Solid Biosciences(SLDB) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents Solid Biosciences Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, for the periods ended March 31, 2025, and 2024 Condensed Consolidated Balance Sheets Total assets increased to $343.9 million as of March 31, 2025, from $188.7 million at December 31, 2024, primarily due to financing activities, while total stockholders' equity grew to $294.5 million Condensed Consolidated Balance Sheets (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $313,409 | $157,302 | | Total assets | $343,904 | $188,662 | | Total current liabilities | $28,779 | $30,257 | | Total liabilities | $49,441 | $51,416 | | Total stockholders' equity | $294,463 | $137,246 | Condensed Consolidated Statements of Operations The company reported a net loss of $39.3 million for Q1 2025, up from $24.3 million in Q1 2024, primarily due to increased operating expenses, especially research and development Condensed Consolidated Statements of Operations (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Research and development | $30,914 | $18,873 | | General and administrative | $9,138 | $7,989 | | Total operating expenses | $40,052 | $26,862 | | Loss from operations | ($40,052) | ($26,862) | | Net loss | ($39,282) | ($24,303) | | Net loss per share, basic and diluted | ($0.59) | ($0.64) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities increased to $31.9 million in Q1 2025, while net cash provided by financing activities significantly rose to $189.7 million, resulting in a $130.4 million net increase in cash Summary of Cash Flows (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($31,850) | ($25,192) | | Net cash used in investing activities | ($27,463) | ($38,490) | | Net cash provided by financing activities | $189,728 | $107,241 | | Net increase in cash, cash equivalents, and restricted cash | $130,415 | $43,559 | Notes to the Condensed Consolidated Financial Statements These notes detail the company's gene therapy focus, liquidity position of $306.9 million sufficient for twelve months, a $5.0 million milestone payment in stock, and $3.3 million in equity-based compensation - The company is a life sciences company focused on advancing a portfolio of gene therapy candidates for Duchenne muscular dystrophy (SGT-003), Friedreich's ataxia (SGT-212), and various cardiac diseases (SGT-501, SGT-601)[29] - As of March 31, 2025, the company had $306.9 million in cash, cash equivalents, and available-for-sale securities, which is expected to fund operations and capital expenditures for at least the next twelve months[32] - In February 2025, the company paid a $5.0 million development milestone for the SGT-212 program by issuing 975,496 shares of common stock to FA212 LLC[47] Equity-Based Compensation Expense (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Research and development | $1,102 | $548 | | General and administrative | $2,239 | $1,063 | | Total | $3,341 | $1,611 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's gene therapy pipeline, increased operating expenses to $40.1 million in Q1 2025, and a strengthened cash position of $306.9 million expected to fund operations into the first half of 2027 Overview Solid Biosciences advances gene therapies for rare neuromuscular and cardiac diseases, with ongoing SGT-003 trials, planned SGT-212 Phase 1b initiation in H2 2025, and SGT-501 IND submission in H1 2025 - SGT-003 (Duchenne): Patient dosing in the Phase 1/2 INSPIRE DUCHENNE trial is ongoing, with positive initial data showing average microdystrophin expression of 110%; the company plans to meet with the FDA in Q4 2025 to discuss potential accelerated regulatory pathways[92][93][95] - SGT-212 (Friedreich's Ataxia): The FDA cleared the IND in January 2025, and a Phase 1b clinical trial in adult patients is anticipated to begin in the second half of 2025[96] - SGT-501 (CPVT): IND-enabling toxicology studies were completed in Q1 2025, and the company expects to submit an IND to the FDA in the first half of 2025[97] Results of Operations Total operating expenses increased 49.1% to $40.1 million in Q1 2025, driven by a 63.8% rise in R&D expenses to $30.9 million, primarily for the SGT-003 program Comparison of Operating Results (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Research and development | $30,914 | $18,873 | $12,041 | 63.8% | | General and administrative | $9,138 | $7,989 | $1,149 | 14.4% | | Total operating expenses | $40,052 | $26,862 | $13,190 | 49.1% | | Net loss | ($39,282) | ($24,303) | ($14,979) | 61.6% | - The $12.0 million increase in R&D expenses was primarily driven by a $7.4 million increase in costs for SGT-003 related to manufacturing, regulatory, and clinical activities[120] Liquidity and Capital Resources The company's cash, cash equivalents, and available-for-sale securities totaled $306.9 million as of March 31, 2025, bolstered by a $188.0 million offering, expected to fund operations into the first half of 2027 - In February 2025, the company raised approximately $188.0 million in net proceeds from an underwritten public offering of common stock and pre-funded warrants[126] - In January 2024, the company received $103.7 million in net proceeds from a private placement of common stock and pre-funded warrants[125] - As of March 31, 2025, the company had $306.9 million in cash, cash equivalents, and available-for-sale securities, which is expected to fund operations into the first half of 2027[127][136] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company faces market risk from interest rate changes, but a 10% shift would not materially impact its short-term investments, while inflation has not yet had a material effect - The company's primary market risk is interest income sensitivity, but due to the short-term nature of its investments, an immediate 10% change in interest rates would not have a material impact on its financial position[146] - Inflation has not had a material effect on the business in the last two years, though it could increase labor and R&D costs in the future[147] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The President and Chief Executive Officer and the Chief Financial Officer concluded that as of March 31, 2025, the company's disclosure controls and procedures were designed and operating effectively[149] - There were no changes in internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[150] PART II. OTHER INFORMATION Item 1. Legal Proceedings As of March 31, 2025, the company is not aware of any material legal proceedings or claims against it - The Company is not aware of any material legal proceedings or claims as of March 31, 2025[74][152] Item 1A. Risk Factors This section outlines significant risks, including historical net losses, funding needs, uncertainties in gene therapy development, reliance on third-party manufacturing, intense competition, and intellectual property challenges Risks Related to Financial Position and Capital Requirements The company has a history of significant net losses, including $39.3 million in Q1 2025, requires additional funding beyond H1 2027, and has never generated product revenue, posing viability risks - The company has incurred significant net losses since inception, with a net loss of $39.3 million for the three months ended March 31, 2025, and an accumulated deficit of $822.7 million[156] - The company will need additional funding to continue operations beyond the first half of 2027, and failure to obtain capital may force delays or termination of product development[160] - The company has never generated revenue from product sales and does not expect to for the foreseeable future, if ever[165] Risks Related to Candidate Development Gene therapy candidate development faces risks including unpredictable timelines, potential side effects, prior clinical holds, challenges in patient enrollment for rare diseases, and intense competition, notably from Sarepta's ELEVIDYS® - The company's gene transfer candidates utilize novel technology, making it difficult to predict the time and cost of development and regulatory approval[174] - A prior clinical trial (IGNITE DMD for SGT-001) was placed on clinical hold by the FDA in the past, and there is no guarantee similar events will not happen in ongoing or future trials[182] - The company faces significant competition, including from Sarepta Therapeutics, which received expanded FDA approval for its Duchenne gene therapy, ELEVIDYS®, in June 2024[261] - Difficulties in enrolling patients in clinical trials for rare diseases could delay or prevent the progress of SGT-003, SGT-212, and other candidates[195] Risks Related to Manufacturing and Commercialization Manufacturing and commercialization risks include reliance on third-party manufacturers, uncertain market acceptance due to gene therapy novelty and safety concerns, and challenges in establishing sales capabilities and securing adequate reimbursement for high-cost treatments - The company has limited gene therapy manufacturing experience and relies on third parties, which could lead to production problems, delays, and issues with regulatory approval of manufacturing processes[273] - The use of viral capsids in gene therapy may be perceived as unsafe, and negative public opinion or increased regulatory scrutiny could damage public perception and hinder business[294] - The commercial success of any approved candidates will depend on market acceptance by physicians, patients, and third-party payors, which is uncertain[291] - Failure to obtain or maintain adequate coverage and reimbursement from government and private payors for potentially high-cost gene therapies could limit the ability to market products[298] Risks Related to Intellectual Property Intellectual property risks include heavy reliance on in-licensed patents, potential loss of rights due to non-compliance, uncertainty in the biotech patent landscape, challenges to patent validity, and defending against infringement claims - The company heavily relies on in-licensed patents and intellectual property from third parties for its candidates, and failure to comply with license obligations could lead to loss of these rights[363] - The patent position of biotech companies is highly uncertain, and the company's patents may be challenged, narrowed, invalidated, or held unenforceable[375][379] - Third parties may initiate legal proceedings alleging infringement of their intellectual property rights, which could be costly and uncertain in outcome[391] - Some in-licensed intellectual property was developed with U.S. government funding and may be subject to federal regulations, including "march-in" rights and a preference for U.S. manufacturing[400] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds On February 28, 2025, the company issued 975,496 common shares as a $5.0 million milestone payment to FA212, exempt from registration under Section 4(a)(2) of the Securities Act - On February 28, 2025, the company issued 975,496 shares of common stock as a $5.0 million milestone payment to FA212 following FDA clearance of the IND for SGT-212[444] - The shares were issued in a private placement exempt from registration under Section 4(a)(2) of the Securities Act[444] Item 5. Other Information No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the first quarter of 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the first quarter of 2025[445] Item 6. Exhibits This section lists exhibits filed with the Quarterly Report on Form 10-Q, including the Form of Pre-Funded Warrant and Sarbanes-Oxley Act certifications from the CEO and CFO - Exhibits filed include the Form of Pre-Funded Warrant and certifications from the CEO and CFO pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[447]