Avidity Biosciences(RNA) - 2025 Q3 - Quarterly Report

Drug Development and Clinical Trials - The company is developing a new class of RNA therapeutics called Antibody Oligonucleotide Conjugates (AOCs) targeting previously untreatable diseases[85]. - Delpacibart zotadirsen (del-zota) is in Phase 2 development for Duchenne muscular dystrophy (DMD) and has shown a 25% increase in dystrophin production and over 80% reduction in creatine kinase levels compared to baseline[92]. - The FDA granted Breakthrough Therapy designation to del-zota for the treatment of DMD44 in July 2025[94]. - Delpacibart etedesiran (del-desiran) is currently in a global Phase 3 trial for myotonic dystrophy type 1 (DM1) with a focus on multiple key functional aspects[96]. - The HARBOR trial for del-desiran involves 159 participants and is designed to assess myotonia and muscle strength, with a primary endpoint of video hand opening time (vHOT)[96]. - The company plans to submit a protocol amendment for the HARBOR trial to extend the data cutoff from 30 weeks to 54 weeks, enhancing the safety and efficacy data[99]. - The Phase 3 HARBOR trial is fully enrolled with 159 participants, and multiple updates from the del-desiran program are expected[100]. - The del-brax program received FDA alignment on accelerated and full approval pathways, with positive topline Phase 1/2 data showing improvements compared to placebo[101]. - Topline data from the FORTITUDE biomarker cohort is anticipated in Q2 2026, while FORTITUDE-3 data readout and global regulatory submissions are expected in 2028[102]. - The FORTITUDE-3 study will evaluate del-brax in approximately 200 participants, assessing key FSHD-related endpoints over 18 months[108]. Financial Performance and Funding - The company reported net losses of $322.3 million and $212.2 million for the years ended December 31, 2024 and 2023, respectively, with an accumulated deficit of $1.3 billion as of September 30, 2025[112]. - Existing cash, cash equivalents, and marketable securities amount to approximately $1.9 billion, expected to fund operations for at least 12 months[114]. - The company entered into a collaboration with Bristol Myers Squibb, receiving approximately $100 million upfront and potential milestone payments totaling up to $1.35 billion[115]. - Under the collaboration with Eli Lilly, the company is eligible for up to $60 million in development milestone payments per target and tiered royalties on net sales[116]. - Revenue increased by $10.1 million and $10.0 million for the three and nine months ended September 30, 2025, primarily due to the recognition of a $10.0 million milestone under the Lilly Agreement[128]. - Research and development expenses increased by $77.8 million for the three months ended September 30, 2025, primarily due to increased external costs associated with clinical trials and preclinical studies[130]. - General and administrative expenses increased by $23.1 million for the three months ended September 30, 2025, primarily due to $11.4 million in higher personnel costs[131]. - Other income decreased by $3.4 million for the three months ended September 30, 2025, primarily due to lower interest income earned on marketable securities[132]. - Net cash used in operating activities was $480.7 million for the nine months ended September 30, 2025, primarily due to increased research and development costs[140]. - Net cash used in investing activities was $245.3 million for the nine months ended September 30, 2025, primarily for purchases of marketable securities[141]. - Net cash provided by financing activities was $856.1 million for the nine months ended September 30, 2025, consisting of $837.4 million in net proceeds from sales of common stock[142]. - The company sold 5,646,583 shares of common stock under the 2024 Sales Agreement, receiving net proceeds of $185.5 million[133]. - On September 15, 2025, the company completed a public offering of 17,250,000 shares at a price of $40.00 per share, netting approximately $651.4 million[134]. Mergers and Agreements - A merger agreement with Novartis AG was entered into on October 25, 2025, with expected closure in the first half of 2026[86]. - The merger includes a spin-off of early-stage precision cardiology programs, with a proposed distribution ratio of 1 share of SpinCo for every 10 shares of the company’s common stock[87]. - A termination fee of $450 million is stipulated in the merger agreement, while a reverse termination fee of $600 million is applicable under certain conditions[88]. Operational Commitments and Changes - The company entered into a sublease agreement in April 2024 with total future lease commitments of approximately $79.2 million, commencing in August 2025[145]. - An additional 80,000 square feet was rented under an amended sublease agreement, with future lease commitments of approximately $53.7 million[145]. - A manufacturing agreement was established in August 2025 with a CMO, requiring minimum purchase obligations totaling approximately $621.6 million from 2026 to 2028[146]. - There have been no material changes to contractual obligations outside the ordinary course of business as of September 30, 2025[148]. - As of September 30, 2025, there have been no material changes in market risk from the previous annual report[150].