Call Start: 16:30 January 1, 0000 5:30 PM ET REGENXBIO Inc. (NASDAQ:RGNX) Q2 2021 Earnings Conference Call August 9, 2021 16:30 ET Company Participants Patrick Christmas - Chief Legal Officer Ken Mills - President & Chief Executive Officer Steve Pakola - Chief Medical Officer Vit Vasista - Chief Financial Officer Conference Call Participants Alec Stranahan - Bank of America Gena Wang - Barclays Dane Leone - Raymond James Matthew Harrison - Morgan Stanley Luca Issi - RBC Capital Dane Leone - Raymond James Es ...

PART I—FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents REGENXBIO Inc.'s unaudited consolidated financial statements for the quarter ended June 30, 2021 [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet as of June 30, 2021, details the company's financial position, reflecting growth in assets and equity | Account | June 30, 2021 ($ in thousands) | December 31, 2020 ($ in thousands) | | :--- | :--- | :--- | | **Total Current Assets** | 437,387 | 531,197 | | **Total Assets** | **836,402** | **708,164** | | **Total Current Liabilities** | 91,554 | 81,447 | | **Total Liabilities** | **329,157** | **330,411** | | **Total Stockholders' Equity** | **507,245** | **377,753** | [Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the three months ended June 30, 2021, revenues increased, but rising operating expenses resulted in a wider net loss | Metric | Three Months Ended June 30, 2021 ($ in thousands) | Three Months Ended June 30, 2020 ($ in thousands) | | :--- | :--- | :--- | | **Total Revenues** | 22,035 | 16,566 | | **Total Operating Expenses** | 74,261 | 58,399 | | **Loss from Operations** | (52,226) | (41,833) | | **Net Loss** | **(57,639)** | **(33,762)** | | **Net Loss Per Share** | **(1.36)** | **(0.91)** | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2021, net cash used in operations and investing was partially offset by financing activities | Cash Flow Activity | Six Months Ended June 30, 2021 ($ in thousands) | Six Months Ended June 30, 2020 ($ in thousands) | | :--- | :--- | :--- | | **Net cash used in operating activities** | (71,003) | (57,069) | | **Net cash provided by (used in) investing activities** | (206,384) | 77,191 | | **Net cash provided by financing activities** | 196,033 | 4,586 | | **Net (decrease) increase in cash** | **(81,354)** | **24,708** | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on accounting policies, key financial items, and legal matters, including the company's business and financial health - The company is a clinical-stage biotechnology firm focused on gene therapy via its proprietary NAV Technology Platform. As of June 30, 2021, it had an accumulated deficit of **$396.9 million** but held **$593.0 million** in cash, cash equivalents, and marketable securities, which management believes is sufficient to fund operations for at least the next 12 months[27](index=27&type=chunk)[28](index=28&type=chunk) - In December 2020, the company sold rights to a capped amount of future Zolgensma royalties to HCR for **$200.0 million**. This transaction is accounted for as a liability, with non-cash interest expense recognized using an effective interest rate of **13.7%** as of June 30, 2021[49](index=49&type=chunk)[53](index=53&type=chunk) - Royalty revenue from Novartis Gene Therapies for Zolgensma sales was **$18.4 million** for Q2 2021 and **$36.7 million** for the first six months of 2021[65](index=65&type=chunk) - An arbitration tribunal ruled in favor of the company in its dispute with Abeona Therapeutics, awarding **$33.6 million** in damages and interest. However, due to uncertainty about collection, the company has recorded an allowance for credit losses of **$8.2 million** against the receivable[68](index=68&type=chunk)[70](index=70&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's business strategy, clinical pipeline, financial performance, and liquidity, highlighting key drivers of change - The company is advancing its **pivotal program for RGX-314** in wet AMD, with one trial enrolling and a second planned for Q4 2021, targeting a BLA filing in **2024**. It is also advancing suprachoroidal delivery of **RGX-314** in **Phase II trials** for wet AMD (AAVIATE) and diabetic retinopathy (ALTITUDE)[87](index=87&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk) | Metric | Three Months Ended June 30, 2021 vs 2020 | Six Months Ended June 30, 2021 vs 2020 | | :--- | :--- | :--- | | **License and Royalty Revenue** | Increased by $5.5M | Increased by $6.7M | | **Research and Development Expense** | Increased by $7.8M | Increased by $10.5M | | **General and Administrative Expense** | Increased by $2.9M | Increased by $5.9M | | **Net Loss** | Increased by $23.9M | Increased by $34.0M | - The increase in license and royalty revenue was primarily driven by higher Zolgensma royalties, which grew **54%** in Q2 2021 vs Q2 2020 due to geographic expansion[118](index=118&type=chunk) - R&D expenses rose due to increased costs for clinical trial activities, particularly for **RGX-314** and **RGX-121**, higher personnel costs from increased headcount, and preclinical research[119](index=119&type=chunk)[123](index=123&type=chunk) - As of June 30, 2021, the company had **$593.0 million** in cash, cash equivalents, and marketable securities. In January 2021, it raised net proceeds of **$216.1 million** from a public stock offering[125](index=125&type=chunk)[126](index=126&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states no material changes to its market risk exposure occurred during the six months ended June 30, 2021 - There have been no material changes to the company's exposure to market risk during the first six months of 2021[142](index=142&type=chunk) [Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of June 30, 2021, with no material changes in internal control - The CEO and CFO concluded that as of June 30, 2021, the company's disclosure controls and procedures were **effective** at a reasonable assurance level[144](index=144&type=chunk) - No changes occurred during the quarter ended June 30, 2021, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[145](index=145&type=chunk) PART II—OTHER INFORMATION [Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) This section directs the reader to Note 8 of the consolidated financial statements for information regarding legal proceedings - Information regarding legal proceedings with Abeona Therapeutics Inc. is detailed in **Note 8**, "License and Royalty Revenue—Abeona Therapeutics Inc.," of the financial statements[149](index=149&type=chunk) [Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) The company highlights risks related to third-party licensing agreements and collaborations, citing the Abeona dispute, with no other material changes from prior disclosures - There have been no material changes from the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2020, with one specified exception[150](index=150&type=chunk) - The company highlights risks related to its reliance on **third-party licensees and collaborators** for the development and commercialization of products using its **NAV Technology Platform**. The dispute with Abeona is cited as an example of these risks[150](index=150&type=chunk)[151](index=151&type=chunk)[154](index=154&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the reporting period - None[158](index=158&type=chunk) [Other Information](index=36&type=section&id=Item%205.%20Other%20Information) The company reported no other material information required to be disclosed in this section for the reporting period - None[161](index=161&type=chunk) [Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including CEO and CFO certifications and financial data in Inline XBRL - The exhibits filed with this report include certifications from the CEO and CFO as required by **Section 302 of the Sarbanes-Oxley Act** and financial statements formatted in **Inline XBRL**[162](index=162&type=chunk)

REGENXBIO Inc. (NASDAQ:RGNX) Q1 2021 Results Conference Call May 5, 2021 4:30 PM ET Company Participants Patrick Christmas - Chief Legal Officer Ken Mills - President and CEO Dr. Steve Pakola - Chief Medical Officer Conference Call Participants Alec Stranahan - Bank of America Gena Wang - Barclays Gbola Amusa - Chardan Esther Rajavelu - UBS Kostas Biliouris - Morgan Stanley Lisa Walter - RBC Operator Good afternoon, and welcome to the REGENXBIO First Quarter 2021 Earnings Conference Call. At this time, all ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 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 001-37553 REGENXBIO Inc. (Exact Name of Registrant as Specified in its Charter) FORM 10-Q (Mark One) Delaware 47-1851754 (State ...

REGENXBIO Inc. (NASDAQ:RGNX) Q4 2020 Earnings Conference Call March 1, 2021 4:30 PM ET Company Participants Patrick Christmas - Chief Legal Officer Ken Mills - President and CEO Steve Pakola - Chief Medical Officer Olivier Danos - Chief Scientific Officer Vit Vasista - CFO Conference Call Participants Esther Rajavelu - UBS Lisa Walter - RBC Capital Operator Good afternoon, and welcome to the REGENXBIO Fourth Quarter and Full Year 2020 Earnings Conference Call. At this time, all participants are in a listen- ...

PART I [Information Regarding Forward-Looking Statements](index=3&type=section&id=INFORMATION%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section clarifies that forward-looking statements are subject to risks and uncertainties, potentially causing actual results to differ from expectations - Forward-looking statements are based on current expectations and assumptions, but **actual results may differ materially** due to risks and uncertainties[10](index=10&type=chunk) - Key risk factors include: impact of COVID-19, ability to obtain and maintain regulatory approval for product candidates, timing and success of clinical trials, intellectual property protection, competition, ability to attract/retain key personnel, market size and acceptance, development partnerships, and financial expectations[11](index=11&type=chunk)[12](index=12&type=chunk) - The company disclaims any duty to update forward-looking statements unless required by law[11](index=11&type=chunk)[12](index=12&type=chunk) [Industry and Market Data](index=4&type=section&id=INDUSTRY%20AND%20MARKET%20DATA) Industry and market data, based on internal and third-party sources, are subject to inherent risks and uncertainties that may cause actual results to differ - Industry and market data are based on internal estimates and third-party sources, believed to be reliable, but are **subject to risks and uncertainties**[15](index=15&type=chunk) [ITEM 1. Business](index=5&type=section&id=ITEM%201.%20Business) REGENXBIO is a clinical-stage gene therapy company leveraging its proprietary NAV® Technology Platform for AAV-mediated antibody delivery and monogenic gene replacement - REGENXBIO is a **clinical-stage biotechnology company** focused on gene therapy using its **proprietary NAV® Technology Platform**[17](index=17&type=chunk)[18](index=18&type=chunk) - The platform includes exclusive rights to **over 100 novel AAV vectors** (NAV Vectors), such as AAV7, AAV8, AAV9, and AAVrh10[18](index=18&type=chunk)[19](index=19&type=chunk) - The company's pipeline addresses genetic diseases through two modalities: **AAV-mediated antibody delivery and monogenic gene replacement**[18](index=18&type=chunk)[19](index=19&type=chunk) [Overview of Business and Technology Platform](index=5&type=section&id=Overview%20of%20Business%20and%20Technology%20Platform) REGENXBIO is a leading clinical-stage biotechnology company utilizing its proprietary NAV® Technology Platform, which includes over 100 novel AAV vectors - REGENXBIO is a **leading clinical-stage biotechnology company** focused on gene therapy, using its **proprietary NAV® Technology Platform**, which includes **over 100 novel AAV vectors**, to deliver functional genes and produce therapeutic proteins or antibodies[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk) [Internal Pipeline: AAV-Mediated Antibody Delivery](index=5&type=section&id=Internal%20Pipeline%3A%20AAV-Mediated%20Antibody%20Delivery) The company is developing RGX-314 for chronic retinal conditions and gene therapy candidates for Hereditary Angioedema and neurodegenerative diseases - **RGX-314** (NAV AAV8 vector) is being developed for **wet age-related macular degeneration (wet AMD), diabetic retinopathy (DR)**, and other chronic retinal conditions, aiming for **sustained production of an anti-VEGF antibody fragment**[20](index=20&type=chunk) - Two delivery routes are being advanced: **subretinal and suprachoroidal** (using SCS Microinjector™)[20](index=20&type=chunk) - A gene therapy candidate for **Hereditary Angioedema (HAE)** using **NAV AAV8 vector** to deliver an **antibody against plasma kallikrein** is in development, with an **update expected in 2021**[22](index=22&type=chunk) - A research partnership with **Neurimmune AG** is exploring novel gene therapies using **NAV Vectors** to deliver antibodies for chronic **neurodegenerative diseases** (tauopathies and alpha-synucleinopathies), with an **update expected in 2021**[23](index=23&type=chunk) [Internal Pipeline: Monogenic Gene Replacement](index=5&type=section&id=Internal%20Pipeline%3A%20Monogenic%20Gene%20Replacement) The company is advancing gene therapies for Duchenne Muscular Dystrophy and severe genetic lysosomal storage diseases, with several IND submissions and trials underway - **RGX-202** is a potential one-time gene therapy for **Duchenne Muscular Dystrophy (DMD)**, using NAV AAV8 to deliver a novel microdystrophin transgene, with **IND submission expected in mid-2021**[25](index=25&type=chunk) - **NAV AAV9-based programs** target severe genetic lysosomal storage diseases: **RGX-121 for MPS II** (Phase I/II ongoing), **RGX-111 for MPS I** (Phase I/II initiated), **RGX-181 for CLN2 disease** (IND submission Q1 2021), and **RGX-381 for ocular manifestations of CLN2 disease** (IND submission H1 2021)[26](index=26&type=chunk)[30](index=30&type=chunk) [Preclinical Programs](index=6&type=section&id=Preclinical%20Programs) The company funds preclinical research for product candidates and seeks partnerships to expand its NAV gene therapy pipeline - The company continues to fund **preclinical research** for potential product candidates and seeks partnerships with academic institutions and biotechnology companies to **expand its NAV gene therapy pipeline**[28](index=28&type=chunk) [AAV Vector Production and Manufacturing](index=7&type=section&id=AAV%20Vector%20Production%20and%20Manufacturing) REGENXBIO is an industry leader in AAV production and manufacturing, establishing robust in-house capabilities and constructing a new cGMP facility - REGENXBIO is an **industry leader in AAV production and manufacturing**, with in-house knowledge of vector characterization and technical operations[31](index=31&type=chunk) - The company has **robust suspension cell culture-based production capabilities** and is constructing a **new cGMP production facility in Rockville, MD**, expected to be **operational in H1 2022**, supporting clinical and commercial production up to **2,000 liters**[31](index=31&type=chunk) [Commercial Licenses to NAV Technology Licensees](index=7&type=section&id=Commercial%20Licenses%20to%20NAV%20Technology%20Licensees) REGENXBIO sublicenses its NAV Vectors to other biotechnology companies, with over 20 partnered candidates and the FDA-approved Zolgensma® validating the platform - REGENXBIO selectively sublicenses its NAV Vectors to other biotechnology companies (NAV Technology Licensees)[32](index=32&type=chunk)[33](index=33&type=chunk) - As of December 31, 2020, **over 20 partnered product candidates** were in preclinical and clinical development using the NAV Technology Platform[32](index=32&type=chunk)[33](index=33&type=chunk) - Novartis AG's **Zolgensma®** (onasemnogene abeparvovec-xioi; AVXS-101), approved by the FDA in May 2019 for SMA Type I, leverages REGENXBIO's NAV AAV9 vector, **validating the platform**[32](index=32&type=chunk)[33](index=33&type=chunk) [Our Strategy](index=8&type=section&id=Our%20Strategy) REGENXBIO's strategy focuses on advancing its proprietary AAV vector technology, expanding its pipeline, optimizing administration routes, and strengthening manufacturing and intellectual property - Apply **proprietary, next-generation AAV vector technology** for in vivo gene therapies, leveraging higher expression, increased durability, broad tissue selectivity, and improved manufacturability[35](index=35&type=chunk)[36](index=36&type=chunk)[39](index=39&type=chunk) - Rapidly advance a **broad pipeline** using **AAV-mediated antibody delivery** (e.g., RGX-314 for wet AMD, DR, HAE, neurodegenerative diseases) and **monogenic gene replacement** (e.g., DMD, MPS II, MPS I, CLN2 disease)[35](index=35&type=chunk)[36](index=36&type=chunk)[39](index=39&type=chunk) - Utilize **advanced routes of administration** (e.g., subretinal, suprachoroidal, CNS delivery) for efficient tissue targeting and lower titers[35](index=35&type=chunk)[36](index=36&type=chunk)[39](index=39&type=chunk) - Establish **industry leadership in gene therapy manufacturing** with **internal cGMP facility (operational H1 2022)** and strong CMO network[35](index=35&type=chunk)[36](index=36&type=chunk)[39](index=39&type=chunk) - Strengthen NAV Technology Platform validation through strategic in-licensing, sublicensing, and progress of external licensees (e.g., FDA-approved Zolgensma)[35](index=35&type=chunk)[36](index=36&type=chunk)[39](index=39&type=chunk) - Maintain and grow an **extensive intellectual property portfolio**, including **over 100 patents and applications** for NAV Vectors[35](index=35&type=chunk)[36](index=36&type=chunk)[39](index=39&type=chunk) [The Broad Potential and Application of Gene Therapy](index=9&type=section&id=The%20Broad%20Potential%20and%20Application%20of%20Gene%20Therapy) Gene therapy offers the potential to treat a broad range of diseases with long-term effects and enables new modalities like gene editing - Gene therapy offers the potential to **treat a broad range of diseases** by expressing or affecting protein production, targeting mechanisms not effectively addressed by existing drugs[40](index=40&type=chunk) - It can create convenient treatment profiles with **single administrations for long-term effects** and simplify the discovery of treatment candidates[40](index=40&type=chunk) - Viral vectors can deliver new modalities like **gene editing and RNA-based therapeutics**[40](index=40&type=chunk) [Our Internal Pipeline](index=9&type=section&id=Our%20Internal%20Pipeline) REGENXBIO is advancing multiple gene therapy candidates, including RGX-314 for retinal conditions, RGX-202 for DMD, and programs for MPS II, MPS I, and CLN2 disease - **RGX-314 (Wet AMD, DR):** Pivotal program active for subretinal delivery (BLA filing expected 2024), Phase II trials ongoing for suprachoroidal delivery in wet AMD (AAVIATE) and DR (ALTITUDE)[20](index=20&type=chunk)[21](index=21&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk] - Positive long-term data from Phase I/II wet AMD trial showed durable treatment effect and reduced injection burden[20](index=20&type=chunk)[21](index=21&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk] - **Hereditary Angioedema (HAE):** Research program developing NAV AAV8 vector for a therapeutic antibody against plasma kallikrein; program update expected in 2021[22](index=22&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk] - **Neurodegenerative Diseases:** Partnership with Neurimmune AG for AAV gene therapies delivering antibodies for tauopathies and alpha-synucleinopathies; program update expected in 2021[23](index=23&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk] - **RGX-202 (DMD):** Potential one-time gene therapy using NAV AAV8 for microdystrophin; IND submission expected mid-2021[25](index=25&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk] - **RGX-121 (MPS II):** Phase I/II trials ongoing for pediatric patients (under 5 and 5-18 years old); well-tolerated with encouraging biomarker signals[26](index=26&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk][87](index=87&type=chunk] - **RGX-111 (MPS I):** Phase I/II clinical trial initiated, first patient dosed in December 2020[26](index=26&type=chunk)[88](index=88&type=chunk] - **RGX-181 (CLN2 disease):** IND submission for CNS delivery expected Q1 2021, Phase I/II enrollment H1 2021[30](index=30&type=chunk)[89](index=89&type=chunk] - **RGX-381 (Ocular CLN2 disease):** IND or foreign equivalent submission for subretinal delivery expected H1 2021[30](index=30&type=chunk)[89](index=89&type=chunk] [AAV Vector Production Platform](index=15&type=section&id=AAV%20Vector%20Production%20Platform) REGENXBIO possesses internal capabilities for scalable AAV production, including a new cGMP facility under construction, and collaborates with CMOs - REGENXBIO has **internal capabilities and infrastructure for scalable AAV production**, including an advanced manufacturing and analytics lab[31](index=31&type=chunk)[91](index=91&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk][96](index=96&type=chunk] - The **suspension-based manufacturing process is robust and scalable** from bench-scale to **1,000-liter cGMP batches**, with plans to **scale to 2,000-liter bioreactors**[31](index=31&type=chunk)[91](index=91&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk][96](index=96&type=chunk] - A **new cGMP production facility in Rockville, MD, is under construction**, expected to be **operational in H1 2022**, to support future clinical and commercial production[31](index=31&type=chunk)[91](index=91&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk][96](index=96&type=chunk] - The company also partners with multiple biologics Contract Manufacturing Organizations (CMOs) and has a **strategic partnership with FUJIFILM Diosynth Biotechnologies** for large-scale cGMP manufacturing[97](index=97&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk] [Proprietary Methods](index=16&type=section&id=Proprietary%20Methods) REGENXBIO has exclusive rights to proprietary AAV production technology from the University of Pennsylvania, enhancing purification and yield - REGENXBIO has licensed **exclusive rights** to proprietary technology from the **University of Pennsylvania (Penn)** for **scalable AAV production methods**, including **efficient secretion of NAV Vectors** into the production medium, which **simplifies purification and improves yield**[101](index=101&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk] [Other Capabilities](index=16&type=section&id=Other%20Capabilities) The company has developed proprietary HEK293 master cell banks and components for clinical vector production, used internally and by licensees - The company has developed and characterized **proprietary HEK293 master cell banks** and other components for **clinical vector production**, used internally and by NAV Technology Licensees[104](index=104&type=chunk) [Commercial Licenses to NAV Technology Licensees](index=16&type=section&id=Commercial%20Licenses%20to%20NAV%20Technology%20Licensees) REGENXBIO sublicenses its NAV Technology Platform to third parties, expanding the gene therapy pipeline and generating revenue through various fees and royalties - REGENXBIO **sublicenses its NAV Technology Platform** to third parties to expand the gene therapy pipeline and generate revenue, while focusing on core internal programs[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk] - As of December 31, 2020, **over 20 partnered product candidates** were in development[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk] - License agreements include **upfront and annual fees, milestone payments, sublicense fees, and low-single to low-double digit royalties** on sales, with obligations to pay licensors a percentage of these revenues[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk] [Gene Therapy Overview and History of Earlier Generation AAV](index=17&type=section&id=Gene%20Therapy%20Overview%20and%20History%20of%20Earlier%20Generation%20AAV) Gene therapy delivers external genes to cells, with AAVs favored for efficiency and safety, and next-generation AAVs showing improved performance over earlier versions - Gene therapy aims to **deliver external genes to cells**, with in vivo approaches directly administering vectors to target tissues[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk][111](index=111&type=chunk] - **Viral vectors, particularly AAVs**, are favored for their **efficiency and favorable safety profiles** (not known to cause disease in humans)[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk][111](index=111&type=chunk] - Earlier generation AAV vectors (e.g., AAV1, AAV2) had limitations including low/short-term gene expression, limited tissue selectivity, and high immune response[112](index=112&type=chunk)[113](index=113&type=chunk] - **Next-generation AAVs (AAV7, AAV8, AAV9, AAVrh10)** were discovered at Penn by searching for capsid gene sequences in non-human primates and humans, showing **improved efficiency**[112](index=112&type=chunk)[113](index=113&type=chunk] [Our Proprietary NAV Technology Platform for Gene Delivery](index=18&type=section&id=Our%20Proprietary%20NAV%20Technology%20Platform%20for%20Gene%20Delivery) REGENXBIO's NAV Technology Platform, based on next-generation AAV vectors, offers superior gene transfer, long-term expression, broad tissue selectivity, lower immune response, and improved manufacturability - REGENXBIO's **NAV Technology Platform**, based on **next-generation AAV vectors** licensed from Penn, offers improved properties over earlier AAVs[115](index=115&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk][120](index=120&type=chunk] - Key benefits include: **higher gene transfer** (10- to 100-fold higher than AAV2 in mouse livers), **longer-term gene expression** (over eight years in animals and clinical trials), **broad and novel tissue selectivity** (e.g., AAV9 for CNS delivery, AAV8 for retinal cells), **lower immune response** (lower neutralizing antibodies and T-cell activation compared to AAV1/AAV2), and **improved manufacturability**[115](index=115&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk][120](index=120&type=chunk] - The platform is protected by **over 100 licensed patents and patent applications**, including **composition of matter claims for AAV7, AAV8, AAV9, and AAVrh10**[121](index=121&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk][127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk] [Platform License Agreements and Other Licenses](index=20&type=section&id=Platform%20License%20Agreements%20and%20Other%20Licenses) REGENXBIO exclusively licenses its NAV Technology Platform from Penn and GSK, with obligations for milestone payments, royalties, and sublicense fees, and holds other related licenses - REGENXBIO **exclusively licenses its NAV Technology Platform** from the **University of Pennsylvania (Penn) and GlaxoSmithKline LLC (GSK)**[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk][133](index=133&type=chunk] - The Penn license grants **exclusive worldwide rights** to AAV gene therapy patents, with obligations for milestone payments (up to **$20.5M**), **low-to-mid-single digit royalties** on net sales, and **low-double to mid-double digit percentages of sublicense royalties**[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk][133](index=133&type=chunk] - The GSK license provides **exclusive worldwide sublicenses** to NAV Technology patents, with obligations for milestone payments (**all paid, up to $1.5M**), low-to-mid-single digit royalties, and sublicense fees[134](index=134&type=chunk)[135](index=135&type=chunk] - Other licenses include agreements with the **Regents of the University of Minnesota and Emory University** for jointly owned intellectual property related to AAV vectors for CNS delivery, involving upfront fees, annual maintenance fees, royalties, and milestone payments[137](index=137&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk] [Intellectual Property](index=23&type=section&id=Intellectual%20Property) REGENXBIO's success relies on robust intellectual property protection, including over 100 licensed patents for novel AAV vectors and product-specific applications - REGENXBIO's success relies on obtaining and maintaining **intellectual property protection** for its product candidates, core technologies, and know-how, including patents, trade secrets, and regulatory exclusivities[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk][143](index=143&type=chunk] - The licensed patent portfolio includes exclusive rights to **over 100 patents and patent applications** worldwide for **novel AAV vectors (AAV7, AAV8, AAV9, AAVrh10)** and their uses, with **terms expiring as late as 2026** (excluding extensions)[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk][143](index=143&type=chunk] - **Product-specific patent applications** for RGX-314, RGX-202, RGX-111/RGX-121, RGX-181, RGX-381, and HAE programs have potential expiration dates ranging from **2034 to 2040**[144](index=144&type=chunk) - The portfolio also covers therapeutic compositions, specific formulations/delivery methods, AAV engineering technology, diagnostic methods, and scalable manufacturing methods[144](index=144&type=chunk) [Customers](index=24&type=section&id=Customers) REGENXBIO's revenues are solely from license and royalty fees, with Novartis Gene Therapies, Inc. accounting for approximately 94% of total revenues in 2020 - REGENXBIO's revenues consist **solely of license and royalty revenue**, with a **high concentration** among a limited number of licensees[145](index=145&type=chunk) - In 2020, **one customer (Novartis Gene Therapies, Inc.)** accounted for approximately **94% of total revenues**[145](index=145&type=chunk) [Research and Development](index=24&type=section&id=Research%20and%20Development) The company's R&D organization possesses expertise in AAV gene therapy, employing rigorous project management and engaging third parties for preclinical and clinical activities - The company has a research and development organization with **expertise in AAV gene therapy**, employing **rigorous project management** and engaging third parties for preclinical research and clinical trials[146](index=146&type=chunk) [Competition](index=24&type=section&id=Competition) REGENXBIO faces significant competition from biotechnology and pharmaceutical companies in gene therapy and other treatment areas, with competition expected to intensify - REGENXBIO faces **significant competition** from **biotechnology and pharmaceutical companies** developing gene therapies and other gene modification methods[147](index=147&type=chunk)[148](index=148&type=chunk][149](index=149&type=chunk] - Competitors include Adverum Biotechnologies, Novartis AG, Sarepta Therapeutics, and others, many with **greater financial and technical resources**[147](index=147&type=chunk)[148](index=148&type=chunk][149](index=149&type=chunk] - **Specific competition exists for wet AMD** (anti-VEGF therapies like Lucentis, Eylea, Beovu), **DR, DMD, MPS II, MPS I, CLN2 disease, and HAE**[150](index=150&type=chunk)[151](index=151&type=chunk] - Competition is **expected to intensify** with new drugs and technologies, focusing on efficacy, safety, convenience, price, and reimbursement[152](index=152&type=chunk) [Government Regulation](index=25&type=section&id=Government%20Regulation) Biological products, including gene therapies, are subject to extensive regulation by the FDA and comparable global authorities across all development and commercialization stages - Biological products, including gene therapies, are subject to **extensive regulation** by the **FDA (CBER)** in the U.S. and **comparable authorities globally**, covering testing, manufacturing, safety, efficacy, labeling, and promotion[153](index=153&type=chunk)[154](index=154&type=chunk] [Human Capital Resources](index=35&type=section&id=Human%20Capital%20Resources) REGENXBIO employs 306 full-time staff, prioritizing talent retention, growth, and diversity through competitive compensation and health and safety measures - As of February 25, 2021, REGENXBIO employed **306 full-time employees**, with **243 in R&D** and **63 in general administrative functions**[208](index=208&type=chunk)[209](index=209&type=chunk][210](index=210&type=chunk] - The company prioritizes **talent retention, growth, and development** through **competitive compensation, benefits**, and professional development programs[208](index=208&type=chunk)[209](index=209&type=chunk][210](index=210&type=chunk] - A **strong commitment to diversity, equity, and inclusion** is integral to fostering innovation[211](index=211&type=chunk) - Health and safety measures, including work-from-home policies and onsite COVID-19 testing, have been implemented to protect employees[212](index=212&type=chunk) [Available Information](index=36&type=section&id=Available%20Information) REGENXBIO's SEC filings and material business developments are accessible on www.sec.gov and the company's website - REGENXBIO's **SEC filings**, including annual, quarterly, and current reports, are available on **www.sec.gov** and the company's website (**www.regenxbio.com**)[213](index=213&type=chunk)[214](index=214&type=chunk] - The company also uses its website and social media channels to communicate material business developments[213](index=213&type=chunk)[214](index=214&type=chunk] [ITEM 1A. Risk Factors](index=37&type=section&id=ITEM%201A.%20Risk%20Factors) This section outlines significant risks across product development, financial position, third-party reliance, manufacturing, commercialization, operations, intellectual property, and common stock ownership - **Risks Related to Our NAV Technology Platform and the Development of Our Product Candidates:** Novel technology, unpredictable development time/cost, limited clinical results, regulatory approval uncertainty, competition, and potential for undesirable side effects[215](index=215&type=chunk) - **Risks Related to Our Financial Position:** History of net losses, expectation of future losses, need for additional funding, and no revenue from product sales to date[216](index=216&type=chunk) - **Risks Related to Third Parties:** Reliance on third parties for R&D and clinical trials, potential for unsuccessful licensing/collaborations, and sharing of trade secrets[217](index=217&type=chunk) - **Risks Related to Manufacturing:** Complexity of gene therapy manufacturing, potential for production problems, delays in regulatory approval of manufacturing processes, and reliance on third-party manufacturers[218](index=218&type=chunk) - **Risks Related to the Commercialization of Our Product Candidates:** Inability to establish sales/marketing capabilities, delays in development goals, challenges in market acceptance, and uncertainty of insurance coverage/reimbursement[219](index=219&type=chunk) - **Risks Related to Our Business Operations:** Difficulty in identifying additional product candidates, dependence on key employees, potential for misconduct, and compliance with healthcare laws[220](index=220&type=chunk) - **Risks Related to Our Intellectual Property:** Reliance on licensed IP, challenges in obtaining/maintaining patent protection, potential for infringement claims, and changes in patent law[221](index=221&type=chunk) - **Risks Related to Ownership of Our Common Stock:** Volatile operating results, dilution from capital raises, risks from acquisitions/partnerships, and anti-takeover provisions[222](index=222&type=chunk)[223](index=223&type=chunk] [ITEM 1B. Unresolved Staff Comments](index=70&type=section&id=ITEM%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments from the SEC to report [ITEM 2. Properties](index=70&type=section&id=ITEM%202.%20Properties) REGENXBIO's headquarters and R&D facilities are in Rockville, MD, with a new 177,000 sq ft facility expected operational in H1 2021 - Current corporate headquarters: **~19,000 sq ft** in Rockville, MD (lease expires Sep 2021)[393](index=393&type=chunk)[394](index=394&type=chunk] - Additional office/lab space: **~73,000 sq ft** in Rockville, MD, and **15,000 sq ft** in New York, NY (leases expire through 2027)[393](index=393&type=chunk)[394](index=394&type=chunk] - New facility: **~177,000 sq ft** office, lab, and manufacturing space in Rockville, MD, under construction, expected to be **operational in H1 2021** (lease expires Sep 2036)[393](index=393&type=chunk)[394](index=394&type=chunk] [ITEM 3. Legal Proceedings](index=70&type=section&id=ITEM%203.%20Legal%20Proceedings) Legal proceedings with Abeona Therapeutics Inc. are detailed in Note 10 of the consolidated financial statements - Legal proceedings with **Abeona Therapeutics Inc.** are detailed in **Note 10** of the consolidated financial statements[396](index=396&type=chunk) [ITEM 4. Mine Safety Disclosures](index=70&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This item is not applicable to REGENXBIO Inc PART II [ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=71&type=section&id=ITEM%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) REGENXBIO's common stock trades on Nasdaq under 'RGNX', with no cash dividends declared or planned since inception - Common stock is traded on **The Nasdaq Global Select Market** under the symbol **"RGNX"**[400](index=400&type=chunk)[403](index=403&type=chunk][404](index=404&type=chunk] - As of February 25, 2021, there were **six holders of record** of common stock[400](index=400&type=chunk)[403](index=403&type=chunk][404](index=404&type=chunk] - The company has **not declared or paid cash dividends** since inception and does not plan to in the foreseeable future[400](index=400&type=chunk)[403](index=403&type=chunk][404](index=404&type=chunk] [ITEM 6. Selected Financial Data](index=72&type=section&id=ITEM%206.%20Selected%20Financial%20Data) This section presents selected five-year consolidated financial data, highlighting revenue fluctuations, operating losses, and changes in cash and marketable securities Consolidated Statements of Operations Data (in thousands, except per share data) | Years Ended December 31, | 2020 | 2019 | 2018 | 2017 | 2016 | | :------------------------- | :----- | :----- | :----- | :----- | :----- | | Total revenues | $154,567 | $35,233 | $218,505 | $10,393 | $4,589 | | Total operating expenses | 273,800 | 184,231 | 130,405 | 86,278 | 69,929 | | Income (loss) from operations | (119,233) | (148,998) | 88,100 | (75,885) | (65,340) | | Net income (loss) | (111,250) | (94,733) | 99,937 | (73,169) | (62,967) | | Net income (loss) per share: Basic | (2.98) | (2.58) | 2.99 | (2.45) | (2.38) | | Net income (loss) per share: Diluted | (2.98) | (2.58) | 2.73 | (2.45) | (2.38) | | Weighted-average common shares outstanding: Basic | 37,281 | 36,690 | 33,427 | 29,878 | 26,409 | | Weighted-average common shares outstanding: Diluted | 37,281 | 36,690 | 36,648 | 29,878 | 26,409 | [407](index=407&type=chunk) Consolidated Balance Sheet Data (in thousands) | December 31, | 2020 | 2019 | 2018 | 2017 | 2016 | | :------------- | :----- | :----- | :----- | :----- | :----- | | Cash and cash equivalents | $338,426 | $69,514 | $75,561 | $46,656 | $24,840 | | Marketable securities | 184,123 | 330,481 | 395,019 | 129,738 | 134,126 | | Working capital | 449,750 | 311,356 | 315,737 | 153,560 | 83,702 | | Total assets | 708,164 | 497,908 | 543,814 | 198,677 | 172,732 | | Non-current liabilities | 248,964 | 14,035 | 12,790 | 1,211 | 1,326 | | Total liabilities | 330,411 | 47,711 | 34,966 | 15,648 | 10,995 | | Common stock and additional paid-in capital | 667,185 | 627,814 | 592,584 | 371,500 | 276,357 | | Total stockholders' equity | 377,753 | 450,197 | 508,848 | 183,029 | 161,737 | [408](index=408&type=chunk) [ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=73&type=section&id=ITEM%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes REGENXBIO's financial condition and results for 2020 and 2019, covering business overview, pipeline, COVID-19 impact, revenue, expenses, accounting policies, and liquidity - REGENXBIO is a **clinical-stage biotechnology company** focused on gene therapy, with a broad pipeline using its **NAV Technology Platform** for **AAV-mediated antibody delivery and monogenic gene replacement**[411](index=411&type=chunk)[412](index=412&type=chunk) - The **COVID-19 pandemic has caused delays** in clinical trials and construction of the new cGMP facility, but **did not significantly impact 2020 results**[423](index=423&type=chunk)[424](index=424&type=chunk)[425](index=425&type=chunk] - Revenues primarily consist of **license and royalty revenue** from the NAV Technology Platform, with **no commercial sales** of its own products to date[423](index=423&type=chunk)[424](index=424&type=chunk)[425](index=425&type=chunk)[426](index=426&type=chunk] [Overview of Business and Product Candidates](index=73&type=section&id=Overview%20of%20Business%20and%20Product%20Candidates) REGENXBIO is a clinical-stage gene therapy company with a broad pipeline of product candidates, including RGX-314, RGX-202, and programs for MPS and CLN2 diseases - REGENXBIO is a **clinical-stage gene therapy company** utilizing its **NAV Technology Platform** for **AAV-mediated antibody delivery and monogenic gene replacement**[411](index=411&type=chunk)[412](index=412&type=chunk)[413](index=413&type=chunk][414](index=414&type=chunk] - Key product candidates include **RGX-314** for wet AMD and DR (pivotal program active, Phase II ongoing), **HAE program** (update expected 2021), neurodegenerative disease program with Neurimmune (update expected 2021), **RGX-202** for DMD (IND mid-2021), **RGX-121 for MPS II** (Phase I/II ongoing), **RGX-111 for MPS I** (Phase I/II initiated), **RGX-181 for CLN2 disease** (IND Q1 2021), and **RGX-381 for ocular CLN2 disease** (IND H1 2021)[411](index=411&type=chunk)[412](index=412&type=chunk)[413](index=413&type=chunk][414](index=414&type=chunk][415](index=415&type=chunk)[416](index=416&type=chunk)[417](index=417&type=chunk)[418](index=418&type=chunk)[419](index=419&type=chunk)[420](index=420&type=chunk)[421](index=421&type=chunk)[422](index=422&type=chunk] - The NAV Technology Platform is licensed to over 20 partnered programs, including the FDA-approved Zolgensma®[411](index=411&type=chunk)[412](index=412&type=chunk)[413](index=413&type=chunk][414](index=414&type=chunk] - The **COVID-19 pandemic has caused delays** in clinical trials and facility construction, but its **full future impact** on business, operations, and financial condition **remains unpredictable**[423](index=423&type=chunk)[424](index=424&type=chunk)[425](index=425&type=chunk] [Financial Overview](index=75&type=section&id=Financial%20Overview) REGENXBIO's revenues are primarily from license and royalty fees, with operating expenses driven by R&D and G&A, and other income from investments - Revenues are primarily from **license and royalty fees** from the NAV Technology Platform, including royalties on **Zolgensma sales** by Novartis Gene Therapies[426](index=426&type=chunk)[427](index=427&type=chunk][428](index=428&type=chunk] - Operating expenses consist of **cost of revenues** (upstream fees to licensors), **research and development** (salaries, preclinical/clinical costs, manufacturing materials), and **general and administrative** (salaries, professional fees, patent expenses)[429](index=429&type=chunk)[430](index=430&type=chunk][431](index=431&type=chunk][432](index=432&type=chunk] - **R&D expenses are expected to increase** as product candidates advance[433](index=433&type=chunk) - Other income includes **interest income** from licensing, **investment income** (interest and gains/losses on securities), and **interest expense** from the sale of future Zolgensma royalties[439](index=439&type=chunk)[440](index=440&type=chunk][441](index=441&type=chunk][442](index=442&type=chunk][443](index=443&type=chunk] Research and Development Expenses (in thousands) | | Years Ended December 31, | | | | :-------------------------- | :----- | :----- | :----- | | | 2020 | 2019 | 2018 | | Direct Expenses | | | | | RGX-314 | $24,083 | $20,713 | $6,580 | | RGX-202 | 14,073 | — | — | | RGX-121 | 10,322 | 3,999 | 4,235 | | RGX-111 | 3,324 | 3,028 | 3,130 | | RGX-181 and RGX-381 | 7,463 | 7,602 | 4,399 | | Other product candidates | 4,674 | 4,823 | 10,849 | | **Total direct expenses** | **63,939** | **40,165** | **29,193** | | Unallocated Expenses | | | | | Platform and new technologies | 24,936 | 21,083 | 12,431 | | Personnel-related | 63,531 | 50,164 | 34,275 | | Facilities and depreciation expense | 12,488 | 9,511 | 5,816 | | Other unallocated | 1,400 | 3,262 | 2,158 | | **Total unallocated expenses** | **102,355** | **84,020** | **54,680** | | **Total research and development** | **$166,294** | **$124,185** | **$83,873** | [435](index=435&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=79&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) This note details REGENXBIO's critical accounting policies, including revenue recognition, R&D expenses, stock-based compensation, royalty liability, and income taxes - **Revenue Recognition (ASC 606):** Involves a **five-step model** to recognize revenue when control of goods/services is transferred[444](index=444&type=chunk)[445](index=445&type=chunk][446](index=446&type=chunk][447](index=447&type=chunk][448](index=448&type=chunk][449](index=449&type=chunk][450](index=450&type=chunk][451](index=451&type=chunk][452](index=452&type=chunk][453](index=453&type=chunk][454](index=454&type=chunk][455](index=455&type=chunk][456](index=456&type=chunk][457](index=457&type=chunk][458](index=458&type=chunk][459](index=459&type=chunk][460](index=460&type=chunk][461](index=461&type=chunk][462](index=462&type=chunk][463](index=463&type=chunk][464](index=464&type=chunk][465](index=465&type=chunk][466](index=466&type=chunk][467](index=467&type=chunk][468](index=468&type=chunk][469](index=469&type=chunk][470](index=470&type=chunk][471](index=471&type=chunk][472](index=472&type=chunk][473](index=473&type=chunk] - **Significant judgment** is required for determining contract term (substantive termination penalties), identifying distinct performance obligations, allocating transaction price, and estimating variable consideration (milestones)[444](index=444&type=chunk)[445](index=445&type=chunk][446](index=446&type=chunk][447](index=447&type=chunk][448](index=448&type=chunk][449](index=449&type=chunk][450](index=450&type=chunk][451](index=451&type=chunk][452](index=452&type=chunk][453](index=453&type=chunk][454](index=454&type=chunk][455](index=455&type=chunk][456](index=456&type=chunk][457](index=457&type=chunk][458](index=458&type=chunk][459](index=459&type=chunk][460](index=460&type=chunk][461](index=461&type=chunk][462](index=462&type=chunk][463](index=463&type=chunk][464](index=464&type=chunk][465](index=465&type=chunk][466](index=466&type=chunk][467](index=467&type=chunk][468](index=468&type=chunk][469](index=469&type=chunk][470](index=470&type=chunk][471](index=471&type=chunk][472](index=472&type=chunk][473](index=473&type=chunk] - **Accrued Research and Development Expenses:** Estimates are made based on contracts, services performed, and expected performance periods for preclinical/clinical activities and manufacturing[444](index=444&type=chunk)[445](index=445&type=chunk][446](index=446&type=chunk][447](index=447&type=chunk][448](index=448&type=chunk][449](index=449&type=chunk][450](index=450&type=chunk][451](index=451&type=chunk][452](index=452&type=chunk][453](index=453&type=chunk][454](index=454&type=chunk][455](index=455&type=chunk][456](index=456&type=chunk][457](index=457&type=chunk][458](index=458&type=chunk][459](index=459&type=chunk][460](index=460&type=chunk][461](index=461&type=chunk][462](index=462&type=chunk][463](index=463&type=chunk][464](index=464&type=chunk][465](index=465&type=chunk][466](index=466&type=chunk][467](index=467&type=chunk][468](index=468&type=chunk][469](index=469&type=chunk][470](index=470&type=chunk][471](index=471&type=chunk][472](index=472&type=chunk][473](index=473&type=chunk] - **Stock-based Compensation (ASC 718):** Expense is recognized based on grant date fair value for stock options (using **Black-Scholes model** with subjective assumptions like volatility, term, risk-free rate) and restricted stock units (closing price at grant date)[444](index=444&type=chunk)[445](index=445&type=chunk][446](index=446&type=chunk][447](index=447&type=chunk][448](index=448&type=chunk][449](index=449&type=chunk][450](index=450&type=chunk][451](index=451&type=chunk][452](index=452&type=chunk][453](index=453&type=chunk][454](index=454&type=chunk][455](index=455&type=chunk][456](index=456&type=chunk][457](index=457&type=chunk][458](index=458&type=chunk][459](index=459&type=chunk][460](index=460&type=chunk][461](index=461&type=chunk][462](index=462&type=chunk][463](index=463&type=chunk][464](index=464&type=chunk][465](index=465&type=chunk][466](index=466&type=chunk][467](index=467&type=chunk][468](index=468&type=chunk][469](index=469&type=chunk][470](index=470&type=chunk][471](index=471&type=chunk][472](index=472&type=chunk][473](index=473&type=chunk] - **Non-cash Interest Expense on Liability Related to Sale of Future Royalties:** A liability is recorded for proceeds from royalty sales, amortized using the **effective interest method** based on estimated future royalty payments[444](index=444&type=chunk)[445](index=445&type=chunk][446](index=446&type=chunk][447](index=447&type=chunk][448](index=448&type=chunk][449](index=449&type=chunk][450](index=450&type=chunk][451](index=451&type=chunk][452](index=452&type=chunk][453](index=453&type=chunk][454](index=454&type=chunk][455](index=455&type=chunk][456](index=456&type=chunk][457](index=457&type=chunk][458](index=458&type=chunk][459](index=459&type=chunk][460](index=460&type=chunk][461](index=461&type=chunk][462](index=462&type=chunk][463](index=463&type=chunk][464](index=464&type=chunk][465](index=465&type=chunk][466](index=466&type=chunk][467](index=467&type=chunk][468](index=468&type=chunk][469](index=469&type=chunk][470](index=470&type=chunk][471](index=471&type=chunk][472](index=472&type=chunk][473](index=473&type=chunk] - **Income Taxes (ASC 740):** Deferred tax assets and liabilities are recognized, with a **full valuation allowance** provided due to a history of operating losses, indicating that the benefit of deferred tax assets is unlikely to be realized[444](index=444&type=chunk)[445](index=445&type=chunk][446](index=446&type=chunk][447](index=447&type=chunk][448](index=448&type=chunk][449](index=449&type=chunk][450](index=450&type=chunk][451](index=451&type=chunk][452](index=452&type=chunk][453](index=453&type=chunk][454](index=454&type=chunk][455](index=455&type=chunk][456](index=456&type=chunk][457](index=457&type=chunk][458](index=458&type=chunk][459](index=459&type=chunk][460](index=460&type=chunk][461](index=461&type=chunk][462](index=462&type=chunk][463](index=463&type=chunk][464](index=464&type=chunk][465](index=465&type=chunk][466](index=466&type=chunk][467](index=467&type=chunk][468](index=468&type=chunk][469](index=469&type=chunk][470](index=470&type=chunk][471](index=471&type=chunk][472](index=472&type=chunk][473](index=473&type=chunk] [Results of Operations](index=83&type=section&id=Results%20of%20Operations) REGENXBIO's 2020 results show increased license and royalty revenue driven by Zolgensma, offset by higher R&D and G&A expenses, and a decrease in investment income Consolidated Results of Operations (in thousands) | | Years Ended December 31, | Change 2020 vs. 2019 | Change 2019 vs. 2018 | | :-------------------------- | :----- | :----- | :----- | :------------------- | :------------------- | | | 2020 | 2019 | 2018 | | | | Revenues | | | | | | | License and royalty revenue | $154,567 | $35,233 | $218,505 | $119,334 | $(183,272) | | Total revenues | 154,567 | 35,233 | 218,505 | 119,334 | (183,272) | | Operating Expenses | | | | | | | Cost of revenues | 35,714 | 8,241 | 9,640 | 27,473 | (1,399) | | Research and development | 166,294 | 124,185 | 83,873 | 42,109 | 40,312 | | General and administrative | 63,817 | 51,815 | 36,850 | 12,002 | 14,965 | | Provision for credit losses and other | 7,975 | (10) | 42 | 7,985 | (52) | | Total operating expenses | 273,800 | 184,231 | 130,405 | 89,569 | 53,826 | | Income (loss) from operations | (119,233) | (148,998) | 88,100 | 29,765 | (237,098) | | Other Income | | | | | | | Interest income from licensing | 4,271 | 2,951 | 8,946 | 1,320 | (5,995) | | Investment income | 9,723 | 48,559 | 7,070 | (38,836) | 41,489 | | Interest expense | (771) | — | — | (771) | — | | Total other income | 13,223 | 51,510 | 16,016 | (38,287) | 35,494 | | Income (loss) before income taxes | (106,010) | (97,488) | 104,116 | (8,522) | (201,604) | | Income Tax Benefit (Expense) | (5,240) | 2,755 | (4,179) | (7,995) | 6,934 | | Net income (loss) | $(111,250) | $(94,733) | $99,937 | $(16,517) | $(194,670) | [475](index=475&type=chunk) - **License and Royalty Revenue (2020 vs. 2019):** Increased by **$119.3M**, driven by a **$40.8M** increase in Zolgensma royalty revenue and an **$80.0M** milestone payment for achieving $1.0B in cumulative net sales of Zolgensma[476](index=476&type=chunk) - **Research and Development Expense (2020 vs. 2019):** Increased by **$42.1M**, primarily due to higher personnel costs (**$13.2M**), external manufacturing services (**$12.2M**), clinical trial/regulatory activities (**$11.3M**), and preclinical studies (**$2.5M**)[477](index=477&type=chunk) - **General and Administrative Expense (2020 vs. 2019):** Increased by **$12.0M**, mainly from professional services (**$8.8M**) and personnel-related costs (**$2.9M**)[478](index=478&type=chunk) - **Provision for Credit Losses and Other (2020 vs. 2019):** Increased by **$8.0M**, primarily due to a **$7.7M provision for credit losses** related to accounts receivable from Abeona Therapeutics Inc[479](index=479&type=chunk) - **Investment Income (2020 vs. 2019):** Decreased by **$38.8M**, mainly due to **lower net gains** from marketable equity securities of Prevail Therapeutics Inc. (**$37.8M in 2019 vs. $4.8M in 2020**) and reduced interest income from marketable debt securities[480](index=480&type=chunk) - **Income Tax Benefit (Expense) (2020 vs. 2019):** Shifted from a **$2.8M benefit to a $5.2M expense**, primarily due to increased U.S. state income taxes from the sale of Zolgensma royalties to HCR and gains from Prevail securities sales[481](index=481&type=chunk) [Liquidity and Capital Resources](index=85&type=section&id=Liquidity%20and%20Capital%20Resources) REGENXBIO's liquidity is supported by cash and marketable securities, recent financing activities, and cash flow from operations, though future funding will be required for increasing expenses - **Sources of Liquidity:** As of Dec 31, 2020, cash, cash equivalents, and marketable securities totaled **$522.5M**, expected to fund operations for at least 12 months[482](index=482&type=chunk)[483](index=483&type=chunk][484](index=484&type=chunk][485](index=485&type=chunk][486](index=486&type=chunk][487](index=487&type=chunk][488](index=488&type=chunk] - Recent sources include a **$200.0M** upfront payment from HCR for Zolgensma royalties (Dec 2020), an **$80.0M** milestone payment from Novartis Gene Therapies (Oct 2020), and a **$189.1M** public offering (Aug 2018)[482](index=482&type=chunk)[483](index=483&type=chunk][484](index=484&type=chunk][485](index=485&type=chunk][486](index=486&type=chunk][487](index=487&type=chunk][488](index=488&type=chunk] - **Post-period Event:** In Jan 2021, completed a public offering of 4,899,000 shares, generating **$216.1M** net proceeds[490](index=490&type=chunk) - **Cash Flows from Operating Activities:** Net cash used decreased by **$53.6M** in 2020 to **$54.1M**, primarily due to increased revenues from Zolgensma royalties and milestone payments, partially offset by higher operating expenses[491](index=491&type=chunk)[492](index=492&type=chunk] - **Cash Flows from Investing Activities:** Net cash provided was **$122.8M** in 2020, mainly from sales/maturities of marketable securities (**$272.7M**) offset by purchases of marketable securities (**$123.0M**) and property/equipment (**$26.9M**, largely for new headquarters)[493](index=493&type=chunk)[494](index=494&type=chunk] - **Cash Flows from Financing Activities:** Net cash provided was **$200.2M** in 2020, primarily from the **$192.8M** net proceeds from the Zolgensma royalty sale and **$7.4M** from stock option exercises/ESPP[495](index=495&type=chunk)[496](index=496&type=chunk] - **Future Funding Requirements:** Expects increased R&D and G&A expenses, significant commercialization costs if products are approved, and rising capital expenditures for facility build-out[497](index=497&type=chunk) - Will require substantial additional capital, potentially through equity, debt, or strategic partnerships[498](index=498&type=chunk) [Contractual Obligations, Commitments and Contingencies](index=88&type=section&id=Contractual%20Obligations%2C%20Commitments%20and%20Contingencies) REGENXBIO's principal commitments include vendor contracts, obligations to licensors, and future Zolgensma royalty payments to HCR, alongside significant operating lease payments - Principal commitments include vendor contracts for research services and purchase commitments, generally terminable upon notice[499](index=499&type=chunk) - Obligations to licensors under in-license agreements include sublicense fees, milestone fees, royalties, and patent maintenance costs, which are not fixed and determinable for future periods[500](index=500&type=chunk) - Under the **royalty purchase agreement with HCR**, **future Zolgensma royalties** (net of licensor payments) are payable to HCR up to a **capped amount ($256.0M by Nov 7, 2024, or $296.0M thereafter)**, with no obligation to repay if royalties are insufficient[501](index=501&type=chunk)[502](index=502&type=chunk] - **Future minimum lease payments** for operating leases total **$131.7M**, with $4.2M due in 2021, $14.7M in 2022-2023, $19.7M in 2024-2025, and $93.1M thereafter[503](index=503&type=chunk) [Off-Balance Sheet Arrangements](index=89&type=section&id=Off-Balance%20Sheet%20Arrangements) REGENXBIO did not have any off-balance sheet arrangements during the periods presented - REGENXBIO did **not have any off-balance sheet arrangements** during the periods presented[504](index=504&type=chunk) [ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk](index=90&type=section&id=ITEM%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section details REGENXBIO's exposure to interest rate and foreign currency exchange rate risks, with the current impact not considered material - **Interest Rate Risk:** Primary exposure is from cash equivalents and marketable securities (**$522.5M** as of Dec 31, 2020)[506](index=506&type=chunk)[507](index=507&type=chunk] - A hypothetical **100 basis point increase** in interest rates would result in an estimated **$1.0M** decline in the net fair value of interest-sensitive securities[506](index=506&type=chunk)[507](index=507&type=chunk] - **Foreign Currency Exchange Rate Risk:** Exposed to fluctuations from transactions in non-U.S. dollar currencies (euros, British pounds, Canadian dollars, Japanese yen)[506](index=506&type=chunk)[507](index=507&type=chunk] - A hypothetical **10% change** in exchange rates is **not expected to materially harm** the business[506](index=506&type=chunk)[507](index=507&type=chunk] [ITEM 8. Financial Statements and Supplementary Data](index=90&type=section&id=ITEM%208.%20Financial%20Statements%20and%20Supplementary%20Data) This item incorporates the audited consolidated financial statements, related notes, and the independent registered public accounting firm's report - The **audited consolidated financial statements** and supplementary data are included, along with the report from **PricewaterhouseCoopers LLP**[508](index=508&type=chunk)[534](index=534&type=chunk)[535](index=535&type=chunk] [Report of Independent Registered Public Accounting Firm](index=95&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) PricewaterhouseCoopers LLP issued an unqualified opinion on REGENXBIO's financial statements and internal controls, noting "License revenue - Substantive Termination Penalties" as a critical audit matter - **PricewaterhouseCoopers LLP** issued an **unqualified opinion** on REGENXBIO Inc.'s consolidated financial statements and the **effectiveness of its internal control over financial reporting** as of December 31, 2020[534](index=534&type=chunk)[535](index=535&type=chunk] - A **critical audit matter** identified was **'License revenue - Substantive Termination Penalties'** due to **significant management judgment** in determining contract terms for revenue recognition, requiring **extensive auditor evaluation**[543](index=543&type=chunk)[544](index=544&type=chunk)[545](index=545&type=chunk] [Consolidated Balance Sheets](index=98&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheets (in thousands) | As of December 31, | 2020 | 2019 | | :------------------- | :----- | :----- | | **Assets** | | | | Cash and cash equivalents | $338,426 | $69,514 | | Marketable securities | 137,314 | 226,696 | | Accounts receivable (net) | 42,999 | 38,148 | | Total current assets | 531,197 | 345,032 | | Marketable securities (non-current) | 46,809 | 103,785 | | Property and equipment, net | 56,467 | 28,973 | | Total assets | $708,164 | $497,908 | | **Liabilities and Stockholders' Equity** | | | | Accounts payable | $10,622 | $6,409 | | Accrued expenses and other current liabilities | 49,082 | 24,846 | | Liability related to sale of future royalties (current) | 18,794 | — | | Total current liabilities | 81,447 | 33,676 | | Liability related to sale of future royalties (non-current) | 174,504 | — | | Total liabilities | 330,411 | 47,711 | | Total stockholders' equity | 377,753 | 450,197 | | Total liabilities and stockholders' equity | $708,164 | $497,908 | [550](index=550&type=chunk) [Consolidated Statements of Operations and Comprehensive Income (Loss)](index=99&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) Consolidated Statements of Operations and Comprehensive Income (Loss) (in thousands, except per share data) | Years Ended December 31, | 2020 | 2019 | 2018 | | :------------------------- | :----- | :----- | :----- | | Total revenues | $154,567 | $35,233 | $218,505 | | Cost of revenues | 35,714 | 8,241 | 9,640 | | Research and development | 166,294 | 124,185 | 83,873 | | General and administrative | 63,817 | 51,815 | 36,850 | | Provision for credit losses and other | 7,975 | (10) | 42 | | Total operating expenses | 273,800 | 184,231 | 130,405 | | Income (loss) from operations | (119,233) | (148,998) | 88,100 | | Total other income | 13,223 | 51,510 | 16,016 | | Income (loss) before income taxes | (106,010) | (97,488) | 104,116 | | Income Tax Benefit (Expense) | (5,240) | 2,755 | (4,179) | | Net income (loss) | $(111,250) | $(94,733) | $99,937 | | Comprehensive income (loss) | $(111,815) | $(93,848) | $99,932 | | Net income (loss) per share: Basic | $(2.98) | $(2.58) | $2.99 | | Net income (loss) per share: Diluted | $(2.98) | $(2.58) | $2.73 | [551](index=551&type=chunk) [Consolidated Statements of Stockholders' Equity](index=100&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) Consolidated Statements of Stockholders' Equity (in thousands) | | Shares | Common Stock Amount | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders' Equity | | :-------------------------- | :----- | :------------------ | :------------------------- | :------------------------------------------ | :------------------ | :------------------------- | | Balances at December 31, 2017 | 31,295 | $3 | $371,497 | $(715) | $(187,756) | $183,029 | | Balances at December 31, 2018 | 36,120 | 4 | 592,580 | (720) | (83,016) | 508,848 | | Balances at December 31, 2019 | 36,992 | 4 | 627,810 | 205 | (177,822) | 450,197 | | Balances at December 31, 2020 | 37,476 | 4 | 667,181 | (360) | (289,072) | 377,753 | [554](index=554&type=chunk) [Consolidated Statements of Cash Flows](index=101&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows (in thousands) | Years Ended December 31, | 2020 | 2019 | 2018 | | :------------------------- | :----- | :----- | :----- | | Net cash provided by (used in) operating activities | $(54,061) | $(107,705) | $104,648 | | Net cash provided by (used in) investing activities | 122,759 | 93,559 | (279,358) | | Net cash provided by financing activities | 200,214 | 8,376 | 204,443 | | Net increase (decrease) in cash and cash equivalents and restricted cash | $268,912 | $(5,770) | $29,733 | | Cash and cash equivalents and restricted cash, End of period | $339,756 | $70,844 | $76,614 | [556](index=556&type=chunk) [Notes to Consolidated Financial Statements](index=102&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [1. Nature of Business](index=102&type=section&id=1.%20Nature%20of%20Business) REGENXBIO is a clinical-stage gene therapy company with an accumulated deficit of **$289.1 million** as of December 31, 2020, requiring additional capital - REGENXBIO is a **clinical-stage biotechnology company** leveraging its **NAV Technology Platform** for gene therapy, with **one commercial product (Zolgensma®)** and **over 20 product candidates** in development[558](index=558&type=chunk) - Accumulated deficit: **$289.1 million** as of December 31, 2020[559](index=559&type=chunk) - Cash, cash equivalents, and marketable securities: **$522.5 million** as of December 31, 2020, sufficient to fund operations for at least the next 12 months[559](index=559&type=chunk) [2. Summary of Significant Accounting Policies](index=102&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note details REGENXBIO's significant accounting policies, covering revenue recognition, R&D expenses, stock-based compensation, income taxes, and recently adopted pronouncements - The company operates as **one operating segment**, with the substantial majority of revenues and assets attributed to the U.S[560](index=560&type=chunk)[561](index=561&type=chunk][562](index=562&type=chunk][563](index=563&type=chunk][564](index=564&type=chunk][565](index=565&type=chunk][566](index=566&type=chunk][567](index=567&type=chunk][568](index=568&type=chunk][569](index=569&type=chunk][570](index=570&type=chunk][571](index=571&type=chunk][572](index=572&type=chunk][573](index=573&type=chunk][574](index=574&type=chunk][575](index=575&type=chunk][576](index=576&type=chunk][577](index=577&type=chunk][578](index=578&type=chunk][579](index=579&type=chunk][580](index=580&type=chunk][581](index=581&type=chunk][582](index=582&type=chunk][583](index=583&type=chunk][584](index=584&type=chunk][585](index=585&type=chunk][586](index=586&type=chunk][587](index=587&type=chunk][588](index=588&type=chunk][589](index=589&type=chunk][590](index=590&type=chunk][591](index=591&type=chunk][592](index=592&type=chunk][593](index=593&type=chunk][594](index=594&type=chunk][595](index=595&type=chunk][596](index=596&type=chunk][597](index=597&type=chunk][598](index=598&type=chunk][599](index=599&type=chunk][600](index=600&type=chunk][601](index=601&type=chunk][602](index=602&type=chunk][603](index=603&type=chunk][604](index=604&type=chunk][605](index=605&type=chunk][606](index=606&type=chunk][607](index=607&type=chunk][608](index=608&type=chunk][609](index=609&type=chunk][610](index=610&type=chunk][611](index=611&type=chunk][612](index=612&type=chunk][613](index=613&type=chunk] - **Cash equivalents** are highly liquid investments with original maturities of 90 days or less[560](index=560&type=chunk)[561](index=561&type=chunk][562](index=562&type=chunk][563](index=563&type=chunk][564](index=564&type=chunk][565](index=565&type=chunk][566](index=566&type=chunk][567](index=567&type=chunk][568](index=568&type=chunk][569](index=569&type=chunk][570](index=570&type=chunk][571](index=571&type=chunk][572](index=572&type=chunk][573](index=573&type=chunk][574](index=574&type=chunk][575](index=575&type=chunk][576](index=576&type=chunk][577](index=577&type=chunk][578](index=578&type=chunk][579](index=579&type=chunk][580](index=580&type=chunk][581](index=581&type=chunk][582](index=582&type=chunk][583](index=583&type=chunk][584](index=584&type=chunk][585](index=585&type=chunk][586](index=586&type=chunk][587](index=587&type=chunk][588](index=588&type=chunk][589](index=589&type=chunk][590](index=590&type=chunk][591](index=591&type=chunk][592](index=592&type=chunk][593](index=593&type=chunk][594](index=594&type=chunk][595](index=595&type=chunk][596](index=596&type=chunk][597](index=597&type=chunk][598](index=598&type=chunk][599](index=599&type=chunk][600](index=600&type=chunk][601](index=601&type=chunk][602](index=602&type=chunk][603](index=603&type=chunk][604](index=604&type=chunk][605](index=605&type=chunk][606](index=606&type=chunk][607](index=607&type=chunk][608](index=608&type=chunk][609](index=609&type=chunk][610](index=610&type=chunk][611](index=611&type=chunk][612](index=612&type=chunk][613](index=613&type=chunk] - Restricted cash collateralizes letters of credit for lease agreements[560](index=560&type=chunk)[561](index=561&type=chunk][562](index=562&type=chunk][563](index=563&type=chunk][564](index=564&type=chunk][565](index=565&type=chunk][566](index=566&type=chunk][567](index=567&type=chunk][568](index=568&type=chunk][569](index=569&type=chunk][570](index=570&type=chunk][571](index=571&type=chunk][572](index=572&type=chunk][573](index=573&type=chunk][574](index=574&type=chunk][575](index=575&type=chunk][576](index=576&type=chunk][577](index=577&type=chunk][578](index=578&type=chunk][579](index=579&type=chunk][580](index=580&type=chunk][581](index=581&type=chunk][582](index=582&type=chunk][583](index=583&type=chunk][584](index=584&type=chunk][585](index=585&type=chunk][586](index=586&type=chunk][587](index=587&type=chunk][588](index=588&type=chunk][589](index=589&type=chunk][590](index=590&type=chunk][591](index=591&type=chunk][592](index=592&type=chunk][593](index=593&type=chunk][594](index=594&type=chunk][595](index=595&type=chunk][596](index=596&type=chunk][597](index=597&type=chunk][598](index=598&type=chunk][599](index=599&type=chunk][600](index=600&type=chunk][601](index=601&type=chunk][602](index=602&type=chunk][603](index=603&type=chunk][604](index=604&type=chunk][605](index=605&type=chunk][606](index=606&type=chunk][607](index=607&type=chunk][608](index=608&type=chunk][609](index=609&type=chunk][610](index=610&type=chunk][611](index=611&type=chunk][612](index=612&type=chunk][613](index=613&type=chunk] - **Marketable securities** are available-for-sale debt and equity securities, carried at fair value[560](index=560&type=chunk)[561](index=561&type=chunk][562](index=562&type=chunk][563](index=563&type=chunk][564](index=564&type=chunk)[565](index=565&type=chunk][566](index=566&type=chunk][567](index=567&type=chunk][568](index=568&type=chunk][569](index=569&type=chunk][570](index=570&type=chunk][571](index=571&type=chunk][572](index=572&type=chunk][573](index=573&type=chunk][57

Financial Data and Key Metrics Changes - REGENXBIO reported revenues of $98.9 million for Q3 2020, a significant increase from $14.7 million in Q3 2019, primarily due to an $80 million milestone fee from Novartis and a $9.6 million increase in Zolgensma royalty revenue [36] - The company ended Q3 2020 with cash, cash equivalents, and marketable securities totaling $289.8 million, down from $400 million as of December 31, 2019, mainly due to net cash used in operating activities of $93.5 million [35] - Net income for Q3 2020 was $8.8 million, compared to a net loss of $34.6 million in Q3 2019, reflecting a significant turnaround in financial performance [38] Business Line Data and Key Metrics Changes - The RGX-314 program is advancing with two Phase II studies underway for the treatment of wet AMD and diabetic retinopathy, indicating progress in the clinical pipeline [9][13] - The company has expanded its MPS II program, allowing for additional patients in the ongoing Phase 1/2 study of RGX-121, demonstrating growth in its rare disease portfolio [23] Market Data and Key Metrics Changes - Zolgensma sales increased by 82% in Q3 2020 compared to Q3 2019, contributing significantly to the company's revenue growth [36] - The ALTITUDE trial for RGX-314 in diabetic retinopathy is expected to enroll 40 patients, highlighting the company's focus on addressing significant unmet medical needs in the market [22] Company Strategy and Development Direction - REGENXBIO is focused on advancing its NAV technology platform and expanding its clinical pipeline, with plans to initiate pivotal studies for RGX-314 in early 2021 [15][30] - The company is also enhancing its manufacturing capabilities with a new GMP facility in Rockville, aimed at ensuring product consistency and scalability [42][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term durability of RGX-314, citing positive results from ongoing studies and the potential for a one-time treatment option for patients [15][21] - The impact of the COVID-19 pandemic on clinical development timelines is being actively monitored, with a focus on maintaining operational stability [11] Other Important Information - REGENXBIO received an $80 million milestone payment from Novartis based on Zolgensma's cumulative net sales exceeding $1 billion, reflecting the success of its partnered product [33] - The company is engaged in ongoing discussions regarding intellectual property rights related to its NAV technology platform, emphasizing the importance of protecting its innovations [100][102] Q&A Session Summary Question: Update on suprachoroidal microinjector program and safety data - Management confirmed that no inflammation has been observed in patients dosed so far in the AAVIATE trial, with a total of 20 patients planned for cohort 1 [55][56] Question: Update on MPS II program - Management plans to provide an update on the MPS II program by the end of 2020, with additional patients enrolled under the expanded protocol [62] Question: Frequency of rescue VEGF injections for RGX-314 - Management indicated that discussions with physicians suggest a target of at least a 50% reduction in the need for rescue injections, emphasizing the value of gene therapy in improving patient outcomes [68][70] Question: Status of CLN2 programs and IND filing - Management confirmed that preclinical studies for RGX-181 and RGX-381 are nearing completion, with IND filings expected by the end of 2020 [90][92] Question: Update on IP dispute with Passage Bio and Sarepta - Management stated there are no specific updates on the IP dispute but emphasized the importance of protecting their NAV technology platform [100][102]

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 001-37553 REGENXBIO Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 47-1851754 (S ...

REGENXBIO, Inc. (NASDAQ:RGNX) Q2 2020 Earnings Conference Call August 6, 2020 4:30 PM ET Company Participants Patrick Christmas – Chief Legal Officer Ken Mills – President and Chief Executive Officer Steve Pakola – Chief Medical Officer Vit Vasista – Chief Financial Officer Conference Call Participants Gena Wang – Barclays Alec Stranahan – Bank of America Mani Foroohar – SVB Sam Lee – Chardan Connor McGuinness Meehan – Morgan Stanley Luca Issi – RBC Capital Operator Good afternoon and welcome to the REGENXB ...

PART I—FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited consolidated financial statements for Q2 2020 show a net loss and decreased total assets, reflecting the period's financial performance Consolidated Balance Sheet Highlights (in thousands of dollars) | | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | $449,738 | $497,908 | | Cash and cash equivalents | $94,222 | $69,514 | | Marketable securities | $245,018 | $330,481 | | **Total Liabilities** | $51,877 | $47,711 | | **Total Stockholders' Equity** | $397,861 | $450,197 | Consolidated Statements of Operations Highlights (in thousands of dollars) | | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | **Total Revenues** | $34,210 | $8,765 | | **Total Operating Expenses** | $113,743 | $81,543 | | Loss from operations | $(79,533) | $(72,778) | | **Net Loss** | $(73,800) | $(33,685) | | **Net Loss Per Share** | $(1.98) | $(0.92) | - The company is a **clinical-stage biotechnology firm** focused on **gene therapy** via its proprietary **NAV Technology Platform**, licensed to third parties and used for its internal pipeline, with **Zolgensma®** as a commercial product[26](index=26&type=chunk) - As of June 30, 2020, the company reported an accumulated deficit of **$251.6 million**, with **$339.2 million** in cash, cash equivalents, and marketable securities deemed sufficient to fund operations for **at least the next 12 months**[27](index=27&type=chunk) - Accounts receivable included **$28.8 million** from a license agreement with **Abeona Therapeutics Inc.**, which led to the **agreement's termination** and an **ongoing arbitration proceeding** to collect unpaid fees due to Abeona's payment failure[67](index=67&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes financial performance, pipeline progress, and COVID-19 impacts, confirming sufficient liquidity for the next 12 months - The company is advancing its pipeline, with plans to initiate a pivotal program for the subretinal delivery of **RGX-314** for wet AMD in the second half of 2020 and a Phase II trial for its suprachoroidal delivery in Q3 2020[85](index=85&type=chunk)[86](index=86&type=chunk) - The **COVID-19 pandemic** has not significantly impacted financial results for the period but is expected to delay new headquarters construction and potentially affect future clinical trials[96](index=96&type=chunk)[97](index=97&type=chunk) Comparison of Results of Operations (in thousands of dollars) | | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $16,566 | $7,881 | $34,210 | $8,765 | | **R&D Expense** | $38,111 | $29,483 | $75,146 | $54,686 | | **G&A Expense** | $15,554 | $13,405 | $30,387 | $24,963 | | **Net Loss** | $(33,762) | $(1,457) | $(73,800) | $(33,685) | - The increase in license and royalty revenue was primarily driven by higher royalty revenue from sales of **Zolgensma**, totaling **$11.9 million** and **$21.9 million** for the three and six months ended June 30, 2020, respectively[116](index=116&type=chunk)[120](index=120&type=chunk) - R&D expenses increased by **$20.5 million** for the first six months of 2020 compared to 2019, mainly due to a **$9.1 million** increase in personnel-related costs from higher headcount and increased external costs for manufacturing and clinical trial activities[121](index=121&type=chunk) - As of June 30, 2020, the company had **$339.2 million** in cash, cash equivalents, and marketable securities, expected to fund operations and capital expenditures for at least the next 12 months[122](index=122&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to the company's market risk exposure were reported for the six months ended June 30, 2020 - There have been no material changes to the company's exposure to market risk during the six months ended June 30, 2020[142](index=142&type=chunk) [Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2020, with no material changes in internal control over financial reporting - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2020[143](index=143&type=chunk)[144](index=144&type=chunk) - No changes occurred during the quarter ended June 30, 2020, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[145](index=145&type=chunk) PART II—OTHER INFORMATION [Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) The company is in arbitration with Abeona Therapeutics Inc. to collect $28.0 million in unpaid license fees after agreement termination - **Abeona Therapeutics Inc.** failed to pay an **$8.0 million** license fee due by April 1, 2020, resulting in a breach and subsequent termination of the license agreement[149](index=149&type=chunk) - Upon termination, an additional **$20.0 million** fee became payable, bringing the total amount due from Abeona to **$28.0 million**, plus interest[149](index=149&type=chunk)[150](index=150&type=chunk) - The company has filed a counterclaim in arbitration to collect the unpaid fees and believes its risk of loss from Abeona's claim is remote[150](index=150&type=chunk) [Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) Updated risk factors highlight COVID-19 impacts on operations and clinical development, alongside risks from third-party collaborations - The **COVID-19 pandemic** could adversely affect business by delaying clinical trials, disrupting the supply chain, and delaying the construction of the new cGMP production facility[152](index=152&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - The company faces risks related to its reliance on **third-party licensees and collaborators**, including lack of control over development, potential for disputes, and termination of agreements, which could harm financial results[158](index=158&type=chunk)[159](index=159&type=chunk) - The ongoing arbitration with **Abeona** is presented as an example of risks related to third-party agreements, which could result in delayed or non-payment of significant fees and have a material adverse effect on the business[162](index=162&type=chunk)[163](index=163&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported for the period - None[165](index=165&type=chunk) [Defaults Upon Senior Securities](index=37&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported - None[166](index=166&type=chunk) [Mine Safety Disclosures](index=37&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable[167](index=167&type=chunk) [Other Information](index=37&type=section&id=Item%205.%20Other%20Information) No information was reported for this item - None[168](index=168&type=chunk) [Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and Inline XBRL financial data - The exhibits include certifications from the **CEO and CFO** under Section 302 of the Sarbanes-Oxley Act (Exhibits 31.1 and 31.2)[170](index=170&type=chunk) - Financial data is provided in **Inline XBRL format** as Exhibit 101[170](index=170&type=chunk)