REGENXBIO(RGNX) - 2025 Q1 - Quarterly Report

PART I—FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Presents REGENXBIO Inc.'s unaudited consolidated financial statements, including balance sheets, income statements, equity, and cash flows, with notes for Q1 2025 Consolidated Balance Sheets Presents the company's financial position, including assets, liabilities, and equity, as of March 31, 2025, and December 31, 2024 | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :--------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | | Cash and cash equivalents | $130,104 | $57,526 | +$72,578 | | Marketable securities | $137,765 | $177,161 | -$39,396 | | Total current assets | $313,237 | $278,001 | +$35,236 | | Total assets | $490,929 | $465,989 | +$24,940 | | Deferred revenue (current) | $13,588 | $115 | +$13,473 | | Deferred revenue (non-current) | $26,297 | — | +$26,297 | | Total liabilities | $216,732 | $206,338 | +$10,394 | | Total stockholders' equity | $274,197 | $259,651 | +$14,546 | - Total assets increased by $24.9 million, primarily driven by a significant increase in cash and cash equivalents, partially offset by a decrease in marketable securities[17] - Deferred revenue saw a substantial increase from $115 thousand to $13.6 million (current) and from zero to $26.3 million (non-current), reflecting new collaboration agreements[17] Consolidated Statements of Operations and Comprehensive Income (Loss) Details the company's revenues, expenses, and net income (loss) for the three months ended March 31, 2025 and 2024 | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | | License and royalty revenue | $87,049 | $15,344 | +$71,705 | | Service revenue | $1,963 | $278 | +$1,685 | | Total revenues | $89,012 | $15,622 | +$73,390 | | Total operating expenses | $76,885 | $79,485 | -$2,600 | | Income (loss) from operations | $12,127 | $(63,863) | +$75,990 | | Net income (loss) | $6,083 | $(63,330) | +$69,413 | | Basic net income (loss) per share | $0.12 | $(1.38) | +$1.50 | | Diluted net income (loss) per share | $0.12 | $(1.38) | +$1.50 | - Total revenues significantly increased by $73.4 million, primarily driven by a $71.7 million increase in license and royalty revenue and a $1.7 million increase in service revenue[18][178][179] - The company reported a net income of $6.1 million for Q1 2025, a substantial improvement from a net loss of $63.3 million in Q1 2024, resulting in positive basic and diluted EPS of $0.12[18] Consolidated Statements of Stockholders' Equity Outlines changes in stockholders' equity, including net income and capital contributions, for the period ending March 31, 2025 | Metric | December 31, 2024 (in thousands) | March 31, 2025 (in thousands) | Change (in thousands) | | :--------------------------------- | :----------------------------- | :---------------------------- | :-------------------- | | Total Stockholders' Equity | $259,651 | $274,197 | +$14,546 | | Additional Paid-in Capital | $1,192,536 | $1,201,020 | +$8,484 | | Accumulated Deficit | $(932,149) | $(926,066) | +$6,083 | | Common Stock Shares Outstanding | 49,549 | 50,117 | +568 | - Total stockholders' equity increased by $14.5 million, primarily due to net income of $6.1 million and an increase in additional paid-in capital from stock-based compensation expense and employee stock purchase plan activities[21] Consolidated Statements of Cash Flows Reports cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2025 and 2024 | Cash Flow Activity | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | | Operating activities | $33,629 | $(55,455) | +$89,084 | | Investing activities | $44,743 | $13,183 | +$31,560 | | Financing activities | $(5,794) | $120,725 | -$126,519 | | Net increase in cash and cash equivalents and restricted cash | $72,578 | $78,453 | -$5,875 | | Cash and cash equivalents and restricted cash, End of period | $132,134 | $115,005 | +$17,129 | - Net cash provided by operating activities significantly improved to $33.6 million in Q1 2025 from a net cash used of $55.5 million in Q1 2024, largely due to the $110.0 million upfront fee from the Nippon Shinyaku collaboration[24][187][188] - Net cash provided by investing activities increased to $44.7 million, driven by maturities of marketable debt securities exceeding purchases[24][191] - Net cash used in financing activities was $5.8 million in Q1 2025, a decrease from $120.7 million provided in Q1 2024, which included proceeds from a public offering[24][193][194] Notes to Consolidated Financial Statements Provides detailed explanations of significant accounting policies, financial statement line items, and other disclosures 1. Nature of Business & Liquidity Describes REGENXBIO's business, cumulative losses, and assessment of liquidity to fund operations for the next 12 months - REGENXBIO Inc. is a clinical-stage biotechnology company focused on gene therapy using its proprietary NAV Technology Platform, which includes exclusive rights to a large portfolio of AAV vectors[27] - The company has incurred cumulative losses of $926.1 million since inception and relies on successful product development, approvals, and additional capital raises to achieve profitability[28] - As of March 31, 2025, the company had $272.7 million in cash, cash equivalents, and marketable securities, which management believes is sufficient to fund operations for at least the next 12 months[28] 2. Summary of Significant Accounting Policies Outlines the key accounting principles and estimates used in preparing the unaudited consolidated financial statements - The unaudited consolidated financial statements are prepared in conformity with GAAP, reflecting all normal and recurring adjustments, and should be read in conjunction with the annual audited statements[29][30] - Estimates are used in areas such as revenue recognition, accrued R&D expenses, stock-based compensation, and fair value measurements, with actual results potentially differing materially[32][33] - Revenue recognition follows ASC 606, involving a five-step model to identify contracts, performance obligations, transaction price, allocation, and recognition upon satisfaction of obligations[41][42] 3. Marketable Securities Details the composition and fair value of the company's available-for-sale debt securities and their maturities | Type of Security | March 31, 2025 Fair Value (in thousands) | December 31, 2024 Fair Value (in thousands) | | :----------------------------- | :------------------------------------- | :---------------------------------------- | | U.S. government and agency securities | $34,722 | $44,215 | | Certificates of deposit | $733 | $1,462 | | Corporate bonds | $107,168 | $141,663 | | Total Marketable Securities | $142,623 | $187,340 | - The company's marketable securities, consisting solely of available-for-sale debt securities, decreased from $187.3 million at December 31, 2024, to $142.6 million at March 31, 2025[60] - As of March 31, 2025, no available-for-sale debt securities had remaining maturities greater than two years, and the company did not identify any credit losses[60][62] 4. Fair Value Measurements Explains the fair value hierarchy and classification of cash equivalents and marketable securities | Financial Instrument | March 31, 2025 Fair Value (in thousands) | December 31, 2024 Fair Value (in thousands) | | :------------------- | :------------------------------------- | :---------------------------------------- | | Money market mutual funds | $103,496 | $43,895 | | U.S. government and agency securities (cash equivalents) | — | $2,498 | | U.S. government and agency securities (marketable) | $34,722 | $44,215 | | Certificates of deposit | $733 | $1,462 | | Corporate bonds | $107,168 | $141,663 | | Total Cash Equivalents and Marketable Securities | $246,119 | $233,733 | - All cash equivalents and marketable securities are classified as Level 2 in the fair value hierarchy, indicating valuations based on observable inputs other than quoted prices in active markets[63][64] 5. Property and Equipment, Net Presents the net book value of property and equipment, detailing categories and accumulated depreciation | Category | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------- | :---------------------------- | :------------------------------- | | Laboratory and manufacturing equipment | $77,505 | $77,141 | | Computer equipment and software | $4,612 | $4,244 | | Furniture and fixtures | $7,032 | $7,031 | | Leasehold improvements | $101,517 | $101,465 | | Total property and equipment | $190,666 | $189,881 | | Accumulated depreciation and amortization | $(76,169) | $(72,292) | | Property and equipment, net | $114,497 | $117,589 | - Net property and equipment decreased from $117.6 million to $114.5 million, primarily due to accumulated depreciation and amortization[66] 6. Leases Discusses lease arrangements, including a sublease of office facilities and related impairment and income - In March 2024, the company subleased its New York office facilities, resulting in an impairment of $2.1 million on long-lived assets (right-of-use assets and property and equipment) in Q1 2024[66][68][70] - The sublease term commenced in April 2024 and expires in April 2027, with the company recognizing $0.1 million in sublease income during Q1 2025[68] - No impairment losses on long-lived assets were recorded during the three months ended March 31, 2025[70] 7. Liability Related to Sale of Future Royalties Details the royalty purchase agreement for Zolgensma, including the Cap Amount, liability changes, and effective interest rate - The company has a royalty purchase agreement with HCR for Zolgensma royalties, with a Cap Amount of $300.0 million applicable from November 8, 2024, until the Novartis License termination[71][72] - The liability related to the sale of future royalties decreased from $59.7 million at December 31, 2024, to $53.7 million at March 31, 2025, after Zolgensma royalties paid to HCR and recognized interest expense[76] - The estimated effective interest rate for the royalty purchase agreement was 66.9% as of March 31, 2025, and 16.1% over the life of the agreement, reflecting the amount and timing of royalty payments[75] 8. Commitments and Contingencies Outlines license agreements, royalty obligations, and potential disputes, including the GSK License - The company has a license agreement with GlaxoSmithKline LLC (GSK) for its NAV Technology Platform, with royalty obligations now assigned to Penn[77][78] - Expenses related to the GSK License were $2.9 million in Q1 2025, including $2.6 million in Zolgensma royalties[79] - A potential dispute with GSK regarding sublicense fees is ongoing, but the company does not believe a loss is probable and no reasonable range of loss is estimable[80] 9. Capitalization Reports on equity offerings, pre-funded warrants, and the At-the-Market Offering Program for common stock - In March 2024, the company completed a public offering, raising $131.1 million net proceeds from the sale of common stock and pre-funded warrants[81] - As of March 31, 2025, 1,324,740 pre-funded warrants remained outstanding, with no exercises during Q1 2025[83] - The company established an At-the-Market (ATM) Offering Program in December 2024, allowing for the sale of up to $150.0 million in common stock, though no shares were sold under this program as of March 31, 2025[84] 10. License and Collaboration Agreements Summarizes key license and collaboration agreements, detailing revenue recognition and potential milestone payments 10.1 License and Collaboration Revenues Details the breakdown of license and royalty revenue and service revenue from various collaboration agreements | Revenue Source | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :----------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | | Zolgensma royalties | $16,993 | $15,214 | +$1,779 | | Nippon Shinyaku licenses | $69,979 | — | +$69,979 | | Other license and royalty revenue | $77 | $130 | -$53 | | Total license and royalty revenue | $87,049 | $15,344 | +$71,705 | | Nippon Shinyaku services | $1,774 | — | +$1,774 | | Other service revenue | $189 | $278 | -$89 | | Total service revenue | $1,963 | $278 | +$1,685 | | Total revenues | $89,012 | $15,622 | +$73,390 | - Total revenues increased significantly by $73.4 million, primarily driven by $70.0 million in non-recurring license revenue and $1.8 million in development service revenue from the Nippon Shinyaku collaboration in Q1 2025[86][178][179] - Unachieved milestones from license and collaboration agreements could result in aggregate payments of up to $2.20 billion, including $549.2 million for clinical trials, $121.3 million for regulatory approvals, and $1.53 billion for sales targets[86] 10.2 Accounts Receivable, Contract Assets and Deferred Revenue Presents balances for accounts receivable, contract assets, and deferred revenue, primarily from collaboration agreements | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------- | :---------------------------- | :------------------------------- | | Accounts receivable, net | $19,400 | $20,947 | | Contract assets | $44 | $239 | | Deferred revenue | $39,885 | $115 | - Deferred revenue increased substantially to $39.9 million, primarily due to consideration received from the Nippon Shinyaku collaboration for performance obligations not yet satisfied[87][88] - The aggregate transaction price allocated to unsatisfied or partially satisfied performance obligations is $47.6 million, mostly from the Nippon Shinyaku agreement, expected to be satisfied over approximately five years[88] 10.3 Zolgensma License with Novartis Gene Therapies Reports Zolgensma royalty revenue and related interest income from the Novartis license agreement | Revenue Type | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :------------------- | :--------------------------------------------- | :--------------------------------------------- | | Zolgensma royalties | $16,993 | $15,214 | | Interest income from licensing | $10 | $7 | - Zolgensma royalties increased by $1.8 million to $17.0 million in Q1 2025 compared to Q1 2024[91] - As of March 31, 2025, $14.4 million of Zolgensma royalties receivable was expected to be paid to HCR under the Royalty Purchase Agreement[91] 10.4 AbbVie Collaboration and License Agreement Outlines the collaboration with AbbVie for ABBV-RGX-314, including development responsibilities and cost reimbursements - The collaboration with AbbVie for ABBV-RGX-314 involves co-exclusive development and commercialization rights in the U.S. and exclusive rights outside the U.S.[92][93] - AbbVie is responsible for the majority of ABBV-RGX-314 development expenses since January 1, 2023, and will lead global commercialization[93][94] | Cost Reimbursement | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Research and development expense | $(14,681) | $(24,977) | | General and administrative expense | $597 | $402 | | Total net cost reimbursement to (from) AbbVie | $(14,084) | $(24,575) | 10.5 Nippon Shinyaku Collaboration and License Agreement Describes the collaboration with Nippon Shinyaku for RGX-121 and RGX-111, including upfront fees and potential milestones - In January 2025, the company entered a collaboration with Nippon Shinyaku for RGX-121 and RGX-111, granting licenses for development and commercialization in the U.S. and certain Asian countries[99][100] - The agreement included an upfront fee of $110.0 million and potential milestone payments of up to $700.0 million, plus double-digit royalties on net sales[101] | Revenue Type | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :------------------- | :--------------------------------------------- | :--------------------------------------------- | | License and royalty revenue | $69,979 | — | | Service revenue | $1,774 | — | | Total revenues | $71,753 | — | 11. Stock-based Compensation Details stock-based compensation expense by award type and unrecognized compensation for future periods | Award Type | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Stock options | $4,707 | $5,978 | | Restricted stock units | $3,668 | $3,447 | | Employee stock purchase plan | $162 | $177 | | Total stock-based compensation expense | $8,537 | $9,602 | - Total stock-based compensation expense decreased by $1.1 million to $8.5 million in Q1 2025, primarily due to a decrease in stock option expense[109] - As of March 31, 2025, unrecognized stock-based compensation expense totaled $65.8 million, expected to be recognized over a weighted-average period of 2.5 years[109] 12. Income Taxes Discusses the company's income tax position, including the valuation allowance for net deferred tax assets - The company has provided a full valuation allowance for its net deferred tax assets as of March 31, 2025, and December 31, 2024, due to a history of operating losses[115] 13. Net Income (Loss) Per Share Presents basic and diluted net income (loss) per share calculations and weighted-average common shares outstanding | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------- | :-------------------------------- | :-------------------------------- | | Net income (loss) | $6,083 (in thousands) | $(63,330) (in thousands) | | Basic net income (loss) per share | $0.12 | $(1.38) | | Diluted net income (loss) per share | $0.12 | $(1.38) | | Weighted-average common shares outstanding (basic) | 51,362 (in thousands) | 45,733 (in thousands) | | Weighted-average diluted common shares | 51,434 (in thousands) | 45,733 (in thousands) | - Basic and diluted net income per share were $0.12 for Q1 2025, a significant improvement from a net loss per share of $(1.38) in Q1 2024[116] - Common stock equivalents were excluded from diluted net loss per share calculations in periods of net losses as their effect would be anti-dilutive[117] 14. Segment Information Confirms the company operates as a single segment, with the CEO as CODM reviewing consolidated financial metrics - The company operates as a single operating segment, focusing on the development and commercialization of gene therapies, with its CEO serving as the chief operating decision maker (CODM)[118] - The CODM reviews consolidated net income (loss) and consolidated cash, cash equivalents, and marketable securities to assess performance and allocate resources[118] | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Revenues | $89,012 | $15,622 | | Cost of license and royalty revenues | $3,436 | $4,283 | | Total research and development expense | $53,087 | $54,844 | | Total general and administrative expense | $20,347 | $18,291 | | Net income (loss) | $6,083 | $(63,330) | 15. Supplemental Disclosures Provides additional details on other current assets, accrued expenses, and non-cash investing and financing activities | Other Current Assets Category | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :---------------------------- | :---------------------------- | :------------------------------- | | Net cost reimbursement due from AbbVie | $14,082 | $11,304 | | Accrued interest on investments | $965 | $1,094 | | Other | $1,035 | $1,376 | | Total Other Current Assets | $16,082 | $13,774 | | Accrued Expenses Category | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------- | :---------------------------- | :------------------------------- | | Accrued personnel costs | $8,534 | $17,607 | | Accrued external R&D expenses | $6,332 | $8,998 | | Accrued sublicense fees and royalties | $6,183 | $8,658 | | Total Accrued Expenses and Other Current Liabilities | $23,597 | $38,070 | - Non-cash investing and financing activities included $0.2 million in purchases of property and equipment in accounts payable and accrued expenses as of March 31, 2025[125] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Analyzes REGENXBIO's Q1 2025 financial condition and operations, covering strategy, pipeline, revenues, expenses, and liquidity 2.1 Overview Introduces REGENXBIO as a clinical-stage biotechnology company focused on gene therapy using its NAV Technology Platform - REGENXBIO is a clinical-stage biotechnology company focused on gene therapy, aiming to improve lives by delivering functional genes to address genetic defects[129] - The company's investigational gene therapies utilize its proprietary adeno-associated virus (AAV) gene therapy delivery platform (NAV Technology Platform) for one-time treatments[129][130] 2.2 Overview of Product Candidates Summarizes the development status of key product candidates, including ABBV-RGX-314, RGX-202, RGX-121, and RGX-111 - ABBV-RGX-314 is being developed in collaboration with AbbVie for chronic retinal conditions (wet AMD, DR, DME), with pivotal trials (ATMOSPHERE, ASCENT) ongoing for subretinal delivery and Phase II trials (AAVIATE, ALTITUDE) for suprachoroidal delivery[130][131][132][133][134] - RGX-202 is an investigational AAV therapeutic for Duchenne muscular dystrophy, with the AFFINITY DUCHENNE trial beyond 50% enrolled and topline data expected in H1 2026[135][136] - RGX-121, for MPS II, achieved its primary endpoint in the CAMPSIITE trial, with a BLA submitted to the FDA in March 2025, and potential approval expected in H2 2025[137] - Development of RGX-111 for MPS I was halted in November 2023 due to strategic pipeline prioritization, but efforts to continue development with Nippon Shinyaku are ongoing[138] 2.3 Collaboration and License Agreement with AbbVie Details the collaboration with AbbVie for ABBV-RGX-314, including development, commercialization, and financial terms - The AbbVie Collaboration Agreement, effective November 2021, involves joint development and commercialization of ABBV-RGX-314, with AbbVie leading global commercialization and sharing U.S. net profits/losses[139] - The company received an upfront fee of $370.0 million and is eligible for up to $1.38 billion in development and sales-based milestones, plus tiered royalties on ex-U.S. net sales[139] 2.4 Collaboration and License Agreement with Nippon Shinyaku Outlines the collaboration with Nippon Shinyaku for RGX-121 and RGX-111, including upfront payments and milestones - The Nippon Shinyaku Collaboration Agreement, effective March 2025, covers the development and commercialization of RGX-121 and RGX-111 in the U.S. and certain Asian countries[140] - The company received an upfront payment of $110.0 million and is eligible for up to $700.0 million in milestones, plus double-digit royalties on net sales[140] - REGENXBIO recognized $71.8 million in revenue under this agreement in Q1 2025 and retains rights to any priority review vouchers[141] 2.5 Overview of Our NAV Technology Platform Describes the NAV Technology Platform, its licensing to other companies, and its application in commercial and clinical products - The NAV Technology Platform is selectively licensed to other biotechnology and pharmaceutical companies, expanding the gene therapy pipeline and generating additional revenue opportunities[142] - As of March 31, 2025, the NAV Technology Platform was applied in one commercial product, Zolgensma, and in the preclinical and clinical development of other licensed products[142] 2.6 Financial Overview Provides a general overview of revenue sources, future revenue dependency, and primary operating expense components - Revenues primarily stem from licensing the NAV Technology Platform and other intellectual property rights, with no revenues yet from commercial sales of the company's own products[143] - Future revenues are highly dependent on the successful development and commercialization of licensed products, which is uncertain and may fluctuate significantly[145] - Operating expenses consist mainly of cost of license and royalty revenues, research and development, and general and administrative expenses, with personnel costs being a significant component[147] 2.7 Critical Accounting Policies and Estimates Highlights critical accounting policies, including revenue recognition under ASC 606 and treatment of variable consideration - Revenue recognition is a critical accounting policy, following ASC 606's five-step model, which involves identifying contracts, performance obligations, transaction price, allocation, and recognition[163][164] - The company evaluates collaboration agreements under ASC 808 and ASC 606, determining if transactions are with customers or collaborative arrangements[167][168] - Variable consideration, such as development and sales-based milestones and royalties, is included in the transaction price only when it is probable that a significant revenue reversal will not occur[170][173][174] 2.8 Results of Operations Analyzes the company's revenues, operating expenses, and net income (loss) for the three months ended March 31, 2025 and 2024 | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | | Total revenues | $89,012 | $15,622 | +$73,390 | | Cost of license and royalty revenues | $3,436 | $4,283 | -$847 | | Research and development | $53,087 | $54,844 | -$1,757 | | General and administrative | $20,347 | $18,291 | +$2,056 | | Income (loss) from operations | $12,127 | $(63,863) | +$75,990 | | Net income (loss) | $6,083 | $(63,330) | +$69,413 | - Total revenues increased by $73.4 million, primarily due to $70.0 million in non-recurring license revenue from the Nippon Shinyaku collaboration[178] - Research and development expenses decreased by $1.8 million, mainly due to a $4.1 million decrease in clinical trial activities and a $1.4 million decrease in preclinical activities, partially offset by a $3.2 million increase in manufacturing-related expenses[180] - General and administrative expenses increased by $2.1 million, driven by higher personnel-related costs, professional services, and corporate overhead[181] 2.9 Liquidity and Capital Resources Assesses the company's cash position, cash flow activities, and future capital requirements and funding strategies - As of March 31, 2025, the company had $272.7 million in cash, cash equivalents, and marketable securities, deemed sufficient to fund operations for at least the next 12 months[182] - Net cash provided by operating activities increased by $89.1 million to $33.6 million in Q1 2025, largely due to the $110.0 million upfront fee from the Nippon Shinyaku collaboration[187][188] - Future capital requirements are significant and depend on factors such as clinical trial timing and results, regulatory approvals, commercialization costs, and the ability to secure additional financing through equity offerings, debt, or collaborations[196][197][199] Item 3. Quantitative and Qualitative Disclosures about Market Risk Reports no material changes to market risk exposure for Q1 2025 compared to the prior annual report - No material changes to market risk exposure occurred during the three months ended March 31, 2025[202] Item 4. Controls and Procedures Disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control - Disclosure controls and procedures were evaluated and deemed effective at a reasonable assurance level as of March 31, 2025[203][204] - No material changes in internal control over financial reporting occurred during the quarter ended March 31, 2025[205] PART II—OTHER INFORMATION Item 1. Legal Proceedings No pending legal actions are expected to materially adversely affect the company's business or financial condition - No pending legal actions are expected to have a material adverse effect on the company's business or financial condition[209] Item 1A. Risk Factors No material changes to risk factors since the Annual Report on Form 10-K for December 31, 2024 - No material changes to risk factors since the Annual Report on Form 10-K for December 31, 2024[210] Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities Reports no unregistered sales of equity securities, use of proceeds, or issuer purchases during the period - No unregistered sales of equity securities, use of proceeds, or issuer purchases of equity securities occurred[211] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities during the period - No defaults upon senior securities were reported[212] Item 4. Mine Safety Disclosures Mine Safety Disclosures are not applicable - Mine Safety Disclosures are not applicable[213] Item 5. Other Information Details Rule 10b5-1 trading plans adopted or terminated by Section 16 officers and directors during Q1 2025 | Name | Title | Action | Date Adopted | Expiration Date | Plan Provides for | Aggregate of Securities to be Purchased/Sold | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Curran Simpson | President and Chief Executive Officer | Adoption | 3/28/2025 | 3/1/2026 | Sale | 36,169 | Item 6. Exhibits Lists all exhibits filed with Form 10-Q, including collaboration agreements, CEO/CFO certifications, and XBRL financials - Key exhibits include the Collaboration and License Agreement with Nippon Shinyaku Co., Ltd. (Exhibit 10.1†)[215] - Certifications of the Chief Executive Officer and Chief Financial Officer (Exhibits 31.1, 31.2, 32.1) are included as required by the Sarbanes-Oxley Act[215] - The financial statements and cover page are formatted in Inline XBRL (Exhibit 101, 104)[215] Signatures The Quarterly Report on Form 10-Q was signed by the President/CEO and CFO on May 12, 2025 - The report was signed by Curran Simpson, President and CEO, and Mitchell Chan, CFO, on May 12, 2025[220]