Passage BIO(PASG) - 2025 Q4 - Annual Report

Clinical Development and Product Candidates - The lead clinical product candidate, PBFT02, aims to elevate progranulin levels to enhance lysosomal function and slow disease progression in neurodegenerative diseases, specifically targeting frontotemporal dementia (FTD) caused by progranulin deficiency (FTD-GRN) [23]. - PBFT02 has shown robust and durable increases in cerebrospinal fluid (CSF) progranulin levels, with concentrations rising from below 3.0 ng/mL at baseline to a mean of 25.9 ng/mL at 12 months in the upliFT-D trial [34]. - PBFT02 is also being evaluated for additional indications, including FTD-C9orf72 and amyotrophic lateral sclerosis (ALS), with an estimated prevalence of FTD-C9orf72 at approximately 21,000 [41]. - The company is actively developing a genetic medicine for Huntington's disease (HD) through a collaboration with Gemma Biotherapeutics, with an estimated prevalence of HD in the U.S. and Europe at approximately 70,000 [25]. - The company expects to declare a clinical candidate for the HD program in the second half of 2026, focusing on reducing somatic instability to slow neurodegeneration [48]. - The company has initiated preclinical studies to explore the potential benefits of increased progranulin levels in diseases with TDP-43 pathology, which is associated with multiple neurodegenerative conditions [39]. - The company has manufactured the PBFT02 clinical supply to support the ongoing Phase 1/2 clinical trial in FTD-GRN and FTD-C9orf72, as well as the initiation of a registrational trial in FTD-GRN [45]. - The company is advancing PBFT02 for the treatment of FTD-GRN, prioritizing the ongoing upliFT-D trial with the goal of moving to the registrational phase [52]. - Initial clinical data for PBFT02 shows robust and durable elevations in CSF PGRN levels and early evidence of reductions in plasma NfL, a disease progression biomarker [52]. - PBFT02 aims to provide higher levels of PGRN to the CNS, addressing the deficiency in GRN mutation carriers, with CSF levels ranging from 30% to 50% of those in normal individuals [69]. - The clinical trial upliFT-D for PBFT02 includes three cohorts with a total of 3 to 10 subjects per cohort, focusing on safety and tolerability over 60 months [95]. - Interim biomarker data showed that Dose 1 of PBFT02 increased CSF PGRN levels from below 3.0 ng/mL at baseline to a mean of 12.4 ng/mL at one month [96]. - PBFT02 was well-tolerated with no significant adverse effects on body weight or neurological signs observed in the 90-day toxicology study [86]. - The company is exploring the therapeutic potential of PBFT02 in additional neurodegenerative indications, including ALS and AD, leveraging shared research and development costs [52]. Regulatory and Compliance - The FDA granted Orphan Drug Designation and Fast Track Designation to PBFT02 for the treatment of FTD-GRN [106]. - The FDA review process for BLAs typically takes ten months for standard reviews and six months for priority reviews, with potential extensions for additional information [153]. - The company must comply with extensive FDA regulations, including preclinical tests and clinical trials, which can take many years to complete [146]. - A BLA submission incurs substantial costs, including application user fees and annual program fees that typically increase annually [153]. - The FDA may require a Risk Evaluation and Mitigation Strategy (REMS) as a condition of BLA approval, which can affect market potential and profitability [156]. - The FDA has specific guidance for gene therapy products, including long-term tracking of subjects for potential delayed adverse effects [158]. - The FDA grants Orphan Drug Designation to products for rare diseases affecting fewer than 200,000 individuals in the U.S., providing a seven-year exclusive marketing period for the first approved product [159]. - Orphan Drug Designation includes benefits such as tax credits for research and a waiver of the BLA user fee [161]. - Fast Track Designation is available for drugs addressing serious conditions with no effective treatment, expediting development and review processes [162]. - Priority Review may be granted for products that significantly improve safety and effectiveness compared to existing therapies, directing additional resources to their evaluation [163]. - Post-approval requirements include adverse event reporting and compliance with cGMPs, with the FDA conducting periodic inspections [171]. Financial Performance and Projections - The company incurred net losses of $45.5 million and $64.8 million for the years ended December 31, 2025 and 2024, respectively, with an accumulated deficit of $704.8 million as of December 31, 2025 [211]. - The company has never generated revenue from product sales and does not expect to achieve profitability for many years, if ever [215]. - As of December 31, 2025, the company's cash and cash equivalents were $46.3 million, expected to fund operations through the end of Q1 2027 [218]. - The company anticipates significant increases in expenses as it advances product candidates through clinical development and seeks regulatory approvals [212]. - Future capital requirements will depend on the progress of clinical trials and the need to maintain and expand the intellectual property portfolio [219]. - The company expects to incur substantial future capital needs to complete planned preclinical and clinical development for its product candidates [217]. - The company has funded operations primarily through proceeds from sales of convertible preferred stock and public offerings [210]. - The ability to raise additional funding is critical for the company to continue its research and development efforts [217]. Intellectual Property and Collaborations - The company has a patent portfolio that includes claims directed to rAAV for treating FTD, with expected expiration dates in 2040 and 2041 [134]. - The company has a patent portfolio that includes seven patent families with pending or issued claims for rAAV treatments for GM1, Krabbe, and MLD [135]. - The patent family for purifying rAAV includes applications pending in 12 jurisdictions, with expected expiration on October 6, 2043 [137]. - The patent family for rAAV treatment of FTD and other neurodegenerative diseases includes a PCT application, with expected expiration on March 3, 2045 [138]. - The company has options under existing agreements to add additional intellectual property to its license portfolio [136]. - The Gemma Collaboration Agreement includes payments of up to $16.5 million per product candidate for Huntington's disease and future CNS indications [125]. - The company is required to pay $0.9 million to Catalent due to the outlicense and transition of its GM1 gangliosidosis program to Gemma [110]. - The company has a collaboration agreement with Catalent for cGMP manufacturing capacity, which is crucial for current and future clinical trials [109]. Workforce and Corporate Culture - As of December 31, 2025, the company had 24 full-time employees, including 7 with advanced degrees and 13 engaged in research and development [191]. - The company faces intense competition for skilled individuals in genetic medicine, leading to high turnover rates and a shortage of experienced professionals [195]. - The company offers a comprehensive total rewards package, including competitive pay, healthcare benefits, and a 5% employer match for retirement plans [196]. - The company emphasizes a commitment to diversity and inclusion as essential to its success and aims to create a thriving workplace [194]. - The company’s mission focuses on improving the lives of patients with neurodegenerative diseases while fostering strong community relationships [192]. Legal Matters - The company is involved in litigation with a former employee regarding a breach of contract claim, with a jury ruling in favor of the company [203]. - The company is not currently a party to any other legal proceedings that would materially affect its business, aside from the ongoing litigation mentioned [204].