Fulfilling the Promise of Gene Therapies for Central Nervous System Disorders 39th Annual J.P. Morgan Healthcare Conference Bruce Goldsmith, PhD | CEO NASDAQ GS: PASG January 11, 2021 Forward-Looking Statement This presentation includes "forward-looking statements" within the meaning of, and made pursuant to the safe harbor provisions of, the Private Securities Litigation Reform Act of 1995, including, but not limited to: our expectation about timing and execution of anticipated milestones, including our pl ...

Passage Bio Corporate Presentation NOVEMBER 2020 Forward-Looking Statements This presentation includes "forward-looking statements" within the meaning of, and made pursuant to the safe harbor provisions of, the Private Securities Litigation Reform Act of 1995, including, but not limited to: our expectation about timing and execution of anticipated milestones, including our planned IND submissions and initiation of clinical trials; our expectations about our collaborators' and partners' ability to execute ke ...

Financial Data and Key Metrics Changes - The company ended the quarter with cash, cash equivalents, and marketable securities of approximately $336 million, compared to $159 million as of December 31, 2019, indicating strong financial health [36] - R&D expenses were $20.8 million for the quarter ended September 30, compared to $10.4 million for the same quarter in 2019, primarily due to increased clinical manufacturing and development costs [37] - G&A expenses increased to $7.8 million for the quarter ended September 30, compared to $1.2 million for the same quarter in 2019, driven by personnel-related costs and professional fees [39] - The net loss was $28.5 million for the third quarter of 2020, compared to $11.4 million in the same quarter of 2019, with a net loss per share of $0.63 compared to $2.02 in the prior year [40] Business Line Data and Key Metrics Changes - The company is focused on three lead programs: PBGM01 for GM1 gangliosidosis, PBFT02 for frontotemporal dementia, and PBKR03 for Krabbe disease, with plans to initiate clinical trials in early 2021 [10][25] - PBGM01 has received orphan drug and rare pediatric disease designations in the U.S. and orphan disease designation in Europe, highlighting its potential in addressing unmet medical needs [19][31] Market Data and Key Metrics Changes - The incidence of GM1 is predicted to be about 0.5 in 100,000 live births, translating to approximately 50 patients potentially diagnosed per year [58] - The company is actively engaging with patient advocacy groups and initiatives like the New York ScreenPlus pilot program to enhance patient identification and support for GM1 and Krabbe disease [22][54] Company Strategy and Development Direction - The company aims to provide life-transforming gene therapies for patients with rare, monogenic CNS diseases, leveraging partnerships with leading research institutions [8][9] - The completion of a dedicated GMP manufacturing suite is a strategic milestone to secure control of the supply chain and support clinical and commercial success [33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in addressing FDA concerns regarding biocompatibility and anticipates initiating the Phase 1/2 trial for PBGM01 in the first quarter of 2021 [14][44] - The company is preparing for clinical trial initiations for FTD and Krabbe programs in the first half of 2021, with ongoing efforts to expand clinical manufacturing and operations teams [45] Other Important Information - The company has a robust pipeline with a total of 17 programs focused on rare, monogenic disorders of the CNS, supported by a strong financial position [11] - Recent preclinical data supports the potential of PBGM01 as a treatment for GM1, showing improvements in neurological function and increased survival in animal models [23] Q&A Session Summary Question: Plans for Invitae collaboration regarding Krabbe disease - Management indicated that while Krabbe is not currently included in the New York ScreenPlus, there are ongoing pilot programs in multiple states for Krabbe screening [54] Question: Expected patient identification from Invitae partnership - The company estimates that the incidence of GM1 is around 50 patients per year, but recognizes that underdiagnosis may increase this number through enhanced awareness and testing initiatives [58][59] Question: Impact of FDA discussions on filing plans for other diseases - Management confirmed that IND submissions for FTD and Krabbe are planned for early 2021, following the resolution of the clinical hold for GM1 [63]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ⌧ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 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: 001-39231 PASSAGE BIO, INC. (Exact Name of Registrant as Specified in its Charter) Delaware ...

Financial Data and Key Metrics Changes - The company ended the quarter with cash and cash equivalents of approximately $353 million, compared to $159 million as of December 31, 2019, indicating a strong cash position expected to fund operations into 2023 [38] - R&D expenses increased to $19.9 million for the quarter ended June 30, compared to $6.3 million for the same quarter in 2019, primarily due to increased clinical manufacturing costs and preparation for clinical trials [39] - G&A expenses rose to $7.4 million for the quarter ended June 30, compared to $1 million for the same quarter in 2019, driven by increased personnel-related costs and expanded operations [40] - The net loss for the second quarter of 2020 was $27.2 million, compared to $13.4 million in the same quarter of 2019, with a net loss per share of $0.60 compared to $3.19 in the prior year [42] Business Line Data and Key Metrics Changes - The company is advancing its lead program PBGM01 for the treatment of infantile GM1 gangliosidosis, with an IND submission to the FDA in June 2020, although it is currently on clinical hold due to device biocompatibility concerns [12][14] - The company is preparing for clinical trials for its other programs, including PBFT02 for frontotemporal dementia and PBKR03 for infantile Krabbe disease, with plans to initiate trials in the first half of 2021 [28][35] Market Data and Key Metrics Changes - The company is focused on rare, monogenetic CNS disorders, which represent a significant unmet medical need, and is working to establish a global clinical supply chain for its gene therapy programs [25][27] Company Strategy and Development Direction - The company aims to build a premier gene therapy company focused on rare CNS disorders and is expanding its internal team to enhance clinical and manufacturing capabilities [8][10] - The strategy includes securing a dedicated manufacturing suite to control the supply chain and support clinical and commercial success [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in addressing FDA concerns regarding the biocompatibility of the delivery device and anticipates enrolling the first patient in the Phase 1/2 trial of PBGM01 by late 2020 or early 2021 [17][46] - The company remains on track to report initial biomarker and safety data in the first half of 2021 and is excited about the potential of its pipeline candidates [47] Other Important Information - The company has secured clinical stage manufacturing capacity and is working with external experts to evaluate options for additional risk assessment and testing related to the FDA's clinical hold [16][25] Q&A Session Summary Question: Clarification on the proposed ICM device components and FDA discussions - Management clarified that the components of the proposed ICM device are similar to those used in other clinical studies, and the current discussions with the FDA are specific to the GM1 IND filing [51][53] Question: Competitive dynamics of the FTD program - Management highlighted differentiation in their FTD program through the use of AAV1, which can significantly increase progranulin levels compared to other approaches, potentially stabilizing the disease [58][61] Question: Immunosuppression plans for clinical trials - Management indicated that a prophylactic immunosuppression regimen will begin with steroid treatment, with adjustments possible based on emerging data from ongoing studies [66][68] Question: Additional testing required by the FDA - Management noted that the additional testing relates to biocompatibility and that they are preparing for various risk assessments and testing as required by the FDA [70][71] Question: DRG or sensory testing in the Phase 1/2 trial - Management confirmed that they will monitor nerve conduction in the GM1 study to detect any changes, following assessments in non-human primates [73]

Part I. Financial Information [Item 1. Interim Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Interim%20Financial%20Statements%20%28Unaudited%29) Unaudited interim financial statements for June 30, 2020, reflect asset growth from the March 2020 IPO, continued net losses, and increased operating expenses [Balance Sheets](index=4&type=section&id=Balance%20Sheets) The balance sheets show a substantial increase in cash and total assets, driven by the IPO, and a shift from deficit to equity Balance Sheet Summary (as of June 30, 2020 vs. December 31, 2019) | Metric | June 30, 2020 (in thousands) | December 31, 2019 (in thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $353,423 | $158,874 | | Total current assets | $368,230 | $165,775 | | Total assets | $378,097 | $178,613 | | **Liabilities & Equity** | | | | Total current liabilities | $14,134 | $3,681 | | Total liabilities | $14,701 | $4,261 | | Total convertible preferred stock | $0 | $230,605 | | Total stockholders' equity (deficit) | $363,396 | $(56,253) | - The significant increase in cash and cash equivalents from **$158.9 million** to **$353.4 million** is primarily due to the net proceeds from the company's **IPO in March 2020**[14](index=14&type=chunk)[29](index=29&type=chunk) - All convertible preferred stock was converted to common stock upon the IPO, resulting in a shift from a stockholders' deficit of **$56.3 million** to a stockholders' equity of **$363.4 million**[14](index=14&type=chunk)[19](index=19&type=chunk) [Statements of Operations](index=5&type=section&id=Statements%20of%20Operations) Statements of operations show increased R&D and G&A expenses, leading to higher net losses for the three and six months ended June 30, 2020 Statements of Operations Summary (Unaudited) | Metric (in thousands) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $19,902 | $6,299 | $33,019 | $9,332 | | General and administrative | $7,402 | $968 | $12,197 | $2,122 | | Loss from operations | $(27,304) | $(7,767) | $(45,216) | $(11,954) | | Net loss | $(27,172) | $(13,426) | $(44,757) | $(21,095) | | Net loss per share | $(0.60) | $(3.19) | $(1.42) | $(5.02) | - Research and development expenses for the six months ended June 30, 2020, increased to **$33.0 million** from **$9.3 million** in the prior year period, driven by preparations for IND filings and clinical trials[17](index=17&type=chunk)[127](index=127&type=chunk) - General and administrative expenses for the six months ended June 30, 2020, rose to **$12.2 million** from **$2.1 million** year-over-year, primarily due to increased headcount and costs associated with operating as a public company[17](index=17&type=chunk)[131](index=131&type=chunk) [Statements of Cash Flows](index=8&type=section&id=Statements%20of%20Cash%20Flows) Cash flow statements highlight a significant increase in cash from financing activities, primarily the IPO, offsetting increased cash used in operations Cash Flow Summary (Six Months Ended June 30) | Metric (in thousands) | 2020 | 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | $(33,566) | $(10,994) | | Net cash used in investing activities | $(193) | $(1,541) | | Net cash provided by financing activities | $228,308 | $66,463 | | **Net increase in cash** | **$194,549** | **$53,928** | - Financing activities provided **$228.3 million** in cash for the first six months of 2020, primarily from the net proceeds of the company's **IPO**[24](index=24&type=chunk)[144](index=144&type=chunk) - Net cash used in operating activities increased to **$33.6 million** for the first six months of 2020, up from **$11.0 million** in the same period of 2019, reflecting the increased net loss and operational scale-up[24](index=24&type=chunk)[141](index=141&type=chunk) [Notes to Unaudited Interim Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Interim%20Financial%20Statements) Notes detail the company's focus on genetic medicines, the impact of its March 2020 IPO, significant financial commitments, and a patent infringement claim - The company is a **genetic medicines company** focused on **rare monogenic CNS diseases**, with a strategic research collaboration with the **University of Pennsylvania's (Penn) Gene Therapy Program (GTP)**[27](index=27&type=chunk) - In **March 2020**, the company closed its **IPO**, raising net proceeds of **$227.5 million**[29](index=29&type=chunk)[67](index=67&type=chunk) - The company has significant commitments, including an amended agreement with Penn requiring **$5.0 million annually** for five years for discovery research, and an annual minimum commitment of **$10.6 million** to Catalent for manufacturing for five years upon validation of the clean room[53](index=53&type=chunk)[59](index=59&type=chunk) - In February 2020, the company received a letter from **Regenxbio Inc.** claiming potential **patent infringement** related to the AAVhu68 capsid and ICM administration method. The company believes it has valid defenses[66](index=66&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's focus on rare CNS genetic disorders, pipeline progress, strengthened financial position from the IPO, and increased R&D and G&A expenses [Overview and Pipeline](index=19&type=section&id=Overview%20and%20Pipeline) The company focuses on genetic medicines for rare CNS disorders, with key programs like PBGM01, PBFT02, and PBKR03 advancing towards clinical trials - The company is focused on developing **genetic medicines** for **rare, monogenic CNS disorders**, leveraging a strategic collaboration with the **University of Pennsylvania's Gene Therapy Program (GTP)**[86](index=86&type=chunk) Development Pipeline and Key Milestones | Program | Indication | Status | Anticipated Milestone | | :--- | :--- | :--- | :--- | | PBGM01 | GM1 Gangliosidosis | IND-enabling | Initiate Phase 1/2 trial in 4Q 2020 - 1Q 2021 | | PBFT02 | Frontotemporal Dementia (FTD-GRN) | IND-enabling | Initiate Phase 1/2 trial in 1H 2021 | | PBKR03 | Krabbe Disease | IND-enabling | Initiate Phase 1/2 trial in 1H 2021 | | PBML04 | Metachromatic leukodystrophy (MLD) | Discovery | - | | PBAL05 | Amyotrophic lateral sclerosis (ALS) | Discovery | - | | PBCM06 | Charcot-Marie-Tooth Type 2A (CMT2A) | Discovery | - | - In July 2020, the FDA placed the IND for **PBGM01** on **clinical hold** pending additional biocompatibility risk assessments of the proposed ICM delivery device. The company is confident it can respond rapidly and expects to initiate the trial in late 2020 or early 2021[89](index=89&type=chunk)[91](index=91&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Results of operations show substantial increases in R&D and G&A expenses for the six months ended June 30, 2020, reflecting operational scale-up - For the six months ended June 30, 2020, R&D expenses increased by **$23.7 million** to **$33.0 million** compared to the same period in 2019. This was driven by increased costs with Penn for IND filings, clinical manufacturing, and higher personnel-related costs[127](index=127&type=chunk) - For the six months ended June 30, 2020, G&A expenses increased by **$10.1 million** to **$12.2 million** year-over-year, primarily due to a **$6.9 million** increase in personnel-related and share-based compensation expense and increased costs of operating as a public company[131](index=131&type=chunk) R&D Expenses by Program (Six Months Ended June 30) | Program (in thousands) | 2020 | 2019 | | :--- | :--- | :--- | | GM1 | $7,509 | $1,522 | | FTD-GRN | $8,563 | $4,261 | | Krabbe | $6,154 | $972 | | MLD | $1,227 | $791 | | ALS | $541 | $686 | | CMT2A | $338 | $0 | | Internal costs, including personnel | $8,687 | $1,100 | | **Total** | **$33,019** | **$9,332** | [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity was significantly bolstered by the March 2020 IPO, providing a cash runway into the first quarter of 2023 - As of June 30, 2020, the company had **$353.4 million** in cash and cash equivalents[134](index=134&type=chunk) - The company received net proceeds of **$227.5 million** from its **IPO** in the first quarter of 2020[134](index=134&type=chunk) - Existing cash and cash equivalents are expected to fund operating expenses and capital expenditure requirements into the **first quarter of 2023**[99](index=99&type=chunk)[134](index=134&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that quantitative and qualitative disclosures about market risk are not applicable, indicating no material exposure - The company states that quantitative and qualitative disclosures about market risk are **not applicable**[152](index=152&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2020, with no material changes in internal control over financial reporting - Management concluded that as of June 30, 2020, the company's disclosure controls and procedures were **effective** at a reasonable assurance level[154](index=154&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[155](index=155&type=chunk) Part II. Other Information [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no current legal proceedings that would have a material adverse effect on its business - The company reports it is **not presently a party** to any legal proceedings that would have a **material adverse effect** on its business[158](index=158&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) The company faces extensive risks including operating losses, need for capital, preclinical development uncertainties, COVID-19 impacts, reliance on third parties, and intellectual property disputes [Risks Related to Financial Position and Need for Additional Capital](index=32&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) The company, a preclinical stage entity, has a history of operating losses and will require substantial additional capital for future development - The company is a **preclinical stage entity** with a history of **operating losses** (**$103.4 million accumulated deficit** as of June 30, 2020) and expects to incur significant losses for the foreseeable future[160](index=160&type=chunk)[161](index=161&type=chunk) - The company will require **substantial additional capital** to complete development and commercialization of its product candidates, and failure to obtain this funding may force delays, limitations, or termination of its programs[166](index=166&type=chunk) [Risks Related to Product Development and Regulatory Approval](index=35&type=section&id=Risks%20Related%20to%20Product%20Development%20and%20Regulatory%20Approval) Product development faces risks from the COVID-19 pandemic, preclinical stage uncertainties, and the novel, unpredictable nature of gene therapy regulatory approval - The **COVID-19 pandemic** could **adversely impact** the business, including preclinical development and planned clinical trials, through delays in operations of regulatory agencies, CROs, and CMOs[173](index=173&type=chunk)[174](index=174&type=chunk) - All product candidates are in **preclinical development**, and their success is **uncertain**. The IND for PBGM01 has been placed on **clinical hold** by the FDA, which must be resolved before the trial can commence[179](index=179&type=chunk)[185](index=185&type=chunk) - Gene therapy is a **novel technology**, making it **difficult to predict** the time and cost of development and regulatory approval. Only a limited number of gene therapy products have been approved to date[196](index=196&type=chunk) [Risks Related to Our Reliance on Third Parties](index=46&type=section&id=Risks%20Related%20to%20Our%20Reliance%20on%20Third%20Parties) The company's reliance on third parties, particularly the University of Pennsylvania for R&D and CROs for clinical trials, poses significant operational risks - The company relies **exclusively on its collaboration** with the **University of Pennsylvania (Penn)** for all preclinical research and development. A failure or termination of this relationship would **materially harm** the business[222](index=222&type=chunk)[223](index=223&type=chunk) - The company will rely on **third-party CROs** to conduct clinical trials, which means important aspects of development programs, including conduct and timing, will be **outside of its direct control**[226](index=226&type=chunk)[228](index=228&type=chunk) [Risks Related to Manufacturing](index=51&type=section&id=Risks%20Related%20to%20Manufacturing) Manufacturing gene therapies is complex, and the company's reliance on third parties like Catalent for supply, without commercial capabilities, presents significant risks - Gene therapies are **complex and difficult to manufacture**. The company relies on third parties like **Catalent** for clinical supply and may face **delays, contamination, or other problems**[245](index=245&type=chunk) - The company has **not yet secured manufacturing capabilities for commercial quantities** and may be unable to negotiate binding agreements with manufacturers on commercially reasonable terms[252](index=252&type=chunk)[253](index=253&type=chunk) [Risks Related to Intellectual Property](index=57&type=section&id=Risks%20Related%20to%20Intellectual%20Property) Intellectual property risks include reliance on in-licensed patent applications, a patent infringement claim from Regenxbio, and potential government 'march-in' rights - The company's intellectual property protection consists solely of **patent applications in-licensed from Penn**, and there is **no assurance** these will mature into issued patents with sufficient scope[279](index=279&type=chunk) - The company received a letter from **Regenxbio Inc.** in February 2020 claiming that the use of the AAVhu68 capsid and ICM administration method infringes on patents licensed to Regenx. An unfavorable outcome could require the company to obtain a license, which may not be available on reasonable terms[303](index=303&type=chunk)[304](index=304&type=chunk) - Intellectual property licensed from Penn may be subject to **federal regulations**, including **"march-in" rights** by the U.S. government, due to being developed with government funding[330](index=330&type=chunk) [Risks Related to Ownership of Our Common Stock](index=77&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) Risks related to common stock ownership include price volatility, significant influence by principal stockholders, and reduced disclosure requirements as an emerging growth company - The company's stock price is likely to be **volatile**, influenced by factors such as clinical trial results, regulatory decisions, and competitor success[381](index=381&type=chunk) - As of June 30, 2020, executive officers, directors, and principal stockholders beneficially owned approximately **38%** of the company's capital stock, giving them **significant influence** over corporate matters[385](index=385&type=chunk) - The company is an **"emerging growth company"** and **"smaller reporting company,"** which allows for **reduced disclosure requirements** that may make its common stock less attractive to some investors[395](index=395&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=83&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered equity sales and confirms its Q1 2020 IPO raised $227.5 million, with no material change in the planned use of proceeds - In **Q1 2020**, the company completed its **IPO**, selling 13,798,900 shares of common stock at $18.00 per share, for net proceeds of approximately **$227.5 million**[410](index=410&type=chunk) - There has been **no material change** in the planned use of proceeds from the IPO as described in the prospectus[411](index=411&type=chunk)

Passage Bio Corporate Presentation JUNE 2020 Forward-Looking Statements This presentation includes "forward-looking statements" within the meaning of, and made pursuant to the safe harbor provisions of, the Private Securities Litigation Reform Act of 1995, including, but not limited to: our expectation about timing and execution of anticipated milestones, including our planned IND submissions and initiation of clinical trials; our expectations about our collaborators' and partners' ability to execute key in ...

PART I. FINANCIAL INFORMATION [Interim Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Interim%20Financial%20Statements%20(Unaudited)) Passage Bio, Inc. reported a net loss for Q1 2020, with cash significantly increasing from its IPO and an accumulated deficit growing [Balance Sheets](index=4&type=section&id=Balance%20Sheets) Balance Sheet Summary (in thousands) | Account | March 31, 2020 (in thousands) | December 31, 2019 (in thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $366,828 | $158,874 | | Total current assets | $382,089 | $165,775 | | Total assets | $392,427 | $178,613 | | **Liabilities & Equity** | | | | Total liabilities | $5,761 | $4,261 | | Total convertible preferred stock | $0 | $230,605 | | Total stockholders' equity (deficit) | $386,666 | $(56,253) | | Total liabilities, convertible preferred stock and stockholders' equity (deficit) | $392,427 | $178,613 | - The company's cash and cash equivalents increased significantly from **$158.9 million** at the end of 2019 to **$366.8 million** as of March 31, 2020, primarily due to its IPO[15](index=15&type=chunk) - Following the IPO in March 2020, all outstanding convertible preferred stock was converted into common stock, resulting in the total convertible preferred stock balance decreasing from **$230.6 million** to zero[15](index=15&type=chunk) [Statements of Operations](index=5&type=section&id=Statements%20of%20Operations) Statements of Operations Summary (in thousands, except per share data) | Account | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :--- | :--- | :--- | | Research and development | $13,117 | $3,033 | | General and administrative | $4,795 | $1,154 | | Loss from operations | $(17,912) | $(4,187) | | Net loss | $(17,585) | $(7,669) | | Net loss per share, basic and diluted | $(1.00) | $(1.83) | - Research and development expenses increased more than fourfold to **$13.1 million** in Q1 2020 from **$3.0 million** in Q1 2019, reflecting intensified development activities[18](index=18&type=chunk) [Statements of Cash Flows](index=7&type=section&id=Statements%20of%20Cash%20Flows) Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | $(21,851) | $(214) | | Net cash used in investing activities | $(99) | $(884) | | Net cash provided by financing activities | $229,904 | $20,157 | | Net increase in cash and cash equivalents | $207,954 | $19,059 | - Financing activities provided **$229.9 million** in cash during Q1 2020, primarily from the net proceeds of the company's IPO[22](index=22&type=chunk) [Notes to Unaudited Interim Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Interim%20Financial%20Statements) - The company is a genetic medicines company focused on rare monogenic central nervous system (CNS) diseases, with key strategic collaborations with the University of Pennsylvania's (Penn) Gene Therapy Program (GTP) and Catalent for manufacturing[25](index=25&type=chunk) - In March 2020, the company completed its IPO, selling **13,798,900 shares** of common stock for net proceeds of **$227.5 million**[27](index=27&type=chunk)[67](index=67&type=chunk) - In May 2020, the company amended its agreement with Penn, committing to fund discovery research at **$5.0 million annually** for five years and increasing its options for additional licensed programs from six to eleven[53](index=53&type=chunk) - The company has an annual minimum commitment of **$10.6 million per year** for five years to Catalent for manufacturing services and use of a dedicated clean room suite[59](index=59&type=chunk) - In February 2020, the company received a letter from Regenxbio Inc. claiming potential patent infringement related to the AAVhu68 capsid and administration method, which the company believes it has valid defenses against[64](index=64&type=chunk)[66](index=66&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's rare CNS disorder focus, pipeline, increased R&D expenses, and strengthened IPO-driven liquidity, with programs on track [Overview and Pipeline](index=18&type=section&id=Overview%20and%20Pipeline) - Passage Bio is a genetic medicines company focused on rare, monogenic CNS disorders, leveraging a strategic research collaboration with the University of Pennsylvania's Gene Therapy Program (GTP)[86](index=86&type=chunk) - The lead product candidates are PBGM01 for GM1 gangliosidosis, PBFT02 for frontotemporal dementia (FTD-GRN), and PBKR03 for Krabbe disease, with IND submissions and Phase 1/2 trials planned for 2020 and early 2021[89](index=89&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk) - The company also has three discovery-stage programs and options to license an additional eleven programs for rare, monogenic CNS indications from Penn[92](index=92&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Comparison of Operating Expenses (in thousands) | Expense Category | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Research and development | $13,117 | $3,033 | $10,084 | | General and administrative | $4,795 | $1,154 | $3,641 | - The **$10.1 million increase** in R&D expenses was primarily due to a **$4.8 million increase** in costs with Penn for IND filing preparations, a **$2.9 million increase** in other research costs for upcoming clinical trials, and a **$2.3 million increase** in personnel-related costs[118](index=118&type=chunk) Research and Development Expenses by Program (in thousands) | Program | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :--- | :--- | :--- | | GM1 | $2,410 | $541 | | FTD-GRN | $3,456 | $1,670 | | Krabbe | $2,252 | $264 | | MLD | $890 | $233 | | ALS | $249 | $153 | | CMT2A | $211 | $0 | | Internal costs, including personnel related | $3,649 | $172 | - General and administrative expenses rose by **$3.6 million**, mainly due to a **$2.2 million increase** in personnel and share-based compensation from increased headcount, and higher professional fees and facility costs[120](index=120&type=chunk)[121](index=121&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) - As of March 31, 2020, the company had **$366.8 million** in cash and cash equivalents and an accumulated deficit of **$76.2 million**[124](index=124&type=chunk) - The company received net proceeds of **$227.5 million** from its IPO in Q1 2020[124](index=124&type=chunk) - Existing cash and cash equivalents are expected to fund operating expenses and capital expenditure requirements into the **first quarter of 2023**[124](index=124&type=chunk) Summary of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :--- | :--- | :--- | | Cash used in operating activities | $(21,851) | $(214) | | Cash used in investing activities | $(99) | $(884) | | Cash provided by financing activities | $229,904 | $20,157 | [Quantitative and Qualitative Disclosures About Market Risk](index=26&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is noted as 'Not applicable', as the company, a smaller reporting entity, is not required to provide this information - The company has indicated that this section is not applicable[141](index=141&type=chunk) [Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2020, with no material changes in internal control over financial reporting - Management concluded that as of March 31, 2020, the company's disclosure controls and procedures were effective at a reasonable assurance level[142](index=142&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[143](index=143&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any legal proceedings that would materially adversely affect its business - The company is not presently a party to any legal proceedings that management believes would have a material adverse effect on the business[146](index=146&type=chunk) [Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) The company faces extensive risks including its preclinical stage, operating losses, need for capital, gene therapy development challenges, third-party dependencies, and intellectual property disputes - The company is a preclinical stage entity with a history of operating losses (**$76.2 million accumulated deficit** as of March 31, 2020) and will require substantial additional funding to advance its product candidates[148](index=148&type=chunk)[149](index=149&type=chunk)[154](index=154&type=chunk) - The COVID-19 pandemic could adversely impact business operations, including preclinical development activities and planned clinical trials, by causing delays in supply chains, regulatory reviews, and patient enrollment[161](index=161&type=chunk)[162](index=162&type=chunk) - The business is critically dependent on its collaboration with the University of Pennsylvania (Penn) for all preclinical research and development, and any failure or termination of this relationship would materially harm the business[212](index=212&type=chunk)[213](index=213&type=chunk) - The company faces intellectual property risks, including a claim from Regenxbio Inc. that the use of the AAVhu68 capsid infringes on its licensed patents, which could require a license or cessation of technology use[297](index=297&type=chunk)[298](index=298&type=chunk) - Gene therapy is a novel and complex technology, making it difficult to manufacture and predict development timelines and costs, with the company relying on third-party manufacturer Catalent for clinical supply[183](index=183&type=chunk)[241](index=241&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=79&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company detailed pre-IPO stock option issuances, preferred stock conversion upon IPO, and the use of **$227.5 million** in net IPO proceeds - Prior to its IPO, the company issued stock options to purchase an aggregate of **3,470,051 shares** of common stock to employees, directors, and consultants under its equity incentive plans[404](index=404&type=chunk) - The IPO in Q1 2020 yielded net proceeds of approximately **$227.5 million** after deducting underwriting discounts, commissions, and other offering expenses[406](index=406&type=chunk) - There has been no material change in the planned use of IPO proceeds as described in the company's prospectus[407](index=407&type=chunk) [Exhibits](index=80&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including key agreements and officer certifications - Key agreements filed as exhibits include the Development Services and Clinical Supply Agreement with Catalent Maryland, Inc. and a new lease agreement for office space in Philadelphia[414](index=414&type=chunk) - The filing includes required certifications from the Principal Executive Officer and Principal Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[415](index=415&type=chunk)