Adverum Biotechnologies, Inc. (NASDAQ:ADVM) Q3 2019 Earnings Conference Call November 7, 2019 4:30 PM ET Company Participants Myesha Lacy - Vice President of Investor Relations & Corporate Communications Leone Patterson - Chief Executive Officer Aaron Osborne - Chief Medical Officer Conference Call Participants Tyler Van Buren - Piper Jaffray Emma Nealon - Cantor Fitzgerald Phil Nadeau - Cowen & Company Joon Lee - SunTrust Patrick Dolezal - LifeSci Capital Myesha Lacy Thank you, and welcome, everyone. Today ...

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 30, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | --- | |---------------------------------------------------------------------------------------|-----------------------------------------------------------------|------ ...

Financial Data and Key Metrics Changes - The company is focused on developing ADVM-022 for treating VEGF-driven retinal diseases, particularly wet AMD and diabetic retinopathy, which are significant causes of vision loss [6][9] - The company has achieved significant clinical and regulatory milestones with ADVM-022, with plans to present 24-week data from the Phase I OPTIC trial at an upcoming meeting [8][21] Business Line Data and Key Metrics Changes - ADVM-022 is being developed as a single intravitreal injection approach, which could provide a more durable treatment option compared to current therapies that require frequent injections [6][13] - The company has discontinued the gene therapy program targeting A1AT deficiency and has moved the program for Hereditary Angioedema back into early development [9][10] Market Data and Key Metrics Changes - Approximately 1.2 million individuals in the US are affected by wet AMD, and the prevalence of diabetic retinopathy is also increasing, indicating a growing market for ADVM-022 [7][19] - The company plans to submit an IND for ADVM-022 in diabetic retinopathy in the first half of 2020, highlighting the potential expansion of its market reach [20] Company Strategy and Development Direction - The company aims to scale up its manufacturing process to support later-stage development and commercial use, with a new corporate headquarters to enhance in-house capabilities [10] - The focus remains on developing ADVM-022 for AMD and diabetic retinopathy, while exploring opportunities in other VEGF-driven diseases [9][20] Management's Comments on Operating Environment and Future Outlook - Management believes that gene therapy can be transformative for patients and is committed to advancing their development pipeline [6][11] - The company is optimistic about the upcoming data presentations and the potential impact of ADVM-022 on treatment burdens for patients [21][65] Other Important Information - Recent corporate updates include the retirement of board member Mitch Finer and the transition of President and Chief Scientific Officer Mehdi Gasmi to the Board of Directors [10] - The company is expanding its talent pool with recent senior management additions to support its mission [11] Q&A Session All Questions and Answers Question: Can you provide clarity on the types of patients being enrolled in the OPTIC trial? - The protocol stipulates that patients must have had at least two injections in the previous four months, ensuring they require frequent anti-VEGF injections [23][24] Question: Can you elaborate on the criteria for rescue injections in the trial? - Rescue injections are based on OCT and vision criteria, with stringent protocols to ensure patients only receive them when necessary [27][29] Question: What is the rationale behind using prophylactic oral steroid dosing in the study? - The use of tapering doses of prednisone is to manage expected immune responses following gene therapy [30][31] Question: How do you view the acceptable level of inflammation for less frequently administered intravitreal gene therapy? - A balance is expected, where some immune response is acceptable if it leads to a significant reduction in the need for rescue injections [33][34] Question: What was the reasoning for the decision to lower the dose in the second cohort? - The decision was based on observing robust preliminary anatomical responses and not due to safety concerns [36][38] Question: Can you clarify the relationship between anatomical responses and the need for additional anti-VEGF injections? - Robust anatomical responses are assessed through OCT, and the goal is to reduce the number of rescue injections required [63][64]

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 June 30, 2019 or ☐ 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: 001-36579 Adverum Biotechnologies, Inc. (Exact name of registrant as specified in its charter) Delaware 20-5258327 (State or other jur ...

PART I—FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) The company's unaudited Q1 2019 financials show a net loss of $14.5 million and total assets of $221.0 million [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to $221.0 million due to a new lease asset, while liabilities also increased accordingly Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $144,107 | $154,949 | | Short-term investments | $45,381 | $50,130 | | Total current assets | $193,137 | $208,754 | | Operating lease right-of-use asset | $22,592 | $— | | **Total assets** | **$221,047** | **$213,495** | | **Liabilities & Equity** | | | | Total current liabilities | $10,610 | $10,719 | | Lease liability, non-current | $22,078 | $— | | **Total liabilities** | **$32,904** | **$12,328** | | Accumulated deficit | $(335,032) | $(320,543) | | **Total stockholders' equity** | **$188,143** | **$201,167** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The company reported a Q1 2019 net loss of $14.5 million, an improvement from the prior year due to lower R&D expenses Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :--- | :--- | :--- | | Collaboration and license revenue | $— | $216 | | Research and development | $10,131 | $12,794 | | General and administrative | $5,576 | $5,368 | | **Operating loss** | **$(15,707)** | **$(17,946)** | | **Net loss** | **$(14,489)** | **$(17,200)** | | Net loss per share | $(0.23) | $(0.30) | [Condensed Consolidated Statements of Stockholders Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%20Equity) Stockholders' equity declined to $188.1 million, primarily driven by the quarterly net loss - Total stockholders' equity decreased by **$13.1 million** during the first quarter of 2019, mainly due to the **net loss of $14.5 million**[8](index=8&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations was $13.2 million, contributing to a total cash decrease of $10.8 million for the quarter Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :--- | :--- | :--- | | Net cash used in operating activities | $(13,217) | $(12,984) | | Net cash provided by investing activities | $2,745 | $25,383 | | Net cash provided by (used in) financing activities | $(370) | $69,798 | | **Net (decrease) increase in cash** | **$(10,842)** | **$82,197** | - The significant difference in financing activities between Q1 2019 and Q1 2018 is due to **$70.2 million in net proceeds from common stock sales in 2018**, which did not recur in 2019[61](index=61&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key notes cover the company's clinical-stage status, adoption of a new lease standard, and collaboration agreement updates - The company is a clinical-stage gene therapy company with an **accumulated deficit of $335.0 million** as of March 31, 2019, but believes it has sufficient funds to continue operations into 2021[14](index=14&type=chunk) - On January 1, 2019, the company adopted the new lease accounting standard (Topic 842), recording a **lease liability of $24.7 million** and a **right-of-use asset of $23.1 million**[16](index=16&type=chunk) - The collaboration agreement with Editas generated no revenue in Q1 2019, as the remaining performance obligations were completed in 2018[25](index=25&type=chunk)[26](index=26&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation](index=13&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operation) Management discusses the clinical hold on its lead product, ADVM-022, and financial results, including a reduced net loss - The company's lead product candidate, ADVM-022 for wet AMD, is in a Phase 1 OPTIC trial; however, the **FDA placed the IND on clinical hold** in April 2019[41](index=41&type=chunk) - Development of ADVM-043 for A1AT deficiency was discontinued based on data from the ADVANCE trial[41](index=41&type=chunk) - R&D expenses decreased by **$2.7 million**, primarily due to a **$3.3 million reduction** in costs from discontinuing the ADVM-043 program[53](index=53&type=chunk) - As of March 31, 2019, the company had **$189.5 million in cash**, cash equivalents, and short-term investments, which is believed to be sufficient to fund operations into 2021[43](index=43&type=chunk)[56](index=56&type=chunk) Results of Operations Comparison (in thousands) | Line Item | Q1 2019 | Q1 2018 | Change | | :--- | :--- | :--- | :--- | | Collaboration and license revenue | $— | $216 | $(216) | | Research and development | $10,131 | $12,794 | $(2,663) | | General and administrative | $5,576 | $5,368 | $208 | | **Operating loss** | **$(15,707)** | **$(17,946)** | **$2,239** | | **Net loss** | **$(14,489)** | **$(17,200)** | **$2,711** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=18&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exempt from this disclosure as a smaller reporting company - The company is not required to provide quantitative and qualitative disclosures about market risk because it qualifies as a **smaller reporting company** under SEC rules[64](index=64&type=chunk) [Item 4. Controls and Procedures](index=18&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of the quarter-end - The CEO and CFO concluded that as of March 31, 2019, the company's **disclosure controls and procedures were effective**[65](index=65&type=chunk) - **No material changes** were made to the company's internal control over financial reporting during the first quarter of 2019[65](index=65&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=19&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material legal proceedings for the period - Not applicable[68](index=68&type=chunk) [Item 1A. Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant financial, developmental, commercial, and operational risks - **Financial Risk:** The company has a history of significant operating losses, with an **accumulated deficit of $335.0 million** as of March 31, 2019, and will require substantial additional funding[70](index=70&type=chunk) - **Development Risk:** The **FDA placed the IND for lead candidate ADVM-022 on clinical hold** in April 2019; failure to lift the hold would harm the business[73](index=73&type=chunk)[74](index=74&type=chunk) - **Commercialization Risk:** ADVM-022, if approved, will compete with well-established anti-VEGF therapies like **Lucentis® and EYLEA®**, requiring market acceptance and adequate reimbursement[104](index=104&type=chunk) - **Reliance on Third Parties:** The company depends on third parties to conduct clinical trials and manufacture its product candidates, introducing risks related to performance and supply chain continuity[81](index=81&type=chunk)[83](index=83&type=chunk) - **Intellectual Property Risk:** The business relies on licensed patents and proprietary technology, and the inability to maintain or protect this IP could materially harm the company[125](index=125&type=chunk)[126](index=126&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable for the reporting period - Not applicable[162](index=162&type=chunk) [Item 3. Defaults Upon Senior Securities](index=48&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - None[162](index=162&type=chunk) [Item 4. Mine Safety Disclosures](index=48&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[162](index=162&type=chunk) [Item 5. Other Information](index=48&type=section&id=Item%205.%20Other%20Information) The company reports no other material information for the period - Not applicable[162](index=162&type=chunk) [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including officer certifications - Exhibits filed include the Employment Agreement with CFO Thomas Leung, CEO and CFO certifications (Rule 13a-14(a) and Section 906), and XBRL interactive data files[163](index=163&type=chunk)[164](index=164&type=chunk) [Signatures](index=50&type=section&id=SIGNATURES) [Signatures](index=50&type=section&id=Signatures) The report is duly signed by the Chief Executive Officer and Chief Financial Officer - The Form 10-Q was signed on **May 8, 2019**, by Leone Patterson (CEO) and Thomas Leung (CFO)[166](index=166&type=chunk)[167](index=167&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | |---------------------------------------------------------------------------------------------------|--------------------------------------------------| | | | | For the transition period from t ...