UNITED STATES SECURITIES AND EXCHANGE COMMISSION (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________________ to _____________________ Commission File Number: 001-39397 INOZYME PHARMA, INC. WASHINGTON, DC 20549 FORM 10-Q (Exact name of registrant as specified in its charter) Dela ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________________ to _____________________ Commission File Number: 001-39397 INOZYME PHARMA, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) 321 Summer Street, Suite 400 B ...

Financial Performance - The company reported net losses of $67.1 million and $56.6 million for the years ended December 31, 2022, and 2021, respectively, with an accumulated deficit of $214.8 million as of December 31, 2022[581]. - Total operating expenses were $68.7 million for the year ended December 31, 2022, compared to $56.6 million for 2021, with expectations of continued significant expenses due to ongoing clinical trials[582]. - The company has not yet generated any revenue from product sales and does not expect to do so in the foreseeable future[593]. - Net cash used in operating activities was $57.8 million for the year ended December 31, 2022, compared to $48.2 million in 2021, reflecting an increase in net loss adjusted for non-cash items[618]. - The company has incurred significant operating losses and negative cash flows since inception, primarily funded through sales of convertible preferred stock and common stock[610]. Research and Development - INZ-701 has received orphan drug designation from the FDA and EMA for the treatment of ENPP1 and ABCC6 Deficiencies, with fast track designation also granted by the FDA[574]. - The Phase 2 clinical trial of INZ-701 for ENPP1 Deficiency is ongoing with plans to report interim data in Q3 2023[575]. - A Phase 1b clinical trial (ENERGY-1) for INZ-701 in infants with ENPP1 Deficiency is planned to be initiated in Q2 2023[576]. - Research and development costs for INZ-701 have totaled $142.1 million from inception through December 31, 2022, with expectations for substantial increases in the foreseeable future[596]. - Research and development expenses rose by $10.1 million to $47.8 million for the year ended December 31, 2022, compared to $37.7 million in 2021, primarily due to increased clinical trial costs[605]. - The company expects to continue increasing research and development expenses as it conducts clinical trials for INZ-701 and prepares for additional product candidates[606]. Financial Position and Funding - The company had cash, cash equivalents, and short-term investments of approximately $127.9 million as of December 31, 2022, and expects to fund operations into Q4 2024[590]. - The company entered into a loan agreement providing up to $70 million in term loans, with a first tranche commitment of $25 million[587]. - Net cash provided by financing activities was $72.8 million for the year ended December 31, 2022, primarily from the issuance of common stock and pre-funded warrants[620]. - As of December 31, 2022, the company had cash, cash equivalents, and short-term investments totaling approximately $127.9 million, up from $111.8 million in 2021[615]. - The company drew down an additional $20.0 million from the Loan Agreement in February 2023, which is expected to fund cash flow requirements into the fourth quarter of 2024[622]. - The company expects to finance cash needs through equity offerings, debt financings, collaborations, and licensing arrangements, but does not have any committed external sources of funds beyond the Loan Agreement[625]. Expenses and Cost Management - The company anticipates significant increases in expenses as it conducts ongoing and planned clinical trials and prepares for potential commercialization[591]. - General and administrative expenses increased by $1.9 million to $20.8 million for the year ended December 31, 2022, from $18.9 million in 2021, mainly due to higher personnel costs[607]. - The company anticipates substantial increases in expenses related to ongoing Phase 1/2 clinical trials of INZ-701 for ENPP1 Deficiency and ABCC6 Deficiency, as well as future commercialization efforts[621]. Market Risks and Economic Factors - The company is exposed to market risks related to interest rate changes, with an immediate change of 100 basis points not expected to materially affect its financial position[638]. - Inflation has generally increased the company's labor and clinical trial costs, but it did not have a material effect on the company's financial condition during the years ended December 31, 2022, and 2021[641]. - The company may need to obtain substantial additional financing to achieve its business objectives, which may not be available on acceptable terms due to various economic factors[623].

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Financial Performance - The company reported a net loss of $48.5 million for the nine months ended September 30, 2022, and $56.6 million for the year ended December 31, 2021, with an accumulated deficit of $196.2 million as of September 30, 2022[96]. - The company reported a net loss of $16.4 million for the three months ended September 30, 2022, compared to a net loss of $14.3 million for the same period in 2021, reflecting an increase of $2.1 million[121]. - Total operating expenses for the nine months ended September 30, 2022, were $49.1 million, an increase of $11.3 million from $37.9 million in the same period in 2021[128]. - Net cash used in operating activities for the nine months ended September 30, 2022, was $43.4 million, compared to $34.7 million for the same period in 2021, reflecting an increase of $8.7 million[142]. - The company has not generated any revenue from product sales and does not expect to do so in the foreseeable future, relying on funding from stock sales and loans[108]. Operating Expenses - Operating expenses were $49.1 million for the nine months ended September 30, 2022, and are expected to continue increasing due to ongoing clinical trials and preclinical activities[97]. - Research and development expenses for the three months ended September 30, 2022, increased by $2.8 million to $12.2 million compared to $9.3 million for the same period in 2021, primarily due to increased clinical trial costs[122]. - Research and development expenses for the nine months ended September 30, 2022, increased by $9.8 million to $34.0 million from $24.2 million in the same period in 2021, driven by clinical trial costs and personnel expenses[129]. - General and administrative expenses for the three months ended September 30, 2022, decreased by $0.2 million to $4.7 million from $4.9 million in the same period in 2021, attributed to a decrease in professional services[125]. - The company expects general and administrative expenses to increase in future periods as operations expand and costs associated with being a public company rise[118]. Cash and Investments - The company has cash, cash equivalents, and short-term investments of approximately $141.5 million as of September 30, 2022[101]. - As of September 30, 2022, the company had total cash, cash equivalents, and short-term investments of approximately $141.5 million, an increase from $111.8 million as of December 31, 2021[139]. - Interest income for the three months ended September 30, 2022, was approximately $0.7 million, significantly higher than $47,000 in the same period in 2021, due to higher interest rates and a larger cash balance[126]. - The company anticipates that existing cash and investments will fund operations into the second quarter of 2024, but this estimate is subject to change based on various factors[147]. Financing Activities - The company raised approximately $68.3 million from an underwritten offering of 16,276,987 shares of common stock at an offering price of $3.69 per share[102]. - Net cash provided by financing activities was $72.8 million for the nine months ended September 30, 2022, primarily from the issuance of common stock and long-term debt[144]. - A Loan Agreement with K2 HealthVentures provides up to $70 million in term loans, with a first tranche commitment of $25 million[103]. - The aggregate principal amount outstanding under the Loan Agreement as of September 30, 2022, was $5.0 million, with an interest rate of 9.60%[156]. Clinical Trials and Product Development - INZ-701, the lead product candidate, has shown a 5-fold mean increase in plasma pyrophosphate (PPi) levels from a baseline of 132-333 nM to a mean of 1356 nM at the 0.2 mg/kg dose level during the Phase 1/2 trial[88]. - The Phase 1/2 clinical trials for INZ-701 are ongoing in both North America and Europe, with the FDA granting orphan drug designation and fast track designation for ENPP1 Deficiency[86]. - The company plans to report topline data from the ongoing trials in the fourth quarter of 2022 and the first quarter of 2023 for ENPP1 and ABCC6 Deficiencies, respectively[89][92]. - The company is exploring the potential for developing a gene therapy for ENPP1 Deficiency and plans to initiate a clinical trial in end-stage kidney disease patients[93]. - The company has incurred approximately $128.3 million in research and development costs for INZ-701 from inception through September 30, 2022, with expectations for substantial increases in these costs as ongoing clinical trials progress[113]. Risks and Economic Factors - The company is exposed to interest rate risk, with an immediate change of 100 basis points potentially affecting interest income by approximately $1.0 million annually[155]. - The company does not currently face significant market risk related to foreign currency exchange rates, although future operations may be impacted[157]. - Inflation has not had a material effect on the company's business or financial condition during the nine months ended September 30, 2022[158].

Financial Performance - The company reported a net loss of $32.1 million for the six months ended June 30, 2022, and $56.6 million for the year ended December 31, 2021, with an accumulated deficit of $179.8 million as of June 30, 2022[95]. - The net loss for the three months ended June 30, 2022, was $15.3 million, compared to a net loss of $12.5 million for the same period in 2021, reflecting an increase of $2.7 million[120]. - The company has not generated any revenue from product sales and does not expect to do so in the foreseeable future[107]. Operating Expenses - Operating expenses were $32.2 million for the six months ended June 30, 2022, and $56.6 million for the year ended December 31, 2021, with expectations of significant future increases due to ongoing clinical trials[96]. - Total operating expenses for the three months ended June 30, 2022, were $15.4 million, an increase of $2.7 million compared to $12.7 million for the same period in 2021[120]. - Research and development expenses increased by $1.8 million to $10.0 million for the three months ended June 30, 2022, primarily due to increased clinical trial costs for INZ-701[121]. - Research and development expenses for the six months ended June 30, 2022, were $21.8 million, an increase of $7.0 million from $14.8 million for the same period in 2021[128]. - General and administrative expenses increased by $1.0 million to $5.4 million for the three months ended June 30, 2022, primarily due to increased personnel costs[124]. Cash and Financing - The company has cash, cash equivalents, and short-term investments of approximately $151.5 million as of June 30, 2022[100]. - The company raised approximately $68.3 million in net proceeds from an underwritten offering of common stock in April 2022[101]. - A Loan Agreement with K2 HealthVentures provides up to $70 million in term loans, with a first tranche commitment of $25 million[102]. - As of June 30, 2022, the company had total cash, cash equivalents, and short-term investments of approximately $151.5 million, up from $111.8 million as of December 31, 2021[142][150]. - Net cash used in operating activities for the six months ended June 30, 2022, was $28.8 million, an increase of $6.4 million compared to the same period in 2021[145]. - Net cash provided by financing activities was $68.6 million for the six months ended June 30, 2022, primarily from the issuance of common stock and pre-funded warrants[147]. - The company anticipates that existing cash and the first tranche commitment will fund operations into the second quarter of 2024, but this is subject to various uncertainties[150]. Clinical Trials and Product Development - INZ-701, the lead product candidate, has shown a 5-fold increase in plasma pyrophosphate (PPi) levels at the 0.2 mg/kg dose level during a 32-day evaluation period[89]. - The Phase 1/2 clinical trials for INZ-701 are ongoing in both North America and Europe, with orphan drug designation granted by the FDA and EMA for ENPP1 and ABCC6 Deficiencies[87]. - The company initiated a Phase 1/2 clinical trial of INZ-701 in adult patients with ABCC6 Deficiency in April 2022, with preliminary data showing a mean PPi level of 1057 nM at the 0.2 mg/kg dose level[91]. - The company plans to finalize the regulatory pathway for a clinical trial of INZ-701 in calciphylaxis in Q4 2022, expanding its therapeutic focus[92]. - The company expects research and development expenses to continue to increase substantially as it conducts ongoing clinical trials and prepares for later stage trials of INZ-701[129]. Market Risks - The company is exposed to market risk related to interest rate changes, with an immediate change of 100 basis points potentially affecting interest income by approximately $0.9 million annually[160]. - The company does not currently face significant market risk from foreign currency exchange rates but may in the future due to contracts with foreign vendors[161]. - Inflation has not materially affected the company's business or financial condition during the six months ended June 30, 2022[162].

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Financial Performance - The company reported a net loss of $16.9 million for the three months ended March 31, 2022, and $56.6 million for the year ended December 31, 2021, with an accumulated deficit of $164.6 million as of March 31, 2022[81]. - Net loss for the three months ended March 31, 2022, was $16.9 million, compared to a net loss of $11.1 million for the same period in 2021, reflecting an increase of $5.8 million[100]. - Cash, cash equivalents, and short-term investments totaled approximately $97.8 million as of March 31, 2022, down from $111.8 million as of December 31, 2021[109]. - Net cash used in operating activities was $14.2 million for the three months ended March 31, 2022, compared to $12.4 million for the same period in 2021, an increase of $1.8 million[112]. - Net cash provided by investing activities was $22.6 million for the three months ended March 31, 2022, significantly higher than $0.6 million for the same period in 2021[113]. - The company anticipates needing substantial additional funding to support ongoing operations and future commercialization efforts[118]. Research and Development - Research and development expenses totaled $16.8 million for the three months ended March 31, 2022, and $56.6 million for the year ended December 31, 2021, with a total of $106.1 million incurred since inception through March 31, 2022[82][90]. - Research and development expenses increased by $5.2 million to $11.8 million for the three months ended March 31, 2022, compared to $6.6 million for the same period in 2021[101]. - The company expects substantial increases in expenses related to ongoing Phase 1/2 clinical trials of INZ-701 and other product candidates[115]. Product Development - INZ-701, the lead product candidate, is currently undergoing Phase 1/2 clinical trials for ENPP1 and ABCC6 Deficiencies, with preliminary data showing significant increases in plasma pyrophosphate levels in patients[73][75]. - The FDA has granted orphan drug designation and fast track designation for INZ-701 for the treatment of ENPP1 Deficiency, indicating potential expedited development[73]. - The company plans to seek worldwide marketing approvals for INZ-701 upon successful completion of clinical development[78]. - The company is exploring the potential for developing a gene therapy for ENPP1 Deficiency, expanding its therapeutic approach beyond INZ-701[78]. Operating Expenses - Total operating expenses for the three months ended March 31, 2022, were $16.8 million, an increase of $5.9 million from $11.0 million in the same period of 2021[100]. - General and administrative expenses rose by $0.6 million to $5.0 million for the three months ended March 31, 2022, from $4.4 million in the same period of 2021[102]. Cash and Investments - As of March 31, 2022, the company had cash, cash equivalents, and short-term investments of approximately $97.8 million[85]. - As of March 31, 2022, the company had received net cash proceeds of approximately $227.4 million from sales of convertible preferred stock and common stock[106]. Accounting and Compliance - As of March 31, 2022, the company reported no material changes to critical accounting estimates compared to the previous fiscal year[121]. - The company is utilizing an extended transition period for compliance with new accounting standards as an emerging growth company[124]. Market and Economic Conditions - The company is not currently exposed to significant market risk from foreign currency exchange rates but may face fluctuations in the future due to contracts with foreign vendors[126]. - Inflation has not materially affected the company's business or financial condition during the three months ended March 31, 2022, compared to the same period in 2021[127]. Commercialization Efforts - The company has not yet commercialized any products or generated revenue from product sales, and does not expect to do so in the foreseeable future[79][88]. - The company is focused on the commercialization activities for product candidates, including INZ-701, with uncertain revenue timing from potential commercial sales[121]. - The company has not experienced material changes in contractual obligations and commitments during the three months ended March 31, 2022[122].

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Financial Performance - The company has not yet commercialized any products or generated revenue from product sales, with net losses of $56.6 million and $56.4 million for the years ended December 31, 2021, and 2020, respectively, resulting in an accumulated deficit of $147.7 million as of December 31, 2021[549]. - The company incurred a net loss of $56.6 million for the year ended December 31, 2021, compared to a net loss of $56.4 million for the year ended December 31, 2020, reflecting an increase in loss of $200,000[568]. - Cash, cash equivalents, and short-term investments totaled approximately $111.8 million as of December 31, 2021, down from $159.9 million as of December 31, 2020[577]. - Net cash used in operating activities was $48.2 million for the year ended December 31, 2021, compared to $36.0 million for the year ended December 31, 2020, representing an increase of $12.2 million[580]. - The company faces substantial doubt about its ability to continue as a going concern within one year after the issuance of its financial statements, necessitating additional funding[553]. Research and Development - The company has incurred $94.3 million in research and development costs for INZ-701 from inception through December 31, 2021, and expects these costs to continue to increase substantially as clinical trials progress[561]. - The company expects research and development expenses to increase as it prepares for and conducts clinical trials of INZ-701[570]. - The company anticipates significant increases in expenses related to ongoing and planned clinical trials, particularly for INZ-701[550]. - The company has entered into a sponsored research agreement with Yale, committing to provide a total of $2.4 million in research support funding over a period of five and a half years[591]. - The company estimates accrued research and development expenses based on service provider contracts and historical experience, with no material differences reported to date[597]. Clinical Trials and Regulatory Approvals - INZ-701 has received orphan drug designation from the FDA and EMA for the treatment of ENPP1 and ABCC6 Deficiencies, with fast track designation also granted by the FDA for ENPP1 Deficiency[543]. - The company initiated its Phase 1/2 clinical trial of INZ-701 for ENPP1 Deficiency in November 2021, with plans to report preliminary safety and biomarker data in the first half of 2022[544]. - The company has received regulatory approvals for clinical trials in the UK, Canada, and the EU for INZ-701, allowing for broader clinical development outside the US[544]. - The company plans to seek worldwide marketing approvals for INZ-701 upon successful completion of clinical development for ENPP1 and ABCC6 Deficiencies[546]. Expenses and Funding - General and administrative expenses increased by $8.4 million to $18.9 million for the year ended December 31, 2021, compared to $10.5 million for the year ended December 31, 2020[571]. - Research and development expenses decreased by $8.8 million to $37.7 million for the year ended December 31, 2021, from $46.5 million for the year ended December 31, 2020[568]. - The company has funded operations primarily through proceeds from the sales of convertible preferred stock and common stock, totaling approximately $227.4 million as of December 31, 2021[547]. - The company expects to need substantial additional funding to support ongoing and planned activities, particularly for clinical trials and commercialization efforts[583]. - The company filed a universal shelf registration statement allowing it to offer and sell up to $200 million of various securities, including common stock[576]. Market and Economic Factors - The company is exposed to market risk related to interest rate changes, but an immediate change of 100 basis points in interest rates would not materially affect the fair market value of its investment portfolio[602]. - The company has not experienced significant market risk related to foreign currency exchange rates, although it may contract with foreign vendors in the future[603]. - Inflation has not had a material effect on the company's business or financial condition during the years ended December 31, 2021, and 2020[604]. Accounting and Compliance - The fair value of stock options is estimated using the Black-Scholes model, with inputs based on historical volatility of similar public companies[598]. - The company has elected to use an extended transition period for complying with new or revised accounting standards as an emerging growth company[600]. - The company may need to relinquish valuable rights to technologies or revenue streams if it raises additional funds through collaborations or licensing arrangements[589]. - The company is responsible for paying annual license maintenance fees, milestone payments, and royalties under its license agreement with Yale, with the timing and likelihood of such payments being uncertain[591].