Financial Position - As of June 30, 2023, the company had an accumulated deficit of $863.2 million and expects to incur substantial expenses and continuing losses from operations in the foreseeable future[67]. - The company had $141.5 million in cash, cash equivalents, and short-term investments as of June 30, 2023, which are expected to fund operations into 2025[71]. - Net loss for the three months ended June 30, 2023, was $31.5 million, a decrease of $12.3 million compared to a net loss of $43.8 million for the same period in 2022[83]. - Net cash used in operating activities for the six months ended June 30, 2023, was $45.7 million, compared to $57.8 million for the same period in 2022[97]. - Other income, net increased to $1.6 million for the three months ended June 30, 2023, from $0.3 million for the same period in 2022, due to higher average yields in investments[91]. - Net cash provided by investing activities for the six months ended June 30, 2023 was $88.7 million, down from $125.9 million in the same period of 2022[100][101]. - Net cash provided by financing activities for the six months ended June 30, 2023 was primarily $0.2 million from the employee purchase plan, compared to $0.4 million in the same period of 2022[102][103]. Research and Development - The company has not generated any revenue from product sales to date, relying instead on research, collaboration, and license arrangements with strategic partners[72]. - The company is developing ADVM-062 for blue cone monochromacy, with Orphan Drug Designation granted by the FDA in January 2022[62]. - The company expects research and development expenses to fluctuate as it focuses on advancing Ixo-vec for the treatment of wet AMD[87]. - Stock-based compensation expense included in research and development expenses was $1.4 million for the three months ended June 30, 2023, compared to $1.8 million for the same period in 2022[85]. - The company needs to expand its research and development activities to support product candidates[102]. Clinical Trials and Regulatory Designations - The LUNA trial for Ixo-vec, evaluating two doses in up to 72 subjects with wet AMD, was fully enrolled in August 2023[56]. - The OPTIC trial has shown strong signals of therapeutic efficacy, including continuous stable aflibercept protein levels from 10 weeks to three years[53]. - The FDA granted Fast Track designation for Ixo-vec for the treatment of wet AMD, recognizing the need for new treatment options[52]. - The European Medicines Agency granted Ixo-vec Priority Medicines designation, enhancing support for its development[57]. - The company anticipates potential additional studies required by the FDA and other regulatory authorities, impacting product development timelines and costs[102]. Operational and Strategic Focus - The company is focusing on advancing Ixo-vec for wet AMD while seeking a partner for further development of ADVM-062[63]. - The company has no operational clinical or commercial manufacturing facilities and relies on third-party contractors for clinical manufacturing[69]. - The commercialization costs, including sales, marketing, and distribution, are expected to increase as the company prepares for larger scale manufacturing[102]. - The company is focused on enhancing its infrastructure and internal systems to support growth[102]. - The ability to hire additional personnel is critical for the company's expansion plans[102]. Market Risks and Challenges - The emergence of competing technologies poses a risk to the company's market position[102]. - The ongoing effects of COVID-19 continue to impact the company's business operations and financial condition[102].

Financial Position - As of March 31, 2023, the company had an accumulated deficit of $831.7 million and expects to incur substantial expenses and continuing losses from operations in the foreseeable future [52]. - The company had $164.3 million in cash, cash equivalents, and short-term investments as of March 31, 2023, which is believed to be sufficient to fund operations into 2025 [53]. - The company has not generated any revenue from product sales to date and relies on third-party contract research organizations for clinical development [52][53]. - The company has not generated any revenue from product sales, with $3.6 million in license revenue for the three months ended March 31, 2023, primarily from a milestone payment related to a license agreement with Lexeo Therapeutics [63]. - The net loss for the three months ended March 31, 2023, was $29.1 million, an improvement of $8.9 million compared to a net loss of $37.9 million for the same period in 2022 [62]. - Net cash used in operating activities was $22.4 million for the three months ended March 31, 2023, compared to $28.9 million for the same period in 2022 [71]. - The company expects to incur substantial expenditures for the development and potential commercialization of its product candidates, indicating a need for additional funding in the future [68]. - The company may need to raise additional funds sooner than expected due to various risks and uncertainties, which could impact its financial condition and business strategies [68]. Clinical Development - The lead product candidate, Ixo-vec, is being developed for wet age-related macular degeneration (wet AMD), which affects approximately 20 million individuals worldwide [42]. - The OPTIC trial for Ixo-vec completed enrollment in July 2020, showing strong therapeutic efficacy signals, including stable aflibercept protein levels and improvements in best-corrected visual acuity [42]. - The LUNA trial, initiated in September 2022, is evaluating two doses of Ixo-vec in up to 72 subjects with wet AMD, focusing on mean change in best-corrected visual acuity and central subfield thickness [45]. - The FDA granted Fast Track designation for Ixo-vec for the treatment of wet AMD, and the European Medicines Agency granted it Priority Medicines (PRIME) designation [42][45]. - The company has restructured operations to prioritize Ixo-vec's clinical development, completing the restructuring in Q4 2022, which is expected to extend the cash runway into 2025 [47]. - The company is collaborating with the BCM Families Foundation to advance the development of ADVM-062, a gene therapy for blue cone monochromacy, which currently has no other therapies in development [46]. - The company anticipates that research and development expenses will fluctuate as it focuses on advancing its Ixo-vec program for the treatment of wet AMD [64]. Operational Impact - The company is continuously evaluating the impact of the COVID-19 pandemic on its operations, with limited impact reported on ongoing clinical trials [50]. - Research and development expenses decreased by $1.9 million to $21.1 million for the three months ended March 31, 2023, compared to $23.0 million for the same period in 2022, mainly due to a reduction in personnel costs [64]. - General and administrative expenses decreased by $2.4 million to $12.8 million for the three months ended March 31, 2023, from $15.2 million in the same period in 2022, driven by lower headcount and reduced professional services costs [65]. - Other income, net increased to $1.2 million for the three months ended March 31, 2023, from $0.2 million in the same period in 2022, due to higher average yields on investments [66].

Gene Therapy Development - Adverum is focused on establishing gene therapy as a new standard of care for prevalent ocular diseases, with core capabilities in vector evaluation and clinical development[11] - The company is exploring potential applications of its gene therapy platform in other indications for highly prevalent diseases[6] - The success of the business heavily relies on the successful development and commercialization of its product candidates[8] - Drug development is characterized as a long, expensive, and uncertain process, with potential delays or failures at any stage[8] - The company anticipates needing to raise additional funding, which may not be available on acceptable terms[8] - The company is actively managing the impact of the COVID-19 pandemic on its operations and clinical trials, reporting limited disruptions to date[21] - The company is conducting nonclinical studies on additional product candidates to advance in the future[50] Financial Performance and Projections - Significant operating losses have been incurred since inception, with expectations of continued losses for the foreseeable future[8] - Cash, cash equivalents, and short-term investments are projected to fund lead gene therapy programs into 2025[8] - The company has incurred significant operating losses since inception and expects to continue incurring losses for the foreseeable future[8] - The company is not currently in compliance with Nasdaq's continued listing standards, which could lead to delisting if not resolved[8] Clinical Trials and Product Candidates - Ixo-vec is a gene therapy product designed for a single intravitreal injection, targeting wet age-related macular degeneration (wet AMD), which affects approximately 20 million individuals worldwide[12] - The OPTIC trial has shown strong therapeutic efficacy signals with continuous stable aflibercept protein levels from 10 weeks to three years, and improvements in best-corrected visual acuity and central subfield thickness (CST)[12] - The LUNA trial is evaluating two doses of Ixo-vec (2E11 and 6E10) in up to 72 subjects, with primary endpoints focusing on mean change in best-corrected visual acuity and CST from baseline to one year[13] - The INFINITY trial for Ixo-vec in diabetic macular edema was halted due to safety concerns at the 6E11 dose, but no similar issues were observed at the 2E11 dose in other trials[15] - Ixo-vec demonstrated a 98% reduction in annualized anti-VEGF injections for subjects receiving a 6E11 dose and an 80% reduction for those receiving a 2E11 dose after a single IVT injection[37] - The OPTIC trial showed that 80% of subjects receiving the 2E11 dose remained free from supplemental anti-VEGF injections[37] Regulatory Designations and Approvals - The FDA granted Fast Track designation for Ixo-vec, and the European Medicines Agency (EMA) granted it Priority Medicines (PRIME) designation to expedite its development[15] - ADVM-062, another product candidate, received Orphan Drug Designation from the FDA and targets blue cone monochromacy, a rare condition affecting 1 to 9 in 100,000 males[16] - The FDA requires an investigational new drug application (IND) to be submitted and cleared before human clinical testing can begin[64] - The FDA can impose clinical holds on a biologic product candidate at any time due to safety concerns or non-compliance[68] Manufacturing and Technology - The company has in-house manufacturing expertise, including scalable process development and GMP quality control[11] - The AAV vector manufacturing process utilizes the Baculovirus Expression Vector System (BEVS), designed for high yield and cost-effective production, capable of scaling up to 2000 liters[52] - The company maintains control over key manufacturing processes, ensuring high purity and safety by avoiding mammalian cell cultures[52] - The proprietary AAV.7m8 vector is licensed to GenSight for the development of gene therapy products, with potential milestone payments and royalties for the company[55] Market Opportunity and Competition - The standard-of-care anti-VEGF therapies for wet AMD generated over $13 billion in sales worldwide in 2021, indicating a significant market opportunity[24] - The company faces competition from established anti-VEGF therapies and various companies developing treatments for chronic retinal conditions, which may have greater resources and experience[53][54] - The company’s gene therapy Ixo-vec for wet AMD is administered via a single intravitreal injection, competing with various therapies currently marketed and in development[53] Employee and Workplace Culture - The company had approximately 123 full-time employees as of December 31, 2022, with 25 holding Ph.D. or M.D. degrees[93] - Racial and ethnic minorities represented 65.9% of the employee base, with women making up 52% of the workforce and 50% of director-level positions[94] - The company has been recognized as a Top Workplace for both 2021 and 2022 by Bay Area News Group[93] - The company is committed to diversity, equity, and inclusion, with initiatives such as employee-led resource groups supporting women and the LGBTQ+ community[94] Regulatory Compliance and Challenges - Companies must comply with GMP requirements, and failure to do so can result in legal or regulatory actions, including product recalls[76] - The company is subject to various data privacy and security obligations, including the CCPA and EU GDPR, which may increase compliance costs and risks[78] - The company may face significant penalties for non-compliance with healthcare regulations, including the federal Anti-Kickback Statute and the False Claims Act[81] - The company must navigate complex reimbursement landscapes for gene therapy products, with third-party payers increasingly scrutinizing cost-effectiveness[84] Future Outlook and Strategic Initiatives - The company is preparing for larger late-stage clinical trials and potential commercialization by evaluating new raw material suppliers and contract manufacturing organizations[52] - The company is investing in creating a work environment that values health, safety, and wellness, aiming to retain diverse talent and foster an inclusive culture[93] - The company has implemented safety protocols and provided protective equipment in response to COVID-19, ensuring employee well-being[98]

Financial Performance - As of September 30, 2022, the company had an accumulated deficit of $769.9 million and $203.3 million in cash, cash equivalents, and short-term investments[54]. - The net loss for Q3 2022 was $40.1 million, an increase of $1.8 million compared to a net loss of $38.4 million in Q3 2021[62]. - The net loss for the nine months ended September 30, 2022, was $121.8 million, up from $111.1 million in 2021, indicating an increase of approximately 9.5%[72]. - Other income for Q3 2022 was $0.9 million, an increase from $0.2 million in Q3 2021, attributed to higher average yields in investments[66]. - Net cash used in operating activities for the nine months ended September 30, 2022, was $89.6 million, compared to $82.0 million for the same period in 2021, reflecting a 20% increase in cash used[72]. - The company reported $151.1 million in net maturities from marketable securities for the nine months ended September 30, 2022, compared to $65.6 million in 2021[73]. - The company incurred $11.6 million in purchases of property and equipment during the nine months ended September 30, 2022, slightly up from $10.8 million in 2021[73]. - The net cash provided by financing activities for the nine months ended September 30, 2022, was $0.4 million, a decrease from $2.0 million in 2021[74]. - Cash and cash equivalents increased by $50.2 million during the nine months ended September 30, 2022, compared to a decrease of $25.2 million in the same period of 2021[71]. - Non-cash charges for the nine months ended September 30, 2022, included $20.0 million, primarily from stock-based compensation of $14.8 million[72]. Product Development - The lead product candidate, Ixo-vec, is being developed for wet age-related macular degeneration (wet AMD), which affects approximately 20 million individuals worldwide[45]. - The OPTIC trial for Ixo-vec completed enrollment in July 2020, showing strong therapeutic efficacy signals, including stable aflibercept protein levels from 10 weeks to three years[45]. - The company received Fast Track designation from the FDA for Ixo-vec and Priority Medicines (PRIME) designation from the EMA, indicating significant unmet medical need[46][47]. - The LUNA trial, initiated in September 2022, is evaluating two doses of Ixo-vec in up to 72 subjects with wet AMD, focusing on visual acuity and central subfield thickness[46]. - ADVM-062, a second product candidate, received Orphan Drug Designation from the FDA and targets blue cone monochromacy, a rare genetic condition affecting visual acuity[48]. - The company expects research and development expenses to decrease in future periods as it focuses on advancing its gene therapy product candidate Ixo-vec for wet AMD treatment[64]. Expenses and Restructuring - Research and development expenses decreased by $0.2 million to $23.8 million for Q3 2022 from $24.1 million in Q3 2021, primarily due to a $2.0 million decrease in facilities-related expenses and a $1.5 million decrease in salaries following workforce reductions[64]. - Total operating expenses increased by $2.5 million to $41.0 million for Q3 2022 compared to $38.5 million in Q3 2021, with research and development expenses accounting for $23.8 million and general and administrative expenses at $17.2 million[62]. - General and administrative expenses increased by $2.7 million to $17.2 million for Q3 2022, primarily due to a $4.1 million reversal of sublease income and $1.0 million in restructuring costs[65]. - Research and development expenses for the nine months ended September 30, 2022, increased by $10.4 million to $77.1 million from $66.7 million in the same period in 2021, driven by increased clinical trial-related expenses[64]. - General and administrative expenses are anticipated to decrease in future periods due to operational streamlining following restructuring measures[65]. Funding and Financial Strategy - The company plans to seek additional funding through equity or debt financings to support ongoing development and commercialization efforts[69]. - A restructuring in July 2022 aimed to prioritize Ixo-vec's clinical development and extend the cash runway into 2025[49]. - The company expects to incur substantial expenses and continuing losses as it advances its product candidates through development and seeks regulatory approval[54]. - The company has not generated any revenue from product sales to date, relying on research, collaboration, and license arrangements for revenue[55]. - The company has not experienced significant disruptions to its supply chain and manufacturing due to the COVID-19 pandemic, but remains vigilant[53].

Financial Position - As of June 30, 2022, the company had an accumulated deficit of $729.7 million and expects to incur substantial expenses and increasing losses from operations in the foreseeable future [49]. - The company had $235.8 million in cash, cash equivalents, and short-term investments as of June 30, 2022, indicating a need for substantial additional funding to support ongoing operations [49]. - The company had $235.8 million in cash, cash equivalents, and short-term investments as of June 30, 2022, down from $305.2 million as of December 31, 2021 [62]. - Cash used in operating activities was $57.8 million for the six months ended June 30, 2022, primarily due to the net loss [64]. - The net loss for the six months ended June 30, 2022, was $81.7 million, compared to a net loss of $72.8 million for the same period in 2021 [64]. Product Development - The lead product candidate, Ixo-vec, is being developed for wet age-related macular degeneration (wet AMD), which affects approximately 20 million individuals worldwide [41]. - The OPTIC trial for Ixo-vec completed enrollment in July 2020, with strong signals of therapeutic efficacy observed, including stable aflibercept levels from 10 weeks to three years [41]. - The company initiated the Phase 2 LUNA trial of Ixo-vec, anticipating dosing the first patient in Q3 2022, evaluating two doses in up to 72 patients [42]. - The European Medicines Agency granted Ixo-vec Priority Medicines (PRIME) designation, enhancing support for its development due to significant unmet medical need [42]. - ADVM-062, the second product candidate, received Orphan Drug Designation from the FDA and targets blue cone monochromacy, a rare condition affecting 1 to 9 in 100,000 males [43]. Operational Changes - The company restructured operations in July 2022, including headcount reductions, to prioritize Ixo-vec's clinical development and extend its cash runway into 2025 [44]. - The company has not experienced significant disruptions to its supply chain and manufacturing due to the COVID-19 pandemic, but remains vigilant about potential future impacts [48]. Financial Performance - Research and development expenses increased by $7.7 million to $30.3 million for the three months ended June 30, 2022, compared to $22.6 million for the same period in 2021 [58]. - General and administrative expenses decreased by $8.2 million to $13.8 million for the three months ended June 30, 2022, from $21.9 million for the same period in 2021 [60]. - Research and development expenses for the six months ended June 30, 2022, totaled $53.2 million, an increase of $10.6 million from $42.6 million for the same period in 2021 [58]. - General and administrative expenses for the six months ended June 30, 2022, were $28.9 million, down from $38.1 million for the same period in 2021 [60]. - The company recognized an income tax provision of $19,000 for the three months ended June 30, 2022, related to foreign operations [61]. - Net cash provided by investing activities for the six months ended June 30, 2022, was $115.1 million, compared to $44.4 million for the same period in 2021 [63]. Future Outlook - The company expects research and development expenses to decrease in future periods as it focuses on advancing its gene therapy product candidate Ixo-vec [58]. - The company emphasizes the need to expand research and development activities [67]. - The costs associated with commercialization activities, including product sales, marketing, manufacturing, and distribution, are significant [67]. - The company may face delays or reductions in development programs if additional funds are not raised [67]. - There is a need for additional infrastructure and internal systems to support growth [67]. - The ability to hire additional personnel is crucial for future operations [67]. - The emergence of competing technologies poses a risk to market acceptance of products [67]. - The effects of the COVID-19 pandemic continue to impact the company's business and financial condition [67].

Financial Position - As of March 31, 2022, the company had an accumulated deficit of $686.0 million and expects to incur substantial expenses and increasing losses from operations in the foreseeable future [46]. - The company has $271.1 million in cash, cash equivalents, and short-term investments as of March 31, 2022, indicating a need for substantial additional funding to support ongoing operations [46]. - As of March 31, 2022, the company had $271.1 million in cash, cash equivalents, and short-term investments, down from $305.2 million as of December 31, 2021 [60]. - The company anticipates needing to raise substantial additional capital to support its development and commercialization efforts [60]. Revenue Generation - The company has not generated any revenue from product sales to date, relying instead on research, collaboration, and license arrangements with strategic partners [47]. - License revenue for the three months ended March 31, 2022, was $7.5 million, unchanged from the previous year [55]. Product Development - The lead product candidate, ADVM-022, is being developed for wet age-related macular degeneration (wet AMD), with the FDA granting Fast Track designation for this treatment [39]. - The OPTIC trial for ADVM-022 completed enrollment in July 2020, showing strong signals of therapeutic efficacy with dose-dependent responses [39]. - ADVM-062, the second product candidate, received Orphan Drug Designation from the FDA and targets blue cone monochromacy (BCM), a rare genetic condition affecting visual acuity [40]. - The company is implementing enhanced prophylactic steroid regimens to minimize inflammation in trial subjects for ADVM-022 [40]. - Research and development expenses are expected to increase as the company advances its product candidates through clinical development and seeks regulatory approval [48]. Operational Expenses - Research and development expenses increased by $3.0 million to $23.0 million for the three months ended March 31, 2022, primarily due to higher personnel costs and clinical trial-related expenses [56]. - General and administrative expenses decreased by $1.0 million to $15.2 million for the three months ended March 31, 2022, mainly due to lower personnel costs and professional services [57]. - Cash used in operating activities was $28.9 million for the three months ended March 31, 2022, compared to $22.3 million in the same period of 2021 [63]. Net Loss - Net loss for the three months ended March 31, 2022, was $37.9 million, compared to a net loss of $28.4 million for the same period in 2021, reflecting an increase of $9.5 million [62]. Supply Chain and Manufacturing - The company has not experienced significant disruptions to its supply chain and manufacturing due to the COVID-19 pandemic, but potential risks remain [45]. - The company does not have operational clinical or commercial manufacturing facilities, relying on third-party contractors for clinical manufacturing and development [46].

Company Overview - Adverum is a clinical-stage gene therapy company focused on unmet medical needs in ocular and rare diseases, with a lead product candidate, ADVM-022, designed for long-term treatment of wet age-related macular degeneration (wet AMD) through a single intravitreal injection[9]. - The company has incurred significant operating losses since inception and expects to continue incurring losses for the foreseeable future[6]. - Adverum anticipates that its cash, cash equivalents, and short-term investments will be sufficient to fund lead gene therapy programs for at least twelve months from the date of the filing[6]. - The company is continuously evaluating the impact of COVID-19 on its operations, with limited disruptions reported to date[12]. - The company has not experienced significant disruptions to its supply chain and manufacturing due to the COVID-19 pandemic, but is actively monitoring potential risks[15]. - The company was incorporated in Delaware in 2006 and completed its IPO in August 2014, changing its name to Adverum Biotechnologies, Inc. after acquiring Annapurna Therapeutics SAS[87]. - The common stock is listed on The Nasdaq Global Market under the symbol "ADVM"[87]. Product Candidates - ADVM-022 utilizes a proprietary vector capsid, AAV.7m8, to deliver aflibercept, aiming to reduce the treatment burden associated with frequent anti-VEGF injections[9]. - The FDA granted Fast Track designation for ADVM-022 for the treatment of wet AMD, with strong signals of therapeutic efficacy observed in the OPTIC trial at doses of 6 x 10^11 vg/eye and 2 x 10^11 vg/eye[10]. - ADVM-062, a novel gene therapy for blue cone monochromacy, received Orphan Drug Designation from the FDA in January 2022, highlighting the company's commitment to rare diseases[10]. - The company is planning a future Phase 2 clinical trial for ADVM-022, evaluating a lower dose of 6 x 10^10 vg/eye with enhanced prophylactic steroid regimens[10]. - The INFINITY trial for ADVM-022 in diabetic macular edema was halted due to dose-limiting toxicity at the 6E11 dose, but no similar safety concerns were noted at the 2E11 dose in ongoing trials[10]. - The Phase 1 OPTIC trial for ADVM-022 began in November 2018, with Fast Track designation from the FDA received in September 2018[28]. - A Phase 2 trial for ADVM-022 is being prepared, with plans to enroll approximately 72 subjects and evaluate similar endpoints as the Phase 1 trial[33]. - The company is advancing its AAV-based directed evolution platform for additional product candidates in nonclinical development[34]. Market Opportunity - Approximately 20 million individuals worldwide are living with wet AMD, with the incidence expected to grow significantly as populations age, impacting an estimated 288 million people by 2040[10]. - The standard-of-care anti-VEGF therapies for wet AMD generated over $13 billion in sales worldwide in 2021, indicating a substantial market opportunity[18]. - The global market for anti-VEGF therapies for wet AMD and other chronic retinal conditions generated over $13 billion in sales in 2021[18]. - The market for wet AMD treatments generated over $13 billion in sales worldwide in 2021, with the incidence of AMD expected to impact 288 million people by 2040[27]. Regulatory Environment - Regulatory approvals and the ability to successfully commercialize product candidates are critical for the company's future revenue generation[7]. - The FDA requires the completion of nonclinical laboratory tests and submission of an IND before human clinical trials can begin[50]. - The BLA submission must demonstrate adequate efficacy and acceptable safety profile based on nonclinical testing and clinical trials[51]. - The FDA aims to review priority BLA applications within 6 months and standard applications within 10 months from successful filing[57]. - The FDA may require additional clinical data or Phase 3 trials if the BLA does not meet statutory and regulatory criteria[57]. - The FDA has the authority to withdraw licensure if ongoing regulatory requirements are not met or if safety issues arise post-marketing[59]. - The new EU Clinical Trials Regulation aims to simplify and streamline the approval process for clinical trials across member states[56]. - The FDA recommends observing subjects for potential delayed adverse events for up to 5 years for certain gene therapy products[56]. - The FDA requires that any modifications to biologics, including changes in indications or manufacturing processes, may necessitate a new BLA or BLA supplement, which could involve additional data or clinical trials[60]. - A biological product approved under section 351(a) of the PHSA can receive 12 years of marketing exclusivity, with 4 years constituting data exclusivity, preventing biosimilar applications during this period[60]. - In the EU, biological products authorized through the centralized procedure are entitled to 8 years of data exclusivity and 10 years of market exclusivity[60]. - The FDA's expedited development programs, such as Fast Track and Breakthrough Therapy designations, allow for rolling reviews and priority reviews, potentially reducing the review time to 6 months[63]. - Orphan Drug Designation grants a 7-year exclusive marketing period in the U.S. for products treating rare diseases affecting fewer than 200,000 individuals[64]. - The FDA may approve biologics based on surrogate endpoints, but post-marketing trials are required to confirm clinical benefits, with potential withdrawal of approval if requirements are not met[63]. - The decentralized authorization procedure allows simultaneous applications for authorization in multiple EU Member States, streamlining the approval process[60]. Competition and Intellectual Property - The company faces significant competition in the gene therapy market, which could impact its commercial opportunities if competitors develop superior treatments[7]. - Adverum's intellectual property position is crucial for its business, with potential risks related to patent rights and third-party claims that could affect its development efforts[6]. - The company owns or licenses over 140 issued patents and has more than 190 pending patent applications, with a focus on AAV-based biological products and methods for treating diseases[45]. - The company has four patent families directed to AAV-based compositions for treating neovascular diseases, with patents expected to expire between 2033 and 2040[46]. - The company has licensed rights to various technologies, including improved rAAV virions, with patents projected to expire between 2024 and 2031[47]. - The company relies on trade secrets and confidentiality agreements to protect its proprietary technology and product candidates[49]. - The company is eligible to receive low to mid-single digit royalties on sales of GenSight's licensed products, indicating potential revenue streams from collaborations[41]. - The company has exclusive worldwide sublicensable license agreements with the University of California, with milestone payments totaling up to $1.5 million for product development[40]. - The company has licensed its AAV.7m8 vector to GenSight for the development of GS030, currently in phase 1/2 trials for retinitis pigmentosa[41]. Financial and Operational Risks - The success of the company heavily relies on the successful development and commercialization of its product candidates, with potential delays or failures in drug development posing significant risks[6]. - The company faces significant competition in the gene therapy market, which could impact its commercial opportunities if competitors develop superior treatments[7]. - The company may face significant penalties for violations of healthcare laws, including civil, criminal, and administrative penalties, which could adversely affect its financial condition and operations[73]. - The company must navigate complex coverage and reimbursement landscapes for gene therapy products, with third-party payers increasingly challenging pricing and cost-effectiveness[74]. - The Affordable Care Act includes provisions that may reduce the profitability of drug products, such as increased minimum rebates owed by manufacturers under the Medicaid Drug Rebate Program[74]. - The company may need to conduct expensive pharmacoeconomic studies to demonstrate the medical necessity and cost-effectiveness of its products to obtain coverage and reimbursement[74]. - Regulatory scrutiny regarding drug pricing practices has increased, with federal prosecutors issuing subpoenas to pharmaceutical companies[73]. - The company could be subject to substantial penalties if found in violation of the federal Anti-Kickback Statute or the civil False Claims Act[72]. - Compliance with evolving privacy and data security laws may prove costly and complex, impacting operational efficiency[73]. - The company may face reputational risks and administrative penalties if it fails to comply with strict laws governing interactions with healthcare providers[72]. - The company’s revenue and future profitability could be negatively affected by legislative or regulatory proposals limiting price increases for its products[73]. - The company is subject to numerous privacy and data protection obligations, including the EU GDPR and CCPA, which may increase compliance costs and exposure to penalties[70]. - The company is subject to numerous environmental, health, and safety regulations, with compliance necessary to avoid substantial fines or operational limitations[80]. Workforce and Culture - As of December 31, 2021, the company had approximately 188 full-time employees, with 131 engaged in research and development[81]. - Racial and ethnic minorities represented 68% of the employee base, and women comprised 52.7% of the workforce[82]. - The company offers a competitive compensation package, including market-competitive pay, stock grants, bonuses, and healthcare benefits[83]. - Employee engagement is highly favorable, contributing to the company being named a Top Workplace in 2021[81]. - The company has implemented employee-led resource groups to support diverse communities within the workforce[82]. - Employee safety and well-being are prioritized, with measures taken in response to COVID-19, including protective equipment and weekly testing[86]. - The company has a governance structure in place for timely communication and decision-making regarding employee safety[86]. - The company is committed to diversity, equity, and inclusion, with employee-led resource groups supporting various communities[82].

[PART I—FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The company reported increased net losses for Q3 and the nine months ended September 30, 2021, with an accumulated deficit of $613.7 million, while total assets increased to $490.6 million and cash decreased to $332.7 million [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of September 30, 2021, total assets increased to $490.6 million, driven by operating lease assets, while cash decreased to $332.7 million, and total liabilities rose sharply to $144.6 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash, cash equivalents & short-term investments | $332,705 | $429,729 | | Operating lease right-of-use assets | $100,174 | $19,376 | | Total assets | $490,581 | $482,567 | | **Liabilities & Equity** | | | | Lease liability (current & non-current) | $122,365 | $30,708 | | Total liabilities | $144,581 | $48,220 | | Accumulated deficit | $(613,667) | $(502,536) | | Total stockholders' equity | $346,000 | $434,347 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Net loss increased to $38.4 million for Q3 2021 and $111.1 million for the nine-month period, primarily due to higher R&D and G&A expenses, partially offset by $7.5 million in license revenue Statement of Operations Summary (in thousands) | Metric | Q3 2021 | Q3 2020 | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | :--- | :--- | | License Revenue | $0 | $0 | $7,500 | $0 | | Research and Development | $24,069 | $16,653 | $66,657 | $50,581 | | General and Administrative | $14,453 | $11,351 | $52,546 | $30,989 | | Operating Loss | $(38,522) | $(28,004) | $(111,703) | $(81,570) | | Net Loss | $(38,362) | $(27,769) | $(111,131) | $(79,875) | | Net Loss per Share | $(0.39) | $(0.31) | $(1.13) | $(0.99) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities increased to $82.0 million for the nine months ended September 30, 2021, while investing activities provided $54.8 million, and financing activities provided $2.0 million Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(82,016) | $(57,067) | | Net cash provided by (used in) investing activities | $54,826 | $(291,743) | | Net cash provided by financing activities | $2,022 | $355,609 | | **Net (decrease) increase in cash** | **$(25,168)** | **$6,799** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes highlight the company's clinical-stage status, accumulated deficit of $613.7 million, sufficient cash runway, and significant events including license revenue and new lease agreements with related impairment charges - The company is a clinical-stage gene therapy company with an accumulated deficit of **$613.7 million** as of September 30, 2021[27](index=27&type=chunk)[28](index=28&type=chunk) - Management believes its cash, cash equivalents, and short-term investments of **$332.7 million** are sufficient to fund operations for at least twelve months from the financial statement issuance date[28](index=28&type=chunk) - In January 2021, the company recognized **$7.5 million** in non-refundable upfront license revenue from an agreement with Lexeo Therapeutics[40](index=40&type=chunk)[41](index=41&type=chunk) - The company recorded a **$1.1 million** impairment charge related to right-of-use assets and leasehold improvements for a terminated lease in Redwood City[44](index=44&type=chunk) - The company entered into a new lease for a facility in North Carolina and subsequently subleased it, determining there was no impairment as the undiscounted sublease income exceeds the asset group's carrying amount[48](index=48&type=chunk)[50](index=50&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the strategic shift to focus ADVM-022 on wet AMD after discontinuing the DME program due to toxicity, noting increased operating losses from higher R&D and G&A expenses, and confirming sufficient cash to fund operations into 2024 - The company is focusing on developing ADVM-022 for wet age-related macular degeneration (wet AMD) and has discontinued development for diabetic macular edema (DME)[63](index=63&type=chunk)[66](index=66&type=chunk) - The decision to halt the DME program followed a dose-limiting toxicity observed at the high dose (6 x 10^11 vg/eye) in the Phase 2 INFINITY trial, with plans for a new Phase 2 trial in wet AMD to evaluate lower doses[66](index=66&type=chunk)[67](index=67&type=chunk) - Reflecting revised timelines and capital priorities, the company has subleased its new GMP manufacturing facility in Durham, North Carolina, and will rely on existing contract manufacturing partners[68](index=68&type=chunk) Comparison of Operating Expenses (in thousands) | Expense Category | Nine Months 2021 | Nine Months 2020 | Change | | :--- | :--- | :--- | :--- | | Research and development | $66,657 | $50,581 | $16,076 | | General and administrative | $52,546 | $30,989 | $21,557 | - The increase in G&A expenses for the nine months ended Sep 30, 2021 was primarily due to a **$9.3 million** increase in personnel costs, **$6.6 million** in professional services (mainly for a proxy contest), and costs related to new leases and asset impairment[100](index=100&type=chunk) - As of September 30, 2021, the company had **$332.7 million** in cash, cash equivalents, and short-term investments, which is expected to fund operations into 2024[103](index=103&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reported no material changes in foreign currency exchange and interest rate risks for the nine months ended September 30, 2021 - No material changes in foreign currency exchange and interest rate risks were reported for the nine months ended September 30, 2021[118](index=118&type=chunk) [Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2021, with no material changes to internal control over financial reporting during the quarter - The CEO and Interim CFO concluded that as of September 30, 2021, the company's disclosure controls and procedures were effective[120](index=120&type=chunk) - No material changes to internal control over financial reporting occurred during the third quarter of 2021[121](index=121&type=chunk) [PART II—OTHER INFORMATION](index=25&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [Legal Proceedings](index=25&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no material legal proceedings during the period - Not applicable[125](index=125&type=chunk) [Risk Factors](index=25&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant financial, clinical development, manufacturing, intellectual property, commercialization, and operational risks, including dependence on ADVM-022 and challenges inherent in gene therapy [Risks Related to Financial Position and Need for Capital](index=26&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Capital) The company faces ongoing significant operating losses and requires substantial additional capital for clinical development and commercialization, with no guarantee of availability or favorable terms - The company has incurred significant operating losses since inception and expects them to continue for the foreseeable future, with no guarantee of ever achieving profitability[127](index=127&type=chunk) - The company will need to raise substantial additional capital to fund operations, and failure to do so could force it to delay, reduce, or eliminate research and development programs[130](index=130&type=chunk) [Risks Related to Discovery and Development](index=28&type=section&id=Risks%20Related%20to%20the%20Discovery%20and%20Development%20of%20Our%20Product%20Candidates) The business is highly dependent on ADVM-022, facing long, expensive, and uncertain gene therapy development, with risks of serious side effects, program discontinuation, and unpredictable timelines due to novel technology - The business heavily depends on the success of one or more product candidates, primarily ADVM-022, and failure to develop, get approval for, or commercialize it would materially harm the business[137](index=137&type=chunk) - Serious complications or side effects, such as the dose-limiting toxicity observed in the INFINITY trial, could lead to discontinuation of clinical programs or refusal of regulatory approval[143](index=143&type=chunk) - The company's gene therapy platform is a novel technology, making it difficult to predict the time, cost, and regulatory pathway for development and approval[151](index=151&type=chunk)[152](index=152&type=chunk) [Risks Related to Manufacturing](index=34&type=section&id=Risks%20Related%20to%20Manufacturing) The company faces significant manufacturing risks, including challenges in developing robust processes, reliance on limited third-party contractors, and the inherent complexity of gene therapy production at commercial scale - Inability to develop and maintain robust and reliable manufacturing processes could delay clinical trials and force program termination[168](index=168&type=chunk) - The company relies on a limited number of vendors, including single-source vendors, for manufacturing, who may not meet regulatory requirements or have sufficient capacity[175](index=175&type=chunk) - Gene therapy manufacturing is novel and complex, with few specialized contract manufacturers, increasing the risk of supply shortages and delays[174](index=174&type=chunk) [Risks Relating to Intellectual Property](index=40&type=section&id=Risks%20Relating%20to%20Our%20Intellectual%20Property) The company's success hinges on obtaining and maintaining intellectual property protection, facing risks of insufficient patent coverage, reliance on potentially terminable third-party licenses, and potential infringement claims - Commercial success depends on protecting intellectual property, but there is no assurance that patents will be issued or afford sufficient protection against competitors[200](index=200&type=chunk) - The company relies on licenses from third parties (e.g., University of California, Cornell, Virovek) for key technology, and the loss of these licenses could materially harm the business[214](index=214&type=chunk)[216](index=216&type=chunk) - Some in-licensed intellectual property was developed with U.S. government funding and is subject to federal regulations, including "march-in" rights and a preference for U.S.-based manufacturing[233](index=233&type=chunk) [Risks Related to Commercialization](index=48&type=section&id=Risks%20Related%20to%20Commercialization%20of%20Our%20Product%20Candidates) Commercialization risks include uncertain market acceptance, intense competition, challenges in securing adequate reimbursement for novel single-administration therapies, and the company's lack of sales and marketing capabilities - Even with regulatory approval, product candidates may not gain market acceptance among physicians, patients, and payers, which is critical for commercial success[240](index=240&type=chunk) - The company faces intense competition from well-established therapies like EYLEA and LUCENTIS, as well as other gene therapy companies like REGENXBIO[243](index=243&type=chunk)[245](index=245&type=chunk) - The company faces uncertainty related to pricing and reimbursement, as its product candidates are designed for single administration, and obtaining adequate coverage is crucial but not guaranteed[271](index=271&type=chunk) [Risks Related to Business Operations](index=55&type=section&id=Risks%20Related%20to%20Our%20Business%20Operations) Operational risks include negative public perception of gene therapy, dependence on key personnel, growth management challenges, COVID-19 impacts, cybersecurity threats, and compliance with complex healthcare and privacy laws - Negative public opinion and increased regulatory scrutiny of gene therapy, potentially fueled by adverse events in the field, could damage perception of the company's products and delay approvals[277](index=277&type=chunk)[279](index=279&type=chunk) - The COVID-19 pandemic has impacted business practices and may continue to affect clinical trials, supply chains, and regulatory processes, with the full extent of future impact remaining uncertain[284](index=284&type=chunk)[290](index=290&type=chunk) - The company is subject to evolving and stringent privacy and data security laws (HIPAA, CCPA, GDPR), and failure to comply could result in significant fines, litigation, and reputational damage[303](index=303&type=chunk)[306](index=306&type=chunk)[308](index=308&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=65&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[338](index=338&type=chunk) [Defaults Upon Senior Securities](index=66&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[340](index=340&type=chunk) [Mine Safety Disclosures](index=66&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable - Not applicable[341](index=341&type=chunk) [Other Information](index=66&type=section&id=Item%205.%20Other%20Information) On November 1, 2021, the company terminated a building lease for a $0.4 million fee and concurrently subleased a portion of the premises to Revolution Medicines, Inc - On November 1, 2021, the company amended a lease to terminate one of its buildings, paying a **$0.4 million** fee[343](index=343&type=chunk) - Concurrently, the company subleased a portion of the terminated premises to Revolution Medicines, Inc. for a monthly base rent of **$0.1 million**[343](index=343&type=chunk) [Exhibits](index=67&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including separation and consulting agreements and required officer certifications - Exhibits filed include separation and consulting agreements with Angela Thedinga, and CEO/CFO certifications as required by Sarbanes-Oxley[346](index=346&type=chunk)

(Mark One) ___________________________________________________________________ FORM 10-Q ___________________________________________________________________ Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Adve ...