PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Solid Biosciences Inc.'s unaudited condensed consolidated financial statements, highlighting a decrease in cash, increased net loss, and significant cash usage for the periods ended September 30, 2023 - The company is a life sciences firm focused on gene therapies for neuromuscular and cardiac diseases, including **SGT-003** for **Duchenne muscular dystrophy**, with its pipeline expanded through the acquisition of **AavantiBio** in December 2022[22](index=22&type=chunk)[23](index=23&type=chunk) - The company believes its existing cash, cash equivalents, and available-for-sale securities of **$142.9 million** (as of Sept 30, 2023) are sufficient to fund operations **into 2025**, though it acknowledges the need for future financing[30](index=30&type=chunk)[89](index=89&type=chunk) Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $49,037 | $155,384 | | Available-for-sale securities | $93,847 | $58,338 | | Total current assets | $148,346 | $219,638 | | Total assets | $184,728 | $260,252 | | **Liabilities & Equity** | | | | Total liabilities | $40,367 | $48,586 | | Total stockholders' equity | $144,361 | $211,666 | Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Q3 2023 | Q3 2022 | 9 Months 2023 | 9 Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Collaboration revenue | $0 | $0 | $0 | $8,094 | | Research and development | $16,702 | $14,005 | $61,110 | $57,130 | | General and administrative | $6,412 | $7,127 | $20,940 | $21,330 | | Loss from operations | $(23,114) | $(21,132) | $(81,987) | $(71,886) | | Net loss | $(20,980) | $(20,410) | $(75,679) | $(70,830) | | Net loss per share | $(1.05) | $(2.71) | $(3.83) | $(9.42) | Condensed Consolidated Statements of Cash Flows (in thousands) | Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(73,357) | $(63,497) | | Net cash used in investing activities | $(35,607) | $(6,943) | | Net cash provided by financing activities | $2,617 | $94 | | **Net decrease in cash** | **$(106,347)** | **$(70,346)** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's gene therapy pipeline, Q3 and YTD 2023 financial results, noting increased R&D expenses, decreased G&A, and liquidity sufficient into 2025 - The company is focused on advancing a diverse pipeline of gene therapy candidates for rare neuromuscular and cardiac diseases, including **SGT-003** for **Duchenne**, **SGT-501** for **CPVT**, **AVB-401** for **BAG3-mediated dilated cardiomyopathy**, and **AVB-202-TT** for **Friedreich's ataxia**[80](index=80&type=chunk) - As of September 30, 2023, the company had cash, cash equivalents, and available-for-sale securities of **$142.9 million**, which is expected to fund operating expenses and capital expenditure requirements **into 2025**[89](index=89&type=chunk)[121](index=121&type=chunk) Comparison of Operating Results (in thousands) | Metric | Q3 2023 | Q3 2022 | 9 Months 2023 | 9 Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Collaboration Revenue | $0 | $0 | $0 | $8,094 | | R&D Expenses | $16,702 | $14,005 | $61,110 | $57,130 | | G&A Expenses | $6,412 | $7,127 | $20,940 | $21,330 | | Net Loss | $(20,980) | $(20,410) | $(75,679) | $(70,830) | - The increase in R&D expenses for Q3 2023 was primarily due to a **$1.5 million** increase in costs for SGT-003 and a **$0.8 million** increase for other development programs, offset by a **$1.3 million** decrease in costs for SGT-001 as development of SGT-003 was prioritized[107](index=107&type=chunk) - For the nine months ended September 30, 2023, R&D expenses increased by **$4.0 million**, driven by a **$13.0 million** increase in SGT-003 costs and a **$4.5 million** increase in other programs, offset by a **$16.5 million** decrease in SGT-001 costs[114](index=114&type=chunk) - Net cash used in operating activities increased to **$73.4 million** for the first nine months of 2023 from **$63.5 million** in the same period of 2022, primarily due to a higher net loss and changes in operating assets and liabilities[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk primarily stems from interest rate changes affecting its short-term investment portfolio, with a 10% rate shift deemed immaterial - The company is exposed to market risk from changes in **interest rates**, primarily affecting interest income from its cash equivalents and available-for-sale securities (treasury bills and corporate bonds)[138](index=138&type=chunk) - Due to the short-term nature of its investment portfolio (contractual maturities of less than one year), the company states that an immediate **10%** change in market interest rates would not materially impact the fair market value of its portfolio or its financial results[138](index=138&type=chunk) [Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal control over financial reporting during Q3 2023 - As of September 30, 2023, the company's President and Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were **effective** at the reasonable assurance level[139](index=139&type=chunk) - There were **no changes** in internal control over financial reporting during the three months ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[140](index=140&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) The company is not aware of any material legal proceedings or claims as of September 30, 2023 - The company states there are **no material legal proceedings** as of the reporting date[142](index=142&type=chunk) [Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) This section details risks including AavantiBio integration, significant net losses, future funding needs, gene therapy development challenges, and reliance on third-party manufacturing and IP - The company may fail to realize the anticipated benefits of its acquisition of **AavantiBio** and may encounter significant **integration difficulties**[145](index=145&type=chunk)[146](index=146&type=chunk) - The company has a history of **significant net losses** (**$75.7 million** for the nine months ended Sep 30, 2023) and expects to continue incurring losses, requiring **additional funding** which may not be available[145](index=145&type=chunk)[152](index=152&type=chunk) - The company's gene transfer candidates are based on **novel technology**, making it difficult to predict development time, cost, and regulatory approval; past clinical trials have been placed on hold by the **FDA**, and future trials may face similar issues or undesirable side effects[145](index=145&type=chunk)[174](index=174&type=chunk)[177](index=177&type=chunk) - The company has **limited gene therapy manufacturing experience** and relies on **third-party manufacturers**, which poses risks of production problems, delays, and unsatisfactory performance[146](index=146&type=chunk)[256](index=256&type=chunk)[265](index=265&type=chunk) - The business heavily relies on **in-licensed patents** and **intellectual property**; failure to maintain these licenses or protect its **IP** could allow competitors to develop similar products and adversely affect commercialization[146](index=146&type=chunk)[343](index=343&type=chunk)[349](index=349&type=chunk) - The company faces **significant competition** from larger, better-funded companies, including **Sarepta Therapeutics**, whose gene therapy **ELEVIDYS** received **FDA accelerated approval** in June 2023 for a similar patient population[242](index=242&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=82&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered equity securities were sold during the three months ended September 30, 2023 - **No unregistered securities** were sold during the three months ended September 30, 2023[424](index=424&type=chunk) [Exhibits](index=83&type=section&id=Item%206.%20Exhibits) Exhibits include Gabriel Brooks' employment agreement and required CEO/CFO certifications under Sarbanes-Oxley Sections 302 and 906 - The exhibits filed with this report include an **employment agreement** for Gabriel Brooks and required **CEO/CFO certifications** under **Sarbanes-Oxley Sections 302 and 906**[426](index=426&type=chunk)

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=2&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents unaudited condensed consolidated financial statements, including balance sheets, operations, and cash flows, with detailed notes [Condensed Consolidated Balance Sheets](index=2&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20at%20June%2030,%202023%20and%20December%2031,%202022) Total assets and stockholders' equity decreased from December 2022 to June 2023, driven by reduced cash and increased accumulated deficit Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Cash and cash equivalents | $91,569 | $155,384 | $(63,815) | -41.07% | | Available-for-sale securities | $68,623 | $58,338 | $10,285 | 17.63% | | Total current assets | $167,475 | $219,638 | $(52,163) | -23.75% | | Total assets | $204,721 | $260,252 | $(55,531) | -21.34% | | Total current liabilities | $15,866 | $22,508 | $(6,642) | -29.51% | | Total liabilities | $40,993 | $48,586 | $(7,593) | -15.63% | | Total stockholders' equity | $163,728 | $211,666 | $(47,938) | -22.65% | | Accumulated deficit | $(617,437) | $(562,738) | $(54,699) | 9.72% | [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20three%20and%20six%20months%20ended%20June%2030,%202023%20and%202022) No collaboration revenue for Q2 and H1 2023; net losses remained substantial, driven by reduced collaboration revenue and increased interest income Condensed Consolidated Statements of Operations (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Collaboration revenue | $0 | $6,169 | $0 | $8,094 | | R&D expenses | $19,777 | $23,180 | $44,408 | $43,125 | | G&A expenses | $7,129 | $6,851 | $14,528 | $14,203 | | Restructuring Charges | $(63) | $1,520 | $(63) | $1,520 | | Total operating expenses | $26,843 | $31,551 | $58,873 | $58,848 | | Loss from operations | $(26,843) | $(25,382) | $(58,873) | $(50,754) | | Interest income, net | $1,949 | $293 | $3,627 | $347 | | Net loss | $(24,629) | $(25,092) | $(54,699) | $(50,420) | | Net loss per share | $(1.25) | $(3.33) | $(2.79) | $(6.71) | - Collaboration revenue decreased to **$0** for both the three and six months ended June 30, 2023, from **$6,169 thousand** and **$8,094 thousand** respectively in the prior year, due to the completion of research and development services under the Ultragenyx Collaboration Agreement[10](index=10&type=chunk)[52](index=52&type=chunk) - Net loss per share significantly improved from **$(3.33)** to **$(1.25)** for the three months ended June 30, 2023, and from **$(6.71)** to **$(2.79)** for the six months ended June 30, 2023, despite increased net loss, primarily due to a substantial increase in weighted average shares outstanding[10](index=10&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss%20for%20the%20three%20and%20six%20months%20ended%20June%2030,%202023%20and%202022) Comprehensive loss for Q2 and H1 2023 was primarily driven by net loss, with minor impact from unrealized gains on securities Condensed Consolidated Statements of Comprehensive Loss (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(24,629) | $(25,092) | $(54,699) | $(50,420) | | Unrealized gain (loss) on available-for-sale securities | $9 | $(71) | $82 | $(77) | | Comprehensive loss | $(24,620) | $(25,163) | $(54,617) | $(50,497) | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20for%20the%20three%20and%20six%20months%20ended%20June%2030,%202023%20and%202022) Stockholders' equity decreased from December 2022 to June 2023, driven by net loss, partially offset by equity compensation and common stock sales Condensed Consolidated Statements of Changes in Stockholders' Equity | Metric | Balance at December 31, 2022 | Six Months Ended June 30, 2023 | Balance at June 30, 2023 | | :-------------------- | :--------------------------- | :----------------------------- | :----------------------- | | Common Stock (shares) | 19,556,732 | 487,657 | 20,044,389 | | Common Stock (amount in thousands) | $20 | $0 | $20 | | Additional paid-in capital (in thousands) | $774,452 | $6,679 | $781,131 | | Accumulated other comprehensive income (loss) (in thousands) | $(68) | $82 | $14 | | Accumulated deficit (in thousands) | $(562,738) | $(54,699) | $(617,437) | | Total stockholders' equity (in thousands) | $211,666 | $(47,938) | $163,728 | - During the six months ended June 30, 2023, the company issued **420,000 shares** of common stock through an 'at-the-market offering' sales agreement, generating net proceeds of **$2,539 thousand**[14](index=14&type=chunk)[73](index=73&type=chunk) - Equity-based compensation contributed **$4,062 thousand** to additional paid-in capital for the six months ended June 30, 2023[14](index=14&type=chunk)[78](index=78&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20six%20months%20ended%20June%2030,%202023%20and%202022) Operating cash usage increased, investing cash usage decreased, and financing activities provided more cash, mainly from common stock issuance Cash Flow Activity (in thousands) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(55,460) | $(43,068) | | Net cash used in investing activities | $(10,972) | $(21,852) | | Net cash provided by financing activities | $2,617 | $95 | | Net decrease in cash, cash equivalents and restricted cash | $(63,815) | $(64,825)

This presentation release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding future expectations, plans and prospects for the company; the ability to successfully achieve and execute on the company's priorities and achieve key clinical milestones; the company's plans to present data from its Friedreich's ataxia program, next-generation Duchenne muscular dystrophy program, novel capsid program, and process developme ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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 March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File Number: 001-38360 Solid Biosciences Inc. (Exact Name of Registrant as Specified in its Charter) (State or other jurisdict ...

Financial Performance - The company incurred a net loss of $86.0 million for the year ended December 31, 2022, with an accumulated deficit of $562.7 million as of the same date [237]. - The company expects to continue incurring significant operating losses for the foreseeable future as it focuses on research and development [237]. - The company has never generated revenue from product sales and does not expect to do so for the foreseeable future [244]. - The company will need to raise additional funds to continue operations beyond 2025, with no assurance that such funds will be available on acceptable terms [240]. Acquisition and Integration - The acquisition of AavantiBio was completed on December 2, 2022, and included pipeline programs for treating FA and BAG3 mediated dilated cardiomyopathy [230]. - There is a risk that the integration of AavantiBio may divert management's attention and disrupt ongoing business operations [231]. - The anticipated benefits of the acquisition may not be realized if integration challenges arise or if undisclosed liabilities surface [232]. - Future capital requirements will depend on the progress and costs associated with integrating AavantiBio and the results of clinical trials for SGT-003 and other candidates [241]. - The company may face increased litigation risks following the acquisition, which could adversely impact business operations [236]. Clinical Trials and Regulatory Challenges - The COVID-19 pandemic has caused disruptions in clinical trials, regulatory activities, and supply chains, impacting the ability to complete preclinical studies and clinical trials [247][248]. - Company has faced challenges in recruiting patients for clinical trials due to COVID-19, resulting in missed or postponed patient visits [249]. - Regulatory approvals may be delayed or impacted due to the redirection of resources by the FDA towards COVID-19 therapies, affecting the progress of the company's product candidates [250]. - The company has limited experience in regulatory submissions and has never completed a clinical trial, which poses risks for future product candidates [272]. - The company may face significant delays in clinical trials due to various factors, including patient recruitment and regulatory approvals [278]. - Regulatory approval for SGT-003, AVB-202-TT, and AVB-401 is uncertain, and even if trials are successful, approvals may be for narrower indications than sought [285]. Product Development and Safety Concerns - The regulatory approval process for gene transfer candidates is uncertain and can be more expensive and time-consuming compared to other products, with only a limited number of such products approved in the U.S. and EU [262]. - There is a risk of undesirable side effects from gene transfer candidates that could delay or prevent regulatory approval, impacting their commercial potential [263]. - Previous gene therapy treatments have reported significant adverse side effects, raising concerns about the safety and efficacy of the company's candidates [266]. - A serious adverse event related to SGT-001 occurred in a clinical trial, leading to a clinical hold by the FDA in November 2019, which was lifted in October 2020 [270]. - The anticipated dosing requirements for SGT-003 may increase the risk of adverse side effects, as seen in previous high-dose AAV vector administrations [268]. Manufacturing and Supply Chain Risks - The company currently relies on third-party manufacturers for SGT-003 and plans to do so for AVB-202-TT and AVB-401 programs, which exposes it to risks of delays and insufficient supply [351]. - The company does not have long-term supply arrangements for SGT-003, which may hinder its ability to scale production and meet future demand [353]. - There is a risk of significant disruption in supply due to factors such as equipment malfunctions, contamination, or public health issues like the COVID-19 pandemic [346]. - The company is at risk of contamination in its manufacturing processes, which could disrupt the supply of its product candidates and affect clinical development timelines [366]. Market and Competitive Landscape - The company faces significant competition from larger pharmaceutical and biotechnology firms, which may achieve regulatory approval before the company or develop more effective therapies [328]. - Competitors such as Pfizer and Sarepta Therapeutics are advancing in clinical trials for gene therapies, with Sarepta having submitted a BLA for its candidate with a PDUFA date of May 29, 2023 [329]. - The company's commercial opportunity may be diminished if competitors launch safer, more effective, or less expensive products first [330]. - The commercial success of gene therapy products may be limited by patients' immune responses, affecting the population amenable to treatment [360]. Regulatory Environment and Compliance - The FDA may require a Risk Evaluation and Mitigation Strategy (REMS) if SGT-003 or other candidates receive marketing approval, which could include a medication guide and communication plan [269]. - Compliance with ongoing regulatory requirements post-approval is necessary, and failure to do so could limit the ability to market future products [291]. - The company is subject to various stringent privacy laws and regulations, including HIPAA, which impose significant compliance costs and potential penalties for violations [405]. - The company faces risks related to anti-corruption laws, including the U.K. Bribery Act and the U.S. Foreign Corrupt Practices Act, which could lead to civil or criminal penalties if violated [416]. Financial and Operational Risks - The company faces potential pricing pressures from both federal and state healthcare reforms, which could limit revenue generation capabilities [396]. - The company has reduced its workforce by approximately 35% in April 2022 and 18% in December 2022 as part of a strategic plan to streamline operations, but may not realize the anticipated benefits from these reductions [381]. - The company is highly dependent on key employees, and the loss of these individuals could impede the achievement of its research and commercialization objectives [378]. - The company may engage in future acquisitions or strategic collaborations, which could increase capital requirements and introduce additional risks [376].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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, 2022 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: 001-38360 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sec ...

© 2022 Solid Biosciences 1 Strategic Update: Acquisition of AavantiBio and $75M PIPE September 30, 2022 Forward-Looking Statements and Industry and Market Data This presentation and various remarks we make during this presentation contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding: future expectations, plans and prospects for Solid Biosciences Inc. (the "Company" or "Solid"), AavantiBio, Inc. ("AavantiBio") and the ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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 June 30, 2022 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: 001-38360 Solid Biosciences Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 90-0943402 (State ...

Solid Biosciences Inc. (NASDAQ:SLDB) Q1 2022 Results Conference Call April 27, 2022 8:00 AM ET Company Participants Caitlin Lowie - VP, Communications and IR Ilan Ganot - Co-Founder, President and CEO Dr. Joel Schneider - COO Dr. Carl Morris - Chief Scientific Officer Dr. Roxana Donisa Dreghici - SVP and Head, Clinical Development Conference Call Participants Gena Wang - Barclays Joseph Schwartz - SVB Securities Allison Bratzel - Piper Sandler Anupam Rama - JP Morgan Maury Raycroft - Jefferies Operator Ladi ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Q1 2022 net loss of $25.3 million, decreased assets, and April 2022 restructuring with 35% workforce reduction Condensed Consolidated Balance Sheet Data (in thousands) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $129,711 | $119,136 | | Available-for-sale securities | $50,339 | $88,643 | | **Total Assets** | **$207,556** | **$232,380** | | Total current liabilities | $21,744 | $23,601 | | **Total Liabilities** | **$22,045** | **$24,169** | | **Total Stockholders' Equity** | **$185,511** | **$208,211** | Condensed Consolidated Statements of Operations (in thousands) | Account | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Collaboration revenue - related party | $1,925 | $3,335 | | Research and development | $19,945 | $14,206 | | General and administrative | $7,352 | $6,015 | | **Loss from operations** | **($25,372)** | **($16,886)** | | **Net loss** | **($25,328)** | **($16,900)** | | **Net loss per share** | **($0.22)** | **($0.19)** | Condensed Consolidated Statements of Cash Flows (in thousands) | Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($27,190) | ($21,366) | | Net cash provided by (used in) investing activities | $37,743 | ($35) | | Net cash provided by financing activities | $22 | $135,154 | - In April 2022, the company implemented a corporate restructuring to prioritize its key programs, SGT-001 and SGT-003, involving a headcount reduction of approximately **35%**, with estimated restructuring costs of **$1.7 million** for severance and employee benefits[83](index=83&type=chunk) [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 strategic shifts, including a 35% workforce reduction to extend cash runway, and Q1 2022 net loss of $25.3 million from increased R&D - The company's lead product candidate is **SGT-001**, a gene transfer therapy for Duchenne, with enrollment in the Phase I/II **IGNITE DMD** trial complete and two-year data suggesting **durable benefit**[90](index=90&type=chunk)[91](index=91&type=chunk)[94](index=94&type=chunk) - In **April 2022**, the company announced a **strategic shift** to a commercially scaled, transient transfection-based manufacturing process for **SGT-001** and narrowed its R&D focus to **SGT-001**, **SGT-003**, and next-generation capsids[92](index=92&type=chunk) - As part of the **April 2022** reorganization, the company reduced its headcount by approximately **35%**, expected to extend the cash runway into the **second quarter of 2024**, based on **$180.1 million** in cash, cash equivalents, and available-for-sale securities as of March 31, 2022[93](index=93&type=chunk)[102](index=102&type=chunk) Comparison of Operating Results (in thousands) | Line Item | Q1 2022 | Q1 2021 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Collaboration Revenue | $1,925 | $3,335 | ($1,410) | (42%) | | R&D Expenses | $19,945 | $14,206 | $5,739 | 40% | | G&A Expenses | $7,352 | $6,015 | $1,337 | 22% | | **Net Loss** | **($25,328)** | **($16,900)** | **($8,428)** | **50%** | Research & Development Expenses Breakdown (in thousands) | Program | Q1 2022 | Q1 2021 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | SGT-001 | $5,422 | $6,173 | ($751) | (12)% | | SGT-003 and other programs | $3,364 | $192 | $3,172 | 1652% | | Unallocated R&D | $11,159 | $7,841 | $3,318 | 42% | | **Total R&D Expenses** | **$19,945** | **$14,206** | **$5,739** | **40%** | [Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risk from interest rate changes on short-term investments, with a 10% change not materially impacting financial position - The company's primary market risk exposure is **interest income sensitivity** related to its cash equivalents and available-for-sale securities[145](index=145&type=chunk) - Due to the short-term nature of its investment portfolio, a **10%** change in interest rates is **not expected to materially impact** the company's financial condition[145](index=145&type=chunk) [Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2022, with no material changes to internal control over financial reporting - As of March 31, 2022, the President and Chief Executive Officer and the interim Chief Financial Officer concluded that the company's disclosure controls and procedures were **effective at the reasonable assurance level**[146](index=146&type=chunk) - **No material changes** to the company's internal control over financial reporting occurred during the first quarter of 2022[147](index=147&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not a party to any material legal proceedings - As of the filing date, the company states there are **no material legal proceedings**[150](index=150&type=chunk) [Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant financial, developmental, manufacturing, commercial, and IP risks, including a history of losses and novel gene therapies - **Financial Risks:** The company has a history of significant net losses (**$25.3M** in Q1 2022) and an accumulated deficit of **$502.1M**, and will **require additional funding** to continue operations beyond its current cash runway[154](index=154&type=chunk)[158](index=158&type=chunk) - **Clinical Development Risks:** SGT-001 and SGT-003 are based on **novel gene transfer technology**, making development time and cost difficult to predict, and the IGNITE DMD trial was previously placed on **clinical hold** by the FDA[153](index=153&type=chunk)[172](index=172&type=chunk)[175](index=175&type=chunk) - **Manufacturing & Commercialization Risks:** The company has **limited gene transfer manufacturing experience** and **relies on third parties**, posing risks of performance, regulatory compliance, and **supply disruption**, with a planned shift to a new manufacturing process for SGT-001 potentially requiring additional studies[155](index=155&type=chunk)[249](index=249&type=chunk)[256](index=256&type=chunk) - **Intellectual Property Risks:** The business **heavily relies on in-licensed patents**, which the company may **not control the prosecution and enforcement** of, and they could be **challenged, invalidated, or circumvented** by competitors[155](index=155&type=chunk)[328](index=328&type=chunk)[334](index=334&type=chunk) - **Competition Risk:** The company faces **significant competition** from **larger, better-funded companies** like Pfizer and Sarepta Therapeutics, which have Duchenne gene therapy candidates in **later stages of clinical development (Phase III)**[235](index=235&type=chunk)[236](index=236&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=88&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) On January 3, 2022, the company issued an inducement grant of 131,400 stock options and 65,700 restricted stock units - On **January 3, 2022**, the company granted a new employee an option for **131,400 shares** and **65,700 restricted stock units** as an **inducement award** under Nasdaq Listing Rule 5635(c)(4)[403](index=403&type=chunk) [Other Information](index=88&type=section&id=Item%205.%20Other%20Information) On April 25, 2022, the Board approved a restructuring plan with a 35% workforce reduction, costing $1.7 million, to extend cash runway into Q2 2024 - On **April 25, 2022**, the Board approved a restructuring plan to reduce the workforce by approximately **35%** to prioritize key programs and extend the cash runway into **Q2 2024**[405](index=405&type=chunk)[406](index=406&type=chunk) - The company estimates total restructuring costs of approximately **$1.7 million**, primarily for severance and employee termination benefits, to be paid mostly during 2022[407](index=407&type=chunk) - A **retention program** was approved for remaining key employees, including cash bonuses and stock option grants for the Chief Legal Officer and Chief Scientific Officer[408](index=408&type=chunk) [Exhibits](index=89&type=section&id=Item%206.%20Exhibits) The section lists exhibits filed with Form 10-Q, including CEO/CFO certifications and Inline XBRL documents for financial reporting - The filing includes **CEO and CFO certifications** pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[410](index=410&type=chunk) - **Inline XBRL** Instance, Schema, and other related taxonomy documents are included as exhibits for interactive data[410](index=410&type=chunk) [Signatures](index=90&type=section&id=Signatures) The report was signed on April 27, 2022, by Ilan Ganot (CEO) and Stephen DiPalma (Interim CFO) - The report was signed on **April 27, 2022**, by **Ilan Ganot (CEO)** and **Stephen DiPalma (Interim CFO)**[413](index=413&type=chunk)