Taysha Gene Therapies(TSHA) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) The company significantly increased cash to $312.8 million post-public offering, reporting a Q2 2025 net loss of $26.9 million due to higher R&D Condensed Consolidated Balance Sheets Total assets rose to $333.3 million by June 30, 2025, driven by a public offering that boosted cash and stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $312,761 | $139,036 | | Total current assets | $316,264 | $142,130 | | Total assets | $333,331 | $160,364 | | Liabilities & Equity | | | | Total current liabilities | $25,349 | $26,227 | | Term loan, net | $41,051 | $43,942 | | Total liabilities | $84,604 | $88,839 | | Total stockholders' equity | $248,727 | $71,525 | | Total liabilities and stockholders' equity | $333,331 | $160,364 | Condensed Consolidated Statements of Operations Q2 2025 revenue increased to $2.0 million, but operating expenses rose, leading to a widened net loss of $26.9 million for the quarter Condensed Consolidated Statements of Operations Highlights (in thousands) | Account | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Six Months 2025 (in thousands) | Six Months 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $1,986 | $1,112 | $4,288 | $4,523 | | Research and development | $20,141 | $15,073 | $35,706 | $35,730 | | General and administrative | $8,598 | $7,338 | $16,756 | $14,422 | | Loss from operations | ($26,753) | ($21,299) | ($48,174) | ($45,629) | | Net loss | ($26,882) | ($20,928) | ($48,411) | ($44,989) | | Net loss per common share | ($0.09) | ($0.09) | ($0.17) | ($0.19) | Condensed Consolidated Statements of Cash Flows Net cash provided by financing activities, primarily from a public offering, led to a $173.7 million increase in cash for the six months ended June 30, 2025 Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Category | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | $(42,202) | $(41,302) | | Net cash used in investing activities | $(309) | $(341) | | Net cash provided by financing activities | $216,236 | $70,446 | | Net increase in cash, cash equivalents and restricted cash | $173,725 | $28,803 | Notes to Condensed Consolidated Financial Statements Notes detail the company's biotech focus, liquidity from a $215.6 million public offering, Astellas option status, debt refinancing, and ongoing legal proceedings - The company is a clinical-stage biotechnology firm focused on AAV-based gene therapies for severe monogenic diseases of the central nervous system[30] - In May 2025, the company completed an underwritten public offering, raising approximately $215.6 million in net proceeds, which is expected to fund operations for at least twelve months from the issuance date of these financial statements[35][36] - Under an agreement with Astellas, Taysha delivered the Rett Data Package for TSHA-102 in mid-2025, triggering a 90-day period for Astellas to decide whether to exercise its option for an exclusive license[63] - On August 7, 2025, the company entered into a new term loan agreement with Trinity Capital, drawing $50.0 million and terminating its previous loan facility. The new agreement provides for up to an additional $50.0 million in financing contingent on achieving certain regulatory milestones for TSHA-102[150] - The company is a nominal defendant in consolidated stockholder derivative lawsuits related to its August 2023 private placement and has received subpoenas from the SEC as part of an investigation into the same financing[141][142][143] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses TSHA-102's clinical progress, a $48.4 million net loss for H1 2025, and liquidity of $312.8 million, projecting funding into 2028 Overview and Clinical Update The company's lead program, TSHA-102 for Rett syndrome, completed Part A dosing with good tolerability and is preparing for pivotal Part B enrollment in Q4 2025 - The lead clinical program, TSHA-102, is in development for Rett syndrome, a rare neurodevelopmental disorder with no approved disease-modifying therapies[161] - Dosing of all 12 patients in Part A of the REVEAL trials is complete. As of August 4, 2025, TSHA-102 was generally well-tolerated with no treatment-related serious adverse events or dose-limiting toxicities[164] - The company has commenced site activation for the REVEAL pivotal Part B trial, with patient enrollment expected to begin in the fourth quarter of 2025[165] - TSHA-102 has received several key regulatory designations, including Orphan Drug, Rare Pediatric Disease, Fast Track, and Regenerative Medicine Advanced Therapy (RMAT) from the FDA[167] Results of Operations Q2 2025 revenue increased to $2.0 million, while R&D expenses rose by $5.0 million and G&A expenses by $1.3 million, primarily due to TSHA-102 activities Comparison of Operating Expenses (in millions) | Expense Category | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (in millions) | | :--- | :--- | :--- | :--- | | Research and development | $20.1 | $15.1 | +$5.0 | | General and administrative | $8.6 | $7.3 | +$1.3 | - The increase in Q2 2025 R&D expenses was primarily driven by BLA-enabling process performance qualification manufacturing initiatives and clinical trial activities[238] Liquidity and Capital Resources Cash and equivalents reached $312.8 million by June 30, 2025, supported by a $215.6 million public offering and new $50.0 million debt, funding operations into 2028 - The company had cash and cash equivalents of $312.8 million as of June 30, 2025[250] - In May 2025, the company raised total net proceeds of $215.6 million from an underwritten public offering[261] - The company believes its existing cash and cash equivalents will be sufficient to fund operating expenses and capital requirements into 2028[264] - In August 2025, the company entered into a new term loan agreement, drawing an initial $50.0 million and repaying its existing term loan[252] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company, Taysha is not required to provide quantitative and qualitative disclosures about market risk[281] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[282] - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[283] PART II. OTHER INFORMATION Legal Proceedings The company faces stockholder derivative lawsuits and an SEC investigation related to its August 2023 Private Placement, with litigation currently stayed - The company is a nominal defendant in consolidated stockholder derivative actions concerning its August 2023 Private Placement. The litigation is currently stayed until September 30, 2025[286] - The company and certain officers received subpoenas from the SEC in late 2024 related to the August 2023 PIPE and other public offerings. The SEC investigation is not a determination of any wrongdoing[287] Risk Factors The company's success hinges on TSHA-102, facing risks from evolving clinical data, lack of pivotal trial experience, Astellas option uncertainties, and legal proceedings - The company is substantially dependent on the success of its lead product candidate, TSHA-102, which is its only product in clinical development[292] - Interim or preliminary results from clinical trials, such as those for TSHA-102, may change as more patient data becomes available, which could harm business prospects[290] - The company has never conducted pivotal clinical trials and may be unable to successfully execute the necessary trials for TSHA-102 to support a BLA submission[298] - Uncertainties exist regarding the option agreement with Astellas for TSHA-102. If Astellas exercises the option, it could be considered a sale of substantially all company assets, and potential disputes over terms could arise[293][294] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the reporting period - The company reported no unregistered sales of equity securities for the period[313] Other Information The company disclosed a Rule 10b5-1 trading plan and a new $50.0 million term loan agreement with Trinity Capital, refinancing prior debt - On June 11, 2025, Sukumar Nagendran, President and Head of R&D, adopted a prearranged Rule 10b5-1 stock trading plan for the potential sale of up to 800,000 shares[318] - On August 7, 2025, the company entered into a new loan agreement with Trinity Capital, drawing $50.0 million in an initial tranche and terminating its existing term loan[319][327] Exhibits This section lists exhibits filed with the quarterly report, including corporate governance documents, pre-funded warrant forms, and officer certifications