Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q ________________________________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR o 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: 001-38841 _____________________________________ ...

Wholly Owned Portfolio PBGENE-HBV (Viral Elimination Program): PBGENE-HBV is Precision's wholly owned in vivo gene editing program under investigation in a global first-in-human clinical trial, which is designed to be a potentially curative treatment for chronic Hepatitis B infection. PBGENE-HBV is the first and only potentially curative gene editing program to enter the clinic that is specifically designed to eliminate the root cause of chronic Hepatitis B, cccDNA, while inactivating integrated HBV DNA. Th ...

Precision BioSciences (DTIL) Conference May 21, 2025 03:15 PM ET Speaker0 Welcome everyone to this session of our May twenty twenty five MicroCap conference. I'm Alex Hanman, and I serve as an equity research analyst here at Sidoti and Company. Today, we're pleased to be in conversation with CFO Alex Kelly and VP of Investor Relations, Naresh Thanna, of Precision Biosciences, ticker d t I l. During the presentation, please feel welcome to submit questions using the Zoom Q and A interface at the bottom of yo ...

Group 1 - Precision BioSciences reported a quarterly loss of $2.21 per share, significantly worse than the Zacks Consensus Estimate of a loss of $0.43, representing an earnings surprise of -413.95% [1] - The company posted revenues of $0.03 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 99.71%, compared to revenues of $17.58 million a year ago [2] - The stock has increased approximately 29.9% since the beginning of the year, outperforming the S&P 500's gain of 0.2% [3] Group 2 - The earnings outlook for Precision BioSciences is currently unfavorable, with a Zacks Rank of 4 (Sell), indicating expected underperformance in the near future [6] - The current consensus EPS estimate for the upcoming quarter is -$0.08 on revenues of $13.7 million, and -$1.17 on revenues of $45.6 million for the current fiscal year [7] - The Medical - Biomedical and Genetics industry is ranked in the top 28% of over 250 Zacks industries, suggesting a favorable industry outlook [8]

Precision BioSciences (DTIL) Update / Briefing May 15, 2025 08:00 AM ET Speaker0 Thank you for standing by. Hello, and welcome to the Precision Biosciences Business Update Conference Call. I would now like to turn the call over to Naresh Tana, Head of Investor Relations. Please go ahead, sir. Speaker1 Thank you, Dustin. Welcome to Precision Biosciences Muscle Program Update. Thank you all for joining today. I'm joined today by Michael Amoroso, President and Chief Executive Officer of Precision Biosciences. ...

"We started 2025 with strong momentum and a focus on generating impactful clinical data across our in vivo gene editing pipeline. Early this year, data from the OTC-HOPE trial provided the first clinical validation for ARCUS in vivo gene insertion following a complete response in an infant with OTC-deficiency," said Michael Amoroso, Chief Executive Officer of Precision BioSciences. "In addition, the Phase 1 ELIMINATE-B trial evaluating PBGENE-HBV, our lead program for chronic Hepatitis B, is progressing as ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20%28unaudited%29) Precision BioSciences reported a significant Q1 2025 revenue decrease to $29 thousand, a net loss of $20.6 million, and reduced total assets Condensed Balance Sheet Data (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $77,223 | $85,899 | | Restricted cash | $22,566 | $22,569 | | Total Assets | $124,411 | $136,388 | | Total Liabilities | $75,074 | $79,995 | | Total Stockholders' Equity | $49,337 | $56,393 | Condensed Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $29 | $17,584 | | Total operating expenses | $22,141 | $21,771 | | Operating loss | $(22,112) | $(4,187) | | Net (loss) income | $(20,565) | $8,588 | | Net (loss) income per share (Basic & Diluted) | $(2.21) | $1.70 | Condensed Statement of Cash Flows (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(19,052) | $(18,981) | | Net cash used in investing activities | $(314) | $(26) | | Net cash provided by financing activities | $10,687 | $40,095 | | Net (decrease) increase in cash | $(8,679) | $(21,088) | [Notes to Condensed Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) Notes detail the company's strategic shift to in vivo gene editing, key collaborations, and financial specifics like loan and warrant liabilities - The company has strategically shifted to **focus exclusively on developing in vivo gene editing therapies**, with its former CAR T programs now accounted for as **discontinued operations**[30](index=30&type=chunk)[31](index=31&type=chunk) - Revenue from the Novartis collaboration was **less than $0.1 million** in Q1 2025, down from **$4.5 million** in Q1 2024. Deferred revenue related to this agreement was **$26.2 million** as of March 31, 2025[54](index=54&type=chunk) - The company has a **$22.5 million** term loan with Banc of California, with a stated interest rate of **6.00%** as of March 31, 2025[38](index=38&type=chunk)[39](index=39&type=chunk) - R&D expenses are broken down by program, with PBGENE-DMD and PBGENE-3243 seeing increased spending, while PBGENE-HBV spending decreased as it moved into the clinic[81](index=81&type=chunk) - Warrants from the March 2024 public offering are **classified as a liability**, valued at **$3.6 million** as of March 31, 2025, with changes in fair value recorded in the statement of operations[82](index=82&type=chunk)[84](index=84&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 the strategic focus on ARCUS gene editing, program updates for PBGENE-HBV and PBGENE-DMD, and financial outlook - The company is a clinical-stage gene editing company focused on developing in vivo therapies for genetic and infectious diseases using its proprietary ARCUS platform[88](index=88&type=chunk) - PBGENE-HBV for chronic Hepatitis B is in a global first-in-human clinical trial. Initial data from the first cohort was safe and well-tolerated, with substantial HBsAg reduction. The FDA has granted **Fast Track designation**[90](index=90&type=chunk)[91](index=91&type=chunk)[92](index=92&type=chunk) - The company is prioritizing and accelerating the PBGENE-DMD program for Duchenne muscular dystrophy, targeting an IND and/or CTA filing in 2025 with clinical data expected in 2026[97](index=97&type=chunk) - Development of PBGENE-3243 for mitochondrial disease is being paused to accelerate PBGENE-DMD and conserve resources[100](index=100&type=chunk) Results of Operations Comparison (in thousands) | Line Item | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $29 | $17,584 | $(17,555) | | Research and development | $13,588 | $13,343 | $245 | | General and administrative | $8,553 | $8,428 | $125 | | Net (loss) income | $(20,565) | $8,588 | $(29,153) | - The company believes its existing cash and cash equivalents of **$99.8 million** will be **sufficient to fund operating expenses and capital expenditure requirements into the second half of 2026**[155](index=155&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate sensitivity on its $99.8 million cash, with no material impact expected from fluctuations - The company's main market risk is interest rate sensitivity on its cash, cash equivalents, and restricted cash, which totaled **$99.8 million** at March 31, 2025[165](index=165&type=chunk) - A hypothetical 10% change in interest rates is not expected to have a material impact on the company's financial condition[165](index=165&type=chunk) [Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2025, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective as of March 31, 2025**[167](index=167&type=chunk) - No material changes were made to the internal control over financial reporting during the three months ended March 31, 2025[168](index=168&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings - As of the report date, the company is **not involved in any material legal proceedings**[170](index=170&type=chunk) [Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including historical losses, funding needs, unproven technology, regulatory complexities, and capital raising limitations - The company has a history of significant operating losses (**$503.0 million** accumulated deficit as of March 31, 2025) and expects to incur losses for the foreseeable future, requiring substantial additional funding[172](index=172&type=chunk)[176](index=176&type=chunk) - The ARCUS gene editing platform is a novel technology, making it difficult to predict the time, cost, and success of product development. The company has not yet been able to assess the safety and efficacy of most of its product candidates in humans[193](index=193&type=chunk) - The regulatory landscape for gene editing therapies is rigorous, complex, and subject to change, which could result in delays, termination of development, or unexpected costs[215](index=215&type=chunk) - The company relies on third parties for collaborations (e.g., Novartis), conducting clinical trials (CROs), and manufacturing (CMOs), and the failure of these parties to perform could substantially harm the business[355](index=355&type=chunk)[362](index=362&type=chunk)[368](index=368&type=chunk) - As of the filing date, the company is subject to the "Baby Shelf Rule," which limits the amount of funds it can raise through its Form S-3 registration statement to **one-third of its public float** in any 12-month period[179](index=179&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=83&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) On January 6, 2025, the company issued **220,712** unregistered common shares to TG Subsidiary for a **$2.5 million** deferred cash payment - On January 6, 2025, the company issued **220,712 shares** of common stock to TG Subsidiary in exchange for a **$2.5 million** deferred cash payment related to their license agreement[439](index=439&type=chunk) - The issuance was an unregistered sale, relying on the **Section 4(a)(2) exemption** under the Securities Act[439](index=439&type=chunk) [Other Information](index=83&type=section&id=Item%205.%20Other%20Information) Two executive officers, Jeff Smith and Alex Kelly, established Rule 10b5-1 trading plans for stock sales and RSU tax obligations - Chief Research Officer Jeff Smith entered into a **Rule 10b5-1 trading plan** to sell up to **7,931 shares** of common stock between May 2025 and January 2026[442](index=442&type=chunk) - Chief Financial Officer Alex Kelly entered into a **Rule 10b5-1 sell-to-cover instruction** to sell shares to cover tax obligations from vesting RSUs[443](index=443&type=chunk) [Exhibits](index=84&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate documents and Sarbanes-Oxley certifications

Core Viewpoint - Precision BioSciences' shares surged 23.8% following the FDA's Fast Track designation for PBGENE-HBV, a gene editing program aimed at curing chronic hepatitis B by targeting cccDNA and integrated HBV DNA [1][2][3] Company Overview - PBGENE-HBV is the first gene editing program with a unique mechanism of action to enter clinical stages as a potential cure for chronic hepatitis B [3] - The company has received FDA clearance to initiate the phase I ELIMINATE-B study for PBGENE-HBV in the U.S., with simultaneous studies in other regions to enhance patient recruitment [4] - Currently, the company is enrolling patients in the low-dose cohort of the ELIMINATE-B study, with plans to escalate to higher doses in subsequent cohorts [5][7] Market Context - Chronic hepatitis B affects approximately 300 million people globally, with around 2 million in the U.S. facing significant health risks, including cirrhosis and liver cancer [8] - Existing antiviral treatments do not eliminate the virus, necessitating lifelong therapy without achieving a functional cure, highlighting the unmet medical need that PBGENE-HBV aims to address [9] Pipeline and Future Prospects - In addition to PBGENE-HBV, Precision BioSciences has several other gene therapy programs in preclinical evaluation, including a partnered candidate, ECUR-506, for treating neonatal onset ornithine transcarbamylase deficiency [10]

Precision BioSciences (DTIL) came out with a quarterly loss of $3.20 per share versus the Zacks Consensus Estimate of a loss of $0.42. This compares to loss of $3.35 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -661.90%. A quarter ago, it was expected that this genome editing company would post a loss of $0.79 per share when it actually produced a loss of $2.83, delivering a surprise of -258.23%.Over the last four quarters, ...

Gene Editing Technology - The ARCUS platform is a novel gene editing technology that utilizes a homing endonuclease, offering a unique cut that drives defined therapeutic outcomes [20]. - PBGENE-HBV, the lead program, aims to eliminate cccDNA in chronic hepatitis B patients, with the first patient dosed in December 2024 and a substantial reduction in HBsAg observed in two of three participants [30][31]. - PBGENE-3243 targets m.3243 associated mitochondrial disease, affecting approximately 20,000 people in the U.S., with plans to submit an IND application in 2025 [33]. - Preclinical data showed ARCUS achieved over 85% gene insertion efficiency in T-cells and 39% in non-dividing primary human hepatocytes [34]. - PBGENE-DMD demonstrated significant improvement in functional effects in DMD-diseased mice, with the ability to edit Pax7+ cells [36]. - PBGENE-LIVER achieved 40% to 45% overall gene insertion efficiency in non-dividing cells in nonhuman primates [37]. Collaborations and Agreements - The Novartis Agreement involves developing a custom ARCUS nuclease for treating hemoglobinopathies, with Novartis responsible for subsequent development and commercialization [38]. - A license agreement with Caribou Biosciences includes upfront payments and royalties on net sales, enhancing the company's collaboration strategy [43]. - On August 15, 2023, Imugene US acquired the manufacturing infrastructure for azer-cel, including clinical trial inventory and related assets, as part of the asset purchase agreement [45]. - The Imugene License Agreement grants Imugene US exclusive and non-exclusive rights to develop and commercialize azer-cel and up to three additional research product candidates [46]. - The Novartis Agreement, effective June 15, 2022, focuses on developing in vivo gene editing products for hemoglobinopathies, including sickle cell disease and beta thalassemia [47]. - Novartis will assume responsibility for all subsequent development, manufacturing, and commercialization activities for the licensed products developed from the ARCUS nuclease [48]. - The Duke License includes milestone payments totaling $0.3 million and low single-digit percentage royalties on net sales of licensed products [52]. Intellectual Property and Patents - The company holds an exclusive license from Duke under 12 issued U.S. patents and two pending U.S. patent applications as of December 31, 2024 [62]. - The patent portfolio includes 45 issued U.S. patents and 46 pending non-provisional U.S. patent applications, with a focus on obtaining additional patent protection for ARCUS technologies [62]. - The company relies on a combination of patents, trade secrets, and licensing agreements to protect its intellectual property and maintain a competitive edge in the market [60]. - The first patent family includes 12 issued patents in the United States, 6 in Europe, 3 in Japan, and 1 each in Australia and Canada, with a standard expiration date of October 18, 2026 [64]. - The second patent family includes 4 issued patents in the United States, 3 in Europe, 2 in Japan, and 1 in Australia, with a standard expiration date of October 31, 2028 [65]. - The third patent family includes 3 issued patents in the United States and 2 each in Europe and Australia, with a standard expiration date of July 14, 2029 [66]. - The fourth patent family has pending applications in multiple countries, with a potential expiration date of May 7, 2040 [67]. - The company owns 30 patent families related to in vivo gene editing technologies, protecting its product candidates [69]. Regulatory and Compliance - The FDA requires the submission of an IND before initiating clinical trials, which becomes effective 30 days after receipt unless safety concerns arise [129]. - Human clinical trials must follow protocols that establish safety, purity, potency, or effectiveness of the proposed biologic product candidate [131]. - The BLA submission includes all relevant data from preclinical and clinical studies, and the FDA aims to review standard applications within 10 months or 6 months for priority reviews [140]. - The FDA may issue a Complete Response Letter (CRL) if the BLA submission is found unacceptable, outlining deficiencies and requesting additional information [141]. - Approval of a product may be granted for specific indications and may require a Risk Evaluation and Mitigation Strategy (REMS) to manage known risks [142]. - The Pediatric Research Equity Act (PREA) mandates pediatric clinical trials for most biologics unless a deferral or waiver is granted [143]. - Fast track designation allows for expedited review of products intended to treat serious conditions and may involve rolling review of the BLA [145]. - Breakthrough therapy designation provides intensive FDA interaction and guidance starting as early as Phase 1 for products showing substantial improvement over existing therapies [146]. - Accelerated approval may be granted based on surrogate endpoints, with confirmatory trials required to verify clinical benefit [147]. - The FDA may withdraw approval of a drug if confirmatory trials fail to verify predicted clinical benefits or if the sponsor does not conduct trials timely [147]. - The Regenerative Medicine Advanced Therapy (RMAT) designation allows for expedited development and review of drugs intended to treat serious or life-threatening diseases, with potential benefits including more frequent FDA meetings and eligibility for accelerated approval [148]. - Orphan Drug Designation can be granted for drugs intended to treat rare diseases affecting fewer than 200,000 individuals in the U.S., providing benefits such as tax credits and a seven-year exclusivity period upon first FDA approval [150][152]. Market and Industry Dynamics - The company competes with major biotechnology firms and academic institutions in the gene editing and therapy sectors, facing significant competition in research and development capabilities [57]. - The ACA has significantly changed healthcare financing and delivery, with ongoing scrutiny over pharmaceutical pricing practices [4]. - The Inflation Reduction Act of 2022 mandates price negotiations for certain drugs starting in 2026, with potential significant impacts on the pharmaceutical industry [4]. - The U.S. federal Anti-Kickback Statute prohibits remuneration to induce purchases of items reimbursable under federal healthcare programs [5]. - The U.S. civil False Claims Act prohibits knowingly presenting false claims for payment to the federal government [6]. - Compliance with healthcare laws involves substantial costs and potential penalties for violations, including exclusion from Medicare and Medicaid programs [7]. Workforce and Culture - The company has a team of 27 full-time employees with Ph.D. or M.D. degrees, emphasizing strong scientific experience in gene therapies [42]. - The organization emphasizes a culture of innovation, accountability, respect, adaptability, and perseverance, aiming to empower employees to deliver meaningful work [218]. - As of December 31, 2024, the workforce was approximately 51% female and 24% from diverse racial backgrounds, with senior leadership being approximately 33% female and 24% Asian or Black [220].