AVROBIO(AVRO) - 2024 Q4 - Annual Report

Financial Performance - The company has not generated any revenue since inception and does not expect to do so in the foreseeable future[470]. - The net loss for the year ended December 31, 2024, was $58.0 million, a 35% increase from the net loss of $42.8 million in 2023[485]. - Cash used in operating activities was $59.1 million in 2024, compared to $40.7 million in 2023, reflecting increased operational funding needs[494]. - The company expects to incur significant expenses and operating losses in the foreseeable future as it advances its research programs and product candidates[491]. - The company has no approved products and has never generated revenue from product sales, relying on financing to support its operations[492]. Clinical Trials and Development - TX45, the lead asset, showed favorable results in a Phase 1a trial with no severe adverse events and a favorable pharmacokinetic/pharmacodynamic relationship[463]. - The Phase 1b trial for TX45 has completed dosing of 19 patients, with preliminary data showing improvements in hemodynamics[464]. - The APEX Phase 2 clinical trial for TX45 commenced in October 2024, with topline results expected in 2026[464]. - TX2100, the second development candidate, is set to initiate a Phase 1 clinical trial in late 2025 or early 2026, pending IND enabling studies[465]. Expenses and Liabilities - Total operating expenses increased by $13.4 million, or 30%, to $58.0 million for the year ended December 31, 2024, compared to $44.6 million in 2023[485]. - Research and development expenses rose by $4.4 million, or 12%, to $41.4 million in 2024, primarily due to increased costs related to the discovery and development of TX2100[486]. - General and administrative expenses surged by $9.0 million, or 117%, to $16.7 million in 2024, driven by higher employee-related and professional consulting expenses[488]. - The company issued SAFEs for proceeds of $34.1 million, recorded as liabilities and measured at fair value until redemption[481]. - The operating lease liability and finance lease liability as of December 31, 2024, were $2.4 million and $0.9 million, respectively[518]. Cash and Financing - As of December 31, 2024, the company had $141.2 million in cash and cash equivalents and an accumulated deficit of $148.6 million[492]. - The company raised $171.7 million in net cash from financing activities in 2024, primarily from the sale of shares[498]. - As of December 31, 2024, the company had cash and cash equivalents totaling $141.2 million[517]. - Minimum lease payments are projected to be $3.0 million in 2025, $0.4 million in 2026, and $0.1 million in 2027[506]. Market and Regulatory Environment - The merger with AVROBIO was completed on June 20, 2024, with Legacy Tectonic stockholders owning approximately 38.5% of the outstanding shares post-merger[467]. - Investors in the Subscription Agreement purchased shares for an aggregate price of $96.6 million, converting into 4,163,606 shares of common stock upon merger completion[469]. - The company is classified as a "smaller reporting company," allowing it to take advantage of scaled disclosures as long as market value remains below $250.0 million or annual revenue is less than $100.0 million[515]. Interest and Inflation - Interest income increased significantly by $3.7 million, or 633%, to $4.3 million in 2024, attributed to a rise in cash and cash equivalents following the Merger[490]. - Interest income and expenses are sensitive to changes in U.S. interest rates, but a 10% change would not materially affect the fair market value of the investment portfolio[518]. - Inflation effects on the company's results of operations and financial condition have been deemed immaterial to date[519]. Estimates and Assumptions - The company evaluates its estimates and assumptions on an ongoing basis, acknowledging that actual results may differ from these estimates[509]. - The fair value of the company's common stock is based on the closing quoted market price as reported by NASDAQ on the date of grant[512]. - The company has not experienced material adjustments to prior estimates of prepaid and accrued research and development expenses[511]. Research Agreements - The company enters into agreements for preclinical research and clinical trials that are generally cancelable without minimum purchase commitments[507].