PART I. FINANCIAL INFORMATION [Unaudited Financial Statements](index=5&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) Unaudited financials show reduced net loss, increased cash, and improved equity, despite persistent going concern doubts Condensed Balance Sheet Data (Unaudited) | Balance Sheet Items | June 30, 2025 ($ in thousands) | December 31, 2024 ($ in thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | 12,657 | 6,839 | | Total current assets | 13,046 | 8,606 | | **Total Assets** | **13,046** | **9,308** | | **Liabilities & Equity** | | | | Accounts payable and accrued expenses | 7,500 | 9,486 | | Total current liabilities | 10,004 | 12,609 | | **Total Liabilities** | **10,154** | **13,181** | | **Total Stockholders' Equity (Deficit)** | **2,892** | **(3,873)** | Condensed Statements of Operations (Unaudited) | Income Statement Items | Three Months Ended June 30, 2025 ($ in thousands) | Three Months Ended June 30, 2024 ($ in thousands) | Six Months Ended June 30, 2025 ($ in thousands) | Six Months Ended June 30, 2024 ($ in thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Research and development | 98 | 4,360 | (866) | 8,164 | | General and administrative | 787 | 1,531 | 2,004 | 2,958 | | Total operating expenses | 885 | 8,540 | 1,138 | 13,771 | | **Net Loss** | **(762)** | **(8,199)** | **(915)** | **(13,390)** | | Net loss per share, basic and diluted | $(0.19) | $(18.36) | $(0.27) | $(40.83) | Condensed Statements of Cash Flows (Unaudited) | Cash Flow Items | Six Months Ended June 30, 2025 ($ in thousands) | Six Months Ended June 30, 2024 ($ in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | (2,728) | (7,656) | | Net cash from investing activities | 1,165 | — | | Net cash provided by financing activities | 7,381 | 5,315 | | **Net change in cash** | **5,818** | **(2,341)** | - The company executed a **1-for-50 reverse stock split** on January 15, 2025. All share and per-share information has been retroactively adjusted to reflect this split[32](index=32&type=chunk)[33](index=33&type=chunk) - Management has concluded that there is **substantial doubt** about the company's ability to continue as a going concern for at least 12 months from the issuance date of the financial statements, due to recurring operating losses and the need for additional funding[37](index=37&type=chunk)[38](index=38&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses improved financial performance from strategic cuts, but liquidity and going concern remain critical despite recent capital - The company is a clinical-stage biopharmaceutical firm focused on CAR T therapies for cancers and autoimmune diseases, with key partnerships with City of Hope, Fred Hutch, and Nationwide Children's Hospital[96](index=96&type=chunk)[97](index=97&type=chunk) Comparison of Operating Results (in thousands) | Period | Metric | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Q2** | R&D Expense | $98 | $4,360 | $(4,262) | (98)% | | | G&A Expense | $787 | $1,531 | $(744) | (49)% | | | **Net Loss** | **$(762)** | **$(8,199)** | **$7,437** | **(91)%** | | **H1** | R&D Expense | $(866) | $8,164 | $(9,030) | (111)% | | | G&A Expense | $2,004 | $2,958 | $(954) | (32)% | | | **Net Loss** | **$(915)** | **$(13,390)** | **$12,475** | **(93)%** | - The significant decrease in R&D expenses in Q2 2025 was primarily due to the non-repeat of costs related to the termination of the uBriGene transaction (**$3.2 million**), reduced outside service expenses (**$0.6 million**), and lower clinical trial costs (**$0.5 million**)[124](index=124&type=chunk)[130](index=130&type=chunk) - The company raised net proceeds of approximately **$6.8 million** from an equity offering in February 2025 and an additional **$7.1 million** from warrant exercises in July 2025, bolstering its cash position[108](index=108&type=chunk)[112](index=112&type=chunk) - As of June 30, 2025, the company had **$12.7 million** in cash and cash equivalents. However, due to its history of substantial operating losses and an accumulated deficit of **$397.6 million**, there remains **substantial doubt** about its ability to continue as a going concern[138](index=138&type=chunk)[139](index=139&type=chunk) [Quantitative and Qualitative Disclosures About Market Risks](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risks) As a smaller reporting company, the company is exempt from providing quantitative and qualitative market risk disclosures - The company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide quantitative and qualitative disclosures about market risks[149](index=149&type=chunk) [Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes in internal control over financial reporting - Based on an evaluation as of June 30, 2025, the company's principal executive and financial officer concluded that disclosure controls and procedures are effective[150](index=150&type=chunk) - No changes in internal control over financial reporting occurred during the most recent quarter that materially affected, or are reasonably likely to materially affect, internal controls[151](index=151&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=27&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no legal proceedings for the period - The company has no legal proceedings to report[152](index=152&type=chunk) [Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from its precarious financial state, unproven CAR T candidates, third-party reliance, and IP challenges Risks Related to Finances and Capital Requirements - The company has incurred significant losses since inception, with an accumulated deficit of **$397.6 million** as of June 30, 2025, and expects to incur losses for the foreseeable future[155](index=155&type=chunk) - There is **substantial doubt** about the company's ability to continue as a going concern. It will need to raise additional funding, which may not be available, or be forced to delay or terminate product development[159](index=159&type=chunk)[160](index=160&type=chunk) - As of the 2024 Form 10-K filing, the company is subject to SEC "baby shelf rules," limiting the amount of funds it can raise via its Form S-3 registration statement to **one-third** of its public float in any 12-month period[171](index=171&type=chunk)[172](index=172&type=chunk) Risks Inherent in Drug Development and Commercialization - The company's CAR T technology is a relatively new approach and faces significant challenges, including regulatory uncertainty, complex manufacturing processes, and potential for severe side effects[189](index=189&type=chunk)[194](index=194&type=chunk) - Clinical trials are expensive, lengthy, and uncertain. Delays in commencement, patient enrollment, or completion could increase costs and jeopardize regulatory approval[193](index=193&type=chunk)[197](index=197&type=chunk)[223](index=223&type=chunk) - Even if approved, product candidates may not achieve market acceptance due to factors like efficacy, safety, pricing, reimbursement, and competition from other treatments[229](index=229&type=chunk)[231](index=231&type=chunk) Risks Related to Reliance on Third Parties - The company relies heavily on third parties, including licensors (COH, Fred Hutch), CROs, and contract manufacturers, to conduct preclinical studies, clinical trials, and manufacturing. Poor performance by these parties could delay or derail development[245](index=245&type=chunk)[252](index=252&type=chunk)[253](index=253&type=chunk) - Reliance on third-party manufacturers increases risks related to supply sufficiency, cost, regulatory compliance (cGMP), and potential for manufacturing delays or disruptions[253](index=253&type=chunk)[256](index=256&type=chunk) - The company relies on third parties for all aspects of its LV vector production, a critical component of its therapies. Any failure or delay from these suppliers could halt clinical studies and commercialization[262](index=262&type=chunk)[265](index=265&type=chunk) Risks Relating to Legislation and Regulation Affecting the Biopharmaceutical and Other Industries - The company is subject to healthcare reform measures like the ACA and the Inflation Reduction Act (IRA), which could increase compliance costs, introduce pricing pressures, and adversely affect its ability to market products profitably[272](index=272&type=chunk)[273](index=273&type=chunk) - Future business arrangements may be subject to anti-kickback, fraud and abuse, and other healthcare laws, which could expose the company to criminal sanctions, civil penalties, and reputational harm[280](index=280&type=chunk)[281](index=281&type=chunk) Risks Related to Intellectual Property and Potential Disputes Thereof - The company's success depends on its ability to obtain and maintain patent protection for its technology. The patent process is uncertain, and issued patents may be challenged, invalidated, or circumvented[286](index=286&type=chunk)[287](index=287&type=chunk) - The company depends on its licensors to maintain and enforce the intellectual property covering its product candidates and has limited control over their actions, which could jeopardize its rights[297](index=297&type=chunk)[298](index=298&type=chunk) - The company may become involved in costly and time-consuming lawsuits to protect its patents or defend against infringement claims from third parties, which could have a material adverse effect on the business[301](index=301&type=chunk)[302](index=302&type=chunk) Risks Relating to Our Control by Fortress - Fortress Biotech controls a **voting majority** of the company's common stock, allowing it to influence all matters requiring stockholder approval, which may create conflicts of interest[315](index=315&type=chunk) - Under existing agreements, Fortress receives an **annual stock dividend** and a **percentage of equity or debt financings**, which results in significant dilution to other stockholders[316](index=316&type=chunk) General Risks and Risks Associated with Ownership of our Common Stock - The company's business is vulnerable to computer system failures, cyber-attacks, and security breaches, which could disrupt operations and lead to the loss of confidential information[320](index=320&type=chunk)[321](index=321&type=chunk) - The company's stock price has been **volatile** and may continue to fluctuate. It has previously **failed to meet Nasdaq's continued listing requirements** and may be subject to delisting if it fails to maintain compliance in the future[335](index=335&type=chunk)[338](index=338&type=chunk)[340](index=340&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=63&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities for the period - None reported[342](index=342&type=chunk) [Defaults Upon Senior Securities](index=63&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities for the period - None reported[343](index=343&type=chunk) [Mine Safety Disclosures](index=63&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - None reported[344](index=344&type=chunk) [Other Information](index=63&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - During the quarter, no directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or other non-Rule 10b5-1 trading arrangement[345](index=345&type=chunk) [Exhibits](index=64&type=section&id=Item%206.%20Exhibits) This section provides an index of exhibits filed or furnished with the Form 10-Q - An index of exhibits filed with the report is provided, including certifications from the CEO/CFO and financial data formatted in iXBRL[347](index=347&type=chunk)[349](index=349&type=chunk)[351](index=351&type=chunk)

Core Insights - Mustang Bio's shares surged 180.7% following the FDA's Orphan Drug designation for its investigational candidate MB-101, aimed at treating rare brain cancers such as recurrent diffuse and anaplastic astrocytoma and glioblastoma [1][4] Group 1: FDA Orphan Drug Designation - The FDA's Orphan Drug designation is granted to drugs for rare diseases affecting fewer than 200,000 people in the U.S., encouraging innovation in unmet medical needs [2] - MB-101, an IL13Rα2-targeted CAR-T cell immunotherapy, is currently in a phase I study for recurrent/refractory GBM patients [1][4] Group 2: Market and Financial Implications - Drugs with Orphan status receive various incentives, including tax credits for clinical study costs, waivers of prescription drug user fees, and seven years of market exclusivity for the designated condition [3] - Year-to-date, Mustang Bio's shares have declined 62.3%, contrasting with a 1.9% decline in the industry [3] Group 3: Clinical Development and Future Plans - MB-101 has shown durable responses in its phase I GBM study, with 50% of patients achieving stable disease or better, including two complete responses lasting 7.5 and over 66 months [7] - Mustang Bio plans to initiate a phase I study of a combination therapy, MB-109, in 2026, pending financing or partnership [8][9] - The company also has another candidate, MB-108, which received Orphan Drug status last year and is being evaluated in a separate phase I study for GBM [6]

Company Overview - Mustang Bio's stock surged by 329% to $5.11 following FDA approval for its experimental treatment MB-101, with a weekly increase exceeding 400% [1][3] - The company is developing cell therapies for aggressive brain cancers, focusing on CAR T treatments licensed from research institutions [8] FDA Approval and Orphan Drug Designation - The FDA granted orphan drug designation to MB-101, which targets recurrent diffuse and anaplastic astrocytoma and glioblastoma, providing significant advantages such as tax credits and seven years of market exclusivity upon final approval [3][4] - The FDA's approval applies to a broader patient group than initially proposed by Mustang [4] Clinical Trials and Treatment Efficacy - MB-101 is a CAR T-cell therapy targeting IL13Ra2, with a Phase 1 trial showing that 50% of patients achieved disease stabilization or better, including two complete responses lasting 7.5 months or longer [5] - Mustang is also developing MB-109, a combination therapy, with both treatments currently in Phase 1 trials at City of Hope and the University of Alabama at Birmingham [6] Financial Situation - The approval comes as a relief for Mustang, which previously indicated potential bankruptcy or other options that could jeopardize shareholder value if additional capital was not raised [7] - As of September 2024, Mustang reported $3.5 million in cash and cash equivalents and an accumulated deficit of $395.8 million [8]

Core Insights - Mustang Bio, Inc. announced that the FDA granted Orphan Drug Designation for MB-101, a CAR-T cell therapy, for the treatment of recurrent diffuse and anaplastic astrocytoma and glioblastoma [1][3] - The combination of MB-101 and MB-108 is expected to enhance treatment efficacy by reshaping the tumor microenvironment [3][5] - Preclinical data supports the potential of this combination therapy to optimize clinical results for patients with recurrent glioblastoma [1][3] Company Developments - Mustang Bio is focused on developing innovative cell therapies for difficult-to-treat cancers and has partnered with leading medical institutions [7] - The company is currently conducting Phase 1 clinical trials for both MB-101 and MB-108, with ongoing patient enrollment [3][4] - The successful development of the MB-109 program, which combines MB-101 and MB-108, is contingent upon securing additional funding or strategic partnerships [4] Regulatory Insights - Orphan Drug Designation provides incentives such as tax credits for clinical trials and seven years of market exclusivity for the designated disease [2] - The designation for MB-101 is broader than initially proposed, indicating strong validation for the company's scientific approach [3]

PART I. FINANCIAL INFORMATION [Unaudited Financial Statements](index=8&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) Mustang Bio's Q1 2025 saw cash increase to **$14.2 million** and net loss decrease, despite ongoing going concern doubts [Balance Sheets](index=8&type=section&id=Balance%20Sheets) The balance sheet reflects a significant increase in cash and total assets, with a shift to positive stockholders' equity Balance Sheet Summary (Unaudited, in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $14,231 | $6,839 | | Total current assets | $14,909 | $8,606 | | **Total Assets** | **$14,909** | **$9,308** | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $11,150 | $12,609 | | Total Liabilities | $11,300 | $13,181 | | Total Stockholders' Equity | $3,609 | $(3,873) | | **Total Liabilities and Stockholders' Equity** | **$14,909** | **$9,308** | [Statements of Operations](index=9&type=section&id=Statements%20of%20Operations) The statements of operations show a substantial reduction in total operating expenses and net loss for the quarter Statements of Operations Summary (Unaudited, in thousands) | | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Research and development | $(964) | $3,804 | | General and administrative | $1,217 | $1,427 | | **Total operating expenses** | **$253** | **$5,231** | | **Loss from operations** | **$(253)** | **$(5,231)** | | **Net Loss** | **$(153)** | **$(5,191)** | | Net loss per share, basic and diluted | $(0.05) | $(24.81) | [Statements of Cash Flows](index=11&type=section&id=Statements%20of%20Cash%20Flows) Cash flow statements indicate a significant increase in cash from financing activities, offsetting operating cash usage Cash Flow Summary (Unaudited, in thousands) | | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,389) | $(5,321) | | Net cash from investing activities | $1,165 | $— | | Net cash provided by financing activities | $7,616 | $49 | | **Net change in cash** | **$7,392** | **$(5,272)** | | Cash at end of period | $14,231 | $1,712 | [Notes to Unaudited Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Financial%20Statements) Key notes detail a reverse stock split, going concern doubts, lease termination gain, and recent equity financing - The company executed a **1-for-50 reverse stock split** effective January 15, 2025. All share and per-share data have been retroactively adjusted[30](index=30&type=chunk)[31](index=31&type=chunk) - Management has concluded that **substantial doubt exists about the Company's ability to continue as a going concern** for at least 12 months from the issuance date of the financial statements, due to expected operating losses and the need for additional funding[35](index=35&type=chunk)[36](index=36&type=chunk) - In February 2025, the company terminated its Plantation Street Facility lease, resulting in a **net gain of $0.4 million** recorded in R&D expense, and sold the remaining equipment for approximately **$1.2 million**[48](index=48&type=chunk) - In February 2025, the company raised approximately **$6.8 million in net proceeds** from a best efforts public offering of common stock and warrants[52](index=52&type=chunk)[53](index=53&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses CAR T pipeline, recent financing, and cost reductions, while acknowledging ongoing going concern limitations [Overview and Pipeline](index=24&type=section&id=Overview%20and%20Pipeline) The company focuses on clinical-stage CAR T therapies for hematologic malignancies, autoimmune diseases, and solid tumors - Mustang Bio is a clinical-stage biopharmaceutical company focused on **CAR T therapies** for hematologic malignancies, autoimmune diseases, and solid tumors[84](index=84&type=chunk)[85](index=85&type=chunk) - The company is exploring an investigator-sponsored trial for **MB-109** (MB-101 CAR T + MB-108 oncolytic virus) for glioblastoma, potentially starting in **Q1 2026**[88](index=88&type=chunk)[92](index=92&type=chunk) - The company is focusing development of **MB-106** (CD20-targeted CAR T) on autoimmune diseases, with a potential investigator-sponsored trial initiation in **Q1 2026**[90](index=90&type=chunk)[93](index=93&type=chunk) [Recent Developments and Financing](index=26&type=section&id=Recent%20Developments%20and%20Financing) Recent developments include a reverse stock split, facility lease termination, and a public offering to regain Nasdaq compliance - On January 15, 2025, the company effected a **1-for-50 reverse stock split** to regain compliance with Nasdaq's minimum bid price requirement[96](index=96&type=chunk)[104](index=104&type=chunk) - In February 2025, the company terminated its Worcester, MA facility lease, sold remaining equipment to AbbVie for **$1.0 million**, and relocated its headquarters[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk) - The company regained compliance with Nasdaq's minimum stockholders' equity rule following a February 2025 public offering that raised **net proceeds of approximately $6.8 million**[105](index=105&type=chunk)[108](index=108&type=chunk) - During Q1 2025, the company raised **gross proceeds of $0.6 million** under its At-the-Market (ATM) offering agreement[111](index=111&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Operating results show a significant decrease in total operating expenses and net loss due to cost-saving measures Comparison of Operations for the Three Months Ended March 31 (in thousands) | | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development | $(964) | $3,804 | $(4,768) | (125)% | | General and administrative | $1,217 | $1,427 | $(210) | (15)% | | **Total operating expenses** | **$253** | **$5,231** | **$(4,978)** | **(95)%** | | **Net Loss** | **$(153)** | **$(5,191)** | **$5,038** | **(97)%** | - The **$4.8 million decrease in R&D expenses** was primarily due to cost-saving actions from 2024, including workforce reduction and clinical trial closures. The figure for Q1 2025 includes a **$0.7 million savings** from settling aged payables and a **$0.4 million net gain** from the termination of the Plantation Street Facility lease, resulting in a credit for the quarter[119](index=119&type=chunk) - General and administrative expenses decreased by **$0.2 million**, mainly due to lower consulting and professional services costs, partially offset by an increase in non-cash stock-based compensation[120](index=120&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is characterized by **$14.2 million** cash, an accumulated deficit, and substantial going concern doubt - As of March 31, 2025, the company had cash and cash equivalents of **$14.2 million** and an accumulated deficit of **$396.9 million**[122](index=122&type=chunk) - There is **substantial doubt** about the company's ability to continue as a going concern for the next 12 months, dependent on raising additional capital[123](index=123&type=chunk) - The company is subject to the SEC's **"baby shelf rules,"** which limits the amount of funds it can raise through its Form S-3 registration statement to **one-third of its public float** in any 12-month period, as its public float is below **$75 million**[124](index=124&type=chunk) [Quantitative and Qualitative Disclosures About Market Risks](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risks) The company is a smaller reporting company and is not required to provide this information - As a smaller reporting company, Mustang Bio is **not required to provide information** under this item[134](index=134&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the principal executive and financial officer, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2025. There were no material changes in internal control over financial reporting during the quarter - Based on an evaluation as of March 31, 2025, the company's principal executive and financial officer concluded that **disclosure controls and procedures are effective**[135](index=135&type=chunk) - No **material changes** to internal control over financial reporting occurred during the most recent quarter[136](index=136&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no legal proceedings - None[137](index=137&type=chunk) [Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) The company faces substantial financial, operational, and strategic risks, including going concern doubts, unproven products, and third-party reliance [Risks Related to Our Finances and Capital Requirements](index=36&type=section&id=Risks%20Related%20to%20Our%20Finances%20and%20Capital%20Requirements) The company faces significant financial risks, including a history of losses, going concern doubts, and limited capital raising ability - The company has a history of significant losses, with an accumulated deficit of **$396.9 million** as of March 31, 2025, and expects to incur losses for the foreseeable future[140](index=140&type=chunk) - There is **substantial doubt** about the company's ability to continue as a going concern, as it will need to raise additional funding which may not be available on acceptable terms[143](index=143&type=chunk)[144](index=144&type=chunk) - The company's ability to raise funds is limited by SEC **"baby shelf rules,"** restricting sales under its Form S-3 to **one-third of its public float** (which is under **$75 million**) in any 12-month period[157](index=157&type=chunk)[159](index=159&type=chunk) [Risks Related to Our Business Strategy, Structure, and Organization](index=45&type=section&id=Risks%20Related%20to%20Our%20Business%20Strategy%2C%20Structure%2C%20and%20Organization) The company's success depends heavily on unproven CAR T product candidates, potentially limiting other opportunities - The company's future success is heavily dependent on its **CAR T product candidates**, which are based on a relatively new and unproven approach to cancer treatment that presents significant challenges[168](index=168&type=chunk)[173](index=173&type=chunk) - As a company with limited resources, it may forgo or delay opportunities with other product candidates that could prove to have greater commercial potential[176](index=176&type=chunk) [Risks Inherent in Drug Development and Commercialization](index=48&type=section&id=Risks%20Inherent%20in%20Drug%20Development%20and%20Commercialization) Drug development faces risks including costly clinical trials, uncertain regulatory approval, potential side effects, and market acceptance challenges - Clinical trials are expensive, time-consuming, and may be delayed or suspended for numerous reasons, including difficulty enrolling patients, which could increase costs and hinder regulatory approval[178](index=178&type=chunk)[182](index=182&type=chunk) - Product candidates are subject to extensive and uncertain regulation by the FDA and other authorities, and there is **no guarantee of receiving approval**[186](index=186&type=chunk)[189](index=189&type=chunk) - Serious or unacceptable side effects identified during development could lead to the abandonment or limitation of product candidates[200](index=200&type=chunk) - Even if approved, product candidates may not achieve **broad market acceptance** among physicians, patients, and payors, which would limit revenues[218](index=218&type=chunk) [Risks Related to Reliance on Third Parties](index=68&type=section&id=Risks%20Related%20to%20Reliance%20on%20Third%20Parties) The company heavily relies on third parties for preclinical studies, clinical trials, and manufacturing, posing risks to development and supply - The company relies on third parties, such as CROs and licensors (COH, Fred Hutch), to conduct preclinical studies and clinical trials, and these parties may not perform satisfactorily[231](index=231&type=chunk)[237](index=237&type=chunk) - The company contracts with third parties for the manufacturing of its product candidates, which increases risks related to supply sufficiency, cost, regulatory compliance (cGMP), and potential delays[238](index=238&type=chunk)[243](index=243&type=chunk) - The company relies on third parties for all aspects of its LV vector production, and any failure by these parties could delay or halt development and commercialization[246](index=246&type=chunk)[248](index=248&type=chunk) [Risks Relating to Legislation and Regulation Affecting the Biopharmaceutical and Other Industries](index=74&type=section&id=Risks%20Relating%20to%20Legislation%20and%20Regulation%20Affecting%20the%20Biopharmaceutical%20and%20Other%20Industries) The company is subject to healthcare reform and anti-kickback laws, potentially increasing costs and limiting profitability - The company is subject to healthcare reform measures, such as the ACA and the Inflation Reduction Act (IRA), which could increase compliance costs, constrain pricing, and adversely affect its ability to market products profitably[255](index=255&type=chunk)[257](index=257&type=chunk)[258](index=258&type=chunk) - Business relationships with healthcare providers and payors are subject to anti-kickback, fraud and abuse, and other healthcare laws, which could expose the company to significant penalties if violations occur[264](index=264&type=chunk)[266](index=266&type=chunk) [Risks Related to Intellectual Property and Potential Disputes Thereof](index=81&type=section&id=Risks%20Related%20to%20Intellectual%20Property%20and%20Potential%20Disputes%20Thereof) Intellectual property risks include challenges in obtaining and maintaining patents, reliance on licensors, and potential costly lawsuits - The company's success depends on its ability to obtain and maintain patent protection, which is an uncertain, expensive, and time-consuming process[271](index=271&type=chunk)[276](index=276&type=chunk) - The company depends on its licensors (e.g., COH, Fred Hutch) to maintain and enforce the intellectual property covering its product candidates, and has limited control over their actions[280](index=280&type=chunk)[281](index=281&type=chunk) - The company may become involved in costly lawsuits to protect its patents or defend against claims that it infringes on the intellectual property rights of third parties[286](index=286&type=chunk)[287](index=287&type=chunk) [Risks Relating to Our Control by Fortress](index=93&type=section&id=Risks%20Relating%20to%20Our%20Control%20by%20Fortress) Fortress Biotech's majority control creates potential conflicts of interest and dilutive stock issuances for other shareholders - Fortress Biotech controls a voting majority of the company's common stock, allowing it to influence all matters requiring stockholder approval, which may create conflicts of interest[297](index=297&type=chunk) - Fortress has the right to receive significant annual stock grants, which will dilute the holdings of other common stockholders[298](index=298&type=chunk) [General Risks and Risks Associated with Ownership of our Common Stock](index=94&type=section&id=General%20Risks%20and%20Risks%20Associated%20with%20Ownership%20of%20our%20Common%20Stock) General risks include cyber-attacks, stock price volatility, and the ongoing risk of Nasdaq delisting despite recent compliance - The company's business is vulnerable to computer system failures and cyber-attacks, which could result in the loss of confidential information, disrupt development programs, and cause reputational harm[301](index=301&type=chunk)[303](index=303&type=chunk) - The market price of the company's common stock has been and may continue to be volatile[321](index=321&type=chunk) - The company recently regained compliance with Nasdaq's listing requirements but is subject to a one-year monitoring period and faces the risk of future delisting if it fails to maintain compliance[329](index=329&type=chunk)[330](index=330&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=103&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) On January 1, 2025, the company issued 69,046 shares of its common stock to Fortress Biotech as an Annual Stock Dividend, representing 2.5% of its fully-diluted outstanding equity as of December 31, 2024. The issuance was exempt from registration under the Securities Act - On January 1, 2025, the company issued **69,046 shares of common stock** to Fortress as an Annual Stock Dividend, representing **2.5% of the company's fully-diluted equity**. This was deemed exempt from registration under Section 4(a)(2) of the Securities Act[331](index=331&type=chunk)[332](index=332&type=chunk) [Defaults Upon Senior Securities](index=103&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[333](index=333&type=chunk) [Mine Safety Disclosures](index=103&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reported no mine safety disclosures - None[334](index=334&type=chunk) [Other Information](index=103&type=section&id=Item%205.%20Other%20Information) During the first quarter of 2025, none of the company's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No directors or officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended March 31, 2025[335](index=335&type=chunk) [Exhibits](index=104&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including agreements related to asset sales, corporate governance documents, warrant forms, securities purchase agreements, and officer certifications

Financial Performance and Condition - The company incurred net losses of $51.6 million and $15.8 million for the years ended December 31, 2023, and 2024, respectively, with an accumulated deficit of $396.7 million as of December 31, 2024[157]. - As of December 31, 2024, the company's cash and cash equivalents were $6.8 million, raising substantial doubt about its ability to continue as a going concern for the next year[162]. - The company has not generated any revenue from its development stage products and does not expect to do so in the foreseeable future[156]. - The company anticipates significant fluctuations in its financial condition and operating results from quarter to quarter and year to year[169]. - The company will require substantial additional funding to advance its product candidates and may not be able to secure this funding on acceptable terms[171]. - The company has a limited operating history since its inception in March 2015, making it difficult to evaluate its business and prospects[167]. - The company reported a stockholders' deficit of $3.7 million as of December 31, 2024, indicating non-compliance with Nasdaq's minimum stockholders' equity requirement of $2.5 million[351]. - The company received a deficiency letter from Nasdaq on March 13, 2024, regarding non-compliance with the Equity Rule, with a plan submitted to regain compliance by April 29, 2024[351]. - The company was granted an extension until September 9, 2024, to demonstrate compliance with the Equity Rule but failed to do so[352]. - A hearing was requested on September 17, 2024, to address the potential delisting from Nasdaq due to continued non-compliance[353]. - The company was notified on May 16, 2024, of non-compliance with the Bid Price Rule, requiring a closing bid price of at least $1.00 per share for ten consecutive business days by November 12, 2024[354]. - The Panel granted an extension to demonstrate compliance with the Equity Rule through February 18, 2025, and the Bid Price Rule through January 31, 2025[355]. - The company completed a public offering on February 10, 2025, raising approximately $6.9 million, which helped in regaining compliance with the Equity Rule[356]. - The company is now subject to mandatory monitoring by the Panel for one year following the compliance notification on February 26, 2025[356]. - If the company fails to maintain compliance with Nasdaq's continued listing rules, it may face delisting, which could adversely affect stockholder liquidity and confidence[357]. - A delisting could also hinder the company's ability to obtain financing and may result in increased price volatility for its common stock[357]. Regulatory and Compliance Risks - The company faces risks related to the development and commercialization of CAR T products, which are expensive and may not generate meaningful revenues until marketing approval is obtained[161]. - The company is subject to SEC regulations limiting the amount of funds it can raise through public offerings, which may impact its ability to secure necessary capital[175]. - The company incurs significant increased costs due to compliance with the Sarbanes-Oxley Act, impacting legal and financial compliance costs[183]. - The company is classified as a "smaller reporting company," with reduced disclosure requirements until certain thresholds are met, including $250 million in non-affiliate common shares or $100 million in annual revenues[185]. - The company must navigate complex regulatory requirements and may need to amend clinical trial protocols, impacting costs and timelines[204]. - The regulatory approval process for product candidates is uncertain and expensive, often taking many years to complete[207]. - The FDA may delay, limit, or deny approval for various reasons, including disagreement with trial design or insufficient data demonstrating safety and efficacy[208]. - Approval procedures vary among foreign markets, which may involve additional testing and administrative reviews, potentially leading to significant delays[210]. - Regulatory approvals are limited to specific indications and conditions for which safety and efficacy have been demonstrated, affecting marketing capabilities[211]. - Off-label promotion is restricted, and non-compliance with FDA regulations could result in severe penalties, including product recalls[212]. - Manufacturing processes must comply with stringent regulations, and any failure could delay commercialization or lead to revenue loss[213]. - The FDA may require costly post-marketing studies or clinical trials to monitor product safety and efficacy after approval[223]. - Public concern regarding drug safety could lead to unfavorable labeling changes or additional regulatory scrutiny[228]. - Delays in patient enrollment for clinical trials could hinder the receipt of necessary regulatory approvals[229]. - The company must obtain FDA approval for any proposed product brand names, and delays in this process could adversely impact business[226]. - The company faces significant delays in clinical trial patient enrollment, which could increase development costs and limit financing opportunities[230]. - The company faces risks related to third-party manufacturers, including potential delays and compliance issues that could impact the development and commercialization of product candidates[260][265]. - The company is subject to regulatory compliance risks, including potential sanctions for non-compliance with cGMP regulations by third-party manufacturers[265]. - Compliance with healthcare laws and regulations may expose the company to significant civil, criminal, and administrative penalties, impacting future earnings[286]. - Relationships with healthcare providers and payors may be constrained by fraud and abuse laws, affecting marketing and distribution strategies[287]. Market and Competitive Risks - The company currently has no products for sale and is heavily dependent on the success of its product candidates, which are in early-stage clinical trials[190]. - The company has invested significant resources in the acquisition and development of product candidates but has not yet demonstrated the ability to commercialize them successfully[191]. - The development of CAR T technology is a focus area, but it presents significant challenges and uncertainties in commercialization[195]. - Delays in clinical trials could increase costs and hinder the ability to pursue regulatory approval for product candidates[199]. - The company anticipates facing increasing competition from generic versions of branded products, which could impact market acceptance and pricing[234]. - Market acceptance of product candidates is contingent on factors such as efficacy, safety, and third-party reimbursement, which are critical for generating revenue[235]. - The market for certain cancer treatments may be limited, affecting potential sales if the product candidates are only effective for specific cancer types[250]. - Negative public perception and regulatory scrutiny could hinder the commercialization of product candidates and affect business operations[251]. - The company must establish sales and marketing capabilities or partner with third parties to successfully commercialize approved product candidates[245]. - Obtaining adequate coverage and reimbursement from third-party payors is crucial for the commercial success of the company's product candidates[240]. - The company relies on third parties for conducting preclinical studies and clinical trials, which may affect control over these activities and lead to delays[253]. - The company may face challenges in establishing strategic collaborations, which could result in significant resource expenditure without guaranteed financial return[277]. - Competitors may develop alternative formulations that do not infringe on the company's patents, potentially harming the commercial opportunity for its product candidates[233]. Intellectual Property Risks - The company faces risks related to patent protection, which could impair its ability to commercialize technology and products if competitors develop similar offerings[293]. - The patent prosecution process is costly and time-consuming, and failure to secure necessary patents could adversely affect competitive positioning and revenue generation[296]. - The uncertain patent landscape in biotechnology and pharmaceuticals may hinder the company's ability to protect its innovations effectively[297]. - The company relies on a regulatory period of market exclusivity for its biologic product candidates, which is generally 12 years from marketing approval, but this period could be shortened by legislative changes[301]. - The company depends on licensors to maintain and enforce intellectual property rights, with limited control over their resources and strategies[302]. - If licensors fail to maintain patents, the company risks losing patent rights, which could significantly impact its business[303]. - The company may face costly litigation related to intellectual property claims, which could distract management and increase operating losses[309]. - The company in-licenses intellectual property from third parties, and disputes over these agreements could adversely affect product development and commercialization[315]. - The uncertainty surrounding patent litigation could compromise the company's competitive position in the marketplace[309]. - The company may not be able to ensure the protection of its trade secrets, which are difficult to safeguard and could harm its competitive position if disclosed[312]. - The company may face claims regarding the wrongful use of trade secrets by employees or consultants, leading to potential litigation costs[311]. - The scope and validity of the company's patent rights are highly uncertain, with risks of patents being invalidated or interpreted narrowly[307]. Operational and Strategic Risks - The company may need to revise its business plan and strategy due to current funding constraints, potentially leading to delays or discontinuation of research and development programs[166]. - The company is increasingly dependent on information technology systems, which face risks from cyber-attacks and system failures that could disrupt operations[323]. - Health pandemics or epidemics, such as COVID-19, could disrupt operations, delay research and development, and negatively impact productivity[331]. - Economic and geopolitical conditions, including trade policies and conflicts, could materially affect the company's operations and financial condition[332][333]. - Attracting and retaining key personnel is critical, as competition for qualified management and scientific personnel is intense[334]. - Misconduct by employees or third-party partners could lead to regulatory noncompliance and significant reputational harm[335][337]. - Unauthorized disclosures of proprietary information could result in monetary damages and harm strategic initiatives[338]. - Legislative changes, such as the ACA and the IRA, could increase costs and limit pricing flexibility, adversely affecting profitability and growth prospects[278][280]. - Future healthcare reforms could limit government payments for healthcare products, resulting in reduced demand and pricing pressures for the company's products[282]. - Future healthcare reforms may impose stricter coverage criteria and downward pressure on product pricing, potentially affecting revenue generation and profitability[283]. - Changes in FDA funding could hinder the agency's ability to hire key personnel, impacting the timely development and commercialization of new products[284]. - Disruptions at the FDA, including government shutdowns, may delay the review and approval of new drugs, adversely affecting business operations[285].

Group 1 - Mustang Bio, Inc. has regained compliance with Nasdaq's minimum stockholders' equity requirement as per Nasdaq Listing Rule 5550(b)(1) [1][2] - The company previously satisfied the minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2) for continued listing, thus meeting all Nasdaq Capital Market listing requirements [2] - Mustang Bio is a clinical-stage biopharmaceutical company focused on developing cell therapies for difficult-to-treat cancers, aiming to license or acquire technologies to fund research and development [3] Group 2 - Mustang Bio has partnered with leading medical institutions to advance CAR-T therapies [3] - The company's common stock is registered under the Securities Exchange Act of 1934 and it files periodic reports with the SEC [3]

Core Viewpoint - Mustang Bio, Inc. has exited its lease for a manufacturing facility in Worcester, Massachusetts, and divested certain fixed assets to AbbVie for $1.0 million, while relocating its corporate headquarters to Waltham, Massachusetts [1][2]. Group 1: Financial Implications - The termination of the lease is expected to result in approximately $2.0 million in cash expense savings over the next 24 months [2]. - The divestment of fixed assets to AbbVie Bioresearch Center Inc. was completed for a total of $1.0 million [1]. Group 2: Strategic Focus - The company remains committed to advancing its existing portfolio and plans to initiate a novel clinical trial with MB-109, targeting recurrent glioblastoma and high-grade astrocytomas in the second half of 2025 [3]. - MB-109 is a combination therapy that includes MB-101 (IL13Rα2-targeted CAR-T cell therapy) and MB-108 (HSV-1 oncolytic virus), aimed at enhancing the efficacy of CAR-T cell therapy by modifying the tumor microenvironment [4]. Group 3: Company Overview - Mustang Bio is a clinical-stage biopharmaceutical company focused on developing cell therapies for difficult-to-treat cancers, partnering with leading medical institutions to advance CAR-T therapies [5].

Core Points - Mustang Bio, Inc. has regained compliance with Nasdaq's minimum bid price requirement for continued listing [1] - The company believes it has at least $2.5 million in stockholders' equity following a public offering, meeting Nasdaq's continued listing requirement [2] - Mustang Bio is a clinical-stage biopharmaceutical company focused on cell therapies for difficult-to-treat cancers, partnering with leading medical institutions for CAR-T therapy development [3]

Core Insights - Mustang Bio, Inc. announced that the FDA granted Orphan Drug Designation for MB-108, a herpes simplex virus type 1 (HSV-1) oncolytic virus, for the treatment of malignant glioma, which could provide additional market exclusivity [1][3] - The company is advancing a novel combination therapy of MB-108 and MB-101 (IL13Rα2-targeted CAR-T cell therapy) aimed at improving treatment outcomes for patients with recurrent glioblastoma and high-grade astrocytomas [1][3] - Preclinical data supports the combination therapy's potential to reshape the tumor microenvironment, making cold tumors "hot" and enhancing the efficacy of CAR-T cell therapy [3][5] Company Overview - Mustang Bio is a clinical-stage biopharmaceutical company focused on developing cell therapies for difficult-to-treat cancers, aiming to translate medical breakthroughs into potential cures [6] - The company has partnered with leading medical institutions to advance CAR-T therapies and is actively seeking to raise additional funding or form strategic partnerships to further develop its programs [4][6] Clinical Development - The ongoing Phase 1 clinical trials for MB-101 and MB-108 are enrolling patients, with previous data indicating that the therapies were well tolerated in patients with recurrent glioblastoma [3][5] - The combination therapy aims to leverage MB-108 to enhance the infiltration and activation of MB-101 CAR-T cells within the tumor mass, potentially leading to improved tumor cell killing [5]