[Fourth Quarter and Full Year 2023 Business Highlights and Financial Results](index=1&type=section&id=Aura%20Biosciences%20Reports%20Fourth%20Quarter%20and%20Full%20Year%202023%20Financial%20Results%20and%20Business%20Highlights) [Pipeline Developments](index=1&type=section&id=Recent%20Pipeline%20Developments) Aura Biosciences advances its lead candidate, bel-sar, across multiple oncology indications, including ongoing Phase 3 trials for choroidal melanoma and Phase 1 for bladder cancer - The company is expanding its lead therapy, bel-sar, into bladder cancer and other solid tumor indications, targeting a multi-billion dollar market with significant unmet medical need[2](index=2&type=chunk) [Choroidal Melanoma (CM) and Indeterminate Lesions (ILs)](index=1&type=section&id=Choroidal%20Melanoma%20%28CM%29%20and%20Indeterminate%20Lesions%20%28ILs%29) Phase 3 CoMpass trial for small CM and ILs actively enrolls, supported by positive Phase 2 data and FDA SPA agreement - The global Phase 3 CoMpass trial is actively enrolling patients for small choroidal melanoma (CM) and indeterminate lesions (ILs). The trial design has a Special Protocol Assessment (SPA) agreement from the FDA[1](index=1&type=chunk)[3](index=3&type=chunk) - Positive Phase 2 data presented at AAO 2023 showed that patients receiving three cycles of therapy had an **80% tumor control rate** and a **90% visual acuity preservation rate** at 12 months follow-up[4](index=4&type=chunk) - The overall tolerability of bel-sar was favorable, with no dose-limiting toxicities, treatment-related serious adverse events (SAEs), or significant adverse events reported[5](index=5&type=chunk) - The company plans to initiate a Phase 2 trial in 2024 for choroidal metastasis (Cmets), the second potential ocular oncology indication for bel-sar, affecting over **20,000 patients annually** in the US/EU[6](index=6&type=chunk) [Bladder Cancer (NMIBC and MIBC)](index=2&type=section&id=Bladder%20Cancer%20%28NMIBC%20and%20MIBC%29) Phase 1 trial for NMIBC and MIBC is ongoing, with mid-2024 data expected and initial complete clinical response observed - The Phase 1 trial for NMIBC and MIBC is ongoing, with data expected in mid-2024. The company received Fast Track Designation from the FDA for NMIBC in June 2022[7](index=7&type=chunk) - The trial has completed enrollment for the cohort receiving bel-sar injection without light activation and has proceeded to the light activation cohorts after a safety review found no issues[8](index=8&type=chunk) - Preliminary data from the first patient in the light-activated cohort demonstrated a **complete clinical response**, with histopathology showing extensive necrosis and immune activation[9](index=9&type=chunk) [Corporate Events](index=3&type=section&id=Recent%20Corporate%20Events) Aura Biosciences completed a public offering in November 2023, raising $99.0 million in gross proceeds - Raised gross proceeds of **$99.0 million** in an underwritten public offering in November 2023, selling **11,000,000 shares** at **$9.00 per share**[10](index=10&type=chunk) [Financial Results Summary](index=3&type=section&id=Full%20Year%20and%20Fourth%20Quarter%202023%20Financial%20Results) Aura Biosciences ended 2023 with $226.2 million cash, funding operations into mid-2026, and reported a $76.4 million net loss - As of December 31, 2023, the company had cash, cash equivalents, and marketable securities of **$226.2 million**, sufficient to fund operations into the second half of 2026[11](index=11&type=chunk) Financial Performance Comparison (in millions) | Metric | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | | R&D Expenses | $20.3 | $13.2 | $65.2 | $42.2 | | G&A Expenses | $4.5 | $4.5 | $19.8 | $18.1 | | Net Loss | $22.1 | $16.6 | $76.4 | $58.8 | [Financial Statements](index=6&type=section&id=Financial%20Statements) Consolidated financial statements detail the company's financial position and performance, including the Statement of Operations and Balance Sheets [Consolidated Statement of Operations and Comprehensive Loss](index=6&type=section&id=Consolidated%20Statement%20of%20Operations%20and%20Comprehensive%20Loss) Aura Biosciences reported a total operating loss of $85.0 million and a net loss of $76.4 million for FY2023, with a net loss per share of $1.93 Statement of Operations (Year Ended Dec 31, in thousands) | Account | 2023 | 2022 | | :--- | :--- | :--- | | Research and development | $65,232 | $42,238 | | General and administrative | $19,759 | $18,057 | | **Total operating loss** | **($84,991)** | **($60,295)** | | Interest income | $8,588 | $1,864 | | **Net loss** | **($76,408)** | **($58,763)** | | Net loss per share | ($1.93) | ($1.96) | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) As of December 31, 2023, total assets increased to $255.1 million, driven by marketable securities, with stockholders' equity rising to $225.8 million Balance Sheet Highlights (As of Dec 31, in thousands) | Account | 2023 | 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $41,063 | $121,582 | | Marketable securities | $185,087 | $67,229 | | **Total Assets** | **$255,075** | **$223,935** | | Total Liabilities | $29,227 | $28,352 | | **Total Stockholders' Equity** | **$225,848** | **$195,583** |

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Aura Biosciences reported a net loss of **$54.3 million** for the nine months ended September 30, 2023, driven by increased R&D expenses, with total assets of **$179.8 million** [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $55,584 | $121,582 | | Marketable securities | $93,472 | $67,229 | | **Total Assets** | **$179,766** | **$223,935** | | Total Liabilities | $28,048 | $28,352 | | **Total Stockholders' Equity** | **$151,718** | **$195,583** | - The company's cash and cash equivalents decreased significantly from **$121.6 million** at the end of 2022 to **$55.6 million** as of September 30, 2023, while marketable securities increased. Total assets and stockholders' equity also decreased during the period[12](index=12&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $15,428 | $11,293 | $44,952 | $29,079 | | General and administrative | $5,060 | $4,762 | $15,256 | $13,603 | | **Total operating loss** | **($20,488)** | **($16,055)** | **($60,208)** | **($42,682)** | | **Net loss** | **($18,512)** | **($15,901)** | **($54,277)** | **($42,204)** | | Net loss per share | ($0.48) | ($0.54) | ($1.43) | ($1.44) | - The net loss for the nine months ended September 30, 2023, increased to **$54.3 million** from **$42.2 million** in the prior-year period, primarily due to a significant rise in research and development expenses[16](index=16&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) - Total stockholders' equity decreased from **$195.6 million** at December 31, 2022, to **$151.7 million** at September 30, 2023, primarily due to the **$54.3 million** net loss, partially offset by stock-based compensation and stock issuances[19](index=19&type=chunk)[20](index=20&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($46,460) | ($36,588) | | Net cash used in investing activities | ($23,843) | ($50,993) | | Net cash provided by financing activities | $4,305 | $430 | | **Net decrease in cash, cash equivalents and restricted cash** | **($65,998)** | **($87,151)** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail Aura Biosciences' clinical-stage biotechnology focus on cancer treatment with bel-sar, sufficient cash for 12 months, key license agreements, and a **$92.6 million** November 2023 follow-on offering - Aura Biosciences is a clinical-stage biotechnology company developing its Virus-Like Drug Conjugates (VDCs) platform for cancer, with bel-sar as its lead candidate for choroidal melanoma and other cancers[26](index=26&type=chunk) - The company expects its cash, cash equivalents, and marketable securities to fund operating expenses and capital requirements for at least the next 12 months from the report's issuance date[31](index=31&type=chunk) - On November 9, 2023, the company completed a follow-on offering, raising approximately **$92.6 million** in net proceeds from selling 11,000,000 shares at **$9.00** per share[93](index=93&type=chunk) - Key license agreements for core technology are in place with LI-COR, Life Technologies, the National Institute of Health (NIH), and Clearside Biomedical, involving potential milestone and royalty payments[71](index=71&type=chunk)[72](index=72&type=chunk)[80](index=80&type=chunk)[84](index=84&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses bel-sar's clinical development, including Phase 2 completion and Phase 3 initiation, noting a **$54.3 million** net loss for the first nine months of 2023, with sufficient funds to operate into H2 2026 [Overview](index=21&type=section&id=Overview) - Aura is a clinical-stage biotechnology company developing bel-sar, a Virus-like Drug Conjugate (VDC), for first-line treatment of early-stage choroidal melanoma and other ocular and urologic cancers[97](index=97&type=chunk)[98](index=98&type=chunk) - Enrollment is complete in the Phase 2 trial for choroidal melanoma, showing an **80% tumor control rate** and **90% visual acuity preservation**, with a global Phase 3 trial expected to begin dosing in Q4 2023 following FDA agreement on a Special Protocol Assessment[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk) - Bel-sar is also being developed for non-muscle invasive bladder cancer (NMIBC), with preliminary Phase 1 data from the first light-activated patient showing a clinical complete response[102](index=102&type=chunk) - The company has not generated revenue and incurred significant operating losses, with a net loss of **$54.3 million** for the nine months ended September 30, 2023, and an accumulated deficit of **$265.2 million**[103](index=103&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Comparison of Operating Results (in thousands) | Period | Research & Development | General & Administrative | Net Loss | | :--- | :--- | :--- | :--- | | **Three Months Ended Sep 30, 2023** | $15,428 | $5,060 | ($18,512) | | **Three Months Ended Sep 30, 2022** | $11,293 | $4,762 | ($15,901) | | **Nine Months Ended Sep 30, 2023** | $44,952 | $15,256 | ($54,277) | | **Nine Months Ended Sep 30, 2022** | $29,079 | $13,603 | ($42,204) | - R&D expenses increased by **$15.9 million** for the nine months ended Sep 30, 2023, primarily due to higher clinical trial costs for Phase 2 and Phase 3 studies, and increased manufacturing and development costs for bel-sar[130](index=130&type=chunk) - General and administrative expenses increased by **$1.7 million** for the nine months ended Sep 30, 2023, mainly driven by higher personnel expenses and general corporate costs related to company growth[131](index=131&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) - As of September 30, 2023, the company held **$149.1 million** in cash, cash equivalents, and marketable securities[109](index=109&type=chunk)[141](index=141&type=chunk) - Subsequent to quarter-end, on November 9, 2023, the company raised approximately **$92.6 million** in net proceeds from a follow-on public offering[133](index=133&type=chunk) - Management believes existing cash combined with the November 2023 offering proceeds will fund operations and capital expenditures into the second half of 2026[109](index=109&type=chunk)[141](index=141&type=chunk) Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($46,460) | ($36,588) | | Net cash used in investing activities | ($23,843) | ($50,993) | | Net cash provided by financing activities | $4,305 | $430 | [Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Aura Biosciences is exempt from providing quantitative and qualitative disclosures about market risk - The company is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and is not required to provide the information under this item[151](index=151&type=chunk) [Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of September 30, 2023[153](index=153&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[154](index=154&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) As of September 30, 2023, the company is not party to any material legal proceedings expected to adversely affect its business - The company reports that it is not currently a party to any claim or litigation that would be reasonably expected to have a material adverse effect on its business[156](index=156&type=chunk) [Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) The company outlines significant risks including financial losses, reliance on bel-sar's success, dependence on third parties for development and manufacturing, and challenges in market acceptance and intellectual property protection - The company has a history of significant net losses (**$54.3 million** for the nine months ended Sep 30, 2023) and anticipates continued losses for the foreseeable future[159](index=159&type=chunk) - The business is heavily dependent on the success of its only product candidate, bel-sar; failure to gain regulatory approval or achieve commercial viability would severely harm the company[178](index=178&type=chunk) - The company relies on third-party contract manufacturing organizations (CMOs) for the production of bel-sar, increasing risks related to supply sufficiency, cost, and regulatory compliance[244](index=244&type=chunk) - The company's ability to compete depends on adequately protecting its proprietary rights, which may not address all potential threats, relying on both owned and in-licensed intellectual property[276](index=276&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=75&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities, no use of IPO proceeds, and no issuer purchases during the period - There were no unregistered sales of equity securities during the reporting period[398](index=398&type=chunk) [Other Information](index=75&type=section&id=Item%205.%20Other%20Information) The company entered a Transition and Release Agreement with its former Chief Medical Officer, Dr. Cadmus Rich, effective November 7, 2023, detailing separation terms - On November 6, 2023, the company entered into a Transition and Release Agreement with its former Chief Medical Officer, Dr. Cadmus Rich, detailing his separation terms, including severance and continued benefits for nine months[399](index=399&type=chunk) [Exhibits](index=76&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents, employment agreements, and SEC certifications - Exhibits filed include the employment offer letter for Jill Hopkins, transition and release agreements with Cadmus Rich, and certifications by the Principal Executive Officer and Principal Financial Officer[401](index=401&type=chunk)

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, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | |-------------------------------------------------------------------------------------|------------------------------------------| | | | | For the transition period from ________ ...

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 March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | |-------------------------------------------------------------------------------------|------------------------------------------| | | | | For the transition period from _______ ...

Company Overview - Aura Biosciences is developing virus-like drug conjugates (VDCs) to target multiple solid tumor indications, including ocular and bladder cancers[6] - The company highlights a multi-billion-dollar addressable market opportunity with its novel platform to treat multiple solid tumors[6] - Aura Biosciences has a strong cash position with a cash runway to fund operations into 2025[6] Ocular Oncology Program - The company initiated activities for a global Phase 3 trial for Primary Choroidal Melanoma and plans to initiate a Phase 2 trial for Choroidal Metastasis in the second half of 2023[6] - In Primary Choroidal Melanoma, approximately 80% of patients are diagnosed with early-stage disease, representing a significant target population[17] - Current radiotherapy treatments leave approximately 70% of patients with major irreversible vision loss within 5-10 years[26] - Phase 2 interim data showed an 89% tumor control rate in the highest dose/regimen group (3 cycles)[39] and 100% tumor control rate in planned Phase 3 population[46] - Phase 2 interim analysis demonstrated visual acuity preservation in approximately 90% of patients[47] - Phase 2 interim data demonstrated a statistically significant tumor growth rate reduction with a p-value of <0.0001 in the planned Phase 3 population[53] - The company estimates a total addressable market of 33,500 for the Ocular Oncology Franchise, including 20,000 Choroidal Metastasis patients diagnosed each year in the US/EU[70, 71] Urologic Oncology Program - The company is enrolling patients in a Phase 1 trial in Non-Muscle Invasive Bladder Cancer (NMIBC), with initial data expected in the second half of 2023[84] - The company notes that NMIBC has a high incidence globally, affecting over 500,000 patients per year[84]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 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 001-40971 AURA BIOSCIENCES, INC. (Exact name of Registrant as specified in its Charter) Delaware 32-0271970 (State or other jurisdiction ...

PART I. [FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) Aura Biosciences' unaudited consolidated financial statements as of September 30, 2022, present key financial positions, operations, and cash flows Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $61,110 | $149,063 | | Marketable securities | $50,409 | $0 | | **Total Assets** | **$143,147** | **$160,030** | | Total current liabilities | $9,964 | $7,355 | | Long-term operating lease liability | $18,129 | $360 | | **Total Liabilities** | **$28,093** | **$7,715** | | **Total Stockholders' Equity** | **$115,054** | **$152,315** | Condensed Consolidated Statements of Operations Highlights (in thousands) | Metric | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Research and development | $29,079 | $17,182 | | General and administrative | $13,603 | $6,441 | | **Total operating loss** | **($42,682)** | **($23,623)** | | **Net loss** | **($42,204)** | **($23,617)** | | **Net loss per share** | **($1.44)** | **($77.93)** | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($36,588) | ($20,324) | | Net cash used in investing activities | ($50,993) | ($1,306) | | Net cash provided by financing activities | $430 | $86,117 | - As of the report issuance date, the company expects its cash, cash equivalents, and marketable securities of **$111.5 million** to be sufficient to fund operating expenses and capital requirements through at least the next 12 months[28](index=28&type=chunk)[30](index=30&type=chunk) - On November 1, 2022, the company filed a shelf registration statement for up to **$250.0 million** and entered into an "at-the-market" (ATM) offering agreement for up to **$75.0 million** of its common stock[102](index=102&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses financial condition, operational results, and belzupacap sarotalocan's clinical progress, highlighting expenses and liquidity [Overview](index=22&type=section&id=MD%26A%20Overview) Aura Biosciences, a clinical-stage biotech, advances belzupacap sarotalocan for ocular and urologic cancers, planning a global Phase 3 trial - The lead product candidate, belzupacap sarotalocan, has received **Orphan Drug Designation** and **Fast Track Designation** from the FDA for the treatment of uveal melanoma[106](index=106&type=chunk) - Interim six-month data from the Phase 2 trial of belzupacap sarotalocan with suprachoroidal (SC) administration showed a favorable safety profile, high levels of visual acuity preservation, and a statistically significant tumor growth rate reduction (**p = 0.0007**)[106](index=106&type=chunk) - The company is expanding into urologic oncology, having initiated a **Phase 1 trial** for non-muscle invasive bladder cancer (NMIBC) in September 2022, with initial data expected in 2023[107](index=107&type=chunk) [Results of Operations](index=26&type=section&id=MD%26A%20Results%20of%20Operations) This section compares Q3 and nine-month operating results, highlighting increased net losses due to higher R&D and G&A expenses Comparison of Operating Results (in thousands) | Period | R&D Expense | G&A Expense | Net Loss | | :--- | :--- | :--- | :--- | | **Q3 2022** | $11,293 | $4,762 | ($15,901) | | **Q3 2021** | $6,365 | $2,530 | ($8,838) | | **Nine Months 2022** | $29,079 | $13,603 | ($42,204) | | **Nine Months 2021** | $17,182 | $6,441 | ($23,617) | - The increase in R&D expenses was primarily due to ongoing preclinical costs, manufacturing and development costs for belzupacap sarotalocan, and higher personnel expenses from growing headcount[132](index=132&type=chunk)[138](index=138&type=chunk) - The increase in G&A expenses was driven by higher personnel costs and increased general corporate expenses related to operating as a public company[133](index=133&type=chunk)[139](index=139&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=MD%26A%20Liquidity%20and%20Capital%20Resources) Liquidity from equity sales, with **$111.5 million** cash as of September 30, 2022, funds operations into 2024, but substantial additional capital is needed - As of September 30, 2022, the company had cash, cash equivalents, and marketable securities totaling **$111.5 million**[114](index=114&type=chunk)[150](index=150&type=chunk) - The company believes its existing cash will be sufficient to fund operating expenses and capital expenditure requirements into **2024**, but this will not be enough to fund belzupacap sarotalocan through regulatory approval[150](index=150&type=chunk)[177](index=177&type=chunk) Material Cash Requirements (in thousands) | Commitment | Total | Less than 1 Year | 1 to 3 Years | 3 to 5 Years | More than 5 Years | | :--- | :--- | :--- | :--- | :--- | :--- | | Operating lease commitments | $34,718 | $3,089 | $6,458 | $6,851 | $18,320 | [Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) As a smaller reporting company, Aura Biosciences is not required to provide quantitative and qualitative disclosures about market risk - The company is a **smaller reporting company** as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and is not required to provide the information under this item[161](index=161&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management, including CEO and CFO, concluded disclosure controls were effective as of September 30, 2022, with no material internal control changes - Management, including the CEO and CFO, concluded that as of September 30, 2022, the company's disclosure controls and procedures were effective[164](index=164&type=chunk) - No change in internal control over financial reporting occurred during the quarter that has materially affected, or is reasonably likely to materially affect, internal controls[165](index=165&type=chunk) PART II. [OTHER INFORMATION](index=32&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings.) As of September 30, 2022, the company is not party to any claim or litigation expected to have a material adverse effect on its business - As of September 30, 2022, the company does not believe it is party to any claim or litigation that would be reasonably expected to have a material adverse effect on its business[167](index=167&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors.) This section outlines material risks related to financial position, product development, third-party reliance, commercialization, intellectual property, and general business [Risks Related to Financial Position and Capital Needs](index=32&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%2C%20and%20Additional%20Capital%20Needs) This section details financial risks, including significant net losses, an accumulated deficit of **$194.3 million**, and the need for substantial additional capital - The company has incurred significant net losses since inception, with an accumulated deficit of **$194.3 million** as of September 30, 2022, and expects to incur increasing operating losses for the foreseeable future[170](index=170&type=chunk) - Substantial additional capital is required to finance operations. Existing cash is expected to fund operations into **2024** but is not sufficient to complete the development and commercialization of belzupacap sarotalocan[176](index=176&type=chunk)[177](index=177&type=chunk) [Risks Related to the Discovery and Development of our Product Candidates](index=36&type=section&id=Risks%20Related%20to%20the%20Discovery%20and%20Development%20of%20our%20Product%20Candidates) This section outlines product development risks, including dependence on belzupacap sarotalocan, regulatory uncertainty for combination products, and clinical trial failures - The company's business is heavily dependent on the successful development, regulatory approval, and commercialization of its only product candidate, **belzupacap sarotalocan**[190](index=190&type=chunk) - The company has not yet successfully initiated or completed any pivotal clinical trials or commercialized any products, making it difficult to evaluate future prospects[200](index=200&type=chunk) - Belzupacap sarotalocan is a **biologic-device combination product**, which may result in additional regulatory complexity and risks during the approval process[204](index=204&type=chunk) [Risks Related to Our Reliance on Third Parties](index=47&type=section&id=Risks%20Related%20to%20Our%20Reliance%20on%20Third%20Parties) This section details risks from reliance on third parties for clinical trials and manufacturing, including performance, compliance, and single-source supply disruptions - The company relies on third parties like **CROs** to conduct clinical trials, which reduces direct control over these activities but does not relieve the company of its regulatory responsibilities[247](index=247&type=chunk)[248](index=248&type=chunk) - The company relies on third-party **CMOs** for the manufacture of belzupacap sarotalocan and is currently reliant on a **single source** for each of its regulatory starting materials, drug substance, and drug product[252](index=252&type=chunk) [Risks Related to Commercialization](index=50&type=section&id=Risks%20Related%20to%20Commercialization) This section covers commercialization risks, including market acceptance, lack of sales infrastructure, intense competition, uncertain pricing, and healthcare law compliance - The company currently has no sales, marketing, or distribution capabilities and no experience in marketing products, which will require significant investment and resources to build[266](index=266&type=chunk) - The market opportunity for belzupacap sarotalocan may be smaller than estimated, which would adversely affect potential revenue and profitability[277](index=277&type=chunk) - The business is subject to numerous healthcare laws and regulations (e.g., **Anti-Kickback Statute**, **False Claims Act**, **HIPAA**), and non-compliance could lead to significant penalties[279](index=279&type=chunk)[281](index=281&type=chunk) [Risks Related to Intellectual Property](index=58&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) This section details intellectual property risks, including patent protection challenges, reliance on third-party licenses, and the difficulty of protecting trade secrets - The company's ability to compete depends on adequately protecting its proprietary rights, which is subject to challenges, potential invalidation, and the high cost of enforcement[299](index=299&type=chunk)[301](index=301&type=chunk) - The company relies on intellectual property licensed from third parties and could lose these rights if it fails to comply with its obligations under the license agreements[307](index=307&type=chunk) - The company relies on confidentiality agreements to protect trade secrets, such as the manufacturing process for the **IRDye 700DX® dye** used in its lead product, which may be breached or difficult to enforce[327](index=327&type=chunk) [General Risks](index=63&type=section&id=General%20Risks) This section outlines general business risks, including personnel, disruptions, cybersecurity, data privacy, stock volatility, dilution, ownership, and emerging growth company status - The company's executive officers, directors, and 5%+ stockholders beneficially own approximately **60.1%** of its outstanding common stock, enabling them to exert significant influence over corporate actions[378](index=378&type=chunk) - The company is an "**emerging growth company**" and a "**smaller reporting company**," which allows for reduced public reporting requirements but may make its stock less attractive to some investors[402](index=402&type=chunk) - Future sales of common stock, including through a new "**at-the-market**" (ATM) program, will be necessary for additional capital but could result in significant dilution to existing stockholders and cause the stock price to decline[393](index=393&type=chunk)[394](index=394&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=80&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) No unregistered equity sales occurred, and no material change in the planned use of **$78.3 million** net IPO proceeds from November 2021 - The company completed its IPO on November 2, 2021, receiving total net proceeds of approximately **$78.3 million** after the underwriters fully exercised their option[420](index=420&type=chunk) - There has been no material change in the planned use of proceeds from the IPO as disclosed in the original prospectus[422](index=422&type=chunk) [Defaults Upon Senior Securities](index=80&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities.) This item is not applicable to the company for the reporting period - Not applicable[422](index=422&type=chunk) [Mine Safety Disclosures](index=80&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to the company for the reporting period - Not applicable[422](index=422&type=chunk) [Other Information](index=80&type=section&id=Item%205.%20Other%20Information.) The company reported no other information for this item during the period - None[422](index=422&type=chunk) [Exhibits](index=81&type=section&id=Item%206.%20Exhibits.) This section lists exhibits filed with the Form 10-Q, including corporate documents and certifications from the Principal Executive and Financial Officers - The filing includes certifications from the Principal Executive Officer and Principal Financial Officer pursuant to Sections **302** and **906** of the Sarbanes-Oxley Act of 2002[425](index=425&type=chunk)

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents unaudited condensed consolidated financial statements for Q1 2022, showing a $12.8 million net loss and increased operating expenses [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2022, total assets were $146.4 million, down from $160.0 million, primarily due to reduced cash and cash equivalents Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $108,382 | $149,063 | | Marketable securities | $24,899 | $0 | | **Total Assets** | **$146,422** | **$160,030** | | Total Liabilities | $7,715 | $5,336 | | **Total Stockholders' Equity** | **$141,086** | **$152,315** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For Q1 2022, the company reported a $12.8 million net loss, a significant increase from $5.9 million in Q1 2021, driven by higher R&D and G&A expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Research and development | $8,276 | $4,185 | | General and administrative | $4,535 | $1,742 | | **Total operating expenses** | **$12,811** | **$5,927** | | **Net loss** | **$(12,835)** | **$(5,927)** | | Net loss per share | $(0.44) | $(20.62) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2022 saw $15.2 million cash used in operations and $25.5 million in investing activities, contrasting with Q1 2021's $87.5 million financing inflow Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(15,200) | $(5,137) | | Net cash used in investing activities | $(25,498) | $(71) | | Net cash provided by financing activities | $17 | $87,489 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's clinical-stage biotech focus, $133.3 million in funds sufficient for 12 months, and key license agreements - Aura Biosciences is a clinical-stage biotechnology company developing its Virus-Like Drug Conjugates (VDCs) platform, with its first candidate, AU-011, targeting primary choroidal melanoma and other cancers[31](index=31&type=chunk) - As of March 31, 2022, the company had **$133.3 million** in cash, cash equivalents, and marketable securities, expected to be sufficient for at least 12 months from the financial statement issuance date[35](index=35&type=chunk)[36](index=36&type=chunk) Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Research and development | $555 | $44 | | General and administrative | $1,039 | $141 | | **Total** | **$1,594** | **$185** | - The company has entered into multiple key license agreements for its core technology with entities including LI-COR, Life Technologies, National Institute of Health (NIH), and Clearside, involving potential future milestone and royalty payments[85](index=85&type=chunk)[86](index=86&type=chunk)[97](index=97&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2022's $12.8 million net loss, driven by R&D and G&A, and confirms $133.3 million cash funds operations into 2024 - The company is a clinical-stage biotech focused on its lead candidate AU-011 for choroidal melanoma, with plans to initiate a pivotal trial in the second half of 2022 and expand into other indications like non-muscle invasive bladder cancer (NMIBC)[109](index=109&type=chunk) - The company has incurred significant operating losses since inception and expects them to continue, with a **net loss of $12.8 million** for Q1 2022 and an accumulated deficit of **$165.0 million** as of March 31, 2022[111](index=111&type=chunk) - With **$133.3 million** in cash, cash equivalents, and marketable securities as of March 31, 2022, management believes it has sufficient capital to fund operations into 2024[116](index=116&type=chunk)[142](index=142&type=chunk) Comparison of Results of Operations (in thousands) | Line Item | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Research and development | $8,276 | $4,185 | | General and administrative | $4,535 | $1,742 | | **Net loss** | **$(12,835)** | **$(5,927)** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Aura Biosciences is not required to provide information for this item - The company is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and is not required to provide the information under this item[154](index=154&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of March 31, 2022, with no material changes to internal controls - Based on an evaluation as of the end of the period, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[156](index=156&type=chunk) - There were no changes in the company's internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting[157](index=157&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) As of March 31, 2022, the company is not a party to any material legal proceedings - The company is not currently party to any claim or litigation that would be reasonably expected to have a material adverse effect on its business[159](index=159&type=chunk) [Item 1A. Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks including financial losses, dependence on AU-011, reliance on third parties, and regulatory hurdles - **Financial Risk:** The company has a history of significant net losses (**$12.8 million** in Q1 2022) and expects to incur losses for the foreseeable future, requiring substantial additional capital[162](index=162&type=chunk) - **Product Dependency Risk:** The company's business is heavily dependent on the success of AU-011, its only product candidate to date[179](index=179&type=chunk) - **Third-Party Reliance Risk:** The company relies on third-party CMOs for manufacturing and CROs for clinical trials, which increases risks related to supply, quality control, and trial execution[237](index=237&type=chunk)[241](index=241&type=chunk) - **Regulatory and Commercialization Risk:** The company faces significant hurdles in obtaining regulatory approval for its novel biologic-device combination product and achieving market acceptance if approved[183](index=183&type=chunk)[193](index=193&type=chunk)[251](index=251&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=75&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales occurred; IPO net proceeds of $78.3 million remain consistent with planned use - The company completed its IPO on November 2, 2021, with net proceeds of approximately **$78.3 million** after deducting discounts, commissions, and expenses[400](index=400&type=chunk) - There has been no material change in the planned use of proceeds from the IPO as disclosed in the prospectus[402](index=402&type=chunk) [Item 3. Defaults Upon Senior Securities](index=75&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Not applicable - Not applicable[403](index=403&type=chunk) [Item 4. Mine Safety Disclosures](index=75&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - Not applicable[403](index=403&type=chunk) [Item 5. Other Information](index=75&type=section&id=Item%205.%20Other%20Information) None - None[403](index=403&type=chunk) [Item 6. Exhibits](index=76&type=section&id=Item%206.%20Exhibits) This section lists exhibits, including corporate governance documents and SOX certifications by key officers - The report includes certifications from the Principal Executive Officer and Principal Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[405](index=405&type=chunk)