Core Viewpoint - 4D Molecular Therapeutics (NASDAQ: FDMT) is considered an attractive investment opportunity for long-term investors with a high-risk tolerance, particularly in late 2025, given its current share price of $8.35 as of September 29 and its market capitalization [1] Company Summary - The company operates in the biotechnology sector, focusing on innovative therapeutic solutions [1] - The current share price indicates potential for growth, appealing to investors looking for long-term value [1] Investment Considerations - The investment is characterized by short-term volatility, which may be suitable for investors who can withstand such fluctuations [1] - The analysis suggests that the company may present a favorable risk-reward profile for those willing to invest in the biotechnology field [1]

Company Overview - 4D is a next-generation genetic medicines and gene therapy company utilizing directed evolution and Nobel Prize-winning technology to create customized vectors for targeted tissues, aiming for improved safety and lower production costs [1] Product Pipeline - The lead product, 4150, is an AAV-based gene therapy designed to express aflibercept for sustained treatment of wet AMD and diabetic eye disease, currently in two well-enrolling Phase III trials, indicating significant commercial potential [2] - Additionally, the company is developing a cystic fibrosis program featuring an inhaled agent that expresses the CFTR transgene [2]

Company Overview - 4D is a next-generation genetic medicines and gene therapy company utilizing directed evolution and Nobel Prize-winning technology to create customized vectors for targeted tissues, aiming for improved safety and lower production costs [1] Product Pipeline - The lead product, 4150, is an AAV-based gene therapy designed to express aflibercept for sustained treatment of wet AMD and diabetic eye disease, currently in two well-enrolling Phase III trials, indicating significant commercial potential [2] - Additionally, the company is developing a cystic fibrosis program featuring an inhaled agent that expresses the CFTR transgene [2]

Summary of 4D Molecular Therapeutics FY Conference Call Company Overview - **Company**: 4D Molecular Therapeutics (NasdaqGS:FDMT) - **Industry**: Genetic medicines and gene therapy - **Core Technology**: Directed evolution and customized vectors for targeted tissue delivery [2][50] Key Products - **Lead Product**: 4D-150 - AAV-based gene therapy for wet AMD and diabetic eye disease - Currently in two Phase 3 trials with expectations of multi-year durability [2][4] - **Cystic Fibrosis Program**: 4D-710 - Inhaled agent delivering CFTR transgene, currently in Phase 2 [2][42] Unmet Needs in Target Indications - **Wet AMD and Diabetic Eye Disease**: - Need for extended durability to reduce injection burden [4][5] - Importance of maintaining vision gain over time [5] - **Patient and Physician Expectations**: - Desire for therapies that provide long-term control of disease with fewer injections [4][5] Safety and Efficacy Data - **4D-150 Safety Profile**: - Over 100 patients treated with more than 97% showing no inflammation or toxicity [7] - Significant reduction in injection burden: - 80-85% reduction in recalcitrant patients [8] - 83% reduction in broad population [8] - 94% reduction in recently diagnosed patients [9] - **Efficacy Metrics**: - Consistent dose-response observed across various patient populations [10] Mechanism of Action - **VEGF-C siRNA Inclusion**: - Aimed to enhance efficacy by boosting aflibercept expression [11][12] Market Dynamics and Physician Sentiment - **Changing Attitudes**: - Increased excitement among retina specialists regarding gene therapy, with 50% expressing interest in gene therapy as a preferred treatment modality [18] - **Practice Dynamics**: - 4D-150 could streamline workflows in high-volume retina practices by reducing treatment burden [20][21] Regulatory Pathway and Trial Design - **Regulatory Designations**: - RMAT and PRIME designations from the FDA and EMA, respectively [32][57] - **Trial Design**: - Randomized control trial design consistent with other successful agents in the market [32] Financial Position - **Cash Balance**: $417 million as of last quarter, sufficient to fund operations into 2028 [46] Future Updates and Expectations - **Enrollment Updates**: - Completion of enrollment for Phase 3 trials expected in Q1 2026 [30] - **Cystic Fibrosis Program**: - Upcoming data on safety and efficacy from ongoing trials [45] Additional Insights - **AI Utilization**: - AI is leveraged in vector discovery to enhance the efficiency of drug development [51] - **Market Competition**: - Company is monitoring developments in biotech innovation, particularly in China [50] Conclusion - 4D Molecular Therapeutics is positioned to address significant unmet needs in the gene therapy space, particularly for wet AMD and cystic fibrosis, with a strong safety profile and promising efficacy data. The company is well-capitalized and strategically focused on regulatory pathways and market dynamics to ensure successful product development and commercialization.

Summary of 4D Molecular Therapeutics FY Conference Call Company Overview - **Company**: 4D Molecular Therapeutics (NasdaqGS:FDMT) - **Lead Product**: 4D-150, targeting wet Age-related Macular Degeneration (AMD) and Diabetic Macular Edema (DME) [4][12] Key Points and Arguments Product Efficacy and Safety - **Efficacy**: 4D-150 shows a treatment burden reduction of 78% to 94% across various patient populations, indicating potential blockbuster status [5][7] - **Safety Profile**: No serious adverse events reported; over 97% of patients experienced no inflammation [4][5] - **Treatment Burden**: In severe patients, treatment burden reduced from 10 injections to 1.8 on average; recently diagnosed patients had an average of 0.3 injections per year [7][8] Phase 3 Program - **Design**: The Phase 3 program is designed to include newly diagnosed patients with no prior therapy, enhancing the likelihood of success [10][11] - **Enrollment Timeline**: Full enrollment expected by Q1 2026, with data anticipated in the first half of 2027 [11][12] - **Regulatory Alignment**: Strong alignment with both FDA and EMA, indicating a well-structured clinical pathway [10] Commercial Opportunity - **Market Potential**: 4D-150 is positioned to fit seamlessly into clinical workflows, with strong pricing flexibility due to low expected cost of goods [12][13] - **Patient Value Proposition**: Reduction in treatment burden and improved adherence, potentially leading to long-term vision preservation [12][13] - **Cash Runway**: The company has over $400 million in cash, funding operations into 2028, surpassing the expected timelines for Phase 3 readouts [43][44] Market Dynamics - **Physician Adoption**: Physicians are expected to initially use 4D-150 on high-need patients before expanding to a broader patient population [36][37] - **Market Sentiment**: There is a disconnect between the demonstrated platform success and investor sentiment, with a need for education on the commercial potential in the retina space [43][44] Additional Important Insights - **Durability of Treatment**: AAV gene therapy is expected to provide durable results, potentially lasting the patient's lifetime [21][22] - **Patient Adherence**: Continuous expression of aflibercept addresses adherence issues, a significant challenge in long-term treatment [20][28] - **Heterogeneity in Patient Response**: Variability in treatment response among patients necessitates a tailored approach in therapy [19][30] This summary encapsulates the critical insights from the conference call, highlighting the potential of 4D-150 in treating wet AMD and DME, the strategic design of the Phase 3 program, and the commercial landscape surrounding the product.

Summary of 4D Molecular Therapeutics Conference Call Company Overview - **Company**: 4D Molecular Therapeutics (FDMT) - **Focus**: Gene therapy portfolio, specifically targeting neovascular diseases and cystic fibrosis Key Programs 1. **4,150 for Neovascular Diseases** - Targets wet AMD and diabetic eye disease - Currently in two Phase III trials (FORFORNTA I and FORFORNTA II) - Strong enthusiasm and enrollment observed - Recent survey indicated 50% of physicians view gene therapy as the most exciting novel approach for wet AMD - Expected completion of enrollment for FORFORNTA I in Q1 2026, with a 52-week endpoint anticipated in 2027 [3][4] 2. **4,710 for Cystic Fibrosis** - An aerosol-delivered vector for cystic fibrosis patients, particularly those not amenable to modulators - Currently in a Phase I dose-finding study - Initial doses were found to be overdosed; adjustments made to lower doses for better physiological expression - Expected readouts on lung function and quality of life in Q4 2025 [4][38] Clinical Trial Insights - **4,150 Program** - Strong dose response observed in Phase I and II trials, with treatment burden reduction between 83% to 94% - Safety profile is robust, with less than 3% transient inflammation reported [6][7] - Changes from Phase II to Phase III include refined patient population and minor tweaks to reinjection criteria to enhance safety and efficacy [12][14] - **4,710 Program** - High expression levels observed initially, but adjustments made to avoid overdosing - Focus on long-term data from patients at various dose levels, with follow-up ranging from 3 to 18 months [39][44] - Emphasis on multiple endpoints including FEV1, Lung Clearance Index, and quality of life metrics [46][50] Market Position and Strategy - The company is well-positioned with cash reserves extending into 2028, allowing for continued development of its gene therapy programs [3] - The focus is on large market opportunities rather than rare diseases, reflecting a strategic shift in the pharmaceutical landscape [62] Regulatory Considerations - The company aims to align with FDA and EMA guidelines, particularly regarding trial designs and patient populations [20][23] - Emphasis on demonstrating significant reductions in treatment burden to meet regulatory expectations [36][37] Future Directions - Potential for collaborations in gene therapy, but with a focus on maintaining the integrity of their own product development [62] - Plans for post-approval studies to assess real-world efficacy and safety of their therapies [26][27] Conclusion 4D Molecular Therapeutics is advancing its gene therapy programs with promising data and a strategic focus on large market opportunities. The company is committed to refining its clinical trials and ensuring alignment with regulatory expectations to maximize the potential of its innovative therapies.

Core Insights - 4D Molecular Therapeutics announced senior leadership changes to enhance focus on late-stage clinical trials and commercial readiness for its lead product candidate, 4D-150 [1][2][3] Leadership Changes - Dr. Julie Clark has been appointed as the new Chief Medical Officer, bringing over 20 years of experience in retina and global clinical development, including leadership roles in multiple BLA submissions and Phase 3 trials [3][5] - Liansheng Zhu, Ph.D., has joined as Senior Vice President of Biometrics and Data Quality, contributing nearly two decades of experience in late-stage clinical development and regulatory submissions [4][5] - Robert Kim, M.D., has stepped down from his role as Chief Medical Officer to pursue other opportunities [5] Clinical Development Focus - The 4FRONT-1 Phase 3 clinical trial for 4D-150 is on track to complete enrollment by Q1 2026, with current enrollment exceeding expectations [4][5] - 4D-150 is positioned as a backbone therapy for retinal vascular diseases, specifically targeting wet age-related macular degeneration and diabetic macular edema [8] Strategic Enhancements - The addition of senior retina leadership advisors aims to support the transition from late-stage development to commercial readiness [4] - The company emphasizes the importance of shared experience and complementary strengths among its leadership team to advance the 4D-150 program [3][5]

Summary of 4D Molecular Therapeutics (FDMT) FY Conference Call Company Overview - **Company**: 4D Molecular Therapeutics (FDMT) - **Industry**: Gene Therapy, specifically focusing on ophthalmology and retinal diseases - **Key Product**: 4D-150, a gene therapy for wet age-related macular degeneration (AMD) currently in Phase 3 trials [3][4] Core Points and Arguments Gene Therapy Platform - 4D has developed a next-generation gene therapy platform utilizing directed evolution technology to create targeted vectors for specific tissues [3] - The company has been operational for over ten years, focusing on genetic medicines [3] Product Development - **4D-150**: The most advanced program, currently in Phase 3 for wet AMD, with promising Phase 1 and 2 data showing efficacy and safety [4][10] - The therapy uses a proprietary intravitreal vector (R100) designed for single injection durability, expressing aflibercept (Eylea) [6][7] Efficacy and Safety - Significant reduction in treatment burden and high rates of injection-free patients observed across various patient populations [7][32] - Safety profile of 4D-150 is strong, with no major signs of intraocular inflammation or severe adverse events reported in recent studies [10][33] Market Need and Competitive Landscape - Current anti-VEGF therapies require frequent injections, leading to adherence issues and potential vision loss over time [19][20] - 4D-150 aims to provide continuous delivery of aflibercept, addressing the treatment burden and improving long-term outcomes [20][21] Commercialization Strategy - The company anticipates that 4D-150 will become a backbone therapy in the treatment of wet AMD, with potential for use in treatment-naive patients as well [29][36] - Initial commercialization may focus on patients with high unmet needs, gradually expanding to a broader patient population as physicians gain confidence in the therapy [36][38] Important Data Points - In the Phase 2b PRISM trial, 60% of patients were injection-free at one year, with 80% injection-free rates in more recently diagnosed patients [34][42] - Upcoming catalysts include longer-term durability data expected in Q4 2025 and updates on enrollment progress for ongoing trials [46][47] Underappreciated Aspects - The significant unmet need for durable therapies in the retinal space is validated by recent surveys indicating high excitement among retina specialists for gene therapy [50][51] - The potential for 4D-150 to provide long-term treatment burden reduction is a compelling value proposition for both patients and payers [25][51] Conclusion - 4D Molecular Therapeutics is positioned to address significant gaps in the treatment of wet AMD through its innovative gene therapy approach, with strong efficacy and safety data supporting its commercial potential [52]

Company Performance - 4D Molecular Therapeutics reported a quarterly loss of $0.98 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.88, and compared to a loss of $0.63 per share a year ago, indicating a significant decline in performance [1] - The company posted revenues of $0.02 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 98.58%, while revenues were zero a year ago [2] - The stock has added about 1.1% since the beginning of the year, underperforming the S&P 500's gain of 8.6% [3] Earnings Outlook - The current consensus EPS estimate for the coming quarter is -$0.93 on revenues of $1.06 million, and for the current fiscal year, it is -$3.45 on revenues of $4.17 million [7] - The estimate revisions trend for 4D Molecular Therapeutics was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, suggesting expected outperformance in the near future [6] Industry Context - The Medical - Drugs industry, to which 4D Molecular Therapeutics belongs, is currently in the top 35% of over 250 Zacks industries, indicating a favorable industry outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5]

PART I. FINANCIAL INFORMATION [Item 1. Condensed Unaudited Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Unaudited%20Financial%20Statements) This section presents the unaudited condensed financial statements, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, collaboration agreements, license arrangements, commitments, and other financial details for the periods ended June 30, 2025, and December 31, 2024 [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) | (In thousands) | June 30, 2025 | December 31, 2024 | Change | % Change | | :--------------------------------- | :------------ | :---------------- | :----- | :------- | | **Assets** | | | | | | Cash and cash equivalents | $77,159 | $149,336 | $(72,177) | -48.3% | | Marketable securities (current) | $216,066 | $275,541 | $(59,475) | -21.6% | | Total current assets | $303,287 | $434,932 | $(131,645) | -30.3% | | Marketable securities (long-term) | $123,806 | $80,583 | $43,223 | 53.6% | | Total assets | $473,637 | $560,384 | $(86,747) | -15.5% | | **Liabilities** | | | | | | Accounts payable | $8,700 | $4,386 | $4,314 | 98.4% | | Accrued and other current liabilities | $19,190 | $18,869 | $321 | 1.7% | | Total current liabilities | $34,677 | $29,149 | $5,528 | 19.0% | | Total liabilities | $52,747 | $49,778 | $2,969 | 6.0% | | **Stockholders' Equity** | | | | | | Total stockholders' equity | $420,890 | $510,606 | $(89,716) | -17.6% | | Total liabilities and stockholders' equity | $473,637 | $560,384 | $(86,747) | -15.5% | [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations) | (In thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (3M) | % Change (3M) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (6M) | % Change (6M) | | :--------------------------------- | :------------------------------- | :------------------------------- | :------------ | :-------------- | :----------------------------- | :----------------------------- | :------------ | :-------------- | | Collaboration and license revenue | $15 | $5 | $10 | 200.0% | $29 | $33 | $(4) | -12.1% | | Research and development | $47,951 | $31,860 | $16,091 | 50.5% | $88,650 | $59,727 | $28,923 | 48.4% | | General and administrative | $11,520 | $10,601 | $919 | 8.7% | $24,456 | $20,898 | $3,558 | 17.0% | | Total operating expenses | $59,471 | $42,461 | $17,010 | 40.1% | $113,106 | $80,625 | $32,481 | 40.3% | | Loss from operations | $(59,456) | $(42,456) | $(17,000) | 40.0% | $(113,077) | $(80,592) | $(32,485) | 40.3% | | Interest income | $4,859 | $7,548 | $(2,689) | -35.6% | $10,441 | $13,293 | $(2,852) | -21.5% | | Net loss | $(54,658) | $(34,953) | $(19,705) | 56.4% | $(102,630) | $(67,354) | $(35,276) | 52.4% | | Net loss per share, basic and diluted | $(0.98) | $(0.63) | $(0.35) | 55.6% | $(1.84) | $(1.29) | $(0.55) | 42.6% | [Condensed Statements of Comprehensive Loss](index=6&type=section&id=Condensed%20Statements%20of%20Comprehensive%20Loss) | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (3M) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (6M) | | :--------------- | :------------------------------- | :------------------------------- | :---------- | :----------------------------- | :----------------------------- | :---------- | | Net loss | $(54,658) | $(34,953) | $(19,705) | $(102,630) | $(67,354) | $(35,276) | | Net unrealized gain/(loss) on marketable securities | $5 | $(184) | $189 | $108 | $(309) | $417 | | Total comprehensive loss | $(54,653) | $(35,137) | $(19,516) | $(102,522) | $(67,663) | $(34,859) | [Condensed Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Statements%20of%20Stockholders%27%20Equity) Total stockholders' equity decreased from **$510.6 million** at December 31, 2024, to **$420.9 million** at June 30, 2025, primarily due to a net loss of **$102.6 million** for the six months ended June 30, 2025, partially offset by stock-based compensation expense and common stock issuances[19](index=19&type=chunk)[12](index=12&type=chunk) Key Changes in Stockholders' Equity (Six Months Ended June 30, 2025) | Item | Amount (in thousands) | | :-------------------------------------- | :-------------------- | | Balances at December 31, 2024 | $510,606 | | Stock-based compensation expense | $11,944 | | Net unrealized gain on marketable securities | $108 | | Net loss | $(102,630) | | Balances at June 30, 2025 | $420,890 | [Condensed Statements of Cash Flows](index=9&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | % Change | | :------------------------------------ | :----------------------------- | :----------------------------- | :----- | :------- | | Net cash used in operating activities | $(91,135) | $(59,331) | $(31,804) | 53.6% | | Net cash provided by (used in) investing activities | $18,096 | $(336,797) | $354,893 | 105.4% | | Net cash provided by financing activities | $862 | $336,081 | $(335,219) | -99.7% | | Net decrease in cash and cash equivalents | $(72,177) | $(60,047) | $(12,130) | 20.2% | | Cash and cash equivalents, end of period | $77,159 | $189,061 | $(111,902) | -59.2% | [Notes to Unaudited Condensed Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) [Note 1. The Company](index=10&type=section&id=Note%201.%20The%20Company) 4D Molecular Therapeutics, Inc. is a late-stage biotechnology company focused on developing durable and disease-targeted therapeutics, having completed a public offering in February 2024 and anticipating continued operating losses and future funding needs despite current liquidity - 4D Molecular Therapeutics, Inc. is a late-stage biotechnology company focused on advancing durable and disease-targeted therapeutics[28](index=28&type=chunk) - In February 2024, the Company completed a public offering, raising net proceeds of **$281.2 million**, with an additional **$34.9 million** in March 2024 from underwriters exercising their option[29](index=29&type=chunk)[30](index=30&type=chunk) - The Company had an accumulated deficit of **$678.8 million** as of June 30, 2025, and expects operating losses and negative cash flows to continue[31](index=31&type=chunk) - Current cash, cash equivalents, and marketable securities are believed to be sufficient to fund planned operations for at least one year, but additional funding will be required[31](index=31&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=11&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) The financial statements are prepared in accordance with U.S. GAAP and SEC interim reporting rules, with management using estimates and judgments, operating as a single segment, managing credit risk, and evaluating new accounting pronouncements - The condensed financial statements are prepared under U.S. GAAP and SEC interim reporting rules, with certain information condensed or omitted compared to annual statements[32](index=32&type=chunk)[33](index=33&type=chunk) - Management's estimates and judgments are crucial for financial reporting, covering areas like useful lives, contract terms, stock options, and derivative instruments[35](index=35&type=chunk) - The Company operates as a single segment, focusing on the discovery, development, and commercialization of medicines[37](index=37&type=chunk) - Credit risk is managed through an investment policy limiting purchases to high-quality issuers and restricting single-issuer investments[38](index=38&type=chunk) - The Company is evaluating the impact of recently issued accounting pronouncements: ASU 2024-03 (Expense Disaggregation Disclosures) effective for fiscal years beginning after December 15, 2026, and ASU 2023-09 (Improvements to Income Tax Disclosures) effective for annual periods beginning after December 15, 2024[43](index=43&type=chunk)[44](index=44&type=chunk) [Note 3. Fair Value Measurements and Marketable Securities](index=13&type=section&id=Note%203.%20Fair%20Value%20Measurements%20and%20Marketable%20Securities) The Company's financial assets are primarily measured at fair value using Level 1 and Level 2 inputs, while a Level 3 derivative liability is valued using a present value analysis, with marketable securities showing aggregate unrealized gains and losses Fair Value of Financial Assets (in thousands) | Asset Type | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Cash | $7,086 | $6,715 | | Money market funds (Level 1) | $62,635 | $142,621 | | Certificates of deposit (Level 2) | $16,385 | $47,647 | | Commercial paper (Level 2) | $51,425 | $60,202 | | U.S. Treasuries (Level 2) | $56,674 | $32,110 | | Corporate bonds (Level 2) | $222,826 | $216,165 | | Total | $417,031 | $505,460 | - The derivative liability is a Level 3 measurement, valued using a present value analysis with multiple scenarios, considering factors like change of control payment, probability of event, product status, and discount rate[46](index=46&type=chunk)[127](index=127&type=chunk) Marketable Securities Unrealized Gains and Losses (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :---------------------------------------------------------------- | :------------ | :---------------- | | Aggregate fair value of marketable securities in a continuous loss position for less than twelve months | $114,697 | $69,947 | | Aggregate fair value of marketable securities in unrealized gain position | $225,175 | $286,177 | | Total marketable securities | $339,872 | $356,124 | [Note 4. Property and Equipment, Net](index=15&type=section&id=Note%204.%20Property%20and%20Equipment%2C%20Net) Property and equipment, net, decreased from **$19.5 million** at December 31, 2024, to **$17.5 million** at June 30, 2025, primarily due to increased accumulated depreciation and amortization Property and Equipment, Net (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Machinery and equipment | $14,488 | $14,172 | | Leasehold improvements | $18,467 | $17,763 | | Construction in progress | $128 | $1,182 | | Total property and equipment | $36,307 | $36,119 | | Less: Accumulated depreciation and amortization | $(18,802) | $(16,585) | | Property and equipment, net | $17,505 | $19,534 | - Depreciation expense was **$1.3 million** for the three months ended June 30, 2025 (up from **$1.2 million** in 2024) and **$2.6 million** for the six months ended June 30, 2025 (up from **$2.4 million** in 2024)[52](index=52&type=chunk) [Note 5. Accrued and Other Current Liabilities](index=16&type=section&id=Note%205.%20Accrued%20and%20Other%20Current%20Liabilities) Accrued and other current liabilities increased slightly from **$18.9 million** at December 31, 2024, to **$19.2 million** at June 30, 2025, driven by increases in accrued clinical and preclinical study costs, consulting and professional fees, and restructuring expenses Accrued and Other Current Liabilities (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Payroll and related expenses | $6,861 | $8,106 | | Accrued clinical and preclinical study costs | $8,277 | $7,977 | | Consulting and professional | $3,032 | $2,672 | | Restructuring expenses | $918 | $0 | | Total accrued and other current liabilities | $19,190 | $18,869 | [Note 6. Research and Collaboration Arrangements](index=16&type=section&id=Note%206.%20Research%20and%20Collaboration%20Arrangements) Collaboration revenue was immaterial and solely from the Cystic Fibrosis Foundation, with ongoing agreements with uniQure and Arbor Biotechnologies, and the CFF agreement involving milestone-based funding and an embedded derivative for a change of control provision Collaboration and License Revenue (in thousands) | Source | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cystic Fibrosis Foundation | $15 | $5 | $29 | $33 | | Total revenue | $15 | $5 | $29 | $33 | - The uniQure Agreement was amended in 2019, eliminating the exclusivity clause and modifying milestone/royalty terms, with no revenues recognized under uniQure agreements for the three and six months ended June 30, 2025 and 2024[61](index=61&type=chunk)[62](index=62&type=chunk)[69](index=69&type=chunk) - The CFF Agreement provides funding for cystic fibrosis research, with milestone payments totaling **$1.8 million** achieved as of June 30, 2025, and future payments contingent on commercial sales and a change of control, the latter being an embedded derivative[70](index=70&type=chunk)[72](index=72&type=chunk)[78](index=78&type=chunk) - The Arbor Agreement, signed in December 2023, is a co-development and co-commercialization agreement for up to six genetic medicine products for CNS indications, with no R&D expenses incurred related to this agreement during the three and six months ended June 30, 2025[79](index=79&type=chunk)[81](index=81&type=chunk) [Note 7. License Arrangements](index=20&type=section&id=Note%207.%20License%20Arrangements) The Astellas License Agreement was terminated in July 2025, while the Aevitas Agreement involves contingent milestone and royalty payments for sCFH rights, and the Company holds exclusive license agreements with the Regents of the University of California for core technologies - The Astellas License Agreement, signed in July 2023 for the 4D Vector, was terminated by AGT for convenience in July 2025, with no expected charges related to this termination[82](index=82&type=chunk)[83](index=83&type=chunk)[137](index=137&type=chunk) - The Aevitas Agreement (April 2023) acquired worldwide rights to sCFH for 4D-175, with potential future milestone payments up to **$144.1 million** and low single-digit royalties, with no liability recorded as of June 30, 2025, as milestones were not deemed probable[84](index=84&type=chunk)[85](index=85&type=chunk) - The Company has exclusive license agreements with the Regents of the University of California for core technologies, including Therapeutic Vector Evolution, involving annual license fees, development milestones up to **$3.1 million**, low single-digit royalties, and mid-teens to mid-twenties sublicense consideration[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) [Note 8. Commitments and Contingencies](index=21&type=section&id=Note%208.%20Commitments%20and%20Contingencies) The Company has operating lease commitments for office, laboratory, and warehouse space in Emeryville, California, with total future minimum lease payments of **$30.4 million**, and no material legal proceedings outstanding - The Company has operating lease commitments for office, laboratory, and warehouse space in Emeryville, California, including the 5980 Horton Lease (expires August 2026), 5858 Horton Lease (extended to December 2030), 5858 Horton Expansion Lease (through December 2030), and Warehouse Lease (through December 2029)[91](index=91&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk) Operating Lease Costs (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating lease cost | $1,344 | $698 | $2,688 | $1,397 | | Variable lease cost | $648 | $354 | $1,422 | $707 | | Total | $1,992 | $1,052 | $4,110 | $2,104 | - As of June 30, 2025, the weighted-average remaining lease term is **5.3 years**, and the weighted-average discount rate is **10.8%**, with total future minimum lease payments of **$30.4 million**[96](index=96&type=chunk) - The Company enters into indemnification agreements in the ordinary course of business and with its directors and officers, and no material legal proceedings were outstanding as of June 30, 2025[97](index=97&type=chunk)[98](index=98&type=chunk) [Note 9. Income Taxes](index=23&type=section&id=Note%209.%20Income%20Taxes) No federal or state income tax provision was recorded due to recurring net losses and a full valuation allowance against deferred tax assets, and the recently enacted One Big Beautiful Bill Act is being assessed for future implications - No federal or state income tax provision was recorded for the three and six months ended June 30, 2025 and 2024, due to recurring net losses[99](index=99&type=chunk) - A full valuation allowance has been taken against net deferred tax assets, as realization of the benefit is not considered more likely than not[99](index=99&type=chunk) - The One Big Beautiful Bill Act, enacted in July 2025, is being assessed for implications on U.S. tax laws, but no material impact is expected on current year financial statements[100](index=100&type=chunk) [Note 10. Common Stock](index=24&type=section&id=Note%2010.%20Common%20Stock) As of June 30, 2025, the Company had **46.7 million** shares of common stock issued and outstanding, with **22.8 million** shares reserved for future issuance, and does not intend to pay dividends, while the Cystic Fibrosis Foundation provided **$14.0 million** in funding for the 4D-710 program - As of June 30, 2025, **46,700,242 shares** of common stock were issued and outstanding, with **300,000,000 shares** authorized[12](index=12&type=chunk)[101](index=101&type=chunk) - The Company has reserved **22,796,483 shares** of common stock for future issuance as of June 30, 2025, an increase from **20,813,800 shares** at December 31, 2024[102](index=102&type=chunk) - The Company does not currently intend to pay dividends on its common stock[101](index=101&type=chunk) - The Cystic Fibrosis Foundation provided **$14.0 million** in funding for the 4D-710 development program, with the commitment fulfilled as of June 30, 2025[102](index=102&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) - The Jefferies ATM offering program was terminated on May 31, 2024, after selling **1,684,550 shares** for net proceeds of **$34.4 million**, and no shares were sold under the Leerink ATM offering program for the six months ended June 30, 2025[105](index=105&type=chunk)[106](index=106&type=chunk) [Note 11. Stock-based Compensation](index=25&type=section&id=Note%2011.%20Stock-based%20Compensation) The Company has three equity incentive plans and an ESPP, with **725,101 RSUs** unvested and **10,445,483 stock options** outstanding as of June 30, 2025, and total stock-based compensation expense for the six months ended June 30, 2025, was **$11.9 million** - The 2025 Employment Inducement Plan reserved **500,000 shares** for new employee grants, with **451,700 shares** available as of June 30, 2025[107](index=107&type=chunk) - The 2020 Equity Incentive Award Plan had **1,431,952 shares** available for grant as of June 30, 2025, after automatic annual increases[108](index=108&type=chunk) - As of June 30, 2025, **725,101 Restricted Stock Units (RSUs)** were unvested, and **10,445,483 stock options** were outstanding, with **5,493,360 exercisable**[114](index=114&type=chunk)[115](index=115&type=chunk) Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $2,498 | $3,196 | $6,479 | $6,231 | | General and administrative | $2,460 | $2,877 | $5,465 | $5,817 | | Total stock-based compensation expense | $4,958 | $6,073 | $11,944 | $12,048 | [Note 12. Common Stock Warrants](index=28&type=section&id=Note%2012.%20Common%20Stock%20Warrants) The Company has various common stock warrants, including pre-funded warrants issued in February 2024 and exchanged in November/December 2024, totaling **9,385,000 shares** issuable upon exercise, which are immediately exercisable at a nominal price and classified as stockholders' equity - A warrant for **23,669 shares** issued in May 2018 was fully vested upon issuance and exercised in May 2025, and another warrant for **30,000 shares** issued in December 2020 vests over four years and expires in 2027[119](index=119&type=chunk)[120](index=120&type=chunk) - In February 2024, the Company sold pre-funded warrants to purchase **3,583,476 shares**, generating **$99.4 million** in net proceeds, and in November and December 2024, additional pre-funded warrants for **6,310,000 shares** were issued in exchange for common stock[122](index=122&type=chunk)[123](index=123&type=chunk) - The pre-funded warrants have a nominal exercise price (**$0.0001 per share**), are immediately exercisable, and are classified as a component of stockholders' equity[122](index=122&type=chunk)[123](index=123&type=chunk) [Note 13. Net Loss Per Share, Basic and Diluted](index=29&type=section&id=Note%2013.%20Net%20Loss%20Per%20Share%2C%20Basic%20and%20Diluted) The Company reported a basic and diluted net loss per share of **$(0.98)** for the three months and **$(1.84)** for the six months ended June 30, 2025, with potentially dilutive securities excluded due to the net loss Net Loss Per Share, Basic and Diluted | (In thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(54,658) | $(34,953) | $(102,630) | $(67,354) | | Weighted-average shares outstanding | 55,927,091 | 55,282,754 | 55,836,075 | 52,277,369 | | Net loss per share, basic and diluted | $(0.98) | $(0.63) | $(1.84) | $(1.29) | - Potentially dilutive securities, including **11,750,245 shares** as of June 30, 2025 (options, RSUs, ESPP, warrants), were excluded from diluted net loss per share calculation because their inclusion would have been antidilutive[126](index=126&type=chunk) [Note 14. Derivative Liability](index=29&type=section&id=Note%2014.%20Derivative%20Liability) An embedded derivative from the CFF Agreement's change of control provision is remeasured to fair value each period, resulting in a derivative liability of **$0.3 million** as of June 30, 2025, with changes recorded in other income (expense), net - An embedded derivative arises from the change of control provision in the CFF Agreement, requiring bifurcation and separate accounting as a derivative liability[127](index=127&type=chunk) - The fair value of the derivative liability was **$0.3 million** as of June 30, 2025, down from **$0.4 million** at December 31, 2024, with the change in fair value recorded in other income (expense), net[128](index=128&type=chunk)[49](index=49&type=chunk) - Valuation uses a present value analysis with multiple scenarios, incorporating estimates for change of control payment (zero to **$18.9 million**), probability of event (**5.0% to 50.0%**), product status at change of control (**4.8% to 17.2%**), and a **15% discount rate**[127](index=127&type=chunk) [Note 15. Related Party Transactions](index=30&type=section&id=Note%2015.%20Related%20Party%20Transactions) The Company entered into a research and option agreement with Reignite Therapeutics Inc., founded by its CEO, for developing adenovirus capsids, with payments to Reignite for R&D expenses totaling **$0.5 million** for the six months ended June 30, 2025 - The Company entered into a research and option agreement with Reignite Therapeutics Inc., a company founded by its CEO, to develop high-capacity, helper-dependent adenovirus capsids[129](index=129&type=chunk) - Payments to Reignite for research and development expenses were **$0.4 million** for the three months ended June 30, 2025, and **$0.5 million** for the six months ended June 30, 2025[130](index=130&type=chunk) - The Company has an option to acquire up to three capsids from the program, with an exercise fee of **$1.0 million** per selected capsid, totaling a maximum of **$3.0 million**[129](index=129&type=chunk) [Note 16. 401(k) Plan](index=30&type=section&id=Note%2016.%20401(k)%20Plan) The Company's 401(k) plan allows eligible employees to make contributions, with company contributions totaling **$1.1 million** for the six months ended June 30, 2025, an increase from the prior year 401(k) Contribution Expenses (in thousands) | Period | 2025 | 2024 | | :------------------------------- | :--- | :--- | | Three Months Ended June 30, | $500 | $400 | | Six Months Ended June 30, | $1,100 | $800 | [Note 17. Segment Information](index=30&type=section&id=Note%2017.%20Segment%20Information) The Company operates as a single operating and reportable segment focused on therapeutics, with all long-lived assets and revenue in the United States, and research and development expenses significantly increased due to trials, payroll, and facilities costs - The Company operates in a single operating and reportable segment, encompassing all activities related to the discovery, development, and commercialization of durable and disease-targeted therapeutics[133](index=133&type=chunk) Disaggregated Research and Development Expenses (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development trials and consumables expenses | $23,426 | $14,162 | $39,586 | $25,781 | | Payroll and personnel expenses | $17,871 | $13,158 | $35,099 | $25,591 | | Facilities and other research and development expenses | $6,654 | $4,540 | $13,965 | $8,355 | | Total research and development expenses | $47,951 | $31,860 | $88,650 | $59,727 | [Note 18. Subsequent Events](index=31&type=section&id=Note%2018.%20Subsequent%20Events) In July 2025, the Company announced a workforce reduction of approximately **25%** of roles, expecting **$3.0 million** in cash expenses and **$15 million** in annual cash compensation cost savings, while the Astellas License Agreement was also terminated - On July 2, 2025, the Company announced a workforce reduction of approximately **25%** of current and planned roles, primarily in early-stage research and development and support functions[136](index=136&type=chunk) - The workforce reduction is expected to incur approximately **$3.0 million** in cash expenses (severance, benefits, termination costs) in Q3 2025, and provide annual cash compensation cost savings of approximately **$15 million**[136](index=136&type=chunk)[154](index=154&type=chunk) - In July 2025, Astellas Gene Therapies, Inc. terminated the Astellas License Agreement for convenience, with no expected charges to the Company[137](index=137&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and operational results, highlighting a strategic pipeline prioritization focusing on 4D-150 and 4D-710, with a workforce reduction in July 2025 to streamline operations and offset increased Phase 3 costs, and anticipating further funding needs despite current liquidity [Overview](index=32&type=section&id=Overview) The Company is a late-stage biotechnology company prioritizing 4D-150 for wet AMD and DME, and 4D-710 for cystic fibrosis, with significant net losses and an accumulated deficit, expecting to finance operations through equity sales, debt, or collaborations - The Company is a late-stage biotechnology company focused on advancing 4D-150 for wet AMD and DME, and 4D-710 for cystic fibrosis, as core pipeline priorities[139](index=139&type=chunk)[140](index=140&type=chunk) - 4D-150 is in Phase 3 clinical trials for wet AMD (4FRONT-1 and 4FRONT-2, with 52-week topline data expected in H1 2027 and H2 2027, respectively) and has shown positive 60-week results in DME (SPECTRA trial), demonstrating **78% reduction in treatment burden**[141](index=141&type=chunk)[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk) - 4D-710 is in Phase 1 clinical trial for cystic fibrosis, with an interim data update expected in Q4 2025[145](index=145&type=chunk) - Net losses were **$54.7 million** and **$102.6 million** for the three and six months ended June 30, 2025, respectively, with an accumulated deficit of **$678.8 million**[150](index=150&type=chunk) - The Company has no approved products and expects to finance operations through equity sales, debt, or collaborations, anticipating continued operating losses[151](index=151&type=chunk)[152](index=152&type=chunk) [Workforce Reduction](index=33&type=section&id=Workforce%20Reduction) On July 2, 2025, the Company announced a workforce reduction of approximately **25%** of roles, primarily in early-stage R&D and support functions, expecting **$3.0 million** in cash expenses and **$15 million** in annual cash compensation cost savings, while maintaining sufficient liquidity for planned expenses - On July 2, 2025, the Company announced a workforce reduction of approximately **25%** of current and planned roles, primarily in early-stage R&D and support functions[154](index=154&type=chunk) - The reduction is expected to result in approximately **$3.0 million** in cash expenses (severance, benefits, termination costs) in Q3 2025, and annual cash compensation cost savings of approximately **$15 million**[154](index=154&type=chunk) - As of June 30, 2025, the Company had **$417.0 million** in cash, cash equivalents, and marketable securities, sufficient to support planned expenses for 4D-150 Phase 3 trials, BLA preparation, and 4D-710 development[154](index=154&type=chunk) [Components of Results of Operations](index=34&type=section&id=Components%20of%20Results%20of%20Operations) Revenue is generated from collaboration and license agreements, while R&D expenses are expensed as incurred, G&A expenses are expected to remain stable or decline, and other income primarily includes interest income and derivative liability adjustments - Revenue is generated from collaboration and license agreements, primarily upfront and milestone payments and expense reimbursement, with no product sales revenue generated to date[155](index=155&type=chunk) - Research and development expenses include personnel costs, lab supplies, fees to CROs/CMOs, technology licenses, and allocated facility costs, which are expensed as incurred and not allocated by product candidate[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk) - General and administrative expenses consist of personnel costs (executive, finance, legal, HR), professional fees, and allocated overhead, and are expected to remain relatively stable or decline due to operational streamlining[162](index=162&type=chunk)[163](index=163&type=chunk) - Other income, net, primarily comprises interest income from cash equivalents and marketable securities, and adjustments for changes in the fair value of derivative liability[164](index=164&type=chunk) [Comparison of the Three and Six Months Ended June 30, 2025 and 2024](index=35&type=section&id=Comparison%20of%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | % Change | | :--------------------------------- | :------------------------------- | :------------------------------- | :------- | :------- | | Collaboration and license revenue | $15 | $5 | $10 | 200% | | Research and development | $47,951 | $31,860 | $16,091 | 51% | | General and administrative | $11,520 | $10,601 | $919 | 9% | | Total operating expenses | $59,471 | $42,461 | $17,010 | 40% | | Loss from operations | $(59,456) | $(42,456) | $(17,000) | 40% | | Other Income, Net | $4,798 | $7,503 | $(2,705) | (36)% | | Net loss | $(54,658) | $(34,953) | $(19,705) | 56% | | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :--------------------------------- | :----------------------------- | :----------------------------- | :------- | :------- | | Collaboration and license revenue | $29 | $33 | $(4) | (12)% | | Research and development | $88,650 | $59,727 | $28,923 | 48% | | General and administrative | $24,456 | $20,898 | $3,558 | 17% | | Total operating expenses | $113,106 | $80,625 | $32,481 | 40% | | Loss from operations | $(113,077) | $(80,592) | $(32,485) | 40% | | Other Income, Net | $10,447 | $13,238 | $(2,791) | (21)% | | Net loss | $(102,630) | $(67,354) | $(35,276) | 52% | - Research and development expenses increased by **$16.1 million (51%)** for the three months and **$28.9 million (48%)** for the six months ended June 30, 2025, primarily due to increased clinical trial activity for 4D-150, higher payroll, and increased facilities/IT expenses[169](index=169&type=chunk)[172](index=172&type=chunk) - General and administrative expenses increased by **$0.9 million (9%)** for the three months and **$3.6 million (17%)** for the six months ended June 30, 2025, mainly due to higher legal fees, consulting services for public company compliance, IT system implementations, and increased G&A headcount[169](index=169&type=chunk)[173](index=173&type=chunk) - Other income, net, decreased by **$2.7 million (36%)** for the three months and **$2.8 million (21%)** for the six months ended June 30, 2025, attributable to lower balances of cash equivalents and marketable securities[170](index=170&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) The Company has historically funded operations through equity sales, with **$417.0 million** in cash, cash equivalents, and marketable securities as of June 30, 2025, believed to be sufficient for at least one year, but expects continued net losses and substantial additional funding needs - The Company has historically funded operations through equity sales, including IPO (**$204.7 million** net), 2021 Offering (**$111.1 million** net), 2023 Offering (**$129.2 million** net), and 2024 Offering (**$281.2 million** net, plus **$34.9 million** from option exercise)[171](index=171&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk)[177](index=177&type=chunk)[179](index=179&type=chunk)[180](index=180&type=chunk) - As of June 30, 2025, cash, cash equivalents, and marketable securities totaled **$417.0 million**, which is believed to be sufficient to fund planned operations for at least one year[182](index=182&type=chunk)[186](index=186&type=chunk) - The Company expects continued net losses and will require substantial additional funding through equity, debt, or collaborations to support ongoing R&D, commercialization, and potential manufacturing capacity expansion[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) Summary of Cash Flows (in thousands) | Category | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(91,135) | $(59,331) | | Net cash provided by (used in) investing activities | $18,096 | $(336,797) | | Net cash provided by financing activities | $862 | $336,081 | | Net decrease in cash and cash equivalents | $(72,177) | $(60,047) | - Net cash used in operating activities increased to **$91.1 million** for the six months ended June 30, 2025, from **$59.3 million** in the prior year, primarily due to increased net loss[192](index=192&type=chunk)[193](index=193&type=chunk) - Net cash provided by investing activities was **$18.1 million** for the six months ended June 30, 2025, a significant change from **$336.8 million** used in the prior year, driven by higher maturities of marketable securities[195](index=195&type=chunk)[196](index=196&type=chunk) - Net cash provided by financing activities decreased substantially to **$0.9 million** for the six months ended June 30, 2025, from **$336.1 million** in the prior year, due to the absence of large public offerings[197](index=197&type=chunk)[198](index=198&type=chunk) [Contractual Obligations, Commitments and Contingencies](index=41&type=section&id=Contractual%20Obligations%2C%20Commitments%20and%20Contingencies) The Company's principal commitments consist of operating lease obligations for its facilities and service agreements with third parties, which generally allow for termination upon notice - The Company's principal commitments as of June 30, 2025, consist of obligations under operating leases for its headquarters and other facilities[200](index=200&type=chunk) - The Company also enters into service agreements with CROs, CMOs, and other third parties, which generally provide for termination upon notice with specified amounts due[199](index=199&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=41&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) No changes were made to the Company's critical accounting policies and significant judgments and estimates during the three and six months ended June 30, 2025, as disclosed in the Annual Report on Form 10-K for 2024 - No changes were made to the Company's critical accounting policies and significant judgments and estimates during the three and six months ended June 30, 2025, as disclosed in the Annual Report on Form 10-K for 2024[202](index=202&type=chunk) [Recent Accounting Pronouncements](index=42&type=section&id=Recent%20Accounting%20Pronouncements) Information on recent accounting pronouncements is provided in Note 2, Summary of Significant Accounting Policies, of the condensed financial statements - Information on recent accounting pronouncements is provided in Note 2, Summary of Significant Accounting Policies, of the condensed financial statements[203](index=203&type=chunk) [Off-Balance Sheet Arrangements](index=42&type=section&id=Off-Balance%20Sheet%20Arrangements) The Company has not engaged in any off-balance sheet arrangements since its inception - The Company has not engaged in any off-balance sheet arrangements since its inception[204](index=204&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The Company's primary market risk is interest rate sensitivity, affecting its **$417.0 million** in cash, cash equivalents, and marketable securities, but an immediate **10%** change in interest rates is not expected to materially affect their fair value, and inflation has not had a significant impact - The Company's market risk primarily stems from interest rate sensitivity, impacting its **$417.0 million** in cash, cash equivalents, and marketable securities as of June 30, 2025[205](index=205&type=chunk) - Due to the short to medium-term maturities of these financial instruments, an immediate **10%** change in interest rates is not expected to have a material effect on their fair value[205](index=205&type=chunk) - Inflation or interest rate changes have not had a significant impact on the Company's results of operations for any periods presented[206](index=206&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management evaluated the effectiveness of the Company's disclosure controls and procedures as of June 30, 2025, concluding they were effective at a reasonable assurance level, with no material changes in internal control over financial reporting during the quarter - The Company maintains disclosure controls and procedures designed to ensure timely and accurate reporting of information required under the Exchange Act[207](index=207&type=chunk) - As of June 30, 2025, management, with the participation of the principal executive and financial officers, concluded that the disclosure controls and procedures were effective at the reasonable assurance level[208](index=208&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[209](index=209&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from Note 8, Commitments and Contingencies, in the condensed financial statements, which states there are no material legal proceedings outstanding as of June 30, 2025 - Legal proceedings information is incorporated by reference from Note 8, Commitments and Contingencies, in the financial statements[211](index=211&type=chunk) - As of June 30, 2025, there are no material legal proceedings outstanding[98](index=98&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks associated with investing in the Company's common stock, covering its limited operating history, recurring net losses, substantial capital requirements, and the inherent uncertainties of novel AAV genetic medicine technology development, alongside manufacturing complexities, competition, intellectual property protection, operational risks, and broader economic conditions [Risk Factor Summary](index=43&type=section&id=Risk%20Factor%20Summary) The Company faces risks from its limited operating history, recurring net losses, substantial capital requirements, and the inherent uncertainties of novel AAV genetic medicine technology development, including potential clinical trial failures, regulatory challenges, manufacturing complexities, intense competition, and intellectual property protection issues - The Company is in late-stage drug development with a limited operating history and no approved products, making future success difficult to predict[215](index=215&type=chunk)[216](index=216&type=chunk) - Recurring net losses are expected to continue, requiring substantial additional capital that may not be available on acceptable terms, potentially delaying or eliminating R&D programs[215](index=215&type=chunk)[217](index=217&type=chunk)[221](index=221&type=chunk) - Product candidates are based on novel AAV genetic medicine technology with limited regulatory and clinical experience, leading to unpredictable development timelines and costs[215](index=215&type=chunk)[235](index=235&type=chunk) - Clinical trials may fail to demonstrate safety and efficacy, preventing or delaying regulatory approval and commercialization[215](index=215&type=chunk)[276](index=276&type=chunk) - Gene therapies are complex to manufacture, posing risks of production problems, supply limitations, and delays[219](index=219&type=chunk)[298](index=298&type=chunk) - Success depends on protecting intellectual property, which is subject to challenges, invalidation, and enforcement difficulties[219](index=219&type=chunk)[383](index=383&type=chunk) [Risks Related to Our Limited Operating History, Financial Condition and Capital Requirements](index=45&type=section&id=Risks%20Related%20to%20Our%20Limited%20Operating%20History%2C%20Financial%20Condition%20and%20Capital%20Requirements) The Company has a limited operating history with no approved products or product revenue, incurring recurring net losses and requiring substantial additional capital, with quarterly operating results expected to fluctuate significantly - The Company has a limited operating history since September 2013, no products approved for commercial sale, and has not generated product revenue, making future success and viability highly uncertain[216](index=216&type=chunk) - The Company has incurred recurring net losses (**$54.7 million** and **$102.6 million** for Q2 and H1 2025, respectively) and expects significant losses to continue, with an accumulated deficit of **$678.8 million** as of June 30, 2025[217](index=217&type=chunk)[218](index=218&type=chunk) - Substantial additional capital is required to finance operations, and failure to raise funds on acceptable terms could force delays, reductions, or termination of R&D programs or commercialization efforts[221](index=221&type=chunk)[225](index=225&type=chunk)[227](index=227&type=chunk) - Quarterly operating results may fluctuate significantly due to factors like clinical trial timing, regulatory approvals, manufacturing costs, and macroeconomic trends, potentially causing stock price volatility[231](index=231&type=chunk)[232](index=232&type=chunk)[234](index=234&type=chunk) [Risks Related to the Research, Discovery, Development and Commercialization of Our Product Candidates](index=49&type=section&id=Risks%20Related%20to%20the%20Research%2C%20Discovery%2C%20Development%20and%20Commercialization%20of%20Our%20Product%20Candidates) Product candidates rely on novel AAV genetic medicine technology with unpredictable development timelines and costs, facing risks from adverse public perception, undesirable side effects, clinical trial failures, intense competition, and challenges in market acceptance and regulatory approvals across multiple jurisdictions - All product candidates rely on novel AAV genetic medicine technology, with limited regulatory and clinical experience, making development time and cost difficult to predict and potentially longer/more expensive[235](index=235&type=chunk) - Adverse public perception or regulatory scrutiny of genetic medicine technology could negatively impact development progress, commercial success, and clinical trial enrollment[243](index=243&type=chunk)[244](index=244&type=chunk)[246](index=246&type=chunk) - Product candidates may cause undesirable side effects, leading to clinical trial delays/halts, restrictive labels, denial of approval, or significant negative post-approval consequences like product recalls or liability claims[247](index=247&type=chunk)[249](index=249&type=chunk)[250](index=250&type=chunk) - The Company has no approved products or product sales revenue and profitability depends on successful development, regulatory approval, and commercialization, which is highly uncertain and may take several years, if ever[251](index=251&type=chunk)[252](index=252&type=chunk)[253](index=253&type=chunk)[254](index=254&type=chunk) - Clinical trials are expensive, time-consuming, and subject to substantial delays or termination due to factors like patient enrollment difficulties, regulatory holds, manufacturing issues, or adverse events[256](index=256&type=chunk)[257](index=257&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk)[261](index=261&type=chunk)[262](index=262&type=chunk) - Interim or preliminary data from studies are subject to change upon comprehensive review and audit, and differences from final data could seriously harm the business[282](index=282&type=chunk)[283](index=283&type=chunk)[284](index=284&type=chunk) - Failure to create a pipeline of additional product candidates or develop commercially successful products through the Therapeutic Vector Evolution platform would limit commercial opportunity[285](index=285&type=chunk) - The Company faces substantial competition from major pharmaceutical and biotechnology companies with greater resources and expertise, potentially leading to competitors developing products more successfully or rendering the Company's candidates obsolete[286](index=286&type=chunk)[287](index=287&type=chunk)[289](index=289&type=chunk) - Inability to establish internal sales and marketing capabilities or secure third-party agreements for commercialization would hinder product sales and revenue generation[290](index=290&type=chunk)[291](index=291&type=chunk)[292](index=292&type=chunk)[293](index=293&type=chunk) - Even with marketing approval, product candidates may fail to achieve market acceptance by physicians, patients, and payors due to factors like efficacy, safety, pricing, and competition[294](index=294&type=chunk)[296](index=296&type=chunk)[297](index=297&type=chunk) - Public health crises (e.g., pandemics) and disruptions at regulatory agencies (e.g., funding shortages, trade restrictions) could adversely affect preclinical/clinical trials, business operations, and timely regulatory approvals[271](index=271&type=chunk)[272](index=272&type=chunk)[274](index=274&type=chunk)[275](index=275&type=chunk) - The Company has received Fast Track, Orphan Drug, RMAT, and PRIME designations for certain product candidates (e.g., 4D-310, 4D-710, 4D-150), but these do not guarantee faster review, approval, or market exclusivity[328](index=328&type=chunk)[329](index=329&type=chunk)[331](index=331&type=chunk)[333](index=333&type=chunk)[336](index=336&type=chunk)[338](index=338&type=chunk) - Failure to obtain regulatory approval in multiple jurisdictions would limit market opportunities and seriously harm the business[342](index=342&type=chunk) - Enacted and future healthcare legislation (e.g., ACA, IRA, OBBB Act) and regulations may increase the difficulty and cost of obtaining marketing approval, affect pricing, and reduce reimbursement, impacting profitability[343](index=343&type=chunk)[346](index=346&type=chunk)[348](index=348&type=chunk)[349](index=349&type=chunk)[352](index=352&type=chunk)[354](index=354&type=chunk) - Successful commercialization depends on obtaining and maintaining coverage and adequate reimbursement from governmental authorities and private health insurers, which is uncertain and can be a lengthy, costly process[358](index=358&type=chunk)[360](index=360&type=chunk)[361](index=361&type=chunk)[362](index=362&type=chunk) [Risks Related to Manufacturing](index=63&type=section&id=Risks%20Related%20to%20Manufacturing) Gene therapies are complex to manufacture, posing risks of production problems, supply limitations, and delays in development or regulatory approvals, with reliance on third-party manufacturers and suppliers entailing additional risks - Gene therapies are complex to manufacture, and production problems (e.g., product defects, contamination, insufficient inventory) could delay development, regulatory approvals, or limit product supply[298](index=298&type=chunk)[299](index=299&type=chunk)[309](index=309&type=chunk) - Delays in obtaining regulatory approval for manufacturing processes or disruptions in internal/contract manufacturing facilities (e.g., non-compliance with cGMP) could delay commercialization efforts[302](index=302&type=chunk)[303](index=303&type=chunk) - Developing internal manufacturing capabilities requires significant resources and management time, and failure to achieve operating efficiencies or manage employee shortages could delay product development timelines[304](index=304&type=chunk)[305](index=305&type=chunk) - Reliance on third-party manufacturers and suppliers for product candidates and raw materials (e.g., plasmids) entails risks of non-satisfactory performance, supply disruptions, increased costs, and quality issues[306](index=306&type=chunk)[308](index=308&type=chunk)[310](index=310&type=chunk)[311](index=311&type=chunk) [Risks Related to Regulatory Approval and Other Legal Compliance Matters](index=66&type=section&id=Risks%20Related%20to%20Regulatory%20Approval%20and%20Other%20Legal%20Compliance%20Matters) The Company faces lengthy, expensive, and unpredictable regulatory approval processes, with approved products remaining subject to ongoing scrutiny, and business operations are subject to healthcare regulatory laws, environmental, health & safety laws, and animal welfare regulations, with non-compliance potentially leading to significant penalties and reputational harm - The regulatory approval processes (FDA, EMA, etc.) are lengthy, expensive, and unpredictable, and failure to obtain approval for product candidates would prevent revenue generation[313](index=313&type=chunk)[314](index=314&type=chunk)[317](index=317&type=chunk) - Even with approval, products remain subject to ongoing regulatory scrutiny, including cGMP compliance, labeling, promotion, and post-marketing studies, and non-compliance can lead to sanctions or market withdrawal[321](index=321&type=chunk)[322](index=322&type=chunk)[323](index=323&type=chunk)[324](index=324&type=chunk)[325](index=325&type=chunk) - Business operations and relationships are subject to healthcare regulatory laws (e.g., Anti-Kickback Statute, False Claims Act, HIPAA), and non-compliance could result in significant penalties, exclusion from healthcare programs, and reputational harm[366](index=366&type=chunk)[367](index=367&type=chunk)[368](index=368&type=chunk) - The Company's research involves hazardous materials, exposing it to environmental and health & safety laws, and non-compliance or accidents could lead to significant costs, liabilities, and operational disruptions[371](index=371&type=chunk)[504](index=504&type=chunk)[505](index=505&type=chunk) - Compliance with animal welfare regulations for research animals could increase operating costs and lead to penalties or adverse publicity if violated[372](index=372&type=chunk) [Risks Related to Our Reliance on Third Parties](index=79&type=section&id=Risks%20Related%20to%20Our%20Reliance%20on%20Third%20Parties) Reliance on third parties for clinical trials, research, and preclinical testing reduces control and poses risks of unsatisfactory performance, missed deadlines, or non-compliance, while dependence on collaborations carries risks of resource discretion, intellectual property disputes, and program termination, and sharing trade secrets increases misappropriation risk - Reliance on third parties (CROs, CMOs, clinical investigators) for clinical trials, research, and preclinical testing reduces control and poses risks of unsatisfactory performance, missed deadlines, or non-compliance with regulatory requirements, potentially delaying product development and approvals[373](index=373&type=chunk)[374](index=374&type=chunk)[375](index=375&type=chunk)[376](index=376&type=chunk) - Dependence on collaborations for R&D and commercialization of product candidates carries risks, including collaborators' discretion over resources, intellectual property disputes, delays, or termination of programs[377](index=377&type=chunk)[378](index=378&type=chunk)[379](index=379&type=chunk)[381](index=381&type=chunk) - Sharing trade secrets with third parties (collaborators, contractors) increases the risk of misappropriation, unauthorized disclosure, or independent discovery by competitors, which could harm the Company's competitive position[420](index=420&type=chunk) [Risks Related to Our Intellectual Property](index=82&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) Commercial success depends on obtaining and maintaining patent and trade secret protection, which is subject to challenges, invalidation, enforcement difficulties, and potential expiration before commercialization, with global protection being challenging and costly, and the Company facing risks of infringement claims or loss of rights from third-party licenses - Commercial success depends on obtaining and maintaining patent and trade secret protection for product candidates and technologies, but patent applications may not issue, issued patents may be challenged or invalidated, and protection may not be sufficient against competitors[383](index=383&type=chunk)[384](index=384&type=chunk)[385](index=385&type=chunk)[387](index=387&type=chunk)[389](index=389&type=chunk) - The lives of patents may not be sufficient to effectively protect product candidates, as patents might expire before or shortly after commercialization, opening the door to competition[395](index=395&type=chunk) - Changes in U.S. or foreign patent laws (e.g., Leahy-Smith Act, EU Patent Package) could diminish the value of patents, increase prosecution costs, and weaken enforcement capabilities[398](index=398&type=chunk)[399](index=399&type=chunk)[400](index=400&type=chunk)[401](index=401&type=chunk) - Protecting intellectual property rights globally is challenging and expensive, with varying levels of protection in different countries, potentially allowing competitors to use inventions where patent protection is weak or absent[402](index=402&type=chunk)[403](index=403&type=chunk)[404](index=404&type=chunk) - The Company may face claims challenging inventorship or ownership of patents and other intellectual property, leading to costly litigation, loss of rights, or diversion of management attention[406](index=406&type=chunk) - Failure to comply with procedural, documentary, and fee payment requirements of patent agencies can result in abandonment or lapse of patent rights[407](index=407&type=chunk) - Inability to protect the confidentiality of trade secrets (unpatented know-how, technology) through agreements and security measures could seriously harm the business, as monitoring unauthorized uses is difficult and enforcement is costly[408](index=408&type=chunk)[409](index=409&type=chunk)[410](index=410&type=chunk)[411](index=411&type=chunk) - Rights to develop and commercialize product candidates are subject to third-party licenses, and failure to comply with license terms or inability to obtain future necessary licenses could result in loss of rights or technology[412](index=412&type=chunk)[413](index=413&type=chunk)[414](index=414&type=chunk)[415](index=415&type=chunk) - Litigation or third-party claims of intellectual property infringement are costly, time-consuming, and could prevent product sales, require licensing, or result in damages[427](index=427&type=chunk)[428](index=428&type=chunk)[431](index=431&type=chunk)[433](index=433&type=chunk)[434](index=434&type=chunk) - The Company may be subject to claims of wrongfully hiring employees from competitors or using/disclosing confidential information of former employers, leading to litigation and potential loss of intellectual property rights[444](index=444&type=chunk)[445](index=445&type=chunk) [Risks Related to Our Operations](index=97&type=section&id=Risks%20Related%20to%20Our%20Operations) The Company is highly dependent on key personnel, faces challenges in managing future growth, is vulnerable to unfavorable global economic conditions, and its IT systems are susceptible to security breaches, while compliance with data protection laws and changes in tax laws pose additional risks - The Company is highly dependent on key managerial, scientific, and medical personnel, and failure to attract, motivate, and retain qualified individuals in a competitive environment could delay product development and harm the business[446](index=446&type=chunk)[447](index=447&type=chunk)[448](index=448&type=chunk) - Future growth will require expanding the organization, which may lead to difficulties in managing increased responsibilities, recruiting employees, and maintaining operational controls[449](index=449&type=chunk)[450](index=450&type=chunk)[452](index=452&type=chunk) - Unfavorable global economic conditions (e.g., inflation, geopolitical conflicts) could adversely affect business, financial condition, and results of operations, potentially straining manufacturers/suppliers or impacting capital raising[453](index=453&type=chunk) - Engaging in acquisitions or strategic partnerships may increase capital requirements, dilute stockholders, incur debt, assume liabilities, and divert management attention[454](index=454&type=chunk)[455](index=455&type=chunk) - Information technology systems, both internal and third-party, are vulnerable to security breaches and disruptions (e.g., cyberattacks, natural disasters), which could lead to loss of confidential information, development delays, liability, and reputational harm[456](index=456&type=chunk)[457](index=457&type=chunk)[458](index=458&type=chunk)[460](index=460&type=chunk)[461](index=461&type=chunk) - Actual or perceived failures to comply with evolving data protection, privacy, and security laws (e.g., HIPAA, CCPA, GDPR) could result in investigations, fines, legal liability, and damage to reputation[464](index=464&type=chunk)[465](index=465&type=chunk)[466](index=466&type=chunk)[467](index=467&type=chunk)[468](index=468&type=chunk)[472](index=472&type=chunk) - The ability to use net operating loss carryforwards (NOLs) and other tax attributes may be limited due to past or future 'ownership changes' under U.S. tax law (Sections 382 and 383 of the Code)[473](index=473&type=chunk) - Changes in tax laws or regulations, or adverse interpretations thereof, could negatively impact the Company's domestic and international business operations and financial performance[474](index=474&type=chunk)[475](index=475&type=chunk) [Risks Related to Ownership of Our Common Stock](index=103&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) The market price of common stock may be volatile due to various factors, with substantial sales by insiders or through equity plans potentially causing declines, and insiders holding significant influence over company matters, while operating as a public company incurs substantial costs and regulatory compliance burdens - The market price of the common stock may be volatile due to clinical trial results, competitive developments, regulatory changes, financing efforts, and general market conditions, potentially leading to substantial losses for investors[476](index=476&type=chunk)[477](index=477&type=chunk) - Sales of a substantial number of common stock shares in the public market, including from equity incentive plans or pre-funded warrants, could cause the market price to decline significantly[479](index=479&type=chunk)[480](index=480&type=chunk)[481](index=481&type=chunk)[482](index=482&type=chunk) - Insiders (directors, executive officers, >5% stockholders) beneficially own approximately **55%** of outstanding common stock, giving them substantial influence over management and stockholder-approved matters, potentially delaying or preventing a change of control[484](index=484&type=chunk) - Operating as a public company incurs significant costs and requires substantial management time for compliance with SEC and Nasdaq rules, including Section 404 of Sarbanes-Oxley, with potential sanctions for non-compliance[485](index=485&type=chunk)[486](index=486&type=chunk)[487](index=487&type=chunk) - Provisions in the Company's certificate of incorporation, bylaws, and Delaware law (e.g., staggered board, limitations on stockholder actions) could discourage, delay, or prevent a change in control or management, depressing the stock price[488](index=488&type=chunk)[489](index=489&type=chunk)[490](index=490&type=chunk) - The Company does not intend to pay dividends on common stock, meaning investor returns will depend solely on stock price appreciation[496](index=496&type=chunk) [General Risk Factors](index=108&type=section&id=General%20Risk%20Factors) Legal proceedings, product liability lawsuits, and misconduct by employees or partners could lead to significant costs, liabilities, and reputational harm, while non-compliance with environmental, health, and safety laws, and increased focus on ESG matters, also pose financial and reputational risks - Legal proceedings or claims, even if unmeritorious, could be costly, time-consuming, divert management attention, and harm the Company's reputation[498](index=498&type=chunk) - Product liability lawsuits, arising from clinical testing or commercialization, could result in substantial liabilitie