available-for-sale securities, and restricted cash equivalents.

Critical Accounting Policies and Use of Estimates

Our discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of our condensed consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, costs and expenses and the disclosure of contingent assets and liabilities in our condensed consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about

~~the~~General ~~carrying values of assets~~ and ~~liabilities~~Administrative ~~that~~Expenses ~~are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ materially from these estimates.~~

~~During~~General ~~the~~and ~~nine~~administrative ~~months~~expenses ~~ended~~consist ~~September~~primarily ~~30,~~of ~~2024,~~salaries ~~there~~and ~~were~~other norelated ~~material~~costs, ~~changes~~including toequity-based ~~our critical accounting policies~~compensation, ~~except~~for aspersonnel ~~noted~~ in ~~Note~~our 1executive, –finance, ~~Nature~~business ofdevelopment ~~the Business~~ and ~~Basis~~administrative ~~of Presentation~~functions. ~~Our~~General ~~critical accounting policies are described under the heading “Management’s Discussion~~ and ~~Analysis~~administrative ofexpenses ~~Financial~~also ~~Condition~~include ~~and~~legal ~~Results~~fees ofrelating ~~Operations—Critical~~to ~~accounting~~patent ~~policies~~ and ~~use~~corporate ofmatters, ~~estimates”~~professional infees ~~our Annual Report on Form 10-K~~ for ~~the~~accounting, ~~year ended December 31~~auditing, ~~2023~~tax and ~~the~~consulting ~~notes to the unaudited condensed consolidated financial statements included in Part I~~services, ~~Item~~insurance 1costs, ~~“Financial~~travel ~~Statements (unaudited)~~expenses,” ofand ~~this quarterly report on Form 10~~facility-Q.related ~~We believe that of our critical accounting policies, the following accounting policies involve the most judgment and complexity:~~expenses.

We expect that our general and administrative expenses will increase in the future as we support our research and development activities and activities related to our INSPIRE DUCHENNE trial, our planned Phase 1b clinical trial of SGT-212, and any other planned or future clinical trials for and potential commercialization of our Candidates.

Other Income, Net

Other income, net consists primarily of interest income. Interest income consists of income earned on our cash and cash equivalents, available-for-sale securities, and restricted cash.

Critical Accounting Policies and Use of Estimates

Our management's discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of our condensed consolidated financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, costs and expenses and the disclosure of contingent assets and liabilities in our condensed consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ materially from these estimates.

During the three months ended March 31, 2025, there were no material changes to our critical accounting policies. Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Use of Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2024 and the notes to the unaudited condensed consolidated financial statements included in Part I, Item 1, “Financial Statements (unaudited),” of this Quarterly Report on Form 10-Q. We believe that of our critical accounting policies, the following accounting policies involve the most judgment and complexity:

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accrued research and development expenses;

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equity-based compensation; and

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derivative liabilities.

Accordingly, we believe the policies set forth above are critical to fully understanding and evaluating our financial condition and results of operations. If actual results or events differ materially from the estimates, judgments and assumptions used by us in applying these policies, our reported financial condition and results of operations could be materially affected.

Results of Operations

Comparison of the ~~three~~Three ~~months~~Months ~~ended~~Ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024

The following table summarizes our results of operations for the periods indicated (in thousands, except percentages):

	Three Months EndedSeptember 30,									%
	Three Months EndedMarch 31,
	2024			2023			Change			Change
	2025			2024			$ Change			% Change
Operating expenses:
Research and development	$	2730,~~327~~914		$	1618,~~702~~873		$	1012,~~625~~041			63.68	%
General and administrative		79,~~855~~138			67,~~412~~989			1,~~443~~149			2214.54	%
Total operating expenses		3540,~~182~~052			2326,~~114~~862			1213,~~068~~190			5249.21	%
Loss from operations		(3540,~~182~~052	)		(2326,~~114~~862	)		(1213,~~068~~190	)		5249.21	%
Other income, net:
Interest income		2,~~328~~300			12,~~962~~651			~~366~~(351	)		18(13.72	)%
Interest expense		(8268	)		(~~106~~95	)		2427			(2228.64	)%
Other income, net		211			278			(67	)		(24.1	)%
Change in fair value of derivative liabilities		(1,650	)		—			(1,650	)		(100.0	)%
Total other income, net		2,457			2,134			323			15.1	%
Other income, net		188			3			185			6166.7	%
Net loss	$	(32,725	)	$	(20,980	)	$	(11,745	)		56.0	%
Total other income, net		770			2,559			(1,789	)		(69.9	)%
Net loss	$	(39,282	)	$	(24,303	)	$	(14,979	)		61.6	%

Research and ~~development~~Development ~~expenses~~Expenses

The following table summarizes our research and development expenses by ~~Candidates~~Candidate for the ~~respective~~ periods indicated (in thousands, except percentages):

	Three Months EndedSeptember 30,							%
	Three Months EndedMarch 31,
	2024		2023		Change			Change
	2025		2024		$ Change			% Change
Allocated research and development expenses:
SGT-001	$	74158	$	~~174~~257	$	(~~100~~99	)		(5738.5	)%
SGT-003		59,~~288~~298		41,~~735~~906		~~553~~7,392			11387.78	%
SGT-501		34,~~299~~466		~~174~~3,807		~~3,125~~659			~~1796~~17.03	%
Other development programs		7,053		1,227		5,826			474.8	%
SGT-212		825		49		776			1583.7	%
Total allocated research and development expenses		15,714		6,310		9,404			149.0	%
Other development programs		3,481		2,205		1,276			57.9	%
Total allocated research and development expenses		18,228		8,224		10,004			121.6	%
Unallocated research and development expenses:
Personnel related expenses		67,~~270~~990		6,~~175~~066		951,924			131.57	%
External expenses		54,~~343~~696		4,~~217~~583		~~1,126~~113			262.75	%
Total unallocated research and development expenses		1112,~~613~~686		10,~~392~~649		12,~~221~~037			1119.71	%
Total research and development expenses	$	2730,~~327~~914	$	1618,~~702~~873	$	1012,~~625~~041			63.68	%

Research and development expenses for the three months ended ~~September~~March 3031, ~~2024~~2025 were $2730.39 million, compared to $1618.79 million for the three months ended ~~September~~March 3031, ~~2023~~2024. The increase of $1012.60 million in research and development expenses was primarily due to a $7.4 million increase in costs for SGT-003 primarily related to manufacturing, regulatory, and clinical costs, a $1.9 million increase in personnel related expenses, a $1.3 million increase in other development program expenses primarily due to manufacturing costs, a $0.8 million increase in costs for SGT-212 primarily related to regulatory and clinical costs, and a $0.7 million increase in costs for SGT-501 primarily related to research, regulatory, and clinical costs, offset by a $0.1 million decrease for SGT-001 due to our decision to deprioritize SGT-001.

23General and Administrative Expenses

~~$5.8~~General ~~million~~and ~~increase~~administrative ~~in other development program~~ expenses ~~primarily~~were ~~due~~$9.1 tomillion for the ~~FA212~~three ~~asset~~months ~~acquisition~~ended ~~and~~March ~~other~~31, ~~research costs~~2025, acompared to $38.10 million ~~increase in costs~~ for ~~SGT-501~~the ~~primarily~~three ~~related~~months toended ~~manufacturing~~March ~~and research costs~~31, ~~a $1~~2024.1 ~~million~~The increase inof ~~external expenses, a~~ $01.61 million ~~increase~~was ~~in costs for SGT-003~~ primarily related to ~~clinical and manufacturing costs, and~~ a $0.1.7 million increase in personnel related ~~expenses~~costs, partially offset by a $0.12 million decrease in ~~costs~~legal ~~for~~fees, ~~SGT-001 primarily related to lower clinical~~ and ~~research~~a ~~costs~~$0.2 ~~due~~million todecrease ~~our~~in ~~decision~~finance ~~to deprioritize SGT-001~~costs.

General and administrative expenses

General and administrative expenses were $7.9 million for the three months ended September 30, 2024, compared to $6.4 million for the three months ended September 30, 2023. The increase of $1.4 million was primarily related to a $1.5 million increase in personnel related costs, and a $0.2 million increase in consulting fees, offset by a $0.3 million decrease in temporary services.

Other income, net

Other income, net was $2.5 million for the three months ended September 30, 2024, compared to $2.1 million for the three months ended September 30, 2023. The activity was primarily related to the increase in interest income on available-for-sale securities included within our portfolio due to higher investment balances from proceeds of our amended and restated at-the market offering sales agreement, dated March 13, 2024, by and between us and Jefferies LLC, or Jefferies, or the ATM Sales Agreement, and January 2024 Private Placement.

Comparison of the nine months ended September 30, 2024 and 2023

The following table summarizes our results of operations for the periods indicated (in thousands, except percentages):

	Nine Months EndedSeptember 30,									%
	2024			2023			Change			Change
Operating expenses:
Research and development	$	65,661		$	61,110		$	4,551			7.4	%
General and administrative		24,171			20,940			3,231			15.4	%
Restructuring charges		—			(63	)		63			(100.0	)%
Total operating expenses		89,832			81,987			7,845			9.6	%
Loss from operations		(89,832	)		(81,987	)		(7,845	)		9.6	%
Other income, net:
Interest income		7,544			5,822			1,722			29.6	%
Interest expense		(265	)		(339	)		74			(21.8	)%
Other income, net		453			825			(372	)		(45.1	)%
Total other income, net		7,732			6,308			1,424			22.6	%
Net loss	$	(82,100	)	$	(75,679	)	$	(6,421	)		8.5	%

Research and development expenses

The following table summarizes our research and development expenses by Candidate for the respective periods (in thousands, except percentages):

	Nine Months EndedSeptember 30,							%
	2024		2023		Change			Change
Allocated research and development expenses:
SGT-001	$	568	$	3,245	$	(2,677	)		(82.5	)%
SGT-003		9,629		19,642		(10,013	)		(51.0	)%
SGT-501		10,529		1,824		8,705			477.2	%
Other development programs		12,229		4,409		7,820			177.4	%
Total allocated research and development expenses		32,955		29,120		3,835			13.2	%
Unallocated research and development expenses:
Personnel related expenses		18,187		19,100		(913	)		(4.8	)%
External expenses		14,519		12,890		1,629			12.6	%
Total unallocated research and development expenses		32,706		31,990		716			2.2	%
Total research and development expenses	$	65,661	$	61,110	$	4,551			7.4	%

~~Research~~Other ~~and development expenses for the nine months ended September 30~~Income, 2024 were $65.7 million, compared to $61.1 million for the nine months ended September 30, 2023. The increase of $4.6 million in research and development expenses was primarily due to an $8.7 million increase in costs for SGT-501 primarily related to manufacturing and research costs, a $7.8 million increase in other development program expenses primarily due to the FA212 asset acquisition and other research costs, and a $1.6 million increase in external expenses, offset by a $10.0 million decrease for SGT-003 primarily related to manufacturing and research costs, a $2.7 million decrease in costs for SGT-001 due to our decision to deprioritize SGT-001, and a $0.9 million decrease in personnel related expenses. Net

~~General~~Other ~~and~~income, ~~administrative~~net ~~expenses~~was $0.8 million for the three months ended March 31, 2025 compared to $2.6 million for the three months ended March 31, 2024. The decrease of $1.8 million was primarily related to the change in fair value of derivative liabilities.

General and administrative expenses were $24.2 million for the nine months ended September 30, 2024, compared to $20.9 million for the nine months ended September 30, 2023. The increase of $3.2 million was primarily related to a $2.2 million increase in personnel related costs, a $1.3 million increase in legal fees, and a $0.3 million increase in software costs, offset by a $0.6 million decrease in temporary services.

Other income, net

Other income, net was $7.7 million for the nine months ended September 30, 2024 compared to other expense of $6.3 million for the nine months ended September 30, 2023. The activity was primarily related to the increase in interest income on available‑for‑sale securities included within our portfolio due to higher investment balances from proceeds from our ATM Sales Agreement and the January 2024 Private Placement.

Liquidity and Capital Resources

Sources of ~~liquidity~~Liquidity

To date, we have financed our operations primarily through the sale of redeemable preferred units and member units, the sale of ~~common~~securities ~~stock and pre-funded warrants to purchase shares of our common stock~~ in private placements and follow-on offerings, the sale of common stock in our initial public offering, and ~~a follow-on public offering and~~ sales of common stock under our "at-the-market offering" sales agreement with Jefferies LLC ("Jefferies") (the "ATM Sales Agreement"). Through ~~September~~March 3031, ~~2024~~2025, we raised an aggregate of $144.6 million of gross proceeds from our sales of preferred units prior to the completion of our initial public offering, and an aggregate of $~~662~~857.01 million of net proceeds from the sale of our common stock through public offerings, including our IPO and a follow-on public ~~offering~~offerings, private placements, the ATM Sales Agreement, and pursuant to the stock purchase ~~agreement with Ultragenyx, as detailed in the following paragraphs~~agreements.

On March 13, 2019, we entered into the ATM Sales Agreement, which was amended and restated in March 2024, under which we may offer and sell, from time to time, shares of our common stock through Jefferies as sales agent. Any such sales being made by any method that is deemed an “at-the-market offering” as defined in Rule 415 promulgated under the Securities Act. We will pay Jefferies a commission of up to 3% of the gross proceeds of any sales of common stock pursuant to the ATM Sales Agreement. During the year ended December 31, ~~2023~~2024, we sold ~~602~~2,~~030~~212,937 shares pursuant to the ATM Sales Agreement resulting in net proceeds of $318.04 million. During the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025, we sold ~~330~~61,~~670~~542 ~~and 1,208,287~~ shares pursuant to the ATM Sales Agreement resulting in net proceeds of $30.12 million ~~and $11~~.~~5 million, respectively.~~

On January 11, 2024, we issued and sold 16,973,103 shares of our common stock at a price per share of $5.53 and, to one investor in lieu of shares of common stock, pre-funded warrants to purchase 2,712,478 shares of common stock at a price of $5.529 per pre-funded warrant, in a private placement we refer to as the January 2024 Private Placement. We received $103.7 million of net proceeds from the January 2024 Private Placement after deducting offering costs.

AsOn ofFebruary ~~September 30~~19, ~~2024~~2025, we ~~had~~issued ~~cash~~and sold in an underwritten offering (the "February 2025 Offering"), ~~cash~~35,739,810 ~~equivalents~~shares ~~and~~of ~~available-for-sale~~our ~~securities~~common stock at a price of $~~171~~4.103 ~~million~~per share and, ~~excluding~~to ~~restricted~~certain ~~cash~~investors in lieu of shares of common stock, pre-funded warrants to purchase 13,888,340 shares of common stock at a price of $14.9029 per pre-funded warrant. We received approximately $188.0 million of net proceeds, after deducting underwriting discounts and ~~had~~commissions noand ~~debt~~offering ~~outstanding~~costs.

~~Cash~~As ~~flows~~of March 31, 2025, we had cash, cash equivalents, and available-for-sale securities of $306.9 million, excluding restricted cash of $2.0 million, and had no debt outstanding.

Summary of Cash Flows

The following table summarizes our sources and uses of cash for each of the periods presented (in thousands):

	Nine Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2024			2023
	2025			2024
Cash used in operating activities	$	(7031,~~367~~850	)	$	(7325,~~357~~192	)
Cash used in investing activities		(5427,~~653~~463	)		(3538,~~607~~490	)
Cash provided by financing activities		~~115~~189,~~497~~728			2107,~~617~~241
Net decrease in cash, cash equivalents, and restricted cash	$	(9,523	)	$	(106,347	)
Net increase in cash, cash equivalents, and restricted cash	$	130,415		$	43,559

Operating Activities

During the three months ended March 31, 2025, operating activities used $31.9 million of cash, primarily resulting from our net loss of $39.3 million partially offset by changes in our operating assets and liabilities of $1.8 million and non-cash charges of $5.6 million. Net cash used by changes in our operating assets and liabilities during the three months ended March 31, 2025 consisted of a decrease of $2.0 million in prepaid and other assets and an increase in accounts payable of $0.5 million, offset by a decrease in the operating lease liability of $0.4 million and a decrease in accrued expenses and other liabilities of $0.3 million. Non-cash activities were driven by equity-based compensation of $3.3 million, depreciation and amortization expense of $0.4 million, non-cash lease expense of $0.6 million, and a change in the fair value of derivative liabilities of $1.7 million, partially offset by amortization on available-for-sale securities of $0.3 million.

~~Operating~~During the three months ended March 31, 2024, operating activities used $25.2 million of cash, primarily resulting from our net loss of $24.3 million and changes in our operating assets and liabilities of $2.9 million, partially offset by non-cash charges of $2.0 million. Net cash used by changes in our operating assets and liabilities during the three months ended March 31, 2024 consisted of an increase of $2.0 million in prepaid and other assets, a decrease in accounts payable of $0.6 million, and a decrease in the operating lease liability of $0.5 million, offset by an increase in accrued expenses and other liabilities of $0.2 million. Non-cash activities were driven by equity-based compensation of $1.6 million, non-cash lease expense of $0.6 million and depreciation expense of $0.3 million, partially offset by amortization on available-for-sale securities of $0.5 million and a gain on lease termination of $0.1 million.

~~During~~Investing the nine months ended September 30, 2024, operating activities used $70.4 million of cash, primarily resulting from our net loss of $82.1 million partially offset by changes in our operating assets and liabilities of $0.7 million and non-cash charges of $11.0 million. Net cash used by changes in our operating assets and liabilities during the nine months ended September 30, 2024 consisted of an increase of $2.5 million in prepaid and other assets, and a decrease in the operating lease liability of $1.3 million, offset by an increase in accrued expenses and other liabilities of $3.1 million, and an increase in accounts payable of $1.4 million. Non-cash activities were driven by equity-based compensation of $6.7 million, depreciation and amortization expense of $2.0 million, non-cash lease expense of $1.8 million, and a change in the fair value of derivative liabilities of $3.4 million, partially offset by amortization on available-for-sale securities of $2.8 million.Activities

During the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2025, ~~operating~~investing activities used $7327.45 million of cash, ~~primarily~~ resulting from ~~our~~the ~~net~~purchases ~~loss~~ of ~~$75.7 million and changes in our operating assets and liabilities of $6.4 million, partially offset by non~~available-~~cash~~for ~~charges~~sale ofsecurities ~~$8.7 million. Net cash used by changes in our operating assets and liabilities during the nine months ended September 30, 2023 consisted~~ of ~~a decrease in accrued expenses and other current and non-current liabilities of~~ $565.3 million, aand ~~decrease in~~ the ~~operating~~purchases ~~lease liability~~ of ~~$1.3~~property ~~million,~~plant and aequipment ~~decrease in accounts payable~~ of $0.91 million, partially offset by athe ~~decrease~~maturity ~~in prepaid and other assets~~ of $1.1 million. Non-cash activities were driven by equity-based compensation of $5.7 million, depreciation and impairment expense of $2.4 million, and non-cash lease expense of $1.9 million, partially offset by amortization on available-for- sale securities of $138.30 million.

~~Investing~~During the three months ended March 31, 2024, investing activities used $38.5 million of cash, resulting from the purchases of available-for sale securities of $83.3 million and the purchases of property plant and equipment of $0.2 million, partially offset by the maturity of available-for sale securities of $45.0 million.

~~During~~Financing the nine months ended September 30, 2024, investing activities used $54.7 million of cash, resulting from the purchases of available-for sale securities of $189.0 million and the purchases of property plant and equipment of $0.5 million, partially offset by the maturity of available-for sale securities of $134.8 million.Activities

During the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2025, ~~investing~~financing activities ~~used~~provided $35189.67 million of cash, resulting from the ~~purchases~~net ofproceeds ~~available-for~~from ~~sale~~the ~~securities~~issuance and sale of ~~$102.8~~common ~~million~~stock and ~~the~~pre-funded ~~purchases~~warrants ofto ~~property~~purchase ~~plant~~shares ~~and~~of ~~equipment~~common stock of $1189.49 million, ~~partially~~ offset by payments of the ~~maturity~~principal portion of ~~available-for~~finance ~~sale~~lease ~~securities~~obligations of $680.61 million.

~~Financing~~During the three months ended March 31, 2024, financing activities provided $107.2 million of cash, resulting from the proceeds from the issuance of common stock and pre-funded warrants to purchase shares of common stock of $107.1 million and proceeds from the exercise of common stock options for $0.1 million.

~~During~~Funding the nine months ended September 30, 2024, financing activities provided $115.5 million of cash, resulting from the net proceeds from the issuance of common stock and pre-funded warrants to purchase shares of common stock of $115.3 million, proceeds from the exercise of common stock options for $0.4 million, and proceeds from the issuance of shares of $0.1 million under the Company's 2021 Employee Stock Purchase Plan, or ESPP, offset by payments of the principal portion of finance lease obligations of $0.3 million.Requirements

During the nine months ended September 30, 2023, financing activities provided $2.6 million of cash, resulting from the proceeds from the issuance of common stock of $2.5 million and purchases of shares under the ESPP.

Funding requirements

We expect our expenses to increase substantially in connection with our ongoing development activities related to our Candidates. In addition, we have incurred and expect to continue to incur costs associated with operating as a public company. We expect that our expenses will increase substantially if and as we:

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continue to enroll patients in our ~~expanded~~ INSPIRE DUCHENNE trial and advance clinical development of SGT-003;

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advance our other Candidates into clinical trials, including our planned Phase 1b clinical trial of SGT-212;

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continue research and preclinical development of our Candidates and adjacent technologies such as assays;

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seek to identify additional ~~Candidates~~candidates;

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engage in regulatory interactions with the ~~United States Food and Drug Administration, or~~ FDA, and other regulatory authorities;

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submit regulatory filings relating to the development of our Candidates and seek marketing approvals for our Candidates that successfully complete clinical trials, if any;

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establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval;

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scale up our manufacturing processes and arrange manufacturing for larger quantities of our ~~Candidates~~product candidates for preclinical and clinical development and potential commercialization;

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maintain, expand, protect and enforce our intellectual property portfolio;

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hire and retain additional clinical, quality control, and scientific personnel;

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build out new facilities or expand existing facilities to support our activities;

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acquire or in-license other drugs, drug candidates, technologies, and intellectual property; and

•

add operational, financial and management information systems and personnel.

As of September 30, 2024, we had cash, cash equivalents and available-for-sale securities of $171.1 million, excluding restricted cash of $1.9 million. Based on our current operating plan, we believe that our cash, cash equivalents, and available-for-sale securities as of September 30, 2024 will be sufficient to fund our operating expenses and capital requirements into 2026. As a result, in order to continue to operate our business beyond that time, we will need to raise additional funds. However, there can be no assurance that we will be able to generate funds on terms acceptable to us, on a timely basis, or at all. In addition, we have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently anticipate.26

~~Because~~As of ~~the~~March ~~numerous~~31, ~~risks~~2025, we had cash, cash equivalents and ~~uncertainties~~available-for-sale ~~associated~~securities ~~with~~of ~~the~~$306.9 ~~development~~million, excluding restricted cash of $2.0 million. Based on our ~~Candidates~~current operating plan, we believe that our cash, cash equivalents and ~~because~~available-for-sale ~~the~~securities ~~extent~~as of March 31, 2025 will be sufficient to ~~which~~fund weour ~~may~~operating ~~enter~~expenses ~~collaborations~~and ~~with~~capital ~~third~~requirements ~~parties~~into ~~for~~the ~~development~~first half of 2027. As a result, in order to continue to operate our ~~Candidates~~business isbeyond ~~unknown~~that time, we ~~are~~will ~~unable~~need to ~~estimate~~raise ~~the~~additional ~~timing~~funds. ~~and~~However, ~~amounts~~there ofcan ~~increased~~be ~~capital~~no ~~outlays~~assurance ~~and~~that ~~operating~~we ~~expenses~~will ~~associated~~be ~~with~~able ~~completing~~to ~~the~~generate ~~research~~funds ~~and~~on ~~development~~terms ofacceptable ~~our~~to ~~Candidates~~us, on a timely basis, or at all. ~~Our~~In ~~future~~addition, ~~capital~~we ~~requirements~~have ~~will~~based ~~depend~~this estimate on ~~many~~assumptions ~~factors~~that may prove to be wrong, ~~including:~~and we could use our available capital resources sooner than we currently anticipate.

Due to the ~~progress,~~numerous ~~costs~~risks and ~~results~~uncertainties associated with the development of our Candidates and because the ~~INSPIRE~~extent ~~DUCHENNE~~to ~~trial~~which we may enter collaborations with third parties for development of our Candidates is unknown, we are unable to estimate the timing and ~~any~~amounts ~~future~~of ~~clinical~~increased ~~trials~~capital outlays and operating expenses associated with completing the research and development of our Candidates;. Our future capital requirements will depend on many factors, including:

•

the progress, costs and results of the INSPIRE DUCHENNE trial, our planned clinical trial of SGT-212, and any future clinical trials of our Candidates;

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the costs, timing and outcome of regulatory review of our Candidates;

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the scope, progress, results and costs of discovery, laboratory testing, manufacturing, preclinical development and clinical trials for our Candidates;

•

the costs associated with manufacturing and use of third-party manufacturers;

•

the revenue, if any, received from commercial sale of our Candidates, should any of our Candidates receive marketing approval;

•

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

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the outcome of any lawsuits filed against us;

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the terms of our current and any future license agreements and collaborations;

•

~~the~~our ~~success~~ability ofto ~~our~~establish ~~collaboration~~and ~~with~~maintain ~~Ultragenyx~~additional strategic collaborations, licensing or other arrangements and the financial terms of such arrangements;

•

our ability to establish and maintain additional strategic collaborations, licensing, or other arrangements and the financial terms of such arrangements;

the payment or receipt of milestones, royalties and other collaboration-based revenues, if any;

•

the extent to which we acquire or in-license other ~~Candidates~~candidates, technologies, and intellectual property; and

•

if and as we need to adapt our business in response to public health emergencies or pandemics, ~~such as the recent COVID–19 pandemic,~~ and collateral consequences related thereto.

We are supplying, and expect to continue to supply, our ongoing and future pre-clinical and clinical development programs with drug product produced at a ~~facility~~cGMP compliant ~~with~~facility ~~the current Good Manufacturing Practice regulations enforced by the FDA, or cGMPs,~~ located at one of our CMOs. We intend to establish the capability and capacity to supply Candidates at commercial scale from multiple sources.

Developing pharmaceutical products, including conducting preclinical studies and clinical trials, is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval for any Candidates or generate revenue from the sale of any products for which we may obtain marketing approval. In addition, our Candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of products that we do not expect to be commercially available for many years, if ever. Accordingly, we will need to obtain substantial additional funds to achieve our business objectives.

Adequate additional funds may not be available to us on acceptable terms, or at all. We do not currently have any committed external source of funds. To the extent that we raise additional capital through the sale of equity securities, our existing stockholders’ ownership interest may be diluted. Any debt or preferred equity financing, if available, may involve agreements that include restrictive covenants that may limit our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, which could adversely impact our ability to conduct our business, and may require the issuance of warrants, which could potentially dilute existing stockholders’ ownership interests.

declaring dividends, which could adversely impact our ability to conduct our business, and may require the issuance of warrants, which could potentially dilute existing stockholders’ ownership interests.

If we raise additional funds through licensing agreements and strategic collaborations with third parties, we may have to relinquish valuable rights to our technology, future revenue streams, research programs, or Candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds, we may be required to delay, limit, reduce and/or terminate development of our Candidates or any future commercialization efforts or grant rights to develop and market Candidates that we would otherwise prefer to develop and market ourselves.

Contractual Obligations and Commitments

During the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025, ~~other than our acquisition agreement with FA212 to make potential milestone payments and pay royalties based on achievement of specified milestones,~~ there were no material changes to our contractual obligations and commitments from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2023~~2024.

Recently Issued Accounting Pronouncements

A summary of significant recent accounting pronouncements that we expect to adopt is included in Note 1 – Nature of the Business and Basis of Presentation to our condensed consolidated financial statements (See Part I, Item 1 – Financial Statements, of this Quarterly Report on Form 10-Q).

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

WeInterest ~~are~~Rate ~~exposed~~Risk to market risk related to changes in interest rates. As of September 30, 2024, our cash equivalents consisted of money market funds, treasury bills, and government bonds that have contractual maturities of less than 90 days from the date of acquisition. As of September 30, 2024, our investments consisted of treasury bills and government bonds that have contractual maturities of less than one year. Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of U.S. interest rates. However, because of the short-term nature of the investments in our portfolio, an immediate 10% change in market interest rates would not have a material impact on the fair market value of our investment portfolio or on our financial position or results of operations.

We are exposed to market risk related to changes in interest rates. As of March 31, 2025, our cash equivalents consisted of money market funds and treasury bills that have contractual maturities of less than 90 days from the date of acquisition. As of March 31, 2025, our investments consisted of treasury bills and government bonds that have contractual maturities of less than one year. Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of U.S. interest rates. However, because of the short-term nature of the investments in our portfolio, an immediate 10% change in market interest rates would not have a material impact on the fair market value of our investment portfolio or on our financial position or results of operations.

Inflation Risk

Inflation generally affects us by increasing our cost of labor and research, manufacturing and development costs. We do not believe that inflation had a material effect on our business, financial condition or results of operations in the last two years. However, our operations may be adversely affected by the inflation in the future.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our President and Chief Executive Officer and our Chief Financial Officer (our principal executive officer and principal financial and accounting officer, respectively), evaluated the effectiveness of our disclosure controls and procedures as of ~~September~~March 3031, ~~2024~~2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or (the "Exchange Act"), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of September 30, 2024, our President and Chief Executive Officer and our Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

In designing and evaluating our disclosure controls and procedures, management recognizes that disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and not be detected. Based on the evaluation of our disclosure controls and procedures as of March 31, 2025, our President and Chief Executive Officer and our Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were designed and operating effectively.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have occurred during the three months ended ~~September~~March 3031, ~~2024~~2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

You should carefully consider the following risk factors, in addition to the other information contained in this Quarterly Report on Form 10-Q, including the section of this report titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes. If any of the events described in the following risk factors and the risks described elsewhere in this Quarterly Report on Form 10-Q occurs, our business, operating results and financial condition could be seriously harmed and the trading price of our common stock could decline. This Quarterly Report on Form 10-Q also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of factors that are described below and elsewhere in this Quarterly Report on Form 10-Q. The risks and uncertainties described below are not the only ones we face. Additional risks not presently known to us or other factors not perceived by us to present significant risks to our business at this time also may impair our business operations.

RISK FACTOR SUMMARY

Our business is subject to a number of risks that if realized could materially affect our business, operating results and financial condition and the trading price of our common stock could decline. These risks are discussed more fully below. These risks include the following:

•

We may fail to realize the anticipated benefits of our acquisition of AavantiBio, those benefits may take longer to realize than expected, and we may encounter significant integration difficulties.

Our stockholders may not realize a benefit from the Acquisition and the related private placement commensurate with the ownership dilution they experienced in connection with the Acquisition and the related private placement.

We have incurred significant net losses since inception and anticipate that we will continue to incur net losses for the foreseeable future and may never achieve or maintain profitability.

•

We will need additional funding, which may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations.

•

We have never generated revenue from product sales and do not expect to do so for the foreseeable future, if ever.

•

Our limited operating history may make it difficult for our stockholders to evaluate the success of our business to date and to assess our future viability.

•

Unfavorable global economic conditions could harm our business, financial condition or results of operations.

•

Our pipeline of gene transfer ~~Candidates~~candidates, ~~are~~which ~~based~~we onrefer to collectively as our Candidates, utilize novel technology, which makes it difficult to predict the time and cost of development and of subsequently obtaining regulatory approval. To our knowledge, only a limited number of gene transfer products have been approved for commercialization in the United States and the European Union.

•

~~Our~~One ~~gene~~of ~~transfer~~our ~~Candidates~~prior ~~may~~clinical ~~cause~~trials ~~undesirable~~had ~~side~~been ~~effects~~placed oron ~~have~~clinical ~~other~~hold ~~properties~~by ~~that~~the ~~could~~Food ~~delay~~and orDrug ~~prevent~~Administration ~~their~~("FDA") ~~clinical~~in ~~development~~the past, ~~regulatory~~and ~~approval,~~we ~~limit~~cannot ~~their~~guarantee ~~commercial~~that ~~potential~~similar orevents ~~result~~will not happen in ~~significant~~ongoing, ~~negative~~planned ~~consequences~~and ~~following~~future ~~any~~clinical ~~potential~~trials ~~marketing~~for ~~approval~~our Candidates.

•

One of our prior clinical trials had been placed on clinical hold by the FDA in the past, and we cannot guarantee that similar events will not happen in future clinical trials for our Candidates.

We have never completed a clinical trial and may be unable to do so for any Candidate, including SGT-003 and other Candidates.

•

~~One~~Our Candidates may cause one or more adverse events or other undesirable side effects ~~caused~~or byhave ~~our~~properties ~~product~~that ~~Candidates~~ could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay, denial or withdrawal of regulatory approval by the FDA or other comparable foreign regulatory authorities, limit the Candidates commercial potential or result in significant negative consequences following any potential marketing approval.

•

Success in preclinical studies or early clinical trials may not be indicative of results obtained in later trials.

•

Preliminary or interim data that we announce or publish from time to time may change as more data becomes available and are subject to audit and verification procedures that could result in material changes in the final data.

•

We may encounter substantial delays in our clinical trials or we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities.

•

We may find it difficult to enroll patients in our clinical trials, which could delay or prevent us from proceeding with clinical trials of SGT-003, SGT-212 or our other Candidates.

•

Even if we complete the necessary clinical trials, we cannot predict when, or if, we will obtain regulatory approval to commercialize our Candidates and the approval may be for a narrower indication than we seek.

•

We face significant competition and our competitors may achieve regulatory approval before us or develop therapies that are more advanced or effective than ours, which may adversely affect our ability to develop, successfully market or commercialize our Candidates. Changes within the competitive landscape could lead us to alter our regulatory and/or clinical trial strategy, baseline eligibility criteria or make other modifications to clinical trial designs.

•

We may not be successful in finding strategic collaborators for continuing development of our Candidates or platform technologies, or for successfully commercializing or competing in the market for certain indications.

•

We have limited gene therapy manufacturing experience and could experience production problems and delays in obtaining regulatory approval of our manufacturing processes, which could result in delays in the development or commercialization of SGT-003, SGT-212, SGT-501, or our other ~~current and future~~ Candidates. In addition, changes to manufacturing sites or processes, or formulations for our Candidates may result in additional cost or delay.

•

We expect to utilize third parties to conduct our product manufacturing for the foreseeable future. Therefore, we are subject to the risk that these third parties may not perform satisfactorily or meet regulatory requirements.

•

Our gene transfer approach utilizes capsids derived from a virus, which may be perceived as unsafe or may result in unforeseen adverse events. Negative public opinion and increased regulatory scrutiny of gene therapy may damage public perception of the safety of gene transfer Candidates and adversely affect our ability to conduct our business or obtain regulatory approvals for our Candidates.

•

We heavily rely on certain in-licensed patents and other intellectual property rights in connection with our development of our Candidates and may be required to acquire or license additional patents or other intellectual property rights to continue to develop and commercialize our Candidates.

•

If we are unable to obtain and maintain patent protection for our Candidates, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize our Candidates may be adversely affected.

•

Our intellectual property licenses with third parties may be subject to disagreements over contract interpretation, which could narrow the scope of our rights to the relevant intellectual property or technology or increase our financial or other obligations to our licensors.

•

The price of our common stock has been, and in the future is likely to be, volatile and fluctuate substantially, which could result in substantial losses for holders of our common stock.

Risks ~~related~~Related to ~~the~~our ~~Acquisition~~Financial Position and Need for Capital Requirements

We may fail to realize the anticipated benefits of our acquisition of AavantiBio, those benefits may take longer to realize than expected, and we may encounter significant integration difficulties.

On December 2, 2022, we completed our acquisition, or the Acquisition, of AavantiBio, Inc., or AavantiBio, and acquired AavantiBio’s pipeline programs which included cardiac and neuromuscular programs. Our ability to realize the anticipated benefits of the Acquisition will depend, to a large extent, on our ongoing ability to integrate AavantiBio and these cardiac and neuromuscular programs into our business and business strategy and realize anticipated growth opportunities and synergies. We may fail to realize some or all of the anticipated benefits of the Acquisition. Potential difficulties we may encounter in the integration process include the following:

the inability to successfully combine the businesses of Solid and AavantiBio in a manner that permits us to achieve the anticipated benefits from the Acquisition, which would result in the anticipated benefits of the Acquisition not being realized partly or wholly in the time frame currently anticipated or at all;

difficulties in managing the expanded operations of a more complex company following the Acquisition;

creation of uniform standards, controls, procedures, policies and information systems;

difficulties in assimilating AavantiBio employees in our business, in maintaining employee morale and in attracting and retaining key personnel; and

potential unknown liabilities, adverse consequences, or unforeseen increased expenses, delays or regulatory conditions associated with the Acquisition.

Also, we now possess certain liabilities and obligations, including contractual liabilities and obligations, that were assumed by us upon closing of the Acquisition. Further, it is possible that undisclosed, contingent or other liabilities, problems or obligations may arise in the future of which we were previously unaware. These disclosed and undisclosed liabilities could have an adverse effect on our business, financial condition and results of operations.

Any or all of these factors could decrease or delay the expected accretive effect of the Acquisition and negatively impact our stock price. As a result, it cannot be assured that we will be successful in the integration of AavantiBio with our business or that we will realize the benefits anticipated from the Acquisition or in the anticipated time frames or at all.

If we are unable to realize the full strategic and financial benefits anticipated from the Acquisition, our stockholders will have experienced substantial dilution of their ownership interests without receiving any commensurate benefit, or only receiving part of the commensurate benefit to the extent the combined company is able to realize only part of the benefits anticipated from the Acquisition and the related private placement.

We may be exposed to increased litigation, including stockholder litigation, which could have an adverse effect on our business and operations.

In the past, stockholders have initiated class action lawsuits against biotechnology companies following periods of volatility in the market prices of these companies’ stock. Such litigation, if instituted against us, could cause us to incur substantial costs and divert management’s attention and resources, which could have a material adverse effect on our business, financial condition and results of operations.

Risks related to our financial position and need for capital requirements

We have incurred significant net losses since inception and anticipate that we will continue to incur net losses for the foreseeable future and may never achieve or maintain profitability.

Since inception, we have incurred significant net losses. Our net ~~loss~~losses ~~was~~were $82 39.13 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025. Our net losses were $96124.07 million and $8696.0 million for the years ended December 31, ~~2023~~2024 and ~~2022~~2023, respectively. As of ~~September~~March 3031, ~~2024~~2025, we had an accumulated deficit of $~~740~~822.97 million. Prior to our acquisition of AavantiBio, Inc. (the "Acquisition,") we ~~had~~ devoted substantially all of our efforts to research and development, including clinical development of SGT-001, which we are no longer developing, and preclinical development of SGT-003, as well as to building out our management team and infrastructure. Following the Acquisition, we also began devoting efforts to preclinical development of our other Candidates, clinical development of SGT-003, as well as building out our ~~new~~ management team. We expect that it could be several years before we have a commercialized product, and we may never have a commercialized product. We expect to continue to incur significant expenses and see continued operating losses for the foreseeable future. We anticipate that our expenses will increase substantially if, and as, we:

•

continue to enroll patients in our ~~expanded~~ INSPIRE DUCHENNE trial and advance clinical development of SGT-003;

•

advance our other Candidates into clinical trials, including our planned Phase 1b clinical trial of SGT-212 in adult patients with FA;

•

continue research and preclinical development of our Candidates and adjacent technologies such as assays;

•

seek to identify additional Candidates;

•

engage in regulatory interactions with the FDA and other regulatory authorities;

•

submit regulatory filings relating to the development of our Candidates and seek marketing approvals for our Candidates that successfully complete clinical trials, if any;

•

establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval;

•

scale up our manufacturing processes and arrange manufacturing for larger quantities of our Candidates for preclinical and clinical development and potential commercialization;

•

maintain, expand, protect and enforce our intellectual property portfolio;

•

hire and retain additional clinical, quality control and scientific personnel;

•

build out new facilities or expand existing facilities to support our activities;

•

acquire or in-license other drugs, drug ~~Candidates~~candidates, technologies and intellectual property; and

•

add operational, financial and management information systems and personnel.

To become and remain profitable, we must develop and eventually commercialize one or more Candidates with significant market potential. This will require us to be successful in a range of challenging activities, and our expenses will increase substantially as we continue to enroll patients in and conduct the INSPIRE DUCHENNE trial, initiate enrollment in our planned Phase 1b clinical trial of SGT-212, and continue to develop our pipeline and complete ongoing and planned preclinical studies and clinical trials of our Candidates, obtain marketing approval for our Candidates, develop adjacent technologies such as assays, develop and validate commercial-scale manufacturing processes, manufacture, market and sell any future Candidates for which we may obtain marketing approval and satisfy any post-marketing requirements. Moreover, the manufacturing process requires materials which may fluctuate in cost or be limited or unavailable to us, as well as relationships with contract development and manufacturing organizations to facilitate the manufacturing process. We may never succeed in any of these activities and, even if we do, we may never generate revenue that is significant or large enough to achieve profitability. If we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, maintain our research and development efforts, expand our business or continue our operations. A decline in the value of our company also could cause stockholders to lose all or part of their investment.

We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the research and development of, conduct clinical trials of, and seek marketing approval for our Candidates. In addition, if we obtain marketing approval for our Candidates, we expect to incur significant expenses related to product sales, marketing, manufacturing and distribution. We also expect to continue to incur additional costs associated with operating as a public company. While we believe that our cash, cash equivalents and available-for-sale securities as of ~~September~~March 3031, ~~2024~~2025, will be sufficient to fund our operating expenses and capital requirements into ~~2026~~the first half of 2027, we have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently anticipate. In order to continue to operate our business beyond that time, we will need to raise additional funds. However, there can be no assurance that we will be able to generate funds on terms acceptable to us, on a timely basis, or at all. In addition, we anticipate that we will need additional funding to complete the development of our Candidates.

Our future capital requirements will depend on many factors, including:

•

the progress, costs and results of the INSPIRE DUCHENNE trial, our planned Phase 1b clinical trial of SGT-212 and any future clinical trials of our Candidates;

•

the costs, timing and outcome of regulatory review of our Candidates;

•

the scope, progress, results and costs of discovery, laboratory testing, manufacturing, preclinical development and clinical trials for our Candidates;

•

the costs associated with manufacturing and use of third-party manufacturers;

•

the revenue, if any, received from commercial sale of our Candidates, should any of our future Candidates receive marketing approval;

•

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

•

the outcome of any lawsuits filed against us;

•

the terms of our current and any future license agreements and collaborations;

•

the success of our collaboration with Ultragenyx;

our ability to establish and maintain additional strategic collaborations, licensing or other arrangements and the financial terms of such arrangements;

•

the payment or receipt of milestones, royalties and other collaboration-based revenues, if any;

•

33the extent to which we acquire or in-license other candidates, technologies and intellectual property; and

•

~~the~~if ~~extent~~and toas ~~which~~ we ~~acquire~~need orto adapt our business in~~-license~~ ~~other~~response ~~Candidates,~~to ~~technologies~~public ~~and~~health ~~intellectual~~emergencies ~~property;~~or pandemics and collateral consequences related thereto.

ifIdentifying potential candidates and asconducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to submit a BLA or obtain marketing approval and achieve product sales. In addition, our Candidates, if approved, may not achieve commercial success. Our product revenue, if any, will be derived from or based on sales of our Candidates that may not be commercially available for many years, if at all. Accordingly, we will need to ~~adapt~~continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all, and may be impacted by the economic climate and market conditions. Our ability to raise additional funds may be adversely impacted by general economic conditions, both inside and outside the U.S., including disruptions to, and instability and volatility in, ~~response~~the credit and financial markets in the U.S. and worldwide, heightened inflation, interest rate and currency rate fluctuations, global trade programs, tariffs and economic slowdown or recession as well as concerns related to public health emergencies or pandemics and geopolitical events, ~~such~~including ascivil ~~the~~or ~~recent~~political ~~COVID‑19~~unrest. ~~pandemic~~In addition, market instability and ~~collateral~~volatility, ~~consequences~~high ~~related~~levels ~~thereto~~of inflation and interest rate fluctuations may increase our cost of financing or restrict our access to potential sources of future liquidity. Alternatively, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans.

Identifying potential candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to submit a biologic license application, or BLA, or obtain marketing approval and achieve product sales. In addition, our Candidates, if approved, may not achieve commercial success. Our product revenue, if any, will be derived from or based on sales of our Candidates that may not be commercially available for many years, if at all. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all, and may be impacted by the economic climate and market conditions. Our ability to raise additional funds may be adversely impacted by general economic conditions, both inside and outside the U.S., including disruptions to, and instability and volatility in, the credit and financial markets in the U.S. and worldwide, heightened inflation, interest rate and currency rate fluctuations, and economic slowdown or recession as well as concerns related to public health emergencies or pandemics, such as the recent COVID-19 pandemic, and geopolitical events, including civil or political unrest. In addition, market instability and volatility, high levels of inflation and interest rate fluctuations may increase our cost of financing or restrict our access to potential sources of future liquidity. Alternatively, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans.

Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies or Candidates.

We may seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, ownership of our common stock will be diluted and the terms may include liquidation or other preferences that adversely affect the rights of our current stockholders. The incurrence of indebtedness would result in increased fixed payment obligations and could involve restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or Candidates, or grant licenses on terms unfavorable to us.

We have never generated revenue from product sales and do not expect to do so for the foreseeable future, if ever.

Our ability to generate revenue from product sales and achieve profitability depends on our ability, alone or with collaborative partners, to successfully complete the development of, and obtain the regulatory approvals necessary to commercialize our Candidates. We do not anticipate generating revenue from product sales for the foreseeable future, if ever. Our ability to generate future revenue from product sales depends heavily on our success in:

•

completing research and development of our Candidates in a timely and successful manner;

•

seeking and obtaining regulatory and marketing approvals for any of our Candidates for which we complete clinical trials;

•

launching and commercializing Candidates for which we obtain regulatory and marketing approval by establishing a sales force and marketing and distribution infrastructure or, alternatively, collaborating with a commercialization partner;

•

maintaining and enhancing a commercially viable, sustainable, scalable, reproducible and transferable manufacturing processes for our Candidates that is compliant with cGMPs;

•

establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate, in terms of cost, amount and quality, products and services to support clinical development and the commercial demand for our Candidates, if approved;

•

obtaining market acceptance, if and when approved, of our Candidates as a viable treatment option by patients, the medical community and third-party payors;

•

qualifying for coverage and adequate reimbursement by government and third-party payors for our Candidates both in the U.S. and internationally;

•

effectively addressing any competing technological and market developments;

•

negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter and performing our obligations under such arrangements;

•

maintaining, protecting, enforcing and expanding our portfolio of intellectual property rights, including patents, trademarks, trade secrets and know-how;

•

avoiding and defending against intellectual property infringement, misappropriation and other claims;

•

implementing additional internal systems and infrastructure, as needed; and

•

attracting, hiring and retaining qualified personnel.

Our limited operating history may make it difficult for our stockholders to evaluate the success of our business to date and to assess our future viability.

Our operations to date, ~~with respect to the development of SGT-001, which we are no longer developing, and SGT-003,~~ have been limited to organizing and staffing our company, business planning, raising capital, acquiring rights to our technology, conducting research and development activities, establishing research and development collaborations, ~~establishing arrangements for the manufacture of SGT-001 and SGT-003,~~ identifying ~~SGT-001~~ and ~~SGT-003~~acquiring asCandidates, ~~potential~~establishing ~~gene~~manufacturing ~~transfer~~arrangements ~~Candidates~~ and undertaking preclinical studies and clinical trials ~~of SGT-001 and SGT-003~~. ~~Following the Acquisition, we have expanded our operations to include the development of additional Candidates.~~ As a company, we have limited experience in clinical development. ~~and~~We we have not yet demonstrated the ability to complete clinical trials of any Candidate, obtain marketing approvals, manufacture at commercial-scale or conduct sales and marketing activities necessary for successful commercialization. Consequently, any predictions our stockholders make about our prospects may not be as accurate as they could be if we had a longer operating history or prior experience integrating acquired businesses into our existing business.

Public health emergencies or pandemics, including the recent COVID-19 pandemic, may affect our ability to initiate and complete current or future preclinical studies or clinical trials, disrupt regulatory activities, disrupt our manufacturing and supply chain or have other adverse effects on our business and operations.

Public health emergencies or pandemics, including the recent COVID-19 pandemic, could adversely affect our business, financial condition, results of operations, and prospects.

We and our third-party manufacturers for supply of drug product for our Candidates, and prospective contract research organizations, or CROs, may face disruptions as a result of such pandemics that may affect our ability to initiate and complete preclinical studies or clinical trials, including disruptions in procuring items that are essential for our research and development activities, including, for example, raw materials used in the manufacturing of drug product for our Candidates, and laboratory supplies for our current and future preclinical studies and clinical trials, in each case, for which there may be shortages because of ongoing efforts to address the outbreak. We and our third-party manufacturers, and prospective CROs, may face disruptions related to future clinical trials arising from delays in Investigational New Drug, or IND, enabling studies, manufacturing disruptions, and the ability to obtain necessary institutional review board or other necessary site approvals, as well as other delays at clinical trial sites.

We may also face difficulties recruiting or enrolling patients for our clinical trials if patients are affected by the recent COVID‑19 pandemic or other public health emergencies or are fearful of visiting or traveling to, or unable to travel to, clinical trial sites. For example, we experienced a few missed or postponed patient visits in our IGNITE DMD trial for SGT-001, which we are no longer developing, due to site closures early in the COVID-19 pandemic.

The response to public health emergencies or pandemics may redirect resources with respect to regulatory and intellectual property matters in a way that would adversely impact our ability to progress regulatory approvals and protect our intellectual property. In addition, we may face impediments to regulatory meetings and approvals due to measures intended to limit in-person interactions.

While the public health emergency declarations related to COVID-19 ended on May 11, 2023, the FDA retained a number of COVID-19 related policies. It is unclear how, if at all, these policies will impact our efforts to develop and commercialize our Candidates.

Unfavorable global economic conditions could harm our business, financial condition or results of operations.

Our results of operations could be harmed by general conditions in the global economy and in the global financial markets. A severe or prolonged economic downturn, including the impact of increased interest rates and inflation, ~~(such~~and asglobal ~~the~~trade ~~recent~~programs ~~rise~~and ~~in inflation in the United States)~~tariffs, could result in a variety of risks to our business, including weakened demand for our Candidates and our ability to raise additional capital when needed on acceptable terms, if at all. A weak or declining economy could strain our manufacturers, possibly resulting in manufacturing disruption, or cause delays in payments for our services by third-party payors or our future collaborators. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could harm our business.

We hold a portion of our cash and cash equivalents that we use to meet our working capital and operating expense needs in deposit accounts that could be adversely affected if the financial institutions holding such funds fail.

We hold a portion of our cash and cash equivalents that we use to meet our working capital and operating expense needs in deposit accounts at multiple financial institutions. The balance held in these accounts may exceed the Federal Deposit Insurance Corporation, or ("FDIC,") standard deposit insurance limit of $250,000. If a financial institution in which we hold such funds fails or is subject to significant adverse conditions in the financial or credit markets, we could be subject to a risk of loss of all or a portion of such uninsured funds or be subject to a delay in accessing all or a portion of such uninsured funds. Any such loss or lack of access to these funds could adversely impact our short-term liquidity and ability to meet our operating expense obligations, including payroll obligations.

For example, on March 10, 2023, Silicon Valley Bank, or ("SVB,") and Signature Bank, were closed by state regulators and the FDIC was appointed receiver for each bank. The FDIC created successor bridge banks and all deposits of SVB and Signature Bank were transferred to the bridge banks under a systemic risk exception approved by the United States Department of the Treasury, the Federal Reserve and the FDIC. If financial institutions in which we hold funds for working capital and operating expenses were to fail, we cannot provide any assurances that such governmental agencies would take action to protect our uninsured deposits or investments in a similar manner.

We also maintain investment accounts with other financial institutions in which we hold our investments and marketable securities and, if access to the funds we use for working capital and operating expenses is impaired, we may not be able to sell investments or transfer funds from our investment accounts to other operating accounts on a timely basis sufficient to meet our operating expense obligations.

~~Risks related to the development of our Candidates~~34

~~Our~~Risks ~~gene~~Related ~~transfer Candidates are based on novel technology, which makes it difficult~~ to ~~predict~~ the ~~time~~Development ~~and cost~~ of ~~development and of subsequently obtaining regulatory approval. To~~ our ~~knowledge, only a limited number of gene transfer products have been approved for commercialization in the United States and the European Union.~~Candidates

WeOur ~~are~~pipeline ~~evaluating SGT-003 for the treatment~~ of ~~Duchenne~~gene ~~and~~transfer ~~are advancing a portfolio of programs for the treatment of other rare genetic diseases, and our future success depends on our successful development of these~~ Candidates. ~~Our~~utilize ~~risk~~novel ~~of failure is high. We have experienced problems and delays in developing SGT-001~~technology, which wemakes ~~are~~it nodifficult ~~longer~~to ~~developing,~~predict ~~and may in~~ the ~~future~~time ~~experience~~and ~~problems~~cost orof ~~delays~~development ~~in developing Candidates. Any such problems or delays would cause unanticipated costs,~~ and ~~any~~of ~~development~~subsequently ~~problems~~obtaining ~~may~~regulatory ~~not be solved~~approval. ~~For~~To ~~example, we or another party may uncover a previously unknown risk associated with~~ our ~~Candidates~~knowledge, ~~the~~only ~~adeno-associated~~a ~~virus,~~limited ornumber ~~AAV, capsid, construct or other issues resulting in toxicity or lack~~ of ~~efficacy~~gene ~~that~~transfer ~~may~~products behave ~~more~~been ~~problematic~~approved ~~than we currently believe and this may prolong the period of observation required~~ for ~~obtaining,~~commercialization ~~or result~~ in the ~~failure~~United toStates ~~obtain,~~and ~~regulatory~~the ~~approval~~European ~~or may necessitate additional clinical testing~~Union.

InOur ~~addition,~~future ~~our~~success ~~ability~~depends toon ~~conduct and complete~~ our ~~preclinical~~successful development ~~testing~~of ~~and studies is contingent on~~ our ~~ability~~Candidates. toOur ~~source~~risk ~~animals~~of ~~and~~failure ~~other~~is ~~supplies~~high. ~~required~~We ~~for~~have ~~the~~experienced ~~conduct~~problems ~~of such testing~~ and ~~studies~~delays ~~and~~in ~~the~~developing ~~performance~~SGT-001, ofwhich ~~animal models. If~~ we are ~~unable~~no tolonger ~~obtain~~developing, ~~all necessary animals~~ and ~~other~~may ~~supplies~~in ~~required for~~ the ~~conduct~~future ofexperience ~~our~~problems ~~preclinical testing and studies,~~ or ~~the~~delays ~~animal~~in ~~models~~developing doCandidates. ~~not~~Any ~~perform~~such asproblems ~~expected,~~or wedelays ~~may~~would because ~~unable~~unanticipated tocosts, ~~complete~~and ~~such~~any ~~preclinical~~ development ~~testing~~problems ~~and~~may ~~studies~~not inbe ~~a timely manner or at all~~solved. For example, ~~some~~we ~~of our IND-enabling toxicology and other studies require certain non-human primates,~~ or ~~NHPs,~~another ~~that~~party may beuncover ~~imported~~a ~~from~~previously ~~countries~~unknown inrisk ~~which~~associated ~~trade~~with ~~relation~~our ~~with~~Candidates, the ~~U.S.~~adeno-associated ~~are~~virus or("AAV") ~~may~~capsid, ~~become~~construct ~~challenging~~ or ~~through~~other ~~vendors~~issues ~~who~~resulting ~~may~~in ~~not~~toxicity ~~be able to timely source certain NHPs~~ or atlack ~~all, which may impair our ability to complete preclinical development testing and studies to support IND or similar applications or delay submission~~ of ~~such applications. Additionally, we may fail to demonstrate adequate Candidate~~ efficacy ~~and/or~~that ~~safety as required by regulatory authorities. We~~ may ~~fail~~be tomore ~~access~~problematic ~~relevant,~~than ~~adequate,~~we orcurrently ~~necessary~~believe ~~animal models, including genetic models of disease~~ and ~~non-human~~this ~~primates in particular, for use in such studies as requested by regulatory authorities. We~~ may ~~also~~prolong ~~experience substantial delays as a result of our reliance on CROs to conduct all animal model experimentation necessary to assess~~ the ~~efficacy~~period ~~and safety~~ of ~~our~~observation ~~Candidates.~~required ~~Any~~for ofobtaining, ~~these~~or ~~factors may~~ result in ~~delays~~the tofailure ~~Candidate progression, inability~~ to obtain, regulatory approval, ~~and/~~or ~~substantial~~may ~~increases~~necessitate inadditional ~~Candidate~~clinical ~~development costs~~testing.

In addition, ~~the~~our ~~product~~ability ~~specifications~~to conduct and ~~the~~complete ~~clinical~~our ~~trial~~preclinical ~~requirements~~development oftesting ~~the~~and ~~FDA,~~studies ~~the~~is ~~European~~contingent ~~Commission,~~on ~~the~~our ~~European~~ability ~~Medicines~~to ~~Agency,~~source oranimals and other supplies required for the ~~EMA,~~conduct ~~and~~of ~~other~~such ~~regulatory~~testing ~~authorities~~and studies and the ~~criteria~~performance ~~these~~of ~~regulators~~animal ~~use~~models. If we are unable to ~~determine~~obtain ~~the~~all ~~safety~~necessary animals and ~~efficacy~~other ofsupplies arequired ~~product~~for ~~candidate~~the ~~vary~~conduct ~~substantially~~of ~~according~~our topreclinical ~~the~~testing ~~type~~and studies, ~~complexity~~or the animal models do not perform as expected, ~~novelty~~we ~~and~~may ~~intended~~be ~~use~~unable to complete such preclinical development testing and ~~market~~studies ofin ~~such~~a ~~product~~timely ~~candidate~~manner or at all. ~~The~~For ~~regulatory~~example, ~~approval~~some ~~process~~of ~~for~~our ~~novel~~IND-enabling ~~product~~toxicology ~~candidates~~and ~~such~~other asstudies ~~ours~~require iscertain ~~unclear~~non-human ~~and~~primates ~~can~~("NHPs") that may be ~~more~~imported ~~expensive~~from ~~and~~countries ~~take~~in ~~longer~~which ~~than~~trade ~~for~~relation ~~other,~~with ~~better~~the ~~known~~U.S. are or ~~more~~may ~~extensively~~become ~~studied~~challenging ~~product~~or ~~candidates.~~through Tovendors ~~our~~who ~~knowledge,~~may ~~only~~not abe ~~limited~~able ~~number~~to oftimely ~~gene~~source ~~transfer~~certain ~~products~~NHPs ~~have~~or ~~been~~at ~~approved~~all, ~~for~~which ~~commercialization~~may inimpair ~~the~~our ~~United~~ability ~~States~~to complete preclinical development testing and ~~the~~studies ~~European~~to ~~Union.~~support AsIND aor ~~result~~similar applications or delay submission of such applications. Additionally, itwe ismay ~~difficult~~fail to ~~determine~~demonstrate ~~how~~adequate ~~long~~Candidate itefficacy ~~will~~and/or ~~take~~safety oras ~~how~~required ~~much~~by itregulatory ~~will~~authorities. ~~cost~~We may fail to ~~obtain~~access ~~regulatory~~relevant, ~~approvals~~adequate, ~~for~~or ~~our~~necessary ~~gene~~animal ~~transfer~~models, ~~Candidates~~including ingenetic ~~either~~models ~~the~~of ~~United~~disease ~~States~~and ornon-human ~~the~~primates ~~European~~in ~~Union~~particular, iffor atuse ~~all.~~in ~~Approvals~~such studies as requested by ~~the~~regulatory ~~European~~authorities. ~~Commission~~We may ~~not~~also beexperience ~~indicative~~substantial delays as a result of ~~what~~our reliance on CROs to conduct all animal model experimentation necessary to assess the ~~FDA~~efficacy and safety of our Candidates. Any of these factors may ~~require~~result ~~for~~in delays to Candidate progression, inability to obtain regulatory approval, and/or ~~vice~~substantial ~~versa~~increases in Candidate development costs.

36In addition, the product specifications and the clinical trial requirements of the FDA, the European Commission, the EMA and other regulatory authorities and the criteria these regulators use to determine the safety and efficacy of a product candidate vary substantially according to the type, complexity, novelty and intended use and market of such product candidate. The regulatory approval process for novel product candidates such as ours is unclear and can be more expensive and take longer than for other, better known or more extensively studied product candidates. To our knowledge, only a limited number of gene transfer products have been approved for commercialization in the United States and the European Union. As a result, it is difficult to determine how long it will take or how much it will cost to obtain regulatory approvals for our gene transfer Candidates in either the United States or the European Union, if at all. Approvals by the European Commission may not be indicative of what the FDA may require for approval and vice versa.

Our gene transfer Candidates may cause undesirable side effects or have other properties that could delay or prevent their clinical development, regulatory approval, limit their commercial potential or result in significant negative consequences following any potential marketing approval.

In the second quarter of 2024, patient dosing commenced in our INSPIRE DUCHENNE trial. Our other current Candidates have not yet been studied in human patients. During the conduct of clinical trials, patients may experience changes in their health, including illnesses, injuries, discomforts or a fatal outcome. Often, it is not possible to determine whether the Candidate being studied caused these conditions. For instance, we reported a serious adverse event in IGNITE DMD, which resulted in a clinical hold in November 2019, which has since been resolved. In April 2021, a patient treated with SGT-001 in IGNITE DMD experienced a systemic inflammatory response classified as a serious adverse event and considered by the investigator to be drug related.

In addition, it is possible that as we test Candidates in larger, longer and more extensive clinical programs, or as use of these Candidates becomes more widespread if they receive regulatory approval, illnesses, injuries, discomforts and other adverse events that were observed in earlier clinical trials, as well as conditions that did not occur or went undetected in previous clinical trials, will be reported by subjects. Many times, side effects are only detectable after investigational products are tested in large-scale, Phase 3 clinical trials or, in some cases, after they are made available to patients on a commercial scale after approval. If additional clinical experience indicates that a Candidate has side effects or causes serious or life-threatening side effects, the development of the Candidate may fail or be delayed, or, if the Candidate has received regulatory approval, such approval may be withdrawn.

There have been several significant adverse side effects in gene therapy treatments in the past, including reported cases of leukemia and death seen in other clinical trials. The FDA convened the Cellular, Tissue, and Gene Therapies Advisory Committee in September 2021 to discuss toxicity risks of AAV based gene therapy products and discussed risks including oncogenicity risks due to capsid genome integration, hepatotoxicity, thrombotic microangiopathy, and neurotoxicity (especially related to dorsal root ganglion toxicity). While new recombinant capsids have been developed with the intent to reduce these side effects, gene therapy is still a relatively new approach to disease treatment and additional adverse side effects could develop. There have been reports of significant adverse side effects, including muscle weakness and myocarditis, in clinical trials of other gene therapy treatments for Duchenne that may be related to the type and location of the specific gene mutation causing the disease. One clinical trial sponsor reported a death, preceded by hypovolemia and cardiogenic shock, of a non-ambulatory Duchenne subject with advanced disease and cardiac dysfunction. There also is the potential risk of delayed adverse events following exposure to gene therapy products due to persistent biologic activity of the genetic material or other components of products used to carry the genetic material. Possible adverse side effects that may occur with treatment with gene therapy products include an immunologic reaction early after administration that could substantially limit the effectiveness of the treatment or represent safety risks for patients. Additionally, in previous clinical trials involving AAV capsids for gene therapy, some subjects experienced the development of a positive ELISPOT test associated with T‑cell responses, which is of unclear clinical translatability. If T-cells are activated, the cellular immune response system may trigger the removal of transduced cells. If our gene transfer Candidates demonstrate a similar effect or other undesirable side effects, we may decide or be required to halt or delay further clinical development of our Candidates involving AAV capsids for gene therapy.

Adverse side effects may be observed following administration of any AAV gene therapy, including SGT-003 or other Candidates. Not all contemplated AAV delivery systems have been validated in human clinical trials previously, such as AAV‑SLB101, which is a novel capsid. If a delivery system does not meet the safety criteria or cannot provide the desired efficacy results, then we may be forced to suspend or terminate our development of SGT-003 or other Candidates. If certain adverse side effects were to occur in the future and we are unable to demonstrate that they were not caused by the administration process or related procedures, the FDA, the European Commission, the EMA or other regulatory authorities could order us to cease further development of, or deny approval of, SGT-003 or other Candidates for any or all targeted indications. Even if we are able to demonstrate that any serious adverse events are not product-related, such occurrences could affect patient recruitment or the ability of enrolled patients to complete the clinical trial. Patients will also create antibodies to the AAV capsid and a second administration of gene transfer might not be safe or successful.

Additionally, if one or more of our Candidates receive marketing approval, the FDA could require us to adopt a Risk Evaluation and Mitigation Strategy, or ("REMS,") to ensure that the benefits outweigh the risks, which may include, among other things, a medication guide outlining the risks of the product for distribution to patients and a communication plan to health care practitioners. Furthermore, if we or others later identify undesirable side effects caused by our Candidates, several potentially significant negative consequences could result, including:

•

regulatory authorities may suspend or withdraw approvals of such a Candidate;

•

regulatory authorities may require additional warnings on the label;

•

we may be required to change the way a Candidate is administered or conduct additional clinical trials;

•

we could be sued and held liable for harm caused to patients; and

•

our reputation may suffer.

37One of our prior clinical trials had been placed on clinical hold by the FDA in the past, and we cannot guarantee that similar events will not happen in ongoing, planned and future clinical trials for our Candidates.

~~One~~In ofNovember ~~our~~2019, ~~prior~~the ~~clinical~~FDA ~~trials~~placed ~~had~~a ~~been~~clinical ~~placed~~hold on ~~clinical~~SGT-001 ~~hold~~following bya serious adverse event in IGNITE DMD. The third patient in the ~~FDA~~2E14 vg/kg cohort of IGNITE DMD, dosed in late October 2019, experienced a serious adverse event deemed related to the ~~past~~study drug that was characterized by complement activation, thrombocytopenia, decrease in red blood cell count, acute kidney injury, and cardio-pulmonary insufficiency. In April 2021, an eighth patient was treated with SGT-001. The patient experienced a systemic inflammatory response which has since fully resolved. The event was classified as a serious adverse event and considered by the investigator to be drug related. While SGT-003 utilizes a different capsid than SGT-001 and includes other changes to the construct and manufacturing process to help avoid or mitigate any such events, we cannot guarantee that similar serious adverse events or clinical holds will not happen in ongoing and future clinical trials ~~for~~of SGT-003. We also cannot guarantee that similar serious adverse events or clinical holds will not happen in planned and future clinical trials of any of our other Candidates.

In November 2019, the FDA placed a clinical hold on SGT-001 following a serious adverse event in IGNITE DMD. The third patient in the 2E14 vg/kg cohort of IGNITE DMD, dosed in late October 2019, experienced a serious adverse event deemed related to the study drug that was characterized by complement activation, thrombocytopenia, decrease in red blood cell count, acute kidney injury, and cardio-pulmonary insufficiency. In April 2021, an eighth patient was treated with SGT-001. The patient experienced a systemic inflammatory response which has since fully resolved. The event was classified as a serious adverse event and considered by the investigator to be drug related. While SGT-003 utilizes a different capsid than SGT-001 and includes other changes to the construct and manufacturing process to help avoid or mitigate any such events, we cannot guarantee that similar serious adverse events or clinical holds will not happen in future clinical trials.

Delays in the completion of, or our inability to conduct, any clinical trial of SGT-003 or any other Candidate, as a result of similar serious adverse events or clinical holds or otherwise, will increase our costs, slow down or cease our Candidate development and approval process and delay or potentially jeopardize our ability to commence product sales and generate revenue. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of SGT-003 or other Candidates.

We have never completed a clinical trial and may be unable to do so for any Candidate, including SGT-003 and other Candidates.

We are early in our development efforts and we have never completed a clinical trial. In the second quarter of 2024, patient dosing commenced in our INSPIRE DUCHENNE trial. Our other current Candidates are still in preclinical development. Preclinical studies involve a lengthy and expensive process with an uncertain outcome. There are many potential preclinical models to test for different disease states, and we could fail to choose the best or a predictive preclinical model to determine proof of concept and potential safety and efficacy of our Candidates. We may decide to suspend further testing on our Candidates or technologies if, in the judgment of our management and advisors, the preclinical test results do not support further development.

We will need to successfully initiate our planned clinical trials and complete our ongoing clinical trials in order to obtain FDA approval to market SGT-003, SGT-212 and other Candidates. We have limited experience in preparing, submitting and prosecuting regulatory submissions, and have not previously submitted a BLA for any Candidate. We cannot be sure that submission of an IND will result in the FDA allowing clinical trials to begin or to begin as proposed, or that, once begun, issues will not arise that suspend or terminate such clinical trials. Carrying out later-stage clinical trials and the submission of a successful BLA is a complicated process. This may be particularly true for design of a pivotal trial for the treatment of Duchenne as the FDA has not given clear guidance as to the necessary endpoints for approval of a treatment for Duchenne. In addition, we cannot be certain how many clinical trials of SGT-003, SGT-212 or other Candidates will be required or how such trials should be designed. Consequently, we may be unable to successfully and efficiently execute and complete necessary clinical trials in a way that leads to BLA submission and approval of SGT-003, SGT-212 or other Candidates. We may require more time and incur greater costs than our competitors and may not succeed in obtaining regulatory approvals of Candidates that we develop. Failure to commence or complete, or delays in, clinical trials, could prevent us from or delay us in commercializing SGT-003, SGT-212 and other Candidates.

Success in preclinical studies or early clinical trials may not be indicative of results obtained in later trials.

Results from preclinical studies or early clinical trials are not necessarily predictive of results from future clinical ~~trial~~trials ~~results~~ and are not necessarily indicative of final results. Our preclinical studies for certain Candidates in animals have been limited. ~~In the second quarter of 2024, patient dosing commenced in our INSPIRE DUCHENNE trial. We have not yet dosed human subjects with any of our other current Candidates.~~ There is a high failure rate for gene therapy and biologic products proceeding through clinical trials. Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials even after achieving promising results in preclinical testing and earlier-stage clinical trials. Data obtained from preclinical studies and clinical ~~activities~~trials are subject to varying interpretations, which may delay, limit or prevent regulatory approval. We also may experience regulatory delays or rejections as a result of many factors, including due to changes in regulatory policy during the period of our Candidate development. Our Candidates may fail to show the desired safety and efficacy in clinical development despite positive results in preclinical studies. This failure could cause us to abandon any of our Candidates.

From time to time, we may announce or publish preliminary or interim data from clinical trials. Positive preliminary or interim data may not be predictive of such trial’s subsequent or overall results. Preliminary or interim data are subject to the risk that one or more of the outcomes may materially change as more data becomes available. Additionally, preliminary or interim data are subject to the risk that one or more of the biologic or clinical outcomes may materially change as patient enrollment continues and more patient data becomes available. Therefore, positive preliminary or interim data in any ongoing clinical trial, including the INSPIRE DUCHENNE trial, may not be predictive of such results in the completed trial. We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully evaluate all data. As a result, preliminary or interim data that we report may differ from future results from the clinical trials, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Preliminary or interim data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary or interim data we previously published. As a result, preliminary or interim data should be viewed with caution until the final data are available. Material adverse changes in the final data compared to preliminary or interim data could significantly harm our business prospects.

We may encounter substantial delays in our clinical trials or we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities.

Before obtaining marketing approval from regulatory authorities for the sale of our Candidates, we must conduct extensive clinical trials to demonstrate the safety and efficacy of the Candidate for its intended indications. Clinical testing is expensive, time‑ consuming and uncertain as to outcome. We cannot guarantee that any clinical trials will be conducted as planned or completed on schedule, if at all. A failure of one or more clinical trials can occur at any stage of testing. Events that may prevent successful or timely completion of clinical development include:

•

delays in obtaining animals in sufficient quantities to run our preclinical studies;

•

delays in reaching a consensus with regulatory authorities on trial design;

•

delays in reaching agreement with the appropriate external parties on dose escalation;

•

delays in enrolling patients in clinical trials;

•

delays in reaching agreement on acceptable terms with prospective CROs and clinical trial sites;

•

delays in opening clinical trial sites or obtaining required institutional review board or independent ethics committee approval at each clinical trial site;

•

delays in recruiting suitable subjects to participate in our clinical trials, including because such trials have restrictive eligibility criteria or may be placebo-controlled trials and patients are not guaranteed to receive treatment with our Candidates, or as a result of alternative therapies or competing trials;

•

difficulty in finding suitable animal models to demonstrate a disease specific phenotype;

•

failure by us, any CROs we engage or any other third parties to adhere to clinical trial requirements;

•

failure to perform in accordance with FDA good clinical practices, or ("GCPs,") or applicable regulatory guidelines in the European Union and other countries;

•

delays in the testing, validation, manufacturing and delivery of our Candidates to the clinical sites, including delays by third parties with whom we have contracted to perform certain of those functions;

•

delays in subjects completing participation in a trial or returning for post-treatment follow-up;

•

clinical trial sites or subjects dropping out of a trial;

•

selection of clinical endpoints that require prolonged periods of clinical observation or analysis of the resulting data;

•

imposition of a clinical hold by regulatory authorities as a result of a serious adverse event, or after an inspection of our clinical trial operations, trial sites or manufacturing facilities or otherwise;

•

occurrence of serious adverse events in trials of the same class of agents conducted by other sponsors;

•

delays as a result of public health emergencies or pandemics, ~~such as the recent COVID-19 pandemic~~ or ~~from the outbreak of another pandemic or contagious disease or~~ other global instability ~~could delay the initiation or rate of completion of any clinical trial~~; or

•

changes in regulatory requirements and guidance that require amending or submitting new clinical protocols.

Additionally, if the results of any clinical trials are inconclusive or if there are safety concerns or serious adverse events associated with our Candidates, we may:

•

interrupt or halt clinical development;

•

be delayed or fail in obtaining marketing approval for our Candidates;

•

obtain approval for indications or patient populations that are not as broad as we intended or desired;

•

obtain approval with labeling that includes significant use or distribution restrictions or safety warnings;

•

be subject to changes in the way our products, if approved, are administered;

•

be required to perform additional clinical trials to support approval or be subject to additional post-marketing testing requirements;

•

have regulatory authorities withdraw, or suspend, their approval of the product or impose restrictions on its distribution in the form of a modified REMS;

•

be sued and held liable for harm caused to patients; or

•

experience damage to our reputation.

In addition, the FDA’s and other regulatory authorities’ policies with respect to clinical trials may change and additional government regulations may be enacted. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies governing clinical trials, our development plans may be impacted. For example, in December 2022, with the passage of Food and Drug Omnibus Reform Act, or FDORA, Congress required sponsors to develop and submit a diversity action plan, or DAP, for each Phase 3 clinical trial or any other “pivotal study” of a new drug or biological product. These plans are meant to encourage the enrollment of more diverse patient populations in late-stage clinical trials of FDA-regulated products. In June 2024, as mandated by FDORA, the FDA issued draft guidance outlining the general requirements for DAPs. Unlike most guidance documents issued by the FDA, the DAP guidance when finalized will have the force of law because FDORA specifically dictates that the form and manner for submission of DAPs are specified in FDA guidance. Similarly, the regulatory landscape related to clinical trials in the EU recently evolved. If we are not able to adapt to these and other changes in existing requirements or the adoption of new requirements or policies governing clinical trials, our development plans may be impacted.

Our product development costs will increase if we experience delays in testing or marketing approvals. In addition, if we make manufacturing or other changes to our Candidates, we may need to conduct additional studies to bridge our modified Candidates to earlier versions. We do not know whether any of our preclinical studies or clinical trials will begin as planned, will need to be restructured or will be completed on schedule, or at all. We may also determine to change the design or protocol of one or more of our clinical trials, which we have done in the past and which could result in delays. Significant preclinical study or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our Candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our Candidates.

If our third-party clinical trial vendors fail to comply with strict regulations, any clinical trials for our Candidates may be delayed or unsuccessful.

We do not have the personnel capacity to conduct or manage the clinical trials that will be necessary for the development of our Candidates. For our INSPIRE DUCHENNE trial we are relying, and for any planned and future clinical trials we expect we will rely on third parties to assist us in managing, monitoring and conducting our clinical trials. If these third parties fail to comply with applicable regulations or do not adequately fulfill their obligations under the terms of our agreements with them, we may not be able to enter into alternative arrangements without undue delay or additional expenditures and, therefore, clinical trials for SGT-003 or other Candidates may be delayed or unsuccessful.

Furthermore, the FDA can be expected to inspect some or all of the clinical sites participating in our clinical trials to determine if our clinical trials are being conducted according to GCPs. If the FDA determines that these clinical sites are not in compliance with applicable regulations, we may be required to delay, repeat or terminate the clinical trials.

We may find it difficult to enroll patients in our clinical trials, which could delay or prevent us from proceeding with clinical trials of SGT-003, SGT-212 or our other Candidates.

Identifying and qualifying patients to participate in any clinical trials of SGT-003, SGT-212 and our other Candidates are critical to our success. Because of our primary focus on rare diseases, we may have difficulty enrolling a sufficient number of eligible patients. The timing of any clinical trials depends on our ability to recruit patients to participate as well as complete required follow-up periods. If patients are unwilling or unable to participate in our gene therapy clinical trials, including because of negative publicity from adverse events related to our Candidates, other approved therapies, or due to competitive clinical trials or approvals for similar patient populations, clinical trials in products employing our capsid or our platform or for other reasons, the timeline for recruiting patients, conducting clinical trials and obtaining regulatory approval of SGT-003, SGT-212 or other Candidates may be delayed. We may also experience delays if patients withdraw from the clinical trial or do not complete the required monitoring period. Furthermore, we may face difficulties in recruiting patients to enroll in, or once enrolled, retaining patients in future clinical trials if they or their caretakers are affected by public health emergencies or pandemics or are fearful of traveling to, or are unable to travel to, our clinical trial sites because of public health emergencies or pandemics or other unforeseen events. These delays could result in increased costs, delays in advancing SGT-003 or other Candidates, delays in testing the effectiveness of our Candidates or termination of clinical trials altogether.

unwilling or unable to participate in our gene therapy clinical trials, including because of negative publicity from adverse events related to our Candidates, other approved therapies, or due to competitive clinical trials or approvals for similar patient populations, clinical trials in products employing our capsid or our platform or for other reasons, the timeline for recruiting patients, conducting clinical trials and obtaining regulatory approval of SGT-003 or other Candidates may be delayed. We may also experience delays if patients withdraw from the clinical trial or do not complete the required monitoring period. Furthermore, we may face difficulties in recruiting patients to enroll in, or once enrolled, retaining patients in future clinical trials if they or their caretakers are affected by public health emergencies or pandemics, such as the recent COVID-19 virus or are fearful of traveling to, or are unable to travel to, our clinical trial sites because of public health emergencies or pandemics or other unforeseen events. These delays could result in increased costs, delays in advancing SGT-003 or other Candidates, delays in testing the effectiveness of our Candidates or termination of clinical trials altogether.

We may not be able to identify, recruit and enroll a sufficient number of patients, or those with required or desired characteristics, to complete any clinical trials in a timely manner. Patient enrollment and trial completion is affected by many factors, including:

•

size of the patient population and the process for identifying subjects;

•

design of the trial protocol;

•

eligibility and exclusion criteria, including age, size and functional ability and pre-existing antibodies to AAV capsids that preclude subjects from being able to receive AAV-mediated gene transfer;

•

restrictions on our ability to conduct clinical trials, including full and partial clinical holds on ongoing or planned clinical trials;

•

perceived risks and benefits of the Candidate under study;

•

perceived risks and benefits of gene therapy-based approaches to the treatment of diseases;

•

release or disclosure of data from our completed or ongoing clinical trials;

•

availability of competing therapies and clinical trials;

•

severity of the disease;

•

proximity and availability of clinical trial sites for prospective subjects;

•

ability to obtain and maintain subject consent;

•

risk that enrolled subjects will drop out before completion of the trial;

•

patient referral practices of physicians;

•

ability to monitor subjects adequately during and after treatment; and

•

in the case of pivotal trials, the risk that patients may opt not to enroll because they are not assured treatment with our Candidate.

If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies governing clinical trials, our development plans may be impacted. For example, in December 2022, with the passage of FDORA, Congress required sponsors to develop and submit a diversity action plan for each Phase 3 clinical trial or any other “pivotal study” of a new drug or biological product. These plans are meant to encourage the enrollment of more diverse patient populations in late-stage clinical trials of FDA-regulated products. ~~Similarly,~~In ~~the~~June ~~regulatory~~2024, ~~landscape~~as ~~related~~mandated toby ~~clinical~~FDORA, ~~trials in~~ the EUFDA ~~recently~~issued ~~evolved.~~draft ~~The~~guidance EUoutlining ~~Clinical Trials Regulation, or CTR, which was adopted in April 2014 and repeals~~ the EUgeneral ~~Clinical~~requirements ~~Trials~~for ~~Directive, became applicable on January 31, 2022~~DAPs. ~~The~~Unlike ~~CTR~~most ~~aims~~guidance todocuments ~~simplify~~issued ~~and~~by ~~streamline~~ the ~~authorization~~FDA, ~~conduct~~the ~~and~~DAP ~~transparency~~guidance ofwhen ~~clinical~~finalized ~~trials~~will inhave the ~~EU.~~force Weof ~~have~~law ~~not~~because ~~previously~~FDORA ~~secured~~specifically ~~authorization~~dictates tothat ~~conduct clinical studies in~~ the ~~European~~form ~~Union pursuant to the CTR~~ and, ~~accordingly,~~manner ~~there~~for issubmission aof ~~risk~~DAPs ~~that we may be delayed in commencing such studies. If we~~ are ~~slow~~specified ~~or unable to adapt to changes~~ in ~~existing~~FDA ~~requirements or the adoption of new requirements or policies governing clinical trials, our development plans may be impacted~~guidance.

~~Our~~We ~~ability~~plan to ~~successfully~~conduct ~~initiate,~~clinical ~~enroll~~trials ~~and~~at ~~complete~~sites aoutside ~~clinical~~the ~~trial~~United States. The FDA may not accept data from trials conducted in ~~any~~such ~~foreign~~locations, ~~country~~and isthe ~~subject~~conduct toof ~~numerous~~trials ~~risks~~outside ~~unique~~the toUnited ~~conducting~~States ~~business~~could insubject ~~foreign~~us ~~countries,~~to ~~including:~~additional delays and expense.

~~different~~We ~~standards~~plan ~~for~~to conduct clinical trials, including the ~~conduct~~INSPIRE DUCHENNE trial, with one or more trial sites that are located outside the United States. Although the FDA may accept data from clinical trials conducted at sites outside the United States, acceptance of these data is subject to conditions imposed by the FDA. For example, where data from foreign clinical trial sites are not intended to serve as the sole basis for approval in the United States, the FDA will not accept the data as support for a marketing application unless the clinical trial was well designed and conducted in accordance with GCP requirements. The FDA must also be able to validate the data from the trial through an onsite inspection, if necessary. Where data from foreign clinical trial sites are intended to serve as the sole basis for marketing approval in the United States, the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the U.S. population and U.S. medical practice; (ii) the trials were performed by clinical investigators of recognized competence and pursuant to GCP regulations; and (iii) the data may be considered valid without the need for an on-site inspection by the FDA, or if the FDA considers such inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means. In addition, these clinical trials are subject to the applicable local laws of the jurisdictions where the trials are conducted. There can be no assurance that the FDA will accept data from trials conducted outside of the United States. If the FDA does not accept the data from any trial that we conduct outside the United States, it would likely result in the need for additional trials, which would be costly and time-consuming and could delay or permanently halt our development of the applicable product candidates.

~~absence~~In inaddition, ~~some~~conducting ~~countries~~clinical oftrials ~~established~~outside ~~groups~~the ~~with~~United ~~sufficient~~States ~~regulatory~~could ~~expertise~~have ~~for~~a ~~review~~significant ofadverse ~~gene~~impact ~~therapy~~on ~~protocols;~~us. Risks inherent in conducting international clinical trials include:

•

41clinical practice patterns and standards of care that vary widely among countries;

•

~~difficulty~~non-U.S. inregulatory ~~identifying~~authority ~~and~~requirements ~~partnering~~that ~~with~~could ~~qualified~~restrict ~~local~~or ~~consultants,~~limit ~~physicians~~our ~~and~~ability ~~partners~~to conduct our clinical trials; ~~and~~

•

~~the~~compliance ~~potential burden of complying~~ with ~~a variety of~~ foreign ~~laws~~manufacturing, ~~medical standards and regulatory requirements~~customs, ~~including~~shipment ~~the regulation of pharmaceutical~~ and ~~biotechnology~~storage ~~research and products.~~requirements;

•

~~Even~~administrative ifburdens weof ~~complete~~conducting ~~the necessary~~ clinical trials, weunder ~~cannot~~multiple ~~predict~~non-U.S. ~~when, or if, we will obtain~~ regulatory ~~approval~~authority toschema; ~~commercialize our Candidates and the approval may be for narrower indication than we seek.~~

•

Weforeign ~~cannot~~exchange ~~commercialize~~fluctuations; our Candidates until the appropriate regulatory authorities have reviewed and approved the Candidate. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state and local statutes and regulations require the expenditure of substantial time and financial resources and we may not be able to obtain the required regulatory approvals. Even if our Candidates meet their safety and efficacy endpoints in clinical trials, the regulatory authorities may not complete their review processes in a timely manner, or we may not be able to obtain regulatory approval. Additional delays may result if an FDA advisory committee or other regulatory authority recommends non-approval or restrictions on approval. In addition, we may experience delays or rejections based upon additional government regulation from future legislation or administrative action or changes in regulatory authority policy during the period of product development, clinical trials and the regulatory review process.

•

~~Further,~~diminished ~~under~~protection ~~the Pediatric Research Equity Act~~ of ~~2003,~~intellectual aproperty ~~BLA or supplement to a BLA for certain biological products must contain data to assess the safety and effectiveness of the biological product~~ in ~~all~~some ~~relevant~~countries; ~~pediatric subpopulations~~ and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective, unless the sponsor receives a deferral or waiver from the FDA. A deferral may be granted for several reasons, including a finding that the product or therapeutic Candidate is ready for approval for use in adults before pediatric trials are complete or that additional safety or effectiveness data needs to be collected before the pediatric trials begin. The applicable legislation in the European Union also requires sponsors to either conduct clinical trials in a pediatric population in accordance with a Pediatric Investigation Plan approved by the Pediatric Committee of the EMA or to obtain a waiver or deferral from the conduct of these studies by this Committee. For any of our Candidates for which we are seeking regulatory approval in the U.S. or the European Union, we cannot guarantee that we will be able to obtain a waiver or alternatively complete any required studies and other requirements in a timely manner, or at all, which could result in associated reputational harm and subject us to enforcement action.

•

interruptions or delays resulting from geopolitical events, such as wars.

The EU Clinical Trials Regulation ("CTR") which was adopted in April 2014 and repeals the EU Clinical Trials Directive, became applicable on January 31, 2022. The CTR aims to simplify and streamline the authorization, conduct and transparency of clinical trials in the EU. We have not previously secured authorization to conduct clinical trials in the European Union pursuant to the CTR and, accordingly, there is a risk that we may be delayed in commencing such studies. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies governing clinical trials, our development plans may be impacted.

We cannot commercialize our Candidates until the appropriate regulatory authorities have reviewed and approved the Candidate. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state and local statutes and

regulations require the expenditure of substantial time and financial resources and we may not be able to obtain the required regulatory approvals. Even if our Candidates meet their safety and efficacy endpoints in clinical trials, the regulatory authorities may not complete their review processes in a timely manner, or we may not be able to obtain regulatory approval. Additional delays may result if an FDA advisory committee or other regulatory authority recommends non-approval or restrictions on approval. In addition, we may experience delays or rejections based upon additional government regulation from future legislation or administrative action or changes in regulatory authority policy during the period of product development, clinical trials and the regulatory review process.

Further, under the Pediatric Research Equity Act of 2003, a BLA or supplement to a BLA for certain biological products must contain data to assess the safety and effectiveness of the biological product in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective, unless the sponsor receives a deferral or waiver from the FDA. A deferral may be granted for several reasons, including a finding that the product or therapeutic Candidate is ready for approval for use in adults before pediatric trials are complete or that additional safety or effectiveness data needs to be collected before the pediatric trials begin. The applicable legislation in the European Union also requires sponsors to either conduct clinical trials in a pediatric population in accordance with a Pediatric Investigation Plan approved by the Pediatric Committee of the EMA or to obtain a waiver or deferral from the conduct of these studies by this Committee. For any of our Candidates for which we are seeking regulatory approval in the U.S. or the European Union, we cannot guarantee that we will be able to obtain a waiver or alternatively complete any required studies and other requirements in a timely manner, or at all, which could result in associated reputational harm and subject us to enforcement action, invalidation of the marketing application, and/or financial penalties. Our collaborators are also subject to similar requirements outside of the United States and the European Union and thus the attendant risks and uncertainties.

Even if we receive regulatory approval, regulatory authorities may approve a Candidate for more limited indications than requested or they may impose significant limitations in the form of narrow indications, warnings or a REMS. Regulatory authorities may require precautions or contra-indications with respect to conditions of use or they may grant approval subject to the performance of costly post-marketing clinical trials. In addition, regulatory authorities may not approve the labeling claims that are necessary or desirable for the successful commercialization of our Candidates. Any of the foregoing scenarios could materially harm the commercial prospects for our Candidates.

Even if we obtain regulatory approval for a Candidate, our Candidates will remain subject to regulatory oversight.

Even if we obtain any regulatory approval for any of our Candidates, we will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping and submission of safety and other post-market information. Any regulatory approvals that we receive for our Candidates may also be subject to a REMS, limitations on the approved indicated uses for which the product may be marketed or conditions of approval, or requirements for potentially costly post-marketing testing and surveillance to monitor the safety, purity, and potency of the biologic product. Advertising and promotional materials must comply with FDA rules and are subject to FDA review, in addition to other potentially applicable federal and state laws.

In addition, later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may have various consequences, including:

•

restrictions on such products, manufacturers or manufacturing processes;

•

restrictions and warnings on the labeling or marketing of a product;

•

restrictions on product distribution or use;

•

requirements to conduct post-marketing studies or clinical trials;

•

warning letters or untitled letters;

•

withdrawal of the products from the market;

•

refusal to approve pending applications or supplements to approved applications that we submit;

•

recall of products;

•

fines, restitution or disgorgement of profits or revenues;

•

suspension or withdrawal of marketing approvals;

•

damage to relationships with any potential collaborators;

•

unfavorable press coverage and damage to our reputation;

•

refusal to permit the import or export of our products;

•

product seizure;

•

injunctions or the imposition of civil or criminal penalties; or

•

litigation involving patients using our products.

In addition, manufacturers of approved products and those manufacturers’ facilities are required to comply with extensive FDA requirements, including ensuring that quality control and manufacturing procedures conform to cGMPs applicable to drug manufacturers or quality assurance standards applicable to medical device manufacturers, which include requirements relating to quality control and quality assurance as well as the corresponding maintenance of records and documentation and reporting requirements. We, any contract manufacturers we may engage in the future, our future collaborators and their contract manufacturers will also be subject to other regulatory requirements, including submissions of safety and other post-marketing information and reports, registration and listing requirements, requirements regarding the distribution of samples to clinicians, recordkeeping, and costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of the product such as the requirement to implement a REMS.

Finally, our ability to develop and market new drug products may be impacted by litigation challenging the FDA’s approval of another company’s drug product. In April 2023, the U.S. District Court for the Northern District of Texas invalidated the approval by the FDA of mifepristone, a drug product which was originally approved in 2000 and whose distribution is governed by various measures adopted under a REMS. The Court of Appeals for the Fifth Circuit declined to order the removal of mifepristone from the market but did hold that plaintiffs were likely to prevail in their claim that changes allowing for expanded access of mifepristone, which the FDA authorized in 2016 and 2021, were arbitrary and capricious. In June 2024, the Supreme Court reversed that decision after unanimously finding that the plaintiffs did not have standing to bring this legal action against the FDA. On October 11, 2024, the Attorneys General of three states ~~(Missouri, Idaho and Kansas)~~ filed an amended complaint in the U.S. District Court for the Northern District of Texas challenging the FDA’s actions. Depending on the outcome of this litigation our ability to develop new drug Candidates and to maintain approval of existing drug products could be delayed, undermined or subject to protracted litigation.

Non-compliance with European Union requirements regarding safety monitoring or pharmacovigilance, and with requirements related to the development of products for the pediatric population, can also result in significant financial penalties. Similarly, failure to comply with the European Union’s requirements regarding the protection of personal information can also lead to significant penalties and sanctions. Further, similar restrictions apply to approved products in the EU. The holder of a marketing authorization is required to comply with a range of requirements applicable to the manufacturing, marketing, promotion and sale of medicinal products. These include: compliance with the EU’s stringent pharmacovigilance or safety reporting rules, which can impose post‑-authorization studies and additional monitoring obligations; the manufacturing of authorized medicinal products, for which a separate manufacturer’s license is mandatory; and the marketing and promotion of authorized drugs, which are strictly regulated in the EU and are also subject to EU Member State laws.

Accordingly, assuming we, or our collaborators, receive marketing approval for one or more of our Candidates, we, and our collaborators, and our and their contract manufacturers will continue to expend time, money and effort in all areas of regulatory compliance, including manufacturing, production, product surveillance and quality control. If we, and our collaborators, are not able to comply with post-approval regulatory requirements, our or our collaborators’ ability to market any future products could be limited, which could adversely affect our ability to achieve or sustain profitability. Further, the cost of compliance with post-approval regulations may have a negative effect on our operating results and financial condition.

Any regulatory approval to market our products will be limited by indication. If we fail to comply or are found to be in violation of FDA regulations restricting the promotion of our products for unapproved uses, we could be subject to criminal penalties, substantial fines or other sanctions and damage awards.

The regulations relating to the promotion of products for unapproved uses are complex and subject to substantial interpretation by the FDA, EMA, Medicines and Healthcare products Regulatory Agency, or ("MHRA"), and other government agencies. In September 2021, the FDA published final regulations which describe the types of evidence that the agency will consider in determining the intended use of a drug product. Physicians may nevertheless prescribe our products off-label to their patients in a manner that is inconsistent with the approved label. We intend to implement compliance and training programs designed to ensure that our sales and marketing practices comply with applicable regulations. Notwithstanding these programs, the FDA or other government agencies may allege or find that our practices constitute prohibited promotion of our products for unapproved uses. We also cannot be sure that our employees will comply with company policies and applicable regulations regarding the promotion of products for unapproved uses.

4342

~~find~~Notwithstanding ~~that~~the ~~our~~regulatory ~~practices~~restrictions ~~constitute~~on ~~prohibited~~off-label promotion, ofthe ~~our~~FDA and other regulatory authorities allow companies to engage in truthful, non-misleading, and non-promotional scientific communications concerning their products ~~for~~in certain circumstances. For example, in January 2025, the FDA published final guidance outlining its policies governing the distribution of scientific information to healthcare providers about unapproved uses of approved products. WeThe ~~also~~final ~~cannot~~guidance calls for such communications to be ~~sure~~truthful, ~~that~~non-misleading ~~our~~and ~~employees~~scientifically ~~will~~sound ~~comply~~and ~~with~~to ~~company~~include ~~policies~~all information necessary for healthcare providers to interpret the strengths and ~~applicable~~weaknesses ~~regulations~~and ~~regarding~~validity and utility of the information about the unapproved use of the approved product. If a company engages in such communications consistent with the guidance’s recommendations, the FDA indicated that it will not treat such communications as evidence of unlawful promotion of ~~products~~a new intended use for ~~unapproved~~the ~~uses~~approved product.

~~Notwithstanding~~In ~~the~~addition, ~~regulatory~~we ~~restrictions~~could onbe ~~off-label~~adversely ~~promotion,~~affected ~~the~~by ~~FDA~~several ~~and~~significant ~~other~~administrative ~~regulatory~~law ~~authorities~~cases ~~allow~~decided ~~companies~~by tothe ~~engage~~U.S. Supreme Court in ~~truthful~~2024. In Loper Bright Enterprises v. Raimondo, ~~non-misleading~~for example, ~~and~~the ~~non-promotional~~court ~~scientific~~overruled ~~communications~~Chevron ~~concerning~~U.S.A., ~~their~~Inc. ~~products~~v. inNatural ~~certain~~Resources ~~circumstances.~~Defense ~~For~~Council, ~~example~~Inc., inwhich ~~October~~for ~~2023,~~40 ~~the~~years ~~FDA~~required ~~published~~federal ~~draft~~courts ~~guidance~~to ~~outlining~~defer ~~the~~to permissible agency’s ~~non-binding~~interpretations ~~policies~~of ~~governing~~statutes ~~the~~that ~~distribution~~are ofsilent ~~scientific~~or ~~information~~ambiguous on ~~unapproved~~a ~~uses~~particular totopic. ~~healthcare~~The ~~providers.~~Supreme ~~This~~Court ~~draft~~stripped ~~guidance~~federal ~~calls~~agencies ~~for~~of ~~such~~this ~~communications~~presumptive todeference beand ~~truthful,~~held ~~non-misleading,~~that ~~factual,~~courts ~~and~~must ~~unbiased~~exercise ~~and~~their ~~include~~independent ~~all~~judgment ~~information~~when ~~necessary~~deciding ~~for~~whether ~~healthcare~~an ~~providers~~agency, tosuch ~~interpret~~as the ~~strengths~~FDA, ~~and~~acted ~~weaknesses~~within ~~and~~its ~~validity~~statutory ~~and~~authority ~~utility~~under of the ~~information~~Administrative ~~about~~Procedure Act (the ~~unapproved use~~"APA"). InAdditionally, ~~addition~~in Corner Post, ~~under~~Inc. ~~some~~v. ~~guidance~~Board ~~from~~of Governors of the ~~FDA~~Federal ~~and~~Reserve System, the ~~Pre-Approval~~court ~~Information~~held ~~Exchange~~that ~~Act~~actions ~~signed~~to ~~into~~challenge ~~law~~a asfederal ~~part~~regulation ofunder the ~~Consolidated~~APA ~~Appropriations~~can ~~Act~~be initiated within six years of ~~2023,~~the ~~companies~~date ~~may~~of ~~also~~injury ~~promote~~to ~~information~~the ~~that~~plaintiff, israther ~~consistent~~than ~~with~~the date the ~~prescribing~~rule ~~information~~is ~~and~~finalized. ~~proactively~~The ~~speak~~decision appears to ~~formulary~~give ~~committee~~prospective ~~members~~plaintiffs ofa ~~payors~~personal ~~regarding~~statute ~~data~~of ~~for~~limitations anto ~~unapproved~~challenge ~~drug~~longstanding oragency ~~unapproved~~regulations. ~~uses~~Another ofdecision, anSecurities ~~approved~~and ~~drug~~Exchange Commission v. WeJarkesy, ~~may~~overturned ~~engage~~regulatory agencies’ ability to impose civil penalties in ~~these~~administrative ~~discussions~~proceedings. ~~and~~These ~~communicate~~decisions ~~with~~could ~~healthcare~~introduce ~~providers,~~additional ~~payors~~uncertainty into the regulatory process and ~~other~~may ~~constituencies~~result in ~~compliance~~additional ~~with~~legal ~~all~~challenges ~~applicable~~to ~~laws,~~actions taken by federal regulatory ~~guidance~~agencies, including the FDA and ~~industry~~CMS, ~~best~~that ~~practices.~~we Werely ~~will~~on. ~~need~~In addition to ~~carefully~~potential ~~navigate~~changes ~~the~~to ~~FDA’s~~regulations ~~various~~as ~~regulations,~~a ~~guidance~~result ~~and~~of ~~policies~~legal challenges, ~~along~~these ~~with~~decisions ~~recently~~may ~~enacted~~result ~~legislation,~~in toincreased ~~ensure~~regulatory ~~compliance~~uncertainty ~~with~~and ~~restrictions~~delays ~~governing~~and ~~promotion~~other impacts, any of which could adversely impact our ~~products.~~business and operations.

In ~~addition~~recent years, wea ~~could~~significant benumber ~~adversely~~of ~~affected~~pharmaceutical byand ~~several~~biotechnology ~~significant~~companies ~~administrative~~have ~~law~~been ~~cases~~the ~~decided~~target byof ~~the~~inquiries ~~U.S.~~and ~~Supreme~~investigations ~~Court~~by invarious ~~2024.~~federal Inand ~~Loper~~state ~~Bright~~regulatory, ~~Enterprises~~investigative, v.prosecutorial ~~Raimondo,~~and ~~for~~administrative ~~example,~~entities in connection with the ~~court~~promotion ~~overruled~~of ~~Chevron~~products ~~U.S.A.,~~for ~~Inc.~~unapproved v.uses ~~Natural~~and ~~Resources~~other ~~Defense~~sales ~~Council~~practices, ~~Inc.,~~including ~~which~~the ~~for~~Department 40of ~~years~~Justice ~~required~~and ~~federal~~various ~~courts~~U.S. toAttorneys’ ~~defer~~Offices, tothe ~~permissible~~Office ~~agency~~of ~~interpretations~~Inspector General of ~~statutes~~the ~~that~~Department ~~are~~of ~~silent~~Health orand ~~ambiguous~~Human onServices a("HHS"), ~~particular~~the ~~topic.~~FDA, ~~The~~the ~~Supreme~~Federal ~~Court~~Trade ~~stripped~~Commission ~~federal~~("FTC"), ~~agencies~~and ofvarious ~~this~~state ~~presumptive~~Attorneys ~~deference~~General ~~and~~offices. ~~held~~These ~~that~~investigations ~~courts~~have ~~must~~alleged ~~exercise~~violations ~~their~~of ~~independent~~various ~~judgment~~federal ~~when~~and ~~deciding~~state ~~whether~~laws anand ~~agency~~regulations, ~~such~~including asclaims ~~the~~asserting ~~FDA~~antitrust violations, ~~acted~~violations ~~within~~of ~~its~~the ~~statutory~~Federal ~~authority~~Food, ~~under~~Drug, ~~the~~and ~~Administrative~~Cosmetic ~~Procedure~~ Act, or the ~~APA.~~False ~~Additionally~~Claims Act, inthe ~~Corner~~Prescription ~~Post,~~Drug ~~Inc.~~Marketing v.Act ~~Board~~and ofanti-kickback ~~Governors~~laws ofand ~~the~~other ~~Federal~~alleged ~~Reserve~~violations ~~System,~~in connection with the ~~court~~promotion ~~held~~of ~~that~~products ~~actions~~for tounapproved ~~challenge~~uses, apricing ~~federal~~and ~~regulation~~Medicare ~~under~~and/or ~~the~~Medicaid ~~APA~~reimbursement. ~~can~~Many beof ~~initiated~~these ~~within~~investigations ~~six~~originate ~~years~~as of“qui tam” actions under the ~~date~~False ofClaims ~~injury~~Act. toUnder the ~~plaintiff,~~False ~~rather~~Claims ~~than~~Act, ~~the~~any ~~date~~individual ~~the~~can ~~rule~~bring isa ~~finalized.~~claim ~~The~~on ~~decision~~behalf ~~appears~~of tothe ~~give~~government ~~prospective~~alleging ~~plaintiffs~~that a ~~personal~~person ~~statute~~or ofentity ~~limitations~~has topresented ~~challenge~~a ~~longstanding~~false ~~agency~~claim ~~regulations.~~or ~~These~~caused ~~decisions~~a ~~could~~false ~~introduce~~claim ~~additional~~to ~~uncertainty~~be ~~into~~submitted to the ~~regulatory~~government ~~process~~for ~~and~~payment. ~~may~~The ~~result~~person inbringing ~~additional~~a ~~legal~~qui ~~challenges~~tam tosuit ~~actions~~is ~~taken~~entitled byto ~~federal~~a ~~regulatory~~share ~~agencies,~~of ~~including~~any ~~the~~recovery ~~FDA~~or ~~and~~settlement. ~~CMS~~Qui tam suits, ~~that~~also wecommonly ~~rely~~referred ~~on.~~to Inas ~~addition~~“whistleblower tosuits,” ~~potential~~are ~~changes~~often tobrought ~~regulations~~by ascurrent aor ~~result~~former ofemployees. ~~legal~~In ~~challenges,~~a ~~these~~qui ~~decisions~~tam ~~may~~suit, ~~result~~the ingovernment ~~increased~~must ~~regulatory~~decide ~~uncertainty~~whether ~~and~~to ~~delays~~intervene and ~~other~~prosecute ~~impacts,~~the ~~any~~case. ofIf ~~which~~it ~~could~~declines, ~~adversely~~the ~~impact~~individual ~~our~~may ~~business~~pursue ~~and~~the ~~operations~~case alone.

In recent years, a significant number of pharmaceutical and biotechnology companies have been the target of inquiries and investigations by various federal and state regulatory, investigative, prosecutorial and administrative entities in connection with the promotion of products for unapproved uses and other sales practices, including the Department of Justice and various U.S. Attorneys’ Offices, the Office of Inspector General of the Department of Health and Human Services, or HHS, the FDA, the Federal Trade Commission, or the FTC, and various state Attorneys General offices. These investigations have alleged violations of various federal and state laws and regulations, including claims asserting antitrust violations, violations of the Federal Food, Drug, and Cosmetic Act, the False Claims Act, the Prescription Drug Marketing Act and anti-kickback laws and other alleged violations in connection with the promotion of products for unapproved uses, pricing and Medicare and/or Medicaid reimbursement. Many of these investigations originate as “qui tam” actions under the False Claims Act. Under the False Claims Act, any individual can bring a claim on behalf of the government alleging that a person or entity has presented a false claim or caused a false claim to be submitted to the government for payment. The person bringing a qui tam suit is entitled to a share of any recovery or settlement. Qui tam suits, also commonly referred to as “whistleblower suits,” are often brought by current or former employees. In a qui tam suit, the government must decide whether to intervene and prosecute the case. If it declines, the individual may pursue the case alone.

If the FDA or any other governmental agency initiates an enforcement action against us or if we are the subject of a qui tam suit and it is determined that we violated prohibitions relating to the promotion of products for unapproved uses, we could be subject to substantial civil or criminal fines or damage awards and other sanctions such as consent decrees and corporate integrity agreements pursuant to which our activities would be subject to ongoing scrutiny and monitoring to ensure compliance with applicable laws and regulations. Any such fines, awards or other sanctions would have an adverse effect on our revenue, business, financial prospects and reputation.

Even if we obtain and maintain approval of one or more of our Candidates from the FDA, we may never obtain approval for our Candidates outside of the United States, which would limit our market opportunities and adversely affect our business.

Even if we receive FDA approval of one or more of our Candidates in the United States, approval of a Candidate in the United States by the FDA does not ensure approval of such Candidate by regulatory authorities in other countries or jurisdictions, and approval by one foreign regulatory authority does not ensure approval by regulatory authorities in other foreign countries or by the FDA. Future sales of our Candidates outside of the United States will be subject to foreign regulatory requirements governing clinical trials, manufacturing and marketing approval. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and more onerous than, those in the United States, including additional preclinical studies or clinical trials. In many countries outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that country. If we submit a marketing authorization application ("MAA") to the EMA for approval of SGT-003, SGT-212 or ~~MAA~~other Candidates in the European Union, toobtaining such approval from the European Commission following the opinion of the EMA is a lengthy and expensive process. Regulatory authorities in countries outside of the United States and the European Union also have requirements for approval of product candidates with which we must comply prior to marketing in those countries. Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our Candidates in certain countries.

4443

SGT-003 or other Candidates in the European Union, obtaining such approval from the European Commission following the opinion of the EMA is a lengthy and expensive process. Regulatory authorities in countries outside of the United States and the European Union also have requirements for approval of product candidates with which we must comply prior to marketing in those countries. Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our Candidates in certain countries.

Further, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries. Also, regulatory approval for our Candidates may be withdrawn. If we fail to comply with the regulatory requirements, our target market will be reduced, and our ability to realize the full market potential of our Candidates will be harmed.

Additionally, we could face heightened risks with respect to obtaining marketing authorization in the United Kingdom as a result of the withdrawal of the United Kingdom from the European Union, commonly referred to as Brexit. The United Kingdom is no longer part of the European Single Market and EU Customs Union. As of January 1, ~~2021,~~2025 the MHRA became responsible for supervising medicines and medical devices in Great Britain, comprising England, Scotland and Wales under domestic law, whereas under the terms of the Northern Ireland Protocol, Northern Ireland is currently subject to European Union rules. The United Kingdom and European Union have however agreed to the Windsor Framework which fundamentally changes the existing system under the Northern Ireland Protocol, including with respect to the regulation of medicinal products in the United Kingdom. Once implemented, the changes introduced by the Windsor Framework will see the MHRA be responsible for approving all medicinal products destined for the UK market (i.e., Great Britain and Northern Ireland), and the EMA will no longer have any role in approving medicinal products destined for Northern Ireland. Any delay in obtaining, or an inability to obtain, any marketing authorizations, as a result of Brexit or otherwise, may force us to restrict or delay efforts to seek regulatory approval in the United Kingdom for our Candidates, which could significantly and materially harm our business.

In addition, foreign regulatory authorities may change their approval policies and new regulations may be enacted. For instance, the EU pharmaceutical legislation is currently undergoing a complete review process, in the context of the Pharmaceutical Strategy for Europe initiative, launched by the European Commission in November 2020. The European Commission’s proposal for revision of several legislative instruments related to medicinal products (including potentially reducing the duration of regulatory data protection, revising the eligibility for expedited pathways, etc.) was published on April 26, 2023 with several amendments requested in April 2024. The proposed revisions remain to be agreed and adopted by the European Parliament and European Council and the proposals may therefore be substantially revised before adoption, which is not anticipated before early 2026. The revisions may, however, have a significant impact on the pharmaceutical industry and our business in the long term.

We expect that we will be subject to additional risks in commercializing any of our Candidates that receive marketing approval outside the United States, including tariffs, trade barriers and regulatory requirements; economic weakness, including inflation, or political instability in particular foreign economies and markets; compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; and workforce uncertainty in countries where labor unrest is more common than in the United States.

We may be materially adversely affected by the imposition of duties and tariffs and other trade barriers and retaliatory countermeasures implemented by the U.S. and other governments.

Recently there have been significant changes to U.S. trade policies, sanctions, legislation, treaties and tariffs, including, but not limited to, trade policies and tariffs affecting products from outside of the U.S. For example, in early 2025, the current U.S. presidential administration announced significant new tariffs on foreign imports into the U.S., specifically from Mexico and Canada, and has proposed additional new tariffs that may be implemented in the future. The extent and duration of increased tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the U.S. and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply, and demand for our products in affected markets. Any new or additional tariffs on goods imported to the U.S. from Mexico, Canada, or other countries, or products imported into the European Union or other non-U.S. markets, could also increase the cost of some of our products and reduce our margins. The imposition of additional tariffs or other trade barriers could increase our costs in certain markets. Other countries have changed, and may continue to change, their own policies on trade as well as business and foreign investment in their respective countries. Additionally, it is possible that U.S. policy changes and uncertainty about such changes could increase market volatility and currency exchange rate fluctuations. As a result of these dynamics, we cannot predict the impact to our business of any future changes to the U.S. or other countries’ trading relationships or the impact of new laws or regulations adopted by the U.S. or other countries.

Regulatory requirements governing gene therapy products are periodically updated and may continue to change in the future.

Regulatory requirements governing gene therapy products have changed frequently and will likely continue to change in the future. Moreover, there is substantial, and sometimes uncoordinated, overlap in those responsible for regulation of gene therapy products. For example, in the United States, the FDA has established the Office of Therapeutic Products within the Center for Biologics Evaluation and Research, ~~or the~~ ("CBER,") to consolidate the review of gene therapy and related products, and the Cellular, Tissue and Gene Therapies Advisory Committee to advise CBER on its review. Gene therapy clinical trials may also be subject to review and oversight by an institutional biosafety committee, a local institutional committee that reviews and oversees basic and clinical research conducted at the institution participating in the clinical trial. Although the FDA decides whether individual gene therapy protocols may proceed, the review process and determinations of other reviewing bodies can impede or delay the initiation of a clinical trial, even if the FDA has reviewed the trial and approved its initiation.

The FDA has issued various guidance documents regarding gene therapies, including final guidance documents released in January 2020 relating to chemistry, manufacturing and controls information for gene therapy INDs, gene therapies for rare diseases and gene therapies for retinal disorders, a final guidance in October 2022 for Human Gene Therapy for Neurodegenerative Diseases, as well as a draft guidance in July 2023 on comparability requirements for manufacturing changes in gene therapy products. In December 2023, a draft guidance on potency assurance for cellular and gene therapy products was released. Although the FDA has indicated that these and other guidance documents it previously issued are not legally binding, we believe that our compliance with them is likely necessary to gain approval for any gene therapy Candidate we may develop. The guidance documents provide additional factors that the FDA will consider at each of the above stages of development and relate to, among other things, the proper preclinical assessment of gene therapies; the chemistry, manufacturing, and control information that should be included in an IND application; the proper design of tests to measure product potency in support of an IND or BLA application; and measures to observe delayed adverse effects in subjects who have been exposed to investigational gene therapies when the risk of such effects is high. Further, for AAV capsids specifically, the FDA typically recommends that sponsors continue to monitor participants for potential gene therapy‑related adverse events for up to a 5-year period. Other types of gene therapy or gene editing products may require longer follow up, potentially up to a maximum 15-year period.

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necessary to gain approval for any gene therapy Candidate we may develop. The guidance documents provide additional factors that the FDA will consider at each of the above stages of development and relate to, among other things, the proper preclinical assessment of gene therapies; the chemistry, manufacturing, and control information that should be included in an IND application; the proper design of tests to measure product potency in support of an IND or BLA application; and measures to observe delayed adverse effects in subjects who have been exposed to investigational gene therapies when the risk of such effects is high. Further, for AAV capsids specifically, the FDA typically recommends that sponsors continue to monitor participants for potential gene therapy‑related adverse events for up to a 5-year period. Other types of gene therapy or gene editing products may require longer follow up, potentially up to a maximum 15-year period.

Similarly, the EMA may issue new guidelines concerning the development and marketing authorization for gene therapy products and require that we comply with these new guidelines. The grant of marketing authorization in the European Union for gene therapy products is governed by Regulation 1394/2007/EC on advanced therapy medicinal products, read in combination with Directive 2001/83/EC of the European Parliament and of the Council, commonly known as the Community code on medicinal products. Regulation 1394/2007/EC includes specific rules concerning the authorization, supervision, and pharmacovigilance of gene therapy medicinal products. Manufacturers of advanced therapy medicinal products must demonstrate the quality, safety, and efficacy of their products to the EMA, which provides an opinion regarding the MAA. The European Commission grants or refuses marketing authorization in light of the opinion delivered by the EMA.

Finally, ethical, social and legal concerns about gene therapy, genetic testing and genetic research could result in additional regulations or prohibiting the processes we may use. Federal and state agencies, congressional committees and foreign governments have expressed their intentions to further regulate biotechnology. More restrictive regulations or claims that our Candidates are unsafe or pose a hazard could prevent us from commercializing any products. New government requirements may be established that could delay or prevent regulatory approval of our Candidates under development. It is impossible to predict whether legislative changes will be enacted, regulations, policies or guidance changed, or interpretations by agencies or courts changed, or what the impact of such changes, if any, may be.

As we advance our Candidates through clinical development, we will be required to consult with these regulatory and advisory groups, and comply with applicable guidelines. These regulatory review committees and advisory groups and any new guidelines they promulgate may lengthen the regulatory review process, require us to perform additional studies, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of Candidates or lead to significant post-approval limitations or restrictions. Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval necessary to bring a potential product to market could decrease our ability to generate sufficient product revenue.

We may not be able to obtain orphan drug exclusivity for one or more of our Candidates, and even if we do, that exclusivity may not prevent the FDA or the EMA from approving other competing products.

Under the Orphan Drug Act, the FDA may designate a product candidate as an orphan drug if it is a drug or biologic intended to treat a rare disease or condition. A similar regulatory scheme governs approval of orphan products by the EMA in the European Union. Generally, if a product candidate with an orphan drug designation subsequently receives the first marketing approval for the indication for which it has such designation, the product is entitled to a period of marketing exclusivity, which precludes the FDA or the EMA from approving another marketing application for a similar product for the same therapeutic indication for that time period. The applicable period is seven years in the United States and ten years in the European Union. The exclusivity period in the European Union can be reduced to six years if a product no longer meets the criteria for orphan drug designation, in particular if the product is sufficiently profitable so that market exclusivity is no longer justified.

The FDA has granted orphan drug designation to SGT-003 for the treatment of Duchenne and the FDA and EMA have granted orphan drug designation to SGT-501 for the treatment of CPVT.

In order for the FDA to grant orphan drug exclusivity to one of our products, the FDA must find that the product is indicated for the treatment of a condition or disease with a patient population of fewer than 200,000 individuals annually in the United States. The FDA may conclude that the condition or disease for which orphan drug exclusivity is sought does not meet this standard. Even if we obtain orphan drug exclusivity for a product, that exclusivity may not effectively protect the product from competition because different products can be approved for the same condition.

In addition, under the FDA September 2021 guidance for interpreting sameness of gene therapy products under the orphan drug regulations, even after an orphan drug is approved, the FDA can subsequently approve a similar product for the same condition if the FDA concludes that the later product is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care. Orphan drug exclusivity may also be lost if the FDA or EMA determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the product to meet the needs of the patients with the rare disease or condition.

The FDA Reauthorization Act of 2017, or ("FDARA,") requires that a drug sponsor demonstrate the clinical superiority of an orphan drug that is otherwise the same as a previously approved drug for the same rare disease in order to receive orphan drug exclusivity. FDARA ~~reverses prior precedent holding that the Orphan Drug Act unambiguously requires that the FDA recognize the orphan exclusivity period regardless of a showing of clinical superiority.~~

46reverses prior precedent holding that the Orphan Drug Act unambiguously requires that the FDA recognize the orphan exclusivity period regardless of a showing of clinical superiority.

The FDA and Congress may further reevaluate the Orphan Drug Act and its regulations and policies. This may be particularly true in light of a decision from the Court of Appeals for the 11th Circuit in September 2021 finding that, for the purpose of determining the scope of exclusivity, the term “same disease or condition” means the designated “rare disease or condition” and could not be interpreted by the FDA to mean the “indication or use.” Thus, the Court of Appeals concluded that orphan drug exclusivity applies to the entire designated disease or condition rather than the “indication or use.” Although there have been legislative proposals to overrule this decision, they have not been enacted into law. In January 2023, the FDA announced that, in matters beyond the scope of that court order, FDA will continue to apply its existing regulations tying orphan-drug exclusivity to the uses or indications for which the orphan drug was approved. We do not know if, when, or how the FDA or Congress may change the orphan drug regulations and policies in the future, and it is uncertain how any changes might affect our business. Depending on what changes the FDA or Congress may make to its orphan drug regulations and policies, our business could be adversely impacted.

We may seek a breakthrough therapy designation for one or more of our Candidates, but we might not receive such designation, and even if we do, such designation may not lead to a faster development or regulatory review or approval process.

We may seek a breakthrough therapy designation for one or more of our Candidates; however, we cannot assure our stockholders that one or more of our Candidates will meet the criteria for that designation. A breakthrough therapy is defined as a therapy that is intended, alone or in combination with one or more other therapies, to treat a serious condition, and preliminary clinical evidence indicates that the therapy may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For therapies and biologics that have been designated as breakthrough therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. Therapies designated as breakthrough therapies by the FDA may also be eligible for priority review if supported by clinical data at the time the BLA is submitted to the FDA.

Designation as a breakthrough therapy is within the discretion of the FDA. Accordingly, even if we believe that one of our Candidates meets the criteria for designation as a breakthrough therapy, the FDA may disagree and instead determine not to make such designation. Even if we receive breakthrough therapy designation, the receipt of such designation for a Candidate may not result in a faster development or regulatory review or approval process compared to drugs considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA. In addition, even if one or more of our Candidates qualifies as a breakthrough therapy, the FDA may later decide that the Candidate no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

Accelerated approval by the FDA, even if granted for one or more of our Candidates, may not lead to a faster development or regulatory review or approval process and it does not increase the likelihood that our Candidates will receive marketing approval.

We may seek approval of one or more of our Candidates using the FDA’s accelerated approval pathway. A product may be eligible for accelerated approval if it treats a serious or life-threatening condition and generally provides a meaningful advantage over available therapies. In addition, it must demonstrate an effect on a surrogate or intermediate endpoint that is reasonably likely to predict clinical benefit or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, or ("IMM,") that is reasonably likely to predict an effect on IMM or other clinical benefit. The FDA or other applicable regulatory agency makes the determination regarding whether a surrogate or intermediate endpoint is reasonably likely to predict long-term clinical benefit. Given that expression of microdystrophin has not yet been established to predict long-term clinical benefit, it is not currently accepted, and it is possible the FDA and/or other applicable regulatory agencies could decide never to accept it, as a surrogate endpoint for the accelerated approval pathway for the treatment of Duchenne.

As a condition of approval, the FDA may require that a sponsor of a drug or biologic product candidate receiving accelerated approval perform adequate and well-controlled post-marketing clinical trials. These confirmatory trials must be completed with due diligence and may be required to be initiated prior to submission of the BLA. In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product. Further, with passage of FDORA in December 2022, Congress modified certain provisions governing accelerated approval of drug and biologic products. Specifically, the new legislation authorized the FDA to: require a sponsor to have its confirmatory clinical trial underway before accelerated approval is awarded, require a sponsor of a product granted accelerated approval to submit progress reports on its post-approval studies to FDA every six months (until the study is completed) and use expedited procedures to withdraw accelerated approval of a BLA after the confirmatory trial fails to verify the product’s clinical benefit.

There can be no assurance that the FDA or comparable foreign regulatory agencies will agree with our surrogate endpoints or intermediate clinical endpoints in any of our clinical trials, or that we will decide to pursue or submit any additional application for accelerated approval or any other form of expedited development, review or approval. Similarly, there can be no assurance that, after feedback from the FDA or comparable foreign regulatory agencies, we will continue to pursue or apply for accelerated approval or any other form of expedited development, review or approval. Furthermore, for any submission of an application for accelerated approval or application under another expedited regulatory designation, there can be no assurance that such submission or application will be accepted for filing or that any expedited development, review or approval will be granted on a timely basis, or at all.

A failure to obtain accelerated approval or any other form of expedited development, review or approval for our Candidates, or withdrawal of a Candidate, would result in a longer time period until commercialization of such Candidate, could increase the cost of development of such Candidate and could harm our competitive position in the marketplace.

A potential regenerative medicine advanced therapy designation by the FDA for our Candidates may not lead to a faster development or regulatory review or approval process, and it does not increase the likelihood that our Candidates will receive marketing approval.

We may seek a regenerative medicine advanced therapy designation for some of our Candidates. A regenerative medicine advanced therapy is defined as cell therapies, therapeutic tissue engineering products, human cell and tissue products, and combination products using any such therapies or products. Gene therapies, including genetically modified cells, that lead to a durable modification of cells or tissues may meet the definition of a regenerative medicine therapy. The regenerative medicine advanced therapy program is intended to facilitate efficient development and expedite review of regenerative medicine advanced therapies, which are intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition. A BLA for a regenerative medicine advanced therapy may be eligible for priority review or accelerated approval through (1) surrogate or intermediate endpoints reasonably likely to predict long-term clinical benefit or (2) reliance upon data obtained from a meaningful number of sites. Benefits of such designation also include early interactions with the FDA to discuss any potential surrogate or intermediate endpoint to be used to support accelerated approval. A regenerative medicine therapy that is granted accelerated approval and is subject to post-approval requirements may fulfill such requirements through the submission of clinical evidence, clinical ~~studies~~trials, patient registries, or other sources of real world evidence, such as electronic health records; the collection of larger confirmatory data sets; or post-approval monitoring of all patients treated with such therapy prior to its approval.

Designation as a regenerative medicine advanced therapy is within the discretion of the FDA. Accordingly, even if we believe one of our Candidates meets the criteria for designation as a regenerative medicine advanced therapy, the FDA may disagree and instead determine not to make such designation. In any event, the receipt of a regenerative medicine advanced therapy designation for a Candidate may not result in a faster development process, review or approval compared to drugs considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA. In addition, even if one or more of our Candidates qualify as regenerative medicine advanced therapies, the FDA may later decide that the biological products no longer meet the conditions for qualification.

We may seek PRIME Designation in the EU for one or more of our Candidates, but we might not receive such designations and, even if we do, such designations may not lead to a faster development or regulatory review or approval process.

In the EU, we may seek PRIME designation for our Candidates in the future. PRIME is a voluntary program aimed at enhancing the EMA’s role to reinforce scientific and regulatory support in order to optimize development and enable accelerated assessment of new medicines that are of major public health interest with the potential to address unmet medical needs. The program focuses on medicines that target conditions for which there exists no satisfactory method of treatment in the EU or even if such a method exists, it may offer a major therapeutic advantage over existing treatments. PRIME is limited to medicines under development and not authorized in the EU and the sponsor intends to apply for an initial marketing authorization application through the centralized procedure. To be accepted for PRIME, a product candidate must meet the eligibility criteria in respect of its major public health interest and therapeutic innovation based on information that is capable of substantiating the claims.

The benefits of a PRIME designation include the appointment of a Committee for Medicinal Products for Human Use rapporteur to provide continued support and help to build knowledge ahead of a marketing authorization application, early dialogue and scientific advice at key development milestones, and the potential to qualify products for accelerated review, meaning reduction in the review time for an opinion on approvability to be issued earlier in the application process. PRIME enables a sponsor to request parallel EMA scientific advice and health technology assessment advice to facilitate timely market access. Even if we receive PRIME designation for any of our Candidates, the designation may not result in a materially faster development process, review or approval compared to conventional EMA procedures. Further, obtaining PRIME designation does not assure or increase the likelihood of EMA’s grant of a marketing authorization.

We may seek a Rare Pediatric Disease Designation for our Candidates. However, a BLA for such Candidates may not meet the eligibility criteria for a priority review voucher upon approval.

With enactment of the Food and Drug Administration Safety and Innovation Act in 2012, Congress authorized the FDA to award priority review vouchers to sponsors of certain rare pediatric disease product applications that meet the criteria specified in the law. This provision is designed to encourage development of new drug and biological products for prevention and treatment of certain rare pediatric diseases. Specifically, under this program, a sponsor who receives an approval for a drug or biologic for a “rare pediatric disease” may qualify for a voucher that can be redeemed to receive a priority review of a subsequent marketing application for a different product. The sponsor of a rare pediatric disease drug product receiving a priority review voucher may transfer (including by sale) the voucher to another sponsor. The voucher may be further transferred any number of times before the voucher is used, as long as the sponsor making the transfer has not yet submitted the application.

In order to receive a priority review voucher upon BLA approval, the product must receive designation from the FDA as a product for a rare pediatric disease prior to approval of the marketing application. A “rare pediatric disease” is a disease that is serious or life-threatening, in which the serious or life-threatening manifestations primarily affect individuals aged from birth to 18 years and affects fewer than 200,000 people in the United States, or affects more than 200,000 people in the United States but there is no reasonable expectation that the cost of developing and making available in the United States a product for such disease or condition will be recovered from sales in the United States of such product. In addition to receiving rare pediatric disease designation, in order to receive a priority review voucher, the BLA must be given priority review, rely on clinical data derived from studies examining a pediatric population and dosages of the product intended for that population, not seek approval for a different adult indication in the original rare pediatric disease product application and be for a product that does not include a previously approved active ingredient.

life-threatening, in which the serious or life-threatening manifestations primarily affect individuals aged from birth to 18 years and affects fewer than 200,000 people in the United States, or affects more than 200,000 people in the United States but there is no reasonable expectation that the cost of developing and making available in the United States a product for such disease or condition will be recovered from sales in the United States of such product. In addition to receiving rare pediatric disease designation, in order to receive a priority review voucher, the BLA must be given priority review, rely on clinical data derived from studies examining a pediatric population and dosages of the product intended for that population, not seek approval for a different adult indication in the original rare pediatric disease product application and be for a product that does not include a previously approved active ingredient.

Under the current statutory sunset provisions for the Rare Pediatric Disease Priority Review Voucher Program, after September 30, 2024, the FDA may only award a voucher for an approved rare pediatric disease product application if the sponsor has rare pediatric disease designation for the drug, and that designation was granted by September 30, 2024.

After September 30, 2026, the FDA may not award any rare pediatric disease priority review vouchers. If we do not obtain approval of a BLA by these dates, and if the Rare Pediatric Disease Priority Review Voucher Program is not further extended by congressional action, we may not receive a Priority Review Voucher.

The FDA has granted rare pediatric disease designation to SGT-003 for the treatment of Duchenne and SGT-501 for the treatment of CPVT.

We may seek a fast track designation for one or more of our Candidates. However, such designation may not actually lead to a faster development or regulatory review or approval process. We might not receive such designation for one or more of our Candidates.

If a therapy is intended for the treatment of a serious condition and ~~nonclinical~~non-clinical or clinical data demonstrates the potential to address unmet medical need for this condition, a drug sponsor may apply for FDA fast track designation. However, fast track designation does not ensure that we will receive marketing approval or that approval will be granted within any particular timeframe. The FDA has broad discretion with respect to whether or not to grant fast track designation to a product candidate, so even if we believe a particular Candidate is eligible for such designation, the FDA may decide not to grant it. Moreover, we may not experience a faster development or regulatory review or approval process with fast track designation compared to conventional FDA procedures. In addition, the FDA may withdraw fast track designation if it believes that the designation is no longer supported by data from our clinical development program or if the unmet need has been fulfilled with the approval of another product. Fast track designation alone does not guarantee qualification for the FDA’s priority review procedures.

The FDA has granted fast track designation to SGT-003 for the treatment of Duchenne and to SGT-212 for the treatment of FA.

We may seek priority review designation for one or more of our Candidates, but we might not receive such designation, and even if we do, such designation may not lead to a faster development or regulatory review or approval process.

If the FDA determines that a product candidate offers a treatment for a serious condition and, if approved, the product would provide a significant improvement in safety or effectiveness, the FDA may designate the product candidate for priority review. A priority review designation means that the goal for the FDA to review an application is six months, rather than the standard review period of ten months. We may request priority review for our Candidates, however, we cannot assume that one or more of our Candidates will meet the criteria for that designation. The FDA has broad discretion with respect to whether or not to grant priority review status to a product candidate, so even if we believe a particular Candidate is eligible for such designation or status, the FDA may decide not to grant it. Moreover, a priority review designation does not necessarily mean a faster development or regulatory review or approval process or necessarily confer any advantage with respect to approval compared to conventional FDA procedures. Receiving priority review from the FDA does not guarantee approval within the six-month review cycle or at all.

Inadequate funding for the FDA, the SEC and other U.S. or foreign government agencies, including from government shut downs, or other disruptions to these agencies’ operations, could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business. 48

~~The~~Disruptions ~~ability~~and ofdelays at the FDA ~~to review~~ and ~~approve~~other ~~new products can be affected by a variety of factors, including~~ government ~~budget~~agencies ~~and~~from funding ~~levels~~cuts, ~~ability to hire and retain key~~ personnel ~~and accept the payment of user fees~~losses, ~~and~~regulatory ~~statutory~~reform, ~~regulatory~~government ~~and~~shutdowns ~~policy changes. Average review times at the agency have fluctuated in recent years as a result. Disruptions at the FDA~~ and other ~~agencies~~developments ~~may~~could ~~also~~hinder ~~slow~~our ~~the~~ability ~~time necessary for new product candidates~~ to beobtain ~~reviewed~~guidance ~~and/or~~from ~~approved~~the byFDA ~~necessary~~regarding ~~government agencies, which would adversely affect~~ our ~~business.~~clinical Indevelopment ~~addition,~~program ~~government~~and ~~funding~~develop ~~of the SEC~~ and ~~other~~secure ~~government~~approval ~~agencies~~of ~~on which~~ our ~~operations~~Candidates ~~may~~in ~~rely,~~a ~~including~~timely ~~those that fund research and development activities~~manner, ~~is subject to the political process,~~ which iswould ~~inherently~~negatively ~~fluid~~impact ~~and~~our ~~unpredictable~~business.

49The FDA and comparable regulatory agencies in foreign jurisdictions play an important role in the development of our Candidates by providing guidance on our clinical development programs and reviewing our regulatory submissions, including INDs, requests for special designations and marketing applications. If these oversight and review activities are disrupted, then correspondingly our ability to develop and secure timely approval of our Candidates could be impacted in a negative manner.

~~Disruptions~~Further, atthere ~~the~~is ~~FDA,~~substantial ~~EMA~~uncertainty ~~and~~as ~~other~~to ~~agencies~~how ~~may~~measures ~~also~~being ~~slow~~implemented by the ~~time~~US ~~necessary~~government ~~for~~administration ~~new~~will ~~product~~impact ~~candidates~~the toFDA, beCMS ~~reviewed~~ and~~/or~~ ~~approved~~other byfederal ~~necessary government~~ agencies, ~~which~~with ~~would~~jurisdiction ~~adversely~~over ~~affect~~ our ~~business~~activities. For example, ina ~~recent~~number ~~years,~~of ~~including~~executive ~~2018~~orders ~~and~~have ~~2019,~~been ~~the~~issued ~~U.S.~~by ~~government~~the ~~has~~President, ~~shut~~which ~~down~~could ~~several~~have ~~times~~a ~~and~~significant ~~certain~~impact ~~regulatory~~on ~~agencies,~~the ~~such~~manner asin which the FDA ~~and~~conducts ~~the~~its ~~SEC,~~operations ~~have~~and ~~had~~engages toin ~~furlough~~regulatory ~~critical employees~~ and ~~stop~~oversight ~~critical~~ activities. InIf ~~addition,~~these ~~disruptions~~or ~~may~~other ~~result~~orders inor ~~events~~executive ~~similar~~actions toimpose ~~the~~constraints ~~COVID-19~~on ~~pandemic.~~FDA’s ~~During~~ability ~~the~~to ~~COVID-19~~engage ~~pandemic,~~in aoversight ~~number~~and ofimplementation ~~companies~~activities ~~announced~~in ~~receipt of complete response letters due to~~ the ~~FDA’s~~normal ~~inability~~course, toour ~~complete~~business ~~required~~may ~~inspections~~be ~~for~~negatively ~~their applications~~impacted. In ~~the~~addition, ~~event~~budget ofcuts aand ~~similar public health emergency in~~ the ~~future,~~loss ~~the~~of FDA ~~may~~personnel ~~not~~could belead ~~able~~ to ~~continue~~further ~~its~~disruptions ~~current~~and ~~pace~~delays ~~and~~in FDA review ~~timelines~~and ~~could~~oversight beof ~~extended~~our product candidates. ~~Regulatory~~Similarly, ~~authorities~~efforts ~~outside~~by the ~~United~~new ~~States~~administration ~~facing~~to ~~similar~~substantially ~~circumstances~~reduce ~~may~~or ~~adopt~~delay ~~similar~~research ~~restrictions~~funding orby ~~other~~the ~~policy~~National ~~measures~~Institutes inof ~~response~~Health toof amedical ~~similar~~research ~~public~~could ~~health~~have ~~emergency~~substantial ~~and~~direct ~~may~~or ~~also~~indirect ~~experience~~impacts ~~delays~~on inour ~~their~~research ~~regulatory~~ activities.

IfIn aaddition, ~~prolonged~~ government ~~shutdown~~funding orof ~~other~~the ~~disruption~~SEC ~~occurs,~~and itother ~~could~~government ~~significantly~~agencies ~~impact~~on ~~the~~which ~~ability~~our ofoperations ~~the~~may ~~FDA~~rely, ~~EMA~~including orthose ~~other~~that ~~regulatory~~fund ~~agency~~research ~~to review~~ and ~~process~~development ~~our~~activities, ~~regulatory~~is ~~submissions~~subject into athe ~~timely~~political ~~manner~~process, which ~~could~~is ~~have~~inherently afluid ~~material~~and ~~adverse~~unpredictable. ~~effect~~For onexample, ~~our~~over ~~business.~~the ~~Further~~last several years, ~~future~~the U.S. government ~~shutdowns~~has orshut ~~other~~down ~~disruptions~~several ~~affect~~times ~~other~~and ~~government~~certain regulatory agencies, such as the FDA and the SEC, ~~which~~have ~~may~~had ~~also~~to ~~impact~~furlough ~~our~~critical ~~business~~FDA, bySEC ~~delaying~~and ~~review~~other ofgovernment ~~our~~employees ~~public~~and ~~filings~~stop critical activities. If a prolonged government shutdown occurs, toit could significantly impact the ~~extent~~ability ~~such~~of the FDA to timely review isand ~~necessary~~process our regulatory submissions and could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

WeAt ~~face~~the ~~significant~~same ~~competition~~time, disruptions at the FDA and ~~our~~other ~~competitors~~government agencies may ~~achieve~~result ~~regulatory~~from ~~approval~~public ~~before~~health usevents orsimilar ~~develop~~to ~~therapies~~the ~~that~~COVID-19 ~~are~~pandemic. ~~more~~For ~~advanced~~example, orduring ~~effective~~the ~~than ours~~pandemic, ~~which~~a ~~may~~number ~~adversely~~of ~~affect~~companies ~~our~~announced ~~ability~~receipt of complete response letters due to ~~develop,~~the ~~successfully~~FDA’s ~~market~~inability orto ~~commercialize~~complete ~~our~~required ~~Candidates~~inspections for their applications. ~~Changes~~In ~~within~~the event of a similar public health emergency in the ~~competitive~~future, ~~landscape~~the ~~could~~FDA ~~lead~~may usnot be able to ~~alter~~continue ~~our~~its ~~clinical~~current ~~trial~~pace ~~strategy,~~and ~~baseline~~review ~~eligibility~~timelines ~~criteria~~could orbe ~~make~~extended. Regulatory authorities outside the United States facing similar circumstances may adopt similar restrictions or other ~~modifications~~policy measures in response to ~~clinical~~a ~~trial~~similar ~~designs~~public health emergency and may also experience delays in their regulatory activities.

Accordingly, if any of the foregoing developments and others impact the ability of the FDA to provide us with guidance regarding our clinical development programs or delay the agency’s review and processing of our regulatory submissions, including INDs and biologics licensing applications, our business would be negatively impacted. Further, any future government shutdown could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

We operate in a highly competitive segment of the biopharmaceutical market. We face competition from many different sources, including larger and better-funded pharmaceutical, specialty pharmaceutical and biotechnology companies, as well as from academic institutions, government agencies and private and public research institutions. Our Candidates, if successfully developed and approved, will compete with established therapies as well as with new treatments that may be introduced by our competitors. There are a variety of product candidates, including gene therapies, in development for Duchenne, CPVT, other cardiomyopathies or FA. Many of our competitors have significantly greater financial, product candidate development, manufacturing and marketing resources than we do. Large pharmaceutical and biotechnology companies have extensive experience in clinical testing and obtaining regulatory approval for their products, and mergers and acquisitions within these industries may result in even more resources being concentrated among a smaller number of larger competitors. Smaller and other early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, enrolling patients in clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

We are aware of a number of companies and research institutions developing gene transfer programs progressing in Duchenne. For example, in June 2023, Sarepta Therapeutics, Inc., or Sarepta, announced that it had received accelerated approval for its gene therapy candidate ELEVIDYS for the treatment of ambulatory pediatric patients aged 4 through 5 years with Duchenne. In December 2023, Sarepta announced that it submitted a supplemental BLA to broaden the approved indication for ELEVIDYS to all patients (all ages and ambulation status) with Duchenne, and on February 16, 2024 Sarepta announced that the FDA accepted the supplemental BLA for priority review. On June 20, 2024, Sarepta announced that the FDA approved an expansion to the labeled indication for ELEVIDYS to include a full approval for the treatment of ambulatory Duchenne patients who are at least 4 years of age. The FDA also granted accelerated approval for non-ambulatory patients aged 4 and older. We are also aware of several companies and research institutions conducting clinical trials of product candidates focused on systemic gene transfers for Duchenne, including Genethon with a product candidate currently being evaluated in a Phase 1/2/3 clinical trial, REGENXBIO Inc. with a product candidate in Phase 1/2 clinical development. Pfizer Inc., or Pfizer had a product candidate in Phase 3 clinical development. On June 12, 2024, Pfizer announced that its candidate did not meet the primary endpoint or demonstrate significance in key secondary endpoints of the trial and on July 30, 2024, announced it had discontinued its DMD program. We are also aware of several companies and research institutions conducting clinical trials in small molecule product candidates focused on CPVT, including Armgo Pharmaceuticals, Inc. with an orally administered Rycal in a Phase 2 clinical trial and Cardurion Pharmaceuticals, Inc. with an orally administered CAMKII-delta inhibitor candidate in a Phase 2 clinical trial. 49

~~Our~~We ~~commercial~~are ~~opportunity~~aware ~~could~~of bea ~~reduced~~number orof ~~eliminated~~companies ifand ~~competitors~~research ~~develop~~institutions ~~and~~developing ~~commercialize~~gene ~~products~~transfer ~~that~~programs ~~are~~progressing ~~first~~in toDuchenne. ~~market~~For orexample, ~~are~~in ~~safer~~June 2023, ~~more~~Sarepta ~~effective~~Therapeutics, ~~have~~Inc. ~~fewer~~("Sarepta") orannounced ~~less~~that ~~severe~~it ~~side~~had ~~effects,~~received ~~have~~accelerated ~~broader~~approval ~~market~~for ~~acceptance~~its gene therapy candidate ELEVIDYS® for the treatment of ambulatory pediatric patients aged 4 through 5 years with Duchenne. In June 2024, ~~are~~Sarepta ~~more~~announced ~~convenient~~an orexpanded US approval of ELEVIDYS® for patients who are ~~less~~at ~~expensive~~least ~~than~~4 ~~any~~years ~~Candidate~~of ~~that~~age weincluding ~~may~~full ~~develop.~~approval ~~Changes~~for ~~within~~ambulatory ~~the~~Duchenne ~~competitive~~patients ~~landscape~~and ~~could~~accelerated ~~lead~~approval usfor tonon-ambulatory ~~alter~~Duchenne ~~regulatory~~patients. We are also aware of several companies and research institutions conducting clinical ~~trial~~trials ~~strategy~~of product candidates focused on systemic gene transfers for Duchenne, ~~baseline~~including ~~eligibility~~Genethon ~~criteria~~with ora ~~make~~product ~~other~~candidate ~~modifications~~currently tobeing evaluated in a Phase 1/2/3 clinical trial ~~designs~~and REGENXBIO Inc. with a product candidate in Phase 1/2/3 clinical development.

We are also aware of a number of companies and research institutions developing gene transfer programs in FA. For example, Lexeo Therapeutics is developing an IV gene therapy to treat the cardiac manifestations of FA. Other competitors currently developing gene therapies to treat FA are in preclinical development, including Neurocrine Biosciences in collaboration with Voyager Therapeutics. We are also aware of other companies developing non-gene therapies for FA, such as Design Therapeutics, Larimar Therapeutics, and PTC Therapeutics who has a PDUFA target action date of August 19, 2025. Biogen’s SKYCLARYS® (omaveloxolone) was approved for the treatment of FA in adults and adolescents aged 16 and older by the FDA and the European Commission in February 2023 and February 2024, respectively.

We are also aware of several companies and research institutions conducting clinical trials in small molecule product candidates focused on CPVT, including Cardurion Pharmaceuticals Inc., with an orally administered CAMKII-delta inhibitor candidate in a Phase 2 clinical trial.

Our commercial opportunity could be reduced or eliminated if competitors develop and commercialize products that are first to market or are safer, more effective, have fewer or less severe side effects, have broader market acceptance, are more convenient or are less expensive than any Candidate that we may develop. Changes within the competitive landscape could lead us to alter regulatory and/or clinical trial strategy, baseline eligibility criteria or make other modifications to clinical trial designs.

We are aware of several companies focused on developing gene therapies in various indications, as well as several companies addressing other methods for modifying genes and regulating gene expression. Any advances in gene therapy technology made by a competitor may be used to develop therapies that could compete against Candidates we develop.

We may fail to capitalize on other potential Candidates that may represent a greater commercial opportunity or for which there is a greater likelihood of success.

The success of our business depends upon our ability to develop and commercialize our Candidates. Because we have limited resources, we may forego or delay pursuit of opportunities with certain programs or Candidates or for indications that later prove to have greater commercial potential than our Candidates. For example, in September 2022, we announced that we would be pausing activities for SGT-001, which we are now no longer developing.

In addition, in October 2020, we entered into a collaboration and license agreement with Ultragenyx, pursuant to which we granted Ultragenyx an exclusive worldwide license under certain intellectual property rights controlled by us to develop AAV8 or other clade E AAV variant pharmaceutical products that express our MD5 nNOS binding domain form of microdystrophin protein for the treatment of Duchenne and other disease indications resulting from a lack of functional dystrophin, which we refer to as the Licensed Products.

Our spending on current and future research and development programs may not yield any commercially viable Candidates. If we do not accurately evaluate the commercial potential for a particular Candidate, we may relinquish valuable rights to that Candidate through strategic collaborations, licensing or other arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such Candidate. Alternatively, we may allocate internal resources to a Candidate in a therapeutic area in which it would have been more advantageous to enter into a partnering arrangement. If any of these events occur, we may be forced to abandon our development efforts with respect to a particular Candidate or fail to develop a potentially successful Candidate.

Risks ~~related~~Related to the ~~manufacturing~~Manufacturing and ~~commercialization~~Commercialization of our Candidates

We have entered into, and may in the future enter into, collaborations with third parties for the development or commercialization of our Candidates. If our collaborations are not successful, we may not be able to capitalize on the market potential of these Candidates and our business could be adversely affected.

InWhile ~~October~~we ~~2020~~have retained all necessary rights to and are developing on our own SGT-003, SGT-212 and other Candidates, we ~~entered~~may in the future enter into adevelopment, distribution or marketing arrangements with third parties with respect to SGT-003, SGT-212 or other Candidates. Our likely collaborators for any such sales, marketing, distribution, development, licensing or broader collaboration arrangements include large and ~~license~~mid-size ~~agreement~~pharmaceutical companies, regional and national pharmaceutical companies and biotechnology companies. If we enter into any such arrangements with ~~Ultragenyx~~any third parties in the future, ~~pursuant~~we will likely have limited control over the amount and timing of resources that our collaborators dedicate to ~~which~~the wedevelopment ~~granted~~or ~~Ultragenyx~~commercialization anof ~~exclusive~~our ~~worldwide~~Candidates. ~~license~~Our ~~under~~ability ~~certain~~to ~~intellectual~~generate ~~property~~revenues ~~rights~~from ~~controlled~~these byarrangements uswill depend on our collaborators’ abilities and efforts to ~~develop~~successfully perform the ~~Licensed~~functions ~~Products~~assigned to them in these arrangements.

While we have retained all rights to and are developing on our own SGT-003, we may in the future enter into development, distribution or marketing arrangements with third parties with respect to SGT-003 or other Candidates. Our likely collaborators for any such sales, marketing, distribution, development, licensing or broader collaboration arrangements include large and mid-size pharmaceutical companies, regional and national pharmaceutical companies and biotechnology companies. If we enter into any such arrangements with any third parties in the future, we will likely have limited control over the amount and timing of resources that our collaborators dedicate to the development or commercialization of our Candidates. Our ability to generate revenues from these arrangements will depend on our collaborators’ abilities and efforts to successfully perform the functions assigned to them in these arrangements. 50

Collaborations that we enter into, ~~including our collaboration with Ultragenyx,~~ may not be successful, and any success will depend heavily on the efforts and activities of such collaborators. Collaborations pose a number of risks, including the following:

•

collaborators have significant discretion in determining the amount and timing of efforts and resources that they will apply to these collaborations;

•

collaborators may not perform their obligations as expected;

•

collaborators may not pursue development of our Candidates or may elect not to continue or renew development programs based on results of clinical trials or other studies, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities;

•

collaborators may not pursue commercialization of any Candidates that achieve regulatory approval or may elect not to continue or renew commercialization programs based on results of clinical trials or other studies, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that may divert resources or create competing priorities;

•

collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a Candidate, repeat or conduct new clinical trials or require a new formulation of a Candidate for clinical testing;

•

we may not have access to, or may be restricted from disclosing, certain information regarding Candidates being developed or commercialized under a collaboration and, consequently, may have limited ability to inform our stockholders about the status of such Candidates on a discretionary basis;

•

51collaborators could develop products that compete directly or indirectly with our Candidates and products pursuant to the collaboration;

•

collaborators, including Ultragenyx, could develop products that compete directly or indirectly with our Candidates and products pursuant to the collaboration;

collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our Candidates and products if the collaborators believe that the competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours;

•

Candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our Candidates;

•

a collaborator may fail to comply with applicable regulatory requirements regarding the development, manufacture, distribution or marketing of a Candidate or product;

•

a collaborator with marketing and distribution rights to one or more of our Candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products;

•

disagreements with collaborators, including disagreements over intellectual property or proprietary rights, contract interpretation or the preferred course of development, might cause delays or terminations of the research, development or commercialization of Candidates, might lead to additional responsibilities for us with respect to Candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive;

•

collaborators may not properly obtain, maintain, enforce, defend or protect our intellectual property or proprietary rights or may use our proprietary information in such a way as to potentially lead to disputes or legal proceedings that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation;

•

disputes may arise with respect to the ownership of intellectual property developed pursuant to our collaborations;

•

collaborators may infringe, misappropriate or otherwise violate the intellectual property or proprietary rights of third parties, which may expose us to litigation and potential liability; and

•

collaborations may be terminated for the convenience of the collaborator, and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable Candidates.

Collaboration agreements may not lead to development or commercialization of Candidates in the most efficient manner, or at all. If any collaborations that we enter into do not result in the successful development and commercialization of products or if one of our collaborators terminates its agreement with us, we may not receive any future research funding or milestone or royalty payments under the collaboration. If we do not receive the funding we expect under these agreements, our development of our Candidates could be delayed and we may need additional resources to develop our Candidates. All of the risks relating to product development, regulatory approval and commercialization described herein also apply to the activities of our collaborators.

Additionally, subject to its contractual obligations to us, if a collaborator of ours is involved in a business combination, the collaborator might deemphasize or terminate the development or commercialization of any Candidate licensed to it by us. If one of our ~~collaborators terminates its agreement with us, we may find it more difficult to attract new collaborators and our perception in the business and financial communities could be adversely affected.~~

collaborators terminates its agreement with us, we may find it more difficult to attract new collaborators and our perception in the business and financial communities could be adversely affected.

We may seek to establish strategic partnerships for developing Candidates or platform technologies due to capital costs required to develop, manufacture and commercialize our Candidates or platform technologies. We may not be successful in our efforts to establish strategic partnerships or other alternative arrangements because, among other things, our research and development pipeline may be insufficient, Candidates or platform technologies may be deemed to be at too early of a stage of development for collaborative effort or third parties may not view our Candidates or platform technologies as having the requisite potential to demonstrate safety and efficacy. We cannot be certain that, following a strategic transaction, we will achieve an economic or business benefit that justifies such transaction. If we seek to but are unable to reach agreements with suitable collaborators on a timely basis, on acceptable terms or at all, we may have to curtail, reduce or delay the development of a Candidate, delay its potential commercialization, reduce the scope of any sales or marketing activities or increase our expenditures and undertake development, manufacturing or commercialization activities independently. If we elect to fund our own independent development or commercialization activities, we will need to obtain additional expertise and additional capital, which may not be available to us on acceptable terms or at all. If we fail to enter into collaborations and do not have sufficient funds or expertise to undertake the necessary development, manufacturing and commercialization activities, we may not be able to further develop our Candidates or platform technologies.

We have limited gene therapy manufacturing experience and could experience production problems and delays in obtaining regulatory approval of our manufacturing processes, which could result in delays in the development or commercialization of SGT-003, SGT-212, SGT-501, or our other Candidates. In addition, changes to manufacturing sites or processes, or formulations for our Candidates may result in additional cost or delay.

We have limited experience manufacturing SGT-003, SGT-212, SGT-501 and our other Candidates. The manufacturing process we have used historically and the manufacturing process we plan to use in the future to produce product for our Candidates are complex and our processes have not been validated for commercial use. As Candidates progress through preclinical studies and clinical trials to marketing approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods and formulation, are altered along the way in an effort to enhance safety, quality, efficacy, yield, manufacturing batch size, minimize costs and achieve consistent results. For example, we have moved to a transient transfection-based manufacturing process for SGT-003 and while we have observed early positive results in preclinical studies and in our ongoing INSPIRE DUCHENNE trial using this new manufacturing process, any further changes in manufacturing or formulation may result in effects and results that are different from those observed in our completed studies to date. Similarly, in the future we may further alter our existing process or introduce an alternative process or formulation of one or more of our Candidates during the course of our planned preclinical studies or clinical trials. Such changes carry the risk that they will not achieve these intended objectives. Any of these changes could cause our Candidates to perform differently and affect the results of planned clinical trials or other future clinical trials conducted with the altered materials. This could delay initiation or completion of clinical trials, require the conduct of bridging studies or clinical trials or the repetition of one or more studies or clinical trials, increase development costs, delay approval of our Candidates and jeopardize our ability to commercialize our Candidates, if approved, and generate revenue.

The production of SGT-003, SGT-212 and SGT-501 uses a transient transfection-based process which requires processing steps that are more complex than those required for most chemical pharmaceuticals. We also intend to use transient transfection manufacturing for our other Candidates. Moreover, unlike chemical pharmaceuticals, the physical and chemical properties of a gene therapy candidate such as ours generally cannot be fully characterized. As a result, assays of the finished product may not be sufficient to ensure that the product will perform in the intended manner. Accordingly, we have and will continue to employ multiple steps to control our manufacturing processes to assure that the process works and that SGT-003, SGT-212, SGT-501 and our other Candidates are made strictly and consistently in compliance with such processes. We must supply all necessary documentation in support of an IND, BLA or MAA on a timely basis and must adhere to the FDA’s and the European Union’s cGMP requirements before we can obtain marketing approval for SGT-003, SGT-212, SGT-501, and other Candidates. In order to obtain approval, we will need to ensure that all of our processes, methods and equipment are compliant with cGMP requirements, by performing extensive audits of contract laboratories, manufacturers and suppliers.

We ~~have~~currently ~~limited~~rely ~~gene~~on ~~therapy~~multiple ~~manufacturing~~third-party ~~experience~~manufacturers for supply of SGT-003, SGT-212 and ~~could~~SGT-501 ~~experience~~and ~~production~~plan ~~problems~~to rely on third-party manufacturers for our other Candidates. In order to produce sufficient quantities of Candidates for clinical trials and ~~delays~~initial inU.S. ~~obtaining~~commercial ~~regulatory~~demand, ~~approval~~we have and will continue to further optimize and increase the capacity of our manufacturing process at our third-party manufacturers. We may need to make changes to our manufacturing processes, ~~which~~beyond ~~could~~implementation ~~result~~of a transient transfection-based manufacturing process. We may not be able to produce sufficient quantities of drug product due to several factors, including capacity constraints, equipment malfunctions, facility contamination, material shortages or contamination, natural disasters, a public health issue (for example, an outbreak of a contagious disease such as the recent COVID-19 pandemic), disruption in ~~delays~~utility services, human error or disruptions in the operations of our suppliers. We may experience variability with respect to the success and yield between lots that will require continued engagement in process development activities to improve the reproducibility, reliability, quality and consistency of yields of the manufacturing process. Additional manufacturing runs will be required to produce necessary or ~~commercialization~~adequate supply for our future clinical trials and there is no guarantee that all of those runs will be within specifications or produce adequate supply. If we are not able to produce sufficient supply on the timeline expected, our overall development schedule for SGT-003, SGT-~~501~~212, orSGT-501 and other ~~current~~Candidates could be delayed, and ~~Candidates.~~we Incould ~~addition,~~incur ~~changes~~additional toexpense. ~~manufacturing~~Any ~~sites~~such orfailure ~~processes,~~could delay or ~~formulations~~prevent ~~for~~development ~~our~~and ~~Candidates~~commercialization ~~may~~of ~~result~~SGT-003, inSGT-212, ~~additional~~SGT-501 ~~cost~~ or ~~delay.~~other Candidates.

We have limited experience manufacturing SGT-003, SGT-501 and our other current or Candidates. The manufacturing process we have used historically and the manufacturing process we plan to use in the future to produce product for our Candidates are complex and our processes have not been validated for commercial use. As Candidates progress through preclinical studies and clinical trials to marketing approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods and formulation, are altered along the way in an effort to enhance safety, quality, efficacy, yield, manufacturing batch size, minimize costs and achieve consistent results. For example, we have moved to a transient transfection-based manufacturing process for SGT-003 and while we have observed positive results in preclinical and clinical studies using this new manufacturing process, any further changes in manufacturing or formulation may result in effects and results that are different from those observed in our completed studies to date. Similarly, in the future we may further alter our existing process or introduce an alternative process or formulation of one or more of our Candidates during the course of our planned preclinical studies or clinical trials. Such changes carry the risk that they will not achieve these intended objectives. Any of these changes could cause our Candidates to perform differently and affect the results of planned clinical trials or other future clinical trials conducted with the altered materials. This could delay initiation or completion of clinical trials, require the conduct of bridging studies or clinical trials or the repetition of one or more studies or clinical trials, increase development costs, delay approval of our Candidates and jeopardize our ability to commercialize our Candidates, if approved, and generate revenue.

The production of SGT-003 and SGT-501 uses a transient transfection-based process which requires processing steps that are more complex than those required for most chemical pharmaceuticals. We also intend to use transient transfection manufacturing for our other Candidates. Moreover, unlike chemical pharmaceuticals, the physical and chemical properties of a gene therapy candidate such as ours generally cannot be fully characterized. As a result, assays of the finished product may not be sufficient to ensure that the product will perform in the intended manner. Accordingly, we have and will continue to employ multiple steps to control our manufacturing processes to assure that the process works and that SGT-003, SGT-501 and our other Candidates are made strictly and consistently in compliance with such processes. We must supply all necessary documentation in support of an IND, BLA or MAA on a timely basis and must adhere to the FDA’s and the European Union’s cGMP requirements before we can obtain marketing approval for SGT-003, SGT-501, and other Candidates. In order to obtain approval, we will need to ensure that all of our processes, methods and equipment are compliant with cGMP requirements, by performing extensive audits of contract laboratories, manufacturers and suppliers.

We currently rely on third-party manufacturers for SGT-003 and SGT-501 and plan to rely on third-party manufacturers for our Candidates. In order to produce sufficient quantities of Candidates for clinical trials and initial U.S. commercial demand, we have and will continue to further optimize and increase the capacity of our manufacturing process at our third-party manufacturers. We may need to make changes to our manufacturing processes, beyond implementation of a transient transfection-based manufacturing process. We may not be able to produce sufficient quantities of drug product due to several factors, including capacity constraints, equipment malfunctions, facility contamination, material shortages or contamination, natural disasters, a public health issue (for example, an outbreak of a contagious disease such as the recent COVID-19 pandemic), disruption in utility services, human error or disruptions in the operations of our suppliers. We may experience variability with respect to the success and yield between lots that will require continued engagement in process development activities to improve the reproducibility, reliability, quality and consistency of yields of the manufacturing process. Additional manufacturing runs will be required to produce necessary or adequate supply for our future clinical trials and there is no guarantee that all of those runs will be within specifications or produce adequate supply. If we are not able to produce sufficient supply on the timeline expected, our overall development schedule for SGT-003, SGT-501 and other Candidates could be delayed, and we could incur additional expense. Any such failure could delay or prevent commercialization of SGT-003 or our IND or commercialization of SGT-501 or other Candidates.

If supply from a manufacturing facility is interrupted, including as a result of capacity constraints, equipment malfunctions, facility contamination, material shortages or contamination, natural disasters, public health emergencies or pandemics, such as the recent COVID-19 pandemic, disruption in utility services or human error, there could be a significant disruption in supply of SGT-003 or other Candidates. In such instance, we may need to locate appropriate replacement third-party manufacturers, and we may not be able to enter into arrangements with such additional third-party manufacturers on favorable terms or at all. Use of new third-party manufacturers could increase the risk of delays in production or insufficient supplies of our Candidates as we transfer our manufacturing technology to these manufacturers and as they gain experience manufacturing our Candidates.

In addition, product manufacturers and their facilities are subject to payment of user fees and continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP requirements and adherence to commitments made in the BLA or foreign marketing application. If we, or a regulatory authority, discover previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, a regulatory authority may impose restrictions relative to that product, the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing.

In addition, the FDA, the EMA and other foreign regulatory authorities may require us to submit samples of any lot of any approved product together with the protocols showing the results of applicable tests at any time. Under some circumstances, the FDA, the EMA or other foreign regulatory authorities may require that we not distribute a lot until the agency authorizes its release. Lot failures or product recalls could cause us to delay or abandon clinical trials or product launches.

We also may encounter problems hiring and retaining the experienced scientific, quality control and manufacturing personnel needed to oversee our manufacturing and quality control process, which could result in delays in our production or difficulties in maintaining compliance with applicable regulatory requirements.

Any problems in our manufacturing process or facilities could make us a less attractive collaborator for potential partners, including biotechnology and pharmaceutical companies and academic research institutions, which could limit our access to additional attractive development programs. Problems in our manufacturing process or facilities also could restrict our ability to meet market demand for our Candidates.

We do not independently manufacture material for our ongoing or planned clinical programs and we are utilizing and expect to utilize materials manufactured by cGMP-compliant third-party suppliers. If these third-party manufacturers do not successfully carry out their contractual duties, meet expected deadlines or manufacture our Candidates in accordance with quality and regulatory requirements or if there are disagreements between us and these third-party manufacturers, we may not be able to complete, or may be delayed in completing, the clinical trials required for approval of our Candidates. In such instances, we may need to locate an appropriate replacement third-party relationship, which may not be readily available or on acceptable terms, which would cause additional delay or increased expense prior to the approval of our Candidates.

Additionally, we rely on our third-party manufacturers for their compliance with the cGMP and their maintenance of adequate quality control, quality assurance and qualified personnel. Furthermore, all of our third-party suppliers and manufacturers are engaged with other companies to supply and/or manufacture materials or products for such companies, which exposes them to regulatory risks for the production of such materials and products. FDA inspections may identify compliance issues at third-party manufacturer facilities or at the facilities of third-party suppliers that may disrupt production or distribution, or require substantial resources to correct and prevent recurrence of any deficiencies, and could result in fines or penalties by regulatory authorities. In addition, discovery of problems with a product or the failure to comply with applicable requirements may result in restrictions on a product, manufacturer or holder of an approved BLA, including withdrawal or recall of the product from the market or other voluntary, FDA‑initiated or judicial action, including fines, injunctions, civil penalties, license revocations, seizure, total or partial suspension of production or criminal penalties, any of which could significantly and adversely affect supplies of our Candidates.

In addition, we do not currently have long-term supply or manufacturing arrangements in place for the production of our Candidates at commercial scale. Although we intend to establish additional sources for long-term supply, from one or more third-party manufacturers, if the gene therapy industry were to grow, we may encounter increasing competition for the materials necessary for the production of Candidates. We may experience difficulties in scaling up production beyond clinical batches. Furthermore, demand for third-party cGMP manufacturing facilities may grow at a faster rate than existing manufacturing capacity, which could disrupt our ability to find and retain third-party manufacturers capable of producing sufficient quantities of our Candidates for future clinical trials or to meet initial commercial demand in the United States. We currently rely, and expect to continue to rely, on additional third parties to manufacture materials for our Candidates and to perform quality testing. We intend to maintain third-party manufacturers for these materials, as well as to serve as additional sources of our Candidates, which will expose us to risks including:

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reduced control of manufacturing activities;

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the inability of certain CMOs to produce our Candidates in the necessary quantities, or in compliance with current cGMP or in compliance with pertinent regulatory requirements and within our planned time frame and cost parameters;

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termination or nonrenewal of manufacturing and service agreements with third parties in a manner or at a time that is costly or damaging to us; and

•

disruptions to the operations of our third-party manufacturer and our and their suppliers caused by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier, natural disasters or public health issues.

Any of these events could lead to clinical trial delays or failure to obtain regulatory approval or impact our ability to successfully commercialize our Candidates. Some of these events could be the basis for FDA action, including injunction, recall, seizure or total or partial suspension of product manufacture.

If we are unable to establish sales, distribution and marketing capabilities or enter into agreements with third parties to market and sell our Candidates, we will be unable to generate any product revenue.

We currently have no sales, distribution or marketing organization. To successfully commercialize any Candidate that may result from our development programs, we will need to develop these capabilities, either on our own or with others. The establishment and development of our own commercial team or the establishment of a contract sales force to market any Candidate we may develop will be expensive and time-consuming and could delay any product launch. Moreover, we cannot be certain that we will be able to successfully develop this capability. We may enter into collaborations regarding our Candidates with other entities to utilize their established marketing and distribution capabilities, but we may be unable to enter into such agreements on favorable terms, if at all. If any future collaborators do not commit sufficient resources to commercialize our Candidates, or we are unable to develop the necessary capabilities on our own, we will be unable to generate sufficient product revenue to sustain our business. We compete with many companies that currently have extensive, experienced and well-funded sales, distribution and marketing operations to recruit, hire, train and retain marketing and sales personnel. We will also face competition in our search for third parties to assist us with the sales and marketing efforts of any future products. Without an internal team or the support of a third party to perform marketing and sales functions, we will be unable to compete successfully against these more established companies.

If we are unable to establish medical affairs capabilities, we will be unable to establish an educated market of physicians to administer any future products.

We currently have no medical affairs team. If we are unable to successfully build a medical affairs team to address scientific and medical questions and provide expert guidance and education in the application, administration and utilization of any future products to physicians, we may not be able to establish an educated market for our products. The establishment and development of our own medical affairs team will be expensive and time-consuming and could delay any product launch. Moreover, we cannot be certain that we will be able to successfully develop this capability.

If the market opportunities for any of our future products are smaller than we believe they are, our revenue prospects may be adversely affected and our business may suffer.

We currently focus our research and product development on treatments for rare genetic neuromuscular and cardiac indications. Our understanding of the patient population with these diseases is based on estimates in published literature and by disease-focused foundations. These estimates may prove to be incorrect and new studies may reduce the estimated incidence or prevalence of these diseases. The number of patients in the United States, the European Union and elsewhere may turn out to be lower than expected, patients may not be otherwise amenable to treatment with our Candidates or patients may become increasingly difficult to identify and access.

Further, there are several factors that could contribute to reducing the actual number of patients who could receive our Candidates less than the potentially addressable market. These include the lack of widespread availability of, and limited reimbursement for, new therapies in many underdeveloped markets. Further, the severity of the progression of a degenerative disease such as Duchenne and FA up to the time of treatment will likely diminish the therapeutic benefit conferred by a gene therapy due to irreversible cell damage.

Certain patients’ immune systems might prohibit the successful delivery of certain gene therapy products, thereby potentially limiting the population of patients amenable to gene transfer.

As with many AAV-mediated gene therapy approaches, certain patients’ immune systems might prohibit the successful delivery of certain gene therapy products, thereby potentially limiting the population of patients amenable to gene transfer. While we are working to better understand the prevalence of antibodies to AAV, or seroprevalence, as it relates to gene therapy, the exact seroprevalence is currently unknown and varies by AAV serotype and age. We may not be able to address these potentially limiting factors for gene therapy as a treatment for certain patients.

The commercial success of any of our Candidates, if approved, will depend upon market acceptance by physicians, patients, third‑party payors and others in the medical community.

Even with the requisite approvals from the FDA in the United States, the European Commission in the European Union and other regulatory authorities internationally, the commercial success of our Candidates will depend, in part, on the acceptance of physicians, patients and health care payors of gene therapy products in general, and, in particular for each of our current and future Candidate, as medically necessary, cost-effective and safe. Any product that we commercialize may not gain acceptance by physicians, patients, health care payors and others in the medical community due to ethical, social, medical and legal concerns. If our products do not achieve an adequate level of acceptance, we may not generate significant product revenue and may not become profitable. The degree of market acceptance of gene therapy products and, in particular, our current and future Candidates, if approved for commercial sale, will depend on multiple factors, including:

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the efficacy and safety of our current and future Candidates as demonstrated in clinical trials;

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the efficacy and potential and perceived advantages of our Candidates over alternative treatments;

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the cost of treatment relative to alternative treatments;

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the clinical indications for which our Candidates are approved by the FDA, the European Commission or other regulatory authorities, as applicable;

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the willingness of physicians to prescribe new therapies;

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the willingness of the target patient population to try new therapies;

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the prevalence and severity of any side effects;

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product labeling or product insert requirements of the FDA, the EMA or other regulatory authorities, including any limitations or warnings contained in a product’s approved labeling;

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relative convenience and ease of administration;

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the strength of marketing and distribution support;

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the timing of market introduction of competitive products;

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the availability of products to meet market demand;

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publicity concerning our Candidates or competing products and treatments;

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any restrictions on the use of our products together with other medications; and

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favorable third-party payor coverage and adequate reimbursement.

Even if a potential Candidate displays a favorable efficacy and safety profile in preclinical studies and clinical trials, market acceptance of the product will not be fully known until after it is launched.

Our efforts to educate the medical community and third-party payors on the benefits of our Candidates may require significant resources and may never be successful. Such efforts may require more resources than are typically required due to the complexity and uniqueness of our potential Candidates. If our Candidates are approved but fail to achieve market acceptance among physicians, patients or third-party payors, we will not be able to generate significant revenue from any such product.

Gene transfer remains a novel technology that faces many challenges imposed by the humoral immune response. The immunogenicity of AAV gene transfers is a very complex process that we and others continue to work understand through the extensive clinical experience that now exists over a broad spectrum of therapeutic areas and indications. Marked inflammatory toxicities have been observed, including complement activation, cytopenias, severe hepatotoxicity as well as transgene related toxicities representing part of the continuum of diverse aspects of clinical immune responses that can be observed post gene transfer.

In particular, our success will depend upon physicians who specialize in the treatment of our pipeline indications, prescribing treatments that involve the use of viral capsids in lieu of, or in addition to, other treatments with which they are more familiar and for which greater clinical data may be available. More restrictive government regulations or negative public opinion may delay or impair the development and commercialization or demand for any Candidate we may develop. A public backlash developed against gene therapy following the death of a patient in 1999 during a gene therapy clinical trial of research subjects with ornithine transcarbamylase, or ("OTC,") deficiency, a rare disorder in which the liver lacks a functional copy of the OTC gene. The death of the clinical trial subject was due to complications of adenovirus capsid administration. Dr. James M. Wilson, former chair of our Scientific Advisory Board, was a co-investigator of the 1999 trial while he was Director of the Institute for Human Gene Therapy of the University of Pennsylvania. Serious adverse events in our clinical trials, including the events that led to the previously-lifted clinical holds on IGNITE DMD or other clinical trials involving gene transfer products or our competitors’ products, even if not ultimately attributable to the relevant Candidates, and the resulting publicity, could result in increased government regulation, unfavorable public perception, potential regulatory delays in the testing or approval of our Candidates, stricter labeling requirements for our Candidates, if approved, and a decrease in demand for our Candidates.

Any contamination in our manufacturing process, shortages of materials or failure of any of our key suppliers to deliver necessary components could result in interruption in the supply of our Candidates and delays in our clinical development or commercialization schedules.

Given the nature of biologics manufacturing, there is a risk of contamination in our manufacturing processes. Any contamination could materially adversely affect our ability to produce our Candidates on schedule and could cause reputational damage.

Some of the materials required in our manufacturing process are derived from biologic sources. Such materials are difficult to procure and may be subject to contamination or recall. A material shortage, contamination, recall or restriction on the use of biologically derived substances in the manufacture of our Candidates could adversely impact or disrupt the manufacturing or the production of clinical material, which could materially and adversely affect our development timelines.

The insurance coverage and reimbursement status of newly approved products is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for our Candidates, if approved, could limit our ability to market those products and decrease our ability to generate product revenue.

There is significant uncertainty related to third-party coverage and reimbursement of newly approved products. We expect the cost of a single administration of gene transfer products, such as those we are developing, to be substantial, when and if they achieve regulatory approval. We expect that coverage and reimbursement by government and private payors will be essential for most patients to be able to afford these treatments. Accordingly, sales of our future products, if approved, will depend substantially, both domestically and abroad, on the extent to which the costs of such Candidates will be paid by health maintenance, managed care, pharmacy benefit and similar health care management organizations, or will be reimbursed by government authorities, private health coverage insurers and other third-party payors. Coverage and reimbursement by a third-party payor may depend upon several factors, including the third-party payor’s determination that use of a product is:

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a covered benefit under its health plan;

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safe, effective and medically necessary;

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appropriate for the specific patient;

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cost-effective;

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durable and a one-time treatment, as applicable; and

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neither experimental nor investigational.

Obtaining coverage and reimbursement for a product from third-party payors is a time-consuming and costly process that could require us to provide to the payor supporting scientific, clinical and cost-effectiveness data. If coverage and reimbursement are not available, or are available only at limited levels, we may not be able to successfully commercialize our future products, if approved. Even if coverage is provided, the approved reimbursement amount may not be adequate to realize a sufficient return on our investment.

To our knowledge, only a limited number of gene transfer products have been approved for coverage and reimbursement by the Centers for Medicare & Medicaid Services, ~~or the~~ ("CMS"), the agency responsible for administering the Medicaid program. It is difficult to predict what the CMS will decide with respect to coverage and reimbursement for fundamentally novel products such as ours, as there is no body of established practices and precedents for these types of products either in the United States or the European Union. For example, several cancer drugs have been approved for reimbursement in the United States and have not been approved for reimbursement in certain European Union member states and vice versa. It is difficult to predict what third-party payors will decide with respect to the coverage and reimbursement for our future products, if approved.

Governments outside the United States tend to impose strict price controls, which may adversely affect our revenue, if any.

Outside the United States, international operations generally are subject to extensive government price controls and other market regulations, and increasing emphasis on cost-containment initiatives in the European Union, Canada and other countries may put pricing pressure on us. In general, the prices of therapeutics outside the United States are substantially lower than in the United States. Other countries may allow companies to fix their own prices for therapeutics, but monitor and control company profits. Additional foreign price controls or other changes in pricing regulations could restrict the amount that we are able to charge for our Candidates. Accordingly, in markets outside the United States, the reimbursement for our Candidates may be reduced compared with the United States and may be insufficient to generate commercially reasonable product revenue.

Additionally, in countries where the pricing of gene therapy products is subject to governmental control, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product. Political, economic and regulatory developments may further complicate pricing negotiations, and pricing negotiations may continue after reimbursement has been obtained. Reference pricing used by various European Union member states and parallel distribution, or arbitrage between low-priced and high-priced member states, can further reduce prices. To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our Candidate to other available therapies. Reimbursement of our products may be unavailable or limited in scope or amount, which would adversely affect our revenue, if any.

been obtained. Reference pricing used by various European Union member states and parallel distribution, or arbitrage between low-priced and high-priced member states, can further reduce prices. To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our Candidate to other available therapies. Reimbursement of our products may be unavailable or limited in scope or amount, which would adversely affect our revenue, if any.

If we obtain approval to commercialize our future products outside of the United States, in particular in the European Union, a variety of risks associated with international operations could materially adversely affect our business.

We expect that we will be subject to additional risks in commercializing our future products, if approved, outside the United States, including:

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different regulatory requirements for approval of therapeutics in foreign countries;

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reduced protection for intellectual property rights;

•

the existence of additional third-party patent rights of potential relevance to our business;

•

unexpected changes in tariffs, trade barriers and regulatory requirements;

•

economic weakness, including inflation, or political instability in particular foreign economies and markets;

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compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;

•

foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country;

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foreign reimbursement, pricing and insurance regimes;

•

production shortages resulting from any events affecting material supply or manufacturing capabilities abroad; and

•

business interruptions resulting from geopolitical actions, including war and terrorism or natural disasters including earthquakes, typhoons, floods and fires.

The failure to comply with applicable foreign regulatory requirements may result in, among other things, fines, suspension, variation or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.

If we engage in future acquisitions or strategic collaborations, this may increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities and subject us to other risks.

We may evaluate various acquisitions and strategic collaborations, including licensing or acquiring complementary products, intellectual property rights, technologies or businesses. Any potential acquisition or strategic collaboration may entail numerous risks, including:

•

increased operating expenses and cash requirements;

•

the assumption of additional indebtedness or contingent liabilities;

•

assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;

•

the diversion of our management’s attention from our existing Candidates and initiatives in pursuing such acquisition or strategic collaboration;

•

retention of key employees, the loss of key personnel and uncertainties in our ability to maintain key business relationships;

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risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and regulatory approvals; and

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our inability to generate revenue from acquired technology and/or products sufficient to meet our objectives in undertaking the acquisition or collaboration or even to offset transaction costs.

In addition, if we undertake acquisitions, we may issue dilutive securities, assume or incur debt obligations, incur large one-time expenses and acquire intangible assets that could result in significant future amortization expense. Moreover, we may not be able to locate suitable acquisition or collaboration opportunities and this inability could impair our ability to grow or obtain access to technology or products that may be important to the development of our business.

58Risks Related to our Business Operations

Risks related to our business operations

Our future success depends on our ability to retain key employees, consultants and advisors and to attract, retain and motivate qualified personnel.

We are highly dependent on members of our executive team, the loss of whose services may adversely impact the achievement of our objectives. While we have entered into employment agreements with certain of our executive officers, any of them could leave our employment at any time. We currently do not have “key person” insurance on any of our employees. The loss of the services of one or more of our current key employees might impede the achievement of our research, development and commercialization objectives.

Recruiting and retaining other qualified employees, consultants and advisors for our business, including scientific and technical personnel, also will be critical to our success. There currently is a shortage of skilled individuals with substantial gene therapy experience, which is likely to continue. As a result, competition for skilled personnel, including in gene therapy research and capsid manufacturing, is intense and the turnover rate can be high. We may not be able to attract and retain personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies and academic institutions for individuals with similar skill sets. In addition, the failure to succeed in preclinical or clinical trials or applications for marketing approval may make it more challenging to recruit and retain qualified personnel. The inability to recruit, or loss of services of certain executives, key employees, consultants or advisors, may impede the progress of our research, development and commercialization objectives.

~~Our strategic plan and associated workforce reductions may not result in anticipated savings, could result in total costs and expenses that are greater than expected and could disrupt our business.~~58

In April 2022 and December 2022, we announced a reduction in workforce by approximately 35% and 18%, respectively, as part of a strategic plan designed to streamline our operating structure. We may not realize, in full or in part, the anticipated benefits, savings and improvements in our cost structure from our restructuring efforts due to unforeseen difficulties, delays or unexpected costs. If we are unable to realize the expected operational efficiencies and cost savings from the restructuring, our operating results and financial condition would be adversely affected. We also cannot guarantee that we will not have to undertake additional workforce reductions or restructuring activities in the future. Furthermore, our strategic restructuring plan and the Acquisition may be disruptive to our operations. For example, our workforce reductions and integration of AavantiBio’s business and operations into ours could yield unanticipated consequences, such as attrition beyond planned staff reductions, or increase difficulties in our day-to-day operations. Our workforce reductions and the Acquisition could also harm our ability to attract and retain qualified management, scientific, clinical, manufacturing and sales and marketing personnel who are critical to our business. Any failure to attract or retain qualified personnel could prevent us from successfully developing and commercializing our Candidates in the future.

If we are unable to manage growth in the scale and complexity of our operations, our performance may suffer.

If we are successful in executing our business strategy, we will need to expand our managerial, operational, financial and other systems and resources to manage our operations, continue our research and development activities and, in the longer term, build a commercial infrastructure to support commercialization of our current and future Candidates and products that are approved for sale. Future growth would impose significant added responsibilities on members of management. It is likely that our management, finance, development personnel, systems and facilities currently in place may not be adequate to support this future growth. Our need to effectively manage our operations, growth and any future Candidates requires that we continue to develop more robust business processes and improve our systems and procedures in each of these areas and to attract and retain sufficient numbers of talented employees. We may be unable to successfully implement these tasks on a larger scale and, accordingly, may not achieve our research, development and growth goals.

Our employees may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements, which could cause significant liability for us and harm our reputation.

We are exposed to the risk of employee fraud or other misconduct, including intentional failures to comply with FDA regulations or similar regulations of comparable foreign regulatory authorities, provide accurate information to the FDA or comparable foreign regulatory authorities, comply with manufacturing standards, comply with federal and state healthcare fraud and abuse laws and regulations and similar laws and regulations established and enforced by comparable foreign regulatory authorities, report financial information or data accurately or disclose unauthorized activities to us. Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. This could include violations of the federal Health Insurance Portability and Accountability Act of 1996, or ("HIPAA"), other U.S. federal and state law, and requirements of non-U.S. jurisdictions, including the European Union Data Protection Directive. It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws, standards, regulations, guidance or codes of conduct. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and results of operations, including the imposition of significant fines or other sanctions.

actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and results of operations, including the imposition of significant fines or other sanctions.

Enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our Candidates and may affect the prices we may set.

Our business and financial prospects could be affected by changes in health care spending and policy in the United States and abroad. We operate in a highly regulated industry and new laws or judicial decisions, or new interpretations of existing laws or decisions, related to health care availability, the method of delivery or payment for health care products and services could negatively impact our business, operations and financial condition.

For example, in the United States there is significant interest in promoting health care reform, as evidenced by the enactment of the Patient Protection and Affordable Care Act and the companion Health Care and Education Reconciliation Act, or (the "Health Care Reform Law"). The Health Care Reform Law increased federal oversight of private health insurance plans and included a number of provisions designed to reduce Medicare expenditures and the cost of health care generally, to reduce fraud and abuse, and to provide access to increased health coverage.

The Health Care Reform Law also imposed substantial changes to the U.S. system for paying for health care, including programs to extend medical benefits to millions of individuals who have lacked insurance coverage. Generally, implementation of the Health Care Reform Law has thus far included significant cost-saving, revenue and payment reduction measures with respect to, for example, several government health care programs that might cover our products in the United States, should they be commercialized, including Medicaid and Medicare. Additional downward pricing pressure associated with the Health Care Reform Law includes that the Health Care Reform Law established and provided significant funding for a Patient-Centered Outcomes Research Institute to coordinate and fund Comparative Effectiveness Research, as those terms are defined in the Health Care Reform Law. While the stated intent of Comparative Effectiveness Research is to develop information to guide providers to the most efficacious therapies, outcomes of Comparative Effectiveness Research could influence the reimbursement or coverage for therapies that are determined to be less cost-effective than others. Should any of our products be approved for sale, but then determined to be less cost-effective than alternative therapies, the levels of reimbursement for these products, or the willingness to reimburse at all, could be adversely impacted.

In addition to legislative changes resulting from the passage of the Health Care Reform Law, other legislative changes have been proposed and adopted since the Health Care Reform Law was enacted. In August 2011, the Budget Control Act of 2011, among other things, led to aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which will remain in effect through the first half of 2032. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs. These changes included aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect in April 2013 and will remain in effect through 2029 unless additional Congressional action is taken. The Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, suspended the 2% Medicare sequester from May 1, 2020 through December 31, 2020, and extended the sequester through 2031. These Medicare sequester reductions were suspended through June 2022, with the full 2% cut resuming thereafter. The American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. These new laws may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for any of our Candidates for which we may obtain regulatory approval or the frequency with which any such Candidate is prescribed or used. Indeed, under current legislation, the actual reductions in Medicare payments may vary up to 4%. The Consolidated Appropriations Act, which was signed into law by President Biden in December 2022, made several changes to sequestration of the Medicare program. Section 1001 of the Consolidated Appropriations Act delays the 4% Statutory Pay-As-You-Go Act of 2010 sequester for two years, through the end of calendar year 2024. Triggered by enactment of the American Rescue Plan Act of 2021, the 4% cut to the Medicare program would have taken effect in January 2023. The Consolidated Appropriations Act’s health care offset title includes Section 4163, which extends the 2% Budget Control Act of 2011 Medicare sequester for six months into fiscal year 2032 and lowers the payment reduction percentages in fiscal years 2030 and 2031.59

~~Since~~In ~~enactment~~addition to legislative changes resulting from the passage of the Health Care Reform Law, ~~there~~other legislative changes have been, proposed and ~~continue~~adopted tosince ~~be,~~the ~~numerous~~Health ~~legal~~Care ~~challenges~~Reform ~~and~~Law ~~Congressional~~was ~~actions~~enacted. toIn ~~repeal~~August ~~and~~2011, ~~replace~~the ~~provisions~~Budget Control Act of ~~the~~2011, ~~law.~~among ~~For~~other ~~example~~things, ~~with~~led ~~enactment~~to ofaggregate ~~the~~reductions ~~Tax~~to ~~Cuts~~Medicare ~~and~~payments ~~Jobs~~to ~~Act~~providers of ~~2017,~~up orto ~~the~~2% ~~TCJA,~~per ~~Congress~~fiscal ~~repealed~~year, ~~the~~which ~~“individual~~will ~~mandate.”~~remain ~~The~~in ~~repeal~~effect ofthrough ~~this~~the ~~provision~~first half of ~~the~~2032. ~~Health~~A ~~Care~~Joint ~~Reform~~Select ~~Law,~~Committee ~~which~~on ~~requires~~Deficit ~~most~~Reduction, ~~Americans~~tasked towith ~~carry~~recommending a ~~minimal~~targeted ~~level~~deficit reduction of ~~health~~at ~~insurance,~~least ~~became~~$1.2 ~~effective~~trillion infor ~~2019.~~the ~~Further,~~years on2013 ~~December~~through 142021, ~~2018,~~was aunable ~~U.S.~~to ~~District~~reach ~~Court~~required ~~judge~~goals, inthereby triggering the ~~Northern~~legislation’s ~~District~~automatic ofreduction ~~Texas~~to ~~ruled~~several ~~that~~government ~~the~~programs. ~~individual~~These ~~mandate~~changes ~~portion~~included aggregate reductions to Medicare payments to providers of ~~the~~up ~~Health~~to ~~Care~~2% ~~Reform~~per ~~Law~~fiscal isyear, anwhich ~~essential~~went into effect in April 2013 and ~~inseverable~~will ~~feature~~remain ofin ~~the~~effect ~~Health~~through ~~Care~~2029 ~~Reform~~unless ~~Law~~additional Congressional action is taken. The Coronavirus Aid, Relief, and ~~therefore~~Economic ~~because~~Security Act (the ~~mandate~~"CARES ~~was~~Act") ~~repealed~~suspended asthe ~~part~~2% ofMedicare ~~the~~sequester ~~TCJA~~from May 1, ~~the~~2020 ~~remaining~~through ~~provisions~~December of31, 2020, and extended the ~~Health~~sequester ~~Care~~through ~~Reform~~2031. ~~Law~~These ~~are~~Medicare ~~invalid~~sequester asreductions ~~well.~~were ~~The~~suspended ~~U.S.~~through ~~Supreme~~June ~~Court~~2022, ~~heard~~with ~~this~~the ~~case~~full on2% ~~November~~cut ~~10,~~resuming ~~2020~~thereafter. ~~and~~The onAmerican ~~June~~Taxpayer 17Relief Act of 2012, ~~2021~~among other things, ~~dismissed~~reduced ~~this~~Medicare ~~action~~payments ~~after~~to ~~finding~~several ~~that~~providers and increased the ~~plaintiffs~~statute doof ~~not~~limitations ~~have~~period ~~standing~~for the government to ~~challenge~~recover ~~the~~overpayments ~~constitutionality~~to ofproviders ~~the~~from ~~statute~~three to five years. ItThese isnew ~~unclear~~laws ~~how~~may ~~such~~result ~~litigation~~in additional reductions in Medicare and other ~~efforts~~healthcare tofunding ~~repeal~~ and ~~replace~~otherwise affect the ~~Health~~prices ~~Care~~we ~~Reform~~may ~~Law~~obtain ~~will~~for ~~impact~~any of our Candidates for which we may obtain regulatory approval or the frequency with which any such Candidate is prescribed or used.

60Since enactment of the Health Care Reform Law, there have been, and continue to be, numerous legal challenges and Congressional actions to repeal and replace provisions of the law. For example, with enactment of the Tax Cuts and Jobs Act of 2017 ("TCJA"), Congress repealed the “individual mandate.” The repeal of this provision of the Health Care Reform Law, which requires most Americans to carry a minimal level of health insurance, became effective in 2019. Further, on December 14, 2018, a U.S. District Court judge in the Northern District of Texas ruled that the individual mandate portion of the Health Care Reform Law is an essential and inseverable feature of the Health Care Reform Law, and therefore because the mandate was repealed as part of the TCJA, the remaining provisions of the Health Care Reform Law are invalid as well. The U.S. Supreme Court heard this case on November 10, 2020 and on June 17, 2021, dismissed this action after finding that the plaintiffs do not have standing to challenge the constitutionality of the statute. It is unclear how such litigation and other efforts to repeal and replace the Health Care Reform Law will impact the Health Care Reform Law and our business. Litigation and legislation over the Health Care Reform Law are likely to continue, with unpredictable and uncertain results.

Health Care Reform Law and our business. Litigation and legislation over the Health Care Reform Law are likely to continue, with unpredictable and uncertain results.

Although the previous administration took actions to undermine or delay implementation of the Health Care Reform Law, President Biden rescinded those actions with the issuance of an Executive Order on January 28, 2021 which directs federal agencies to reconsider rules and other policies that limit Americans’ access to health care, and consider actions that will protect and strengthen that access. Under this Executive Order, federal agencies are directed to re-examine policies that undermine protections for people with pre-existing conditions, including complications related to COVID-19; demonstrations and waivers under Medicaid and the Health Care Reform Law that may reduce coverage or undermine the programs, including work requirements; policies that undermine the Health Insurance Marketplace or other markets for health insurance; policies that make it more difficult to enroll in Medicaid and the Health Care Reform Law; and policies that reduce affordability of coverage or financial assistance, including for dependents. This Executive Order also directs the HHS to create a special enrollment period for the Health Insurance Marketplace in response to the recent COVID-19 pandemic.

Current and future legislative efforts may limit the prices for our products, if and when they are licensed for marketing and that could materially impact our ability to generate revenues.

The costs and prices of prescription pharmaceuticals have been the subject of considerable discussion in the United States. To date, there have been several ~~recent~~ U.S. congressional inquiries, as well as proposed and enacted state and federal legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the costs of drugs under Medicare and reform government program reimbursement methodologies for drug products. At the federal level, Congress and the current administration have each indicated that it will continue to seek new legislative and/or administrative measures to control drug costs. For example, the former administration issued several executive orders intended to lower the costs of prescription products and certain provisions in these orders have been incorporated into regulations. These regulations include an interim final rule implementing a most favored nation model for prices that would tie Medicare Part B payments for certain physician-administered pharmaceuticals to the lowest price paid in other economically advanced countries, effective January 1, 2021. That rule, however, has been subject to a nationwide preliminary injunction and, on December 29, 2021, CMS issued a final rule to rescind it. With issuance of this rule, CMS stated that it will explore all options to incorporate value into payments for Medicare Part B pharmaceuticals and improve beneficiaries’ access to evidence-based care.

In addition, in October 2020, the HHS and the FDA published a final rule allowing states and other entities to develop a Section 804 Importation Program to import certain prescription drugs from Canada into the United States. That regulation was challenged in a lawsuit by the Pharmaceutical Research and Manufacturers of America, or ("PhRMA"), but the case was dismissed by a federal district court in February 2023 after the court found that PhRMA did not have standing to sue HHS. Several states have passed laws allowing for the importation of drugs from Canada. Certain of these states have submitted Section 804 Importation Program proposals and are awaiting FDA approval. ~~Vermont~~Florida now has ~~submitted~~authority to import certain products from Canada for a ~~concept~~period ~~letter~~of totwo ~~HHS~~years once certain conditions are met. InFlorida ~~January~~will ~~2024~~first need to submit a pre-import request for each product selected for importation, ~~the~~which ~~FDA~~must be approved by the FDA. Florida’s ~~plan~~will ~~for~~also ~~Canadian~~need ~~drug~~to ~~importation~~relabel the products and perform quality testing of the products to meet FDA standards. Further, the HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.

Further, on November 20, 2020, the HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Medicare Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law. The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a new safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers, the implementation of which has been delayed until January 1, 2032, by the Inflation Reduction Act, or ("IRA").

The IRA has implications for Medicare Part D, which is a program available to individuals who are entitled to Medicare Part A or enrolled in Medicare Part B to give them the option of paying a monthly premium for outpatient prescription drug coverage. Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025). The IRA permits the Secretary of HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years.60

61The IRA has implications for Medicare Part D, which is a program available to individuals who are entitled to Medicare Part A or enrolled in Medicare Part B to give them the option of paying a monthly premium for outpatient prescription drug coverage. Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation; and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025). The IRA permits the Secretary of HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years.

Specifically, with respect to price negotiations, Congress authorized Medicare to negotiate lower prices for certain costly single‑source drug and biologic products that do not have competing generics or biosimilars and are reimbursed under Medicare Part B and Part D. CMS may negotiate prices for ten high-cost drugs paid for by Medicare Part D starting in 2026, followed by 15 Part D drugs in 2027, 15 Part B or Part D drugs in 2028, and 20 Part B or Part D drugs in 2029 and beyond. This provision applies to drug products that have been approved for at least 9 years and biologics that have been licensed for 13 years, but it does not apply to drugs and biologics that have been approved for a single rare disease or condition. The first cycle of negotiations for the Medicare Drug Price Negotiation Program commenced in the summer of 2023. On August 15, 2024, HHS published the results of the first Medicare drug price negotiations for ten selected drugs that treat a range of conditions, including diabetes, chronic kidney disease, and rheumatoid arthritis. The prices of these ten drugs will become effective January 1, 2026. OnIn ~~October~~August 2, 2024, inHHS ~~final~~published ~~guidance,~~the ~~CMS~~results ~~indicated~~of ~~that~~the itfirst ~~will~~Medicare ~~announce~~drug ~~the~~price ~~selection~~negotiations offor upten toselected 15drugs ~~additional~~that ~~drugs~~treat ~~covered~~a byrange ~~Part~~of Dconditions ~~for~~and the ~~second~~prices ~~cycle~~will ofbecome ~~negotiations~~effective byJanuary ~~February~~ 1, 2026. In January 2025, CMS announced the next 15 drug and biologic prices that will be subject to the IRA’s price negotiation provisions. This second cycle of negotiations with participating drug companies will occur during 2025, and any negotiated prices for this second set of drugs will be effective starting January 1, 2027. CMS issued a public statement on January 2025, declaring that lowering the cost of prescription drugs is a top priority of the new administration and CMS is committed to considering opportunities to bring greater transparency in the negotiation program.

Further, the legislation subjects drug manufacturers to civil monetary penalties and a potential excise tax for failing to comply with the legislation by offering a price that is not equal to or less than the negotiated “maximum fair price” under the law or for taking price increases that exceed inflation. The legislation also requires manufacturers to pay rebates for drugs in Medicare Part D whose price increases exceed inflation. The new law also caps Medicare out-of-pocket drug costs at an estimated $42,000 a year ~~in 2024 and, thereafter~~ beginning in 2025~~, at $2,000 a year~~.

The IRA includes a provision exempting orphan drugs from Medicare price negotiation but this exclusion has been interpreted by CMS in final guidance issued in July 2023 to apply only to those orphan drugs with an approved indication (or indications) for a single rare disease or condition. The final guidance clarifies that CMS will consider only active designations/approvals when evaluating a drug for the exclusion, such that designations/indications withdrawn before the selected drug publication date will not be considered. CMS also clarified that, if a drug loses its orphan drug exclusion status, the agency will use the earliest date of approval/licensure to determine whether the product is a qualifying single source drug subject to price negotiations.

In June 2023, Merck filed a lawsuit against HHS and CMS asserting that, among other things, the IRA’s Drug Price Negotiation Program for Medicare constitutes an uncompensated taking in violation of the Fifth Amendment of the Constitution. Subsequently, a number of other parties, including ~~the U.S. Chamber of Commerce and~~ pharmaceutical companies, also filed lawsuits in various courts with similar constitutional claims against HHS and CMS. There have been various decisions by the courts considering these cases since they were filed. HHS has generally won the substantive disputes in these cases, and various federal district court judges have expressed skepticism regarding the merits of the legal arguments being pursued by the pharmaceutical industry. Certain of these cases are now on appeal. We expect that litigation involving these and other provisions of the IRA will continue with unpredictable and uncertain results. Accordingly, while it is currently unclear how the IRA will be effectuated, we cannot predict with certainty what impact any federal or state health reforms will have on us, but such changes could impose new or more stringent regulatory requirements on our activities or result in reduced reimbursement for our products, any of which could adversely affect our business, results of operations and financial condition.

At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. A number of states, for example, require drug manufacturers and other entities in the drug supply chain, including health carriers, pharmacy benefit managers, wholesale distributors, to disclose information about pricing of pharmaceuticals. This is increasingly true with respect to products approved pursuant to the accelerated approval pathway. State Medicaid programs and other payers are developing strategies and implementing significant coverage barriers, or refusing to cover these products outright, arguing that accelerated approval drugs have insufficient or limited evidence despite meeting the FDA’s standards for accelerated approval. In addition, regional health care authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other health care programs. These measures could reduce the ultimate demand for our products, if approved, or put pressure on our product pricing. We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our Candidates or additional pricing pressures.

It is likely that federal and state legislatures within the United States and foreign governments will continue to consider changes to existing health care legislation. We cannot predict the reform initiatives that may be adopted in the future or whether initiatives that have been adopted will be repealed or modified. The continuing efforts of the government, insurance companies, managed care organizations and other health care payors of to contain or reduce costs of health care may adversely affect:

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the demand for any Candidates for which we may obtain regulatory approval;

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our ability to set a price that we believe is fair for our products;

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our ability to obtain coverage and reimbursement approval for a product;

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our ability to generate revenue and achieve or maintain profitability; and

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the level of taxes that we are required to pay.

Finally, in the European Union, similar political, economic and regulatory developments may affect our ability to profitably commercialize our Candidates, if approved. In addition to continuing pressure on prices and cost containment measures, legislative developments at the European Union or member state level may result in significant additional requirements or obstacles that may increase our operating costs. The delivery of healthcare in the European Union, including the establishment and operation of health services and the pricing and reimbursement of medicines, is almost exclusively a matter for national, rather than European Union, law and policy. National governments and health service providers have different priorities and approaches to the delivery of healthcare and the pricing and reimbursement of products in that context. In general, however, the healthcare budgetary constraints in most European Union member states have resulted in restrictions on the pricing and reimbursement of medicines by relevant health service providers. Coupled with ever-increasing European Union and national regulatory burdens on those wishing to develop and market products, this could prevent or delay marketing approval of our Candidates, restrict or regulate post-approval activities and affect our ability to commercialize our Candidates, if approved.

In markets outside of the United States and the European Union, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action in the United States, the European Union or any other jurisdiction. If we or any third parties we may engage are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or such third parties are not able to maintain regulatory compliance, our Candidates may lose any regulatory approval that may have been obtained and we may not achieve or sustain profitability.

Our relationships with customers, physicians and third-party payors will be subject, directly or indirectly, to federal and state health care fraud and abuse laws, false claims laws, health information privacy and security laws, and other health care laws and regulations. If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties.

If we obtain FDA approval for our current or future Candidates and begin commercializing one or more of those products in the United States, our operations will be directly or indirectly through our prescribers, customers and purchasers, subject to various federal and state fraud and abuse laws and regulations, including, without limitation, the federal Health Care Program Anti-Kickback Statute, the federal civil and criminal laws and the Physician Payment Sunshine Act and regulations. These laws will impact, among other things, our proposed sales, marketing and educational programs. In addition, we may be subject to patient privacy laws by both the federal government and the states in which we conduct our business. The laws that will affect our operations include, but are not limited to:

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the federal Health Care Program Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind, in return for the purchase, recommendation, leasing or furnishing of an item or service reimbursable under a federal health care program, such as the Medicare and Medicaid programs. This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand, and prescribers, purchasers and formulary managers on the other. The Health Care Reform Law amended the intent requirement of the federal Anti-Kickback Statute. A person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it;

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federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment or approval from Medicare, Medicaid or other government payors that are false or fraudulent. The Health Care Reform Law provides and recent government cases against pharmaceutical and medical device manufacturers support the view that Federal Anti-Kickback Statute violations and certain marketing practices, including off-label promotion, may implicate the False Claims Act;

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HIPAA, which created new federal criminal statutes that prohibit a person from knowingly and willfully executing a scheme or from making false or fraudulent statements to defraud any health care benefit program, regardless of the payor (e.g., public or private);

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HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or ("HITECH"), and its implementing regulations, and as amended again by the final HIPAA omnibus rule, Modifications to the HIPAA Privacy, Security, Enforcement, and Breach Notification Rules Under HITECH and the Genetic Information Nondiscrimination Act; Other Modifications to HIPAA, published in January 2013, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization by entities subject to the rule, such as health plans, health care clearinghouses and health care providers;

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federal transparency laws, including the federal Physician Payment Sunshine Act, that require certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the CMS information related to: (i) payments or other “transfers of value” made to physicians, other healthcare professionals and teaching hospitals and (ii) ownership and investment interests held by physicians and their immediate family members;

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state and foreign law equivalents of each of the above federal laws, state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other health care providers or marketing expenditures and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts in certain circumstances, such as specific disease states; and

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state and foreign laws that govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws. If our operations are found to be in violation of any of the laws described above or any other government regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion from participation in government health care programs, such as Medicare and Medicaid, imprisonment and the curtailment or restructuring of our operations.

The risk of our being found in violation of these laws is increased by the fact that many of them have not been fully interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. The shifting compliance environment and the need to build and maintain robust and expandable systems to comply with multiple jurisdictions with different compliance and/or reporting requirements increases the possibility that we may run afoul of one or more of the requirements.

We are subject to stringent privacy laws, information security laws, regulations, policies and contractual obligations related to data privacy and security and changes in such laws, regulations, policies, contractual obligations and failure to comply with such requirements could subject us to significant fines and penalties, which may have a material adverse effect on our business, financial condition or results of operations.

We are subject to data privacy and protection laws and regulations that apply to the collection, transmission, storage and use of personally-identifying information, which among other things, impose certain requirements relating to the privacy, security and transmission of personal information, including comprehensive regulatory systems in the United States, EU and UK. The legislative and regulatory landscape for privacy and data protection continues to evolve in jurisdictions worldwide, and there has been an increasing focus on privacy and data protection issues with the potential to affect our business. Failure to comply with any of these laws and regulations could result in enforcement action against us, including fines, imprisonment of company officials and public censure, claims for damages by affected individuals, damage to our reputation and loss of goodwill, any of which could have a material adverse effect on our business, financial condition, results of operations or prospects.

There are numerous U.S. federal and state laws and regulations related to the privacy and security of personal information. In particular, regulations promulgated pursuant to HIPAA establish privacy and security standards that limit the use and disclosure of individually identifiable health information, or protected health information, and require the implementation of administrative, physical and technological safeguards to protect the privacy of protected health information and ensure the confidentiality, integrity and availability of electronic protected health information. Determining whether protected health information has been handled in compliance with applicable privacy standards and our contractual obligations can be complex and may be subject to changing interpretation. These obligations may be applicable to some or all of our business activities now or in the future.

If we are unable to properly protect the privacy and security of protected health information, we could be found to have breached our contracts. Further, if we fail to comply with applicable privacy laws, including applicable HIPAA privacy and security standards, we could face civil and criminal penalties. HHS enforcement activity can result in financial liability and reputational harm, and responses to such enforcement activity can consume significant internal resources. In addition, state attorneys general are authorized to bring civil actions seeking either injunctions or damages in response to violations that threaten the privacy of state residents. We cannot be sure how these regulations will be interpreted, enforced or applied to our operations. In addition to the risks associated with enforcement activities and potential contractual liabilities, our ongoing efforts to comply with evolving laws and regulations at the federal and state level may be costly and require ongoing modifications to our policies, procedures and systems.

In 2018, California passed into law the California Consumer Privacy Act, or ("CCPA,") which took effect on January 1, 2020 and imposed many requirements on businesses that process the personal information of California residents. Many of the CCPA’s requirements are similar to those found in the General Data Protection Regulation, or ("GDPR"), including requiring businesses to provide notice to data subjects regarding the information collected about them and how such information is used and shared, and providing data subjects the right to request access to such personal information and, in certain cases, request the erasure of such personal information. The CCPA also affords California residents the right to opt-out of “sales” of their personal information. The CCPA contains significant penalties for companies that violate its requirements. In November 2020, California voters passed a ballot initiative for the California Privacy Rights Act ("CPRA"), which went into effect on January 1, 2023, and significantly expanded the CCPA to incorporate additional GDPR-like provisions including requiring that the use, retention, and sharing of personal information of California residents be reasonably necessary and proportionate to the purposes of collection or processing, granting additional protections for sensitive personal information, and requiring greater disclosures related to notice to residents regarding retention of information. The CPRA also created a new enforcement agency – the California Privacy Protection Agency – whose sole responsibility is to enforce the CPRA and other California privacy laws, which will further increase compliance risk. The provisions in the CPRA may apply to some of our business activities.

64In addition to California, several other states have passed comprehensive privacy laws similar to the CCPA and CPRA. These laws are either in effect or will go into effect sometime over the next several years. Like the CCPA and CPRA, these laws create obligations related to the processing of personal information, as well as special obligations for the processing of “sensitive” data (which includes health data in some cases). Some of the provisions of these laws may apply to our business activities. There are also states that are strongly considering privacy laws that will go into effect over the next several years. Other states will be considering these laws in the future, and Congress has also been debating passing a federal privacy law. There are also states that are specifically regulating health information that may affect our business. These laws may impact our business activities, including our identification of research subjects, relationships with business partners and ultimately the marketing and distribution of our products.

contains significant penalties for companies that violate its requirements. In November 2020, California voters passed a ballot initiative for the California Privacy Rights Act, or CPRA, which went into effect on January 1, 2023 and significantly expanded the CCPA to incorporate additional GDPR-like provisions including requiring that the use, retention, and sharing of personal information of California residents be reasonably necessary and proportionate to the purposes of collection or processing, granting additional protections for sensitive personal information, and requiring greater disclosures related to notice to residents regarding retention of information. The CPRA also created a new enforcement agency – the California Privacy Protection Agency – whose sole responsibility is to enforce the CPRA and other California privacy laws, which will further increase compliance risk. The provisions in the CPRA may apply to some of our business activities. In addition to California, at least eighteen other states have passed comprehensive privacy laws similar to the CCPA and CPRA. These laws are either in effect or will go into effect sometime before the end of 20

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