Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934 For the transition period from ____________ to ____________ Commission File Number: 001-12584 THERIVA BIOLOGICS, INC. (Exact name of registrant as specified in its charter) Nevada 13- ...

Exhibit 99.1 CervoMed Reports Second Quarter 2025 Financial Results and Provides Corporate Updates Reported 32-week data from Phase 2b RewinD-LB Trial Extension phase showing neflamapimod treatment resulted in a substantial reduction in clinically significant worsening compared to control arm over 32 weeks, which improved further among patients who have minimal evidence of Alzheimer's disease (AD) co-pathology (ptau181 < 2.2 pg/mL at screening) At week 32 of the Extension phase, patients treated with neflam ...

Exhibit 99.1 CervoMed Reports Second Quarter 2025 Financial Results and Provides Corporate Updates Reported 32-week data from Phase 2b RewinD-LB Trial Extension phase showing neflamapimod treatment resulted in a substantial reduction in clinically significant worsening compared to control arm over 32 weeks, which improved further among patients who have minimal evidence of Alzheimer's disease (AD) co-pathology (ptau181 < 2.2 pg/mL at screening) At week 32 of the Extension phase, patients treated with neflam ...

PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited condensed consolidated financial statements for Q2 2025 reveal a **$12.6 million net loss** and **$260.2 million accumulated deficit**, raising going concern doubts [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets reached **$15.6 million**, with **cash at $9.4 million**, total liabilities decreasing to **$9.1 million**, and stockholders' equity improving to **$6.5 million** Balance Sheet Highlights (in thousands) | Balance Sheet Highlights (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $9,410 | $8,714 | | Total current assets | $11,081 | $10,659 | | Total assets | $15,624 | $15,591 | | **Liabilities & Equity** | | | | Total current liabilities | $4,891 | $6,207 | | Total liabilities | $9,100 | $10,836 | | Total stockholders' equity | $6,524 | $4,755 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the six months ended June 30, 2025, the company reported a **net loss of $12.6 million** with no revenue, as R&D expenses slightly decreased and G&A expenses slightly increased Statement of Operations (in thousands) | Statement of Operations (in thousands) | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Research and development | $(6,961) | $(7,395) | | General and administrative | $(5,745) | $(5,612) | | Loss from operations | $(12,706) | $(13,007) | | Net loss | $(12,612) | $(12,717) | | Basic and diluted net loss per share | $(30.84) | $(4,458.98) | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations was **$13.7 million**, offset by **$14.4 million from financing activities**, resulting in a **$0.7 million cash increase** and a **$9.4 million ending balance** Cash Flow Summary (in thousands) | Cash Flow Summary (in thousands) | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(13,668) | $(12,804) | | Net cash provided by financing activities | $14,364 | $3,966 | | Increase (decrease) in cash | $696 | $(8,838) | | Cash and cash equivalents at end of period | $9,410 | $8,066 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's clinical-stage biotech focus, disclose substantial doubt about its going concern status, and cover equity offerings, reverse stock splits, and single-segment operations - The company is a clinical-stage biotechnology firm focused on developing novel immunotherapy candidates for cancer, with two clinical candidates (mipletamig and ALG.APV-527) and three preclinical candidates in development[24](index=24&type=chunk) - Management has concluded there is substantial doubt about the company's ability to continue as a going concern for the next year due to recurring net losses (**$12.6 million** for the six months ended June 30, 2025) and negative operating cash flows (**$13.7 million** for the same period)[25](index=25&type=chunk) - The company effected a **1-for-20 reverse stock split** on May 23, 2025, with all share and per-share amounts retroactively adjusted[43](index=43&type=chunk)[45](index=45&type=chunk) - During the first six months of 2025, the company raised capital through multiple equity offerings, including a registered direct offering in April and an at-the-market offering in June[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) - The company operates as a single operating segment focused on the discovery and development of novel oncology therapeutics[74](index=74&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses cancer immunotherapy development, an **85% mipletamig remission rate**, **$15.9 million financing**, operational expense shifts, and liquidity challenges, including **$9.4 million cash** and ongoing financing efforts [Results of Operations](index=25&type=section&id=Results%20of%20Operations) R&D expenses decreased by **$0.4 million to $7.0 million** due to preclinical shifts, while G&A expenses increased by **$0.1 million to $5.7 million** due to consulting costs Expense Comparison (in thousands) | Expense Comparison (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Research and Development | $6,961 | $7,395 | | General and Administrative | $5,745 | $5,612 | - The decrease in R&D spending was driven by the ramp-down of the ALG.APV-527 escalation phase, partially offset by increased costs for the mipletamig trial due to patient enrollment[101](index=101&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company held **$9.4 million in cash** with a **$260.2 million accumulated deficit**, having raised **$15.9 million** through equity offerings and utilizing SEPA and ATM agreements for future capital - The company had cash and cash equivalents of **$9.4 million** as of June 30, 2025[113](index=113&type=chunk) - For the six months ended June 30, 2025, the company raised **$15.9 million** in proceeds through various equity offerings[115](index=115&type=chunk) - The company has a Standby Equity Purchase Agreement (SEPA) with Yorkville to sell up to **$25.0 million** of common stock over 36 months[109](index=109&type=chunk) - An At The Market (ATM) Offering Agreement with Roth Capital allows the company to sell shares, under which it raised **$3.8 million** in the first six months of 2025[110](index=110&type=chunk)[117](index=117&type=chunk) - On August 6, 2025, the Compensation Committee approved a one-time supplemental cash payment of **$1.2 million** to its executive officers, along with increases to base salaries and bonus targets[120](index=120&type=chunk)[121](index=121&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risk disclosures were reported as of June 30, 2025, compared to the prior Annual Report on Form 10-K - There were no material changes to the company's market risk disclosures since the last Annual Report on Form 10-K filed on February 14, 2025[130](index=130&type=chunk) [Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[131](index=131&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[132](index=132&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal claims or actions expected to materially impact its financial condition or operations - Management believes there are currently no pending legal claims or actions that could materially and adversely affect the company[135](index=135&type=chunk) [Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) This section outlines material risks including significant operating losses, going concern doubts, capital needs, potential Nasdaq delisting, clinical trial delays, third-party dependencies, competition, and IP protection - The company has a history of significant operating losses, with a net loss of **$12.6 million** for the six months ended June 30, 2025, and an accumulated deficit of **$260.2 million**[138](index=138&type=chunk) - There is substantial doubt about the company's ability to continue as a going concern, and it will require additional capital to fund operations[139](index=139&type=chunk)[140](index=140&type=chunk) - The company's common stock is at risk of delisting from the Nasdaq Capital Market if it fails to maintain compliance with continued listing requirements, such as minimum stockholders' equity[180](index=180&type=chunk)[181](index=181&type=chunk) - The company's long-term success depends on its ability to develop, receive regulatory approval for, and commercialize its product candidates, a process which is lengthy, expensive, and uncertain[257](index=257&type=chunk) - The business is dependent on third parties for conducting clinical trials and manufacturing product candidates, and any failure by these parties could substantially harm the business[211](index=211&type=chunk)[218](index=218&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=90&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Discloses unregistered equity transactions, including common warrant sales in a private placement and a Standby Equity Purchase Agreement (SEPA) with Yorkville - On April 4, 2025, the company sold common warrants to purchase up to **176,470 shares** of common stock in a private placement, relying on exemptions under Section 4(a)(2) and/or Regulation D of the Securities Act[322](index=322&type=chunk) - On June 16, 2025, the company entered into a Standby Equity Purchase Agreement (SEPA) with Yorkville, allowing it to sell up to **$25.0 million** of its common stock over 36 months[323](index=323&type=chunk) [Defaults Upon Senior Securities](index=90&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable [Mine Safety Disclosures](index=90&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable [Other Information](index=90&type=section&id=Item%205.%20Other%20Information) Details significant executive compensation adjustments approved August 6, 2025, including a **$1.2 million supplemental cash payment** and increases to base salaries and bonus targets Supplemental Cash Payments to Executive Officers | Executive Officer | Supplemental Cash Payment | | :--- | :--- | | Marvin L. White (CEO) | $400,000 | | Jeffrey G. Lamothe (COO) | $300,000 | | SoYoung Kwon (GC) | $250,000 | | Daphne Taylor (CFO) | $250,000 | | **Total** | **$1,200,000** | Executive Officer Base Salary Adjustments | Executive Officer | Prior Base Salary | New Base Salary (as of Aug 6, 2025) | | :--- | :--- | :--- | | Marvin L. White (CEO) | $595,000 | $690,000 | | Jeffrey G. Lamothe (COO) | $504,400 | $590,000 | | SoYoung Kwon (GC) | $472,500 | $545,000 | | Daphne Taylor (CFO) | $457,000 | $520,000 | [Exhibits](index=93&type=section&id=Item%206.%20Exhibits) Provides an index of exhibits filed with the Form 10-Q, including documents for the reverse stock split, financing agreements, and officer certifications - The report includes exhibits related to the May 2025 reverse stock split, warrant and securities purchase agreements from April and June 2025 financings, and the Standby Equity Purchase Agreement from June 2025[336](index=336&type=chunk) Signatures The report was signed by the President and CEO, and the Senior Vice President and CFO on August 11, 2025 - The report was signed on August 11, 2025, by Marvin L. White, President and Chief Executive Officer, and Daphne Taylor, Senior Vice President and Chief Financial Officer[339](index=339&type=chunk)[341](index=341&type=chunk)

[Executive Summary & Q2 2025 Business Update](index=1&type=section&id=Executive%20Summary%20%26%20Q2%202025%20Business%20Update) Aptevo Therapeutics achieved significant clinical and financial milestones in Q2 2025, including a new bispecific drug launch, high AML response rates, and increased liquidity [Second Quarter Highlights](index=1&type=section&id=Second%20Quarter%20Highlights) Aptevo Therapeutics made significant progress in Q2 2025, launching APVO455, achieving an 85% AML response rate with mipletamig, and securing $15.9 million in financing - Company pipeline expanded, introducing APVO455, a Nectin-4 x CD3 bispecific for solid tumors[5](index=5&type=chunk) - Mipletamig achieved an **85% response rate** in frontline AML patients (11 out of 13) across two combination trials[5](index=5&type=chunk) - Raised **$15.9 million** through financing, extending cash runway to Q4 2025, and secured an additional **$25 million** equity credit line[5](index=5&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Marvin White highlighted decisive Q2 progress, emphasizing the expanded CD3 bispecific portfolio, mipletamig's strong AML performance, and improved financial health - CEO emphasized the company expanded its differentiated CD3 bispecific portfolio by introducing APVO455 (a Nectin-4 x CD3 bispecific) to address a broad range of solid tumor types[4](index=4&type=chunk) - Mipletamig showed outstanding performance in frontline Acute Myeloid Leukemia (AML) patients, with **85% of evaluable patients** achieving remission in two independent trials, validating its differentiated mechanism of action[4](index=4&type=chunk)[6](index=6&type=chunk) - Company strengthened its financial position by raising **$15.9 million**, extending the cash runway to the end of Q4 2025 to support future clinical and business milestones[6](index=6&type=chunk) [Pipeline and Clinical Development](index=2&type=section&id=Pipeline%20and%20Clinical%20Development) Aptevo's pipeline features novel bispecific immunotherapies, including the new APVO455 for solid tumors and mipletamig, showing strong efficacy in AML [APVO455: A Novel T-Cell Engager for Solid Tumors](index=2&type=section&id=APVO455%3A%20A%20Novel%20T-Cell%20Engager%20for%20Solid%20Tumors) APVO455 is a preclinical Nectin-4 x CD3 bispecific T-cell engager designed for Nectin-4 high-expressing solid tumors, aiming for a wide therapeutic window and favorable safety - APVO455 is a preclinical Nectin-4 x CD3 bispecific T-cell engager, targeting Nectin-4 high-expressing solid tumors such as bladder, breast, NSCLC, and head and neck cancers[7](index=7&type=chunk) - The drug is designed to avoid peripheral binding or T-cell activation, activating only in the presence of Nectin-4 positive tumor cells, aiming for a wider therapeutic window, more consistent immune activation, and favorable safety[7](index=7&type=chunk) [CRIS-7-Derived CD3 Portfolio](index=2&type=section&id=CRIS-7-Derived%20CD3%20Portfolio) Aptevo's CRIS-7 derived CD3 portfolio includes mipletamig, APVO442, and APVO455, all sharing a common CD3 binding domain for enhanced safety and tumor-specific activation - The CD3 portfolio includes mipletamig (CD123 x CD3, for frontline AML, in Phase 1b/2 clinical trials), APVO442 (PSMA x CD3, targeting prostate cancer, in preclinical development), and APVO455 (Nectin-4 x CD3, for various solid tumor types)[8](index=8&type=chunk)[12](index=12&type=chunk) - All three molecules share the same CRIS-7-derived CD3 binding domain, designed to drive tumor-specific immune activation while limiting harmful side effects for patients, particularly reducing cytokine release syndrome[8](index=8&type=chunk) [Additional Pipeline Candidates](index=2&type=section&id=Additional%20Pipeline%20Candidates) Beyond the CD3 portfolio, Aptevo is developing ALG.APV-527 and preclinical candidates APVO711 and APVO603 for various solid tumor types - Aptevo continues to develop the clinical candidate ALG.APV-527 (4-1BB x 5T4)[9](index=9&type=chunk) - Preclinical candidates include APVO711 (checkpoint inhibitor with additional features) and APVO603 (4-1BB x OX40), both targeting various solid tumor types[9](index=9&type=chunk) [Mipletamig Data Highlights](index=2&type=section&id=Mipletamig%20Data%20Highlights) Mipletamig continues to demonstrate impressive clinical performance and a compelling safety profile, positioning it to potentially redefine frontline AML treatment - Mipletamig's clinical data remains impressive, positioning it as a strong candidate to reshape frontline AML treatment and potentially elevate the standard of care[10](index=10&type=chunk) [Efficacy Data Continues to Outperform Benchmarks](index=2&type=section&id=Efficacy%20Data%20Continues%20to%20Outperform%20Benchmarks) Mipletamig's efficacy data consistently surpasses benchmarks, with 85% of frontline patients achieving remission, including those with poor prognoses - To date, **85% of frontline patients** in two trials have achieved remission[11](index=11&type=chunk) - Among these responding patients, several with poor prognoses at screening achieved complete remission (CR), including one successfully undergoing stem cell transplant, a rare favorable outcome in the unfit AML patient population[13](index=13&type=chunk) [Stand Out Safety and Tolerability Outcomes Continue](index=3&type=section&id=Stand%20Out%20Safety%20and%20Tolerability%20Outcomes%20Continue) Mipletamig continues to show excellent safety and tolerability, with no cytokine release syndrome reported in frontline treated patients - To date, no cytokine release syndrome (CRS) has been reported in frontline treated patients[14](index=14&type=chunk) [Financial Results](index=3&type=section&id=Financial%20Results) Aptevo's Q2 2025 financial results show $9.4 million in cash, $15.9 million raised, and a net loss of $6.2 million, with shifts in R&D and G&A expenses [Q2 2025 Financial Highlights](index=3&type=section&id=Q2%202025%20Financial%20Highlights) As of June 30, 2025, Aptevo reported $9.4 million in cash, raised $15.9 million, and recorded a net loss of $6.2 million, with R&D decreasing and G&A increasing year-over-year Q2 2025 Financial Highlights (Units: Million USD) | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | Change (YoY) | | :------------------------- | :----------------------- | :----------------------- | :---------- | | Cash and Cash Equivalents (as of June 30) | 9.4 | N/A | N/A | | Gross Proceeds from Equity Offering (Q2) | 15.9 | N/A | N/A | | Research and Development Expenses | 3.3 | 3.6 | Decrease of 0.3 | | General and Administrative Expenses | 2.9 | 2.4 | Increase of 0.5 | | Net Loss | 6.2 | 5.9 | Increase of 0.3 | | Net Loss Per Share | 8.40 | 1,236.96 | Decrease of 1,228.56 | - The decrease in R&D expenses was primarily due to reduced preclinical and ALG.APV-527 expenditures, partially offset by increased mipletamig trial costs[16](index=16&type=chunk) - The increase in G&A expenses was primarily due to higher consulting costs[17](index=17&type=chunk) [CONSOLIDATED BALANCE SHEETS](index=4&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, Aptevo's total assets were $15.624 million, with cash at $9.41 million, total liabilities at $9.1 million, and total stockholders' equity increasing to $6.524 million Key Consolidated Balance Sheet Data (Units: Thousand USD) | Item | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash and Cash Equivalents | $9,410 | $8,714 | | Total Current Assets | $11,081 | $10,659 | | Total Assets | $15,624 | $15,591 | | Total Current Liabilities | $4,891 | $6,207 | | Total Liabilities | $9,100 | $10,836 | | Total Stockholders' Equity | $6,524 | $4,755 | - Total stockholders' equity increased from **$4.755 million** as of December 31, 2024, to **$6.524 million** as of June 30, 2025[20](index=20&type=chunk) [CONSOLIDATED STATEMENTS OF OPERATIONS](index=5&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For the three months ended June 30, 2025, Aptevo reported a net loss of $6.204 million and a net loss per share of $8.40, with R&D at $3.328 million and G&A at $2.898 million Key Consolidated Statements of Operations Data (Units: Thousand USD) | Operating Expenses | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :----------------------- | :------------- | :------------- | :----------- | :----------- | | Research and Development Expenses | $(3,328) | $(3,643) | $(6,961) | $(7,395) | | General and Administrative Expenses | $(2,898) | $(2,381) | $(5,745) | $(5,612) | | Operating Loss | $(6,226) | $(6,024) | $(12,706) | $(13,007) | | Other Income, Net | $22 | $141 | $94 | $290 | | Net Loss | $(6,204) | $(5,883) | $(12,612) | $(12,717) | | Net Loss Per Share, Basic and Diluted | $(8.40) | $(1,236.96) | $(30.84) | $(4,458.98) | | Shares Used in Per Share Calculation | 738,149 | 4,756 | 408,985 | 2,852 | - Net loss per share significantly decreased from **($1,236.96)** in Q2 2024 to **($8.40)** in Q2 2025, primarily due to a substantial increase in outstanding shares[22](index=22&type=chunk) [Corporate Information](index=6&type=section&id=Corporate%20Information) This section provides an overview of Aptevo Therapeutics, its proprietary platform technologies, mission, forward-looking statement disclaimers, and contact details [About Aptevo Therapeutics](index=6&type=section&id=About%20Aptevo%20Therapeutics) Aptevo Therapeutics Inc. is a clinical-stage biotech company leveraging its ADAPTIR® and ADAPTIR-FLEX® platforms to develop novel bispecific immunotherapies for cancer patients - Aptevo Therapeutics Inc. is a clinical-stage biotechnology company focused on developing novel bispecific immunotherapies for cancer treatment[23](index=23&type=chunk) - The company has two clinical candidates (Mipletamig and ALG.APV-527) and four preclinical candidates, all based on its proprietary ADAPTIR® and ADAPTIR-FLEX® platform technologies[23](index=23&type=chunk) - Aptevo's mission is to improve treatment outcomes and transform the lives of cancer patients[23](index=23&type=chunk) [Safe Harbor Statement](index=6&type=section&id=Safe%20Harbor%20Statement) The Safe Harbor Statement clarifies that the press release contains forward-looking statements based on current expectations, but actual results may differ due to inherent risks and uncertainties - This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995, regarding the activity, efficacy, safety, tolerability, and potential uses of therapeutic candidates, as well as clinical program progress and financial condition[24](index=24&type=chunk) - Investors should recognize that actual results may differ materially from Aptevo's expectations if underlying assumptions prove inaccurate or unknown risks or uncertainties emerge, and thus should not place undue reliance on any forward-looking statements[25](index=25&type=chunk) - Important factors that could cause actual results to differ materially from forward-looking statements include further evaluation of preliminary or interim data, adverse events in clinical development, changes in regulatory, social, macroeconomic, and political conditions, the impact of competing products, and the company's ability to raise capital[26](index=26&type=chunk) [CONTACT](index=7&type=section&id=CONTACT) This section provides contact information for Aptevo Therapeutics' Investor Relations and Corporate Communications, including the name, email, and phone number of the lead - The head of Investor Relations and Corporate Communications is Miriam Weber Miller[27](index=27&type=chunk) - Contact email: IR@apvo.com or Millerm@apvo.com, phone: 206-859-6628[27](index=27&type=chunk)

PART I – FINANCIAL INFORMATION This section presents Protara Therapeutics, Inc.'s unaudited condensed consolidated financial statements and detailed notes on accounting policies, financial instruments, and equity activities [Item 1. Condensed Consolidated Financial Statements](index=6&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents Protara Therapeutics, Inc.'s unaudited condensed consolidated financial statements and detailed notes on accounting policies, financial instruments, and equity activities [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $31,496 | $162,798 | | Marketable debt securities | $90,720 | $7,494 | | Total current assets | $125,091 | $172,155 | | Total assets | $156,933 | $181,454 | | Total current liabilities | $9,761 | $10,961 | | Total liabilities | $12,510 | $14,320 | | Total stockholders' equity | $144,423 | $167,134 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $10,770 | $6,387 | $19,918 | $14,135 | | General and administrative | $5,816 | $4,274 | $10,792 | $8,377 | | Total operating expenses | $16,586 | $10,661 | $30,710 | $22,512 | | Net income (loss) | $(14,960) | $(9,513) | $(26,874) | $(20,608) | | Net income (loss) per share, basic and diluted | $(0.35) | $(0.45) | $(0.65) | $(1.26) | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) - Total stockholders' equity decreased from **$167,134 thousand** at December 31, 2024, to **$144,423 thousand** at June 30, 2025, primarily due to a net loss of **$14,960 thousand** for the three months ended June 30, 2025, and **$11,914 thousand** for the three months ended March 31, 2025[21](index=21&type=chunk) - Common stock shares outstanding increased from 35,044,772 at December 31, 2024, to 38,581,863 at June 30, 2025, driven by conversions of Series 1 Preferred Stock, exercise of pre-funded warrants, and the Underwriters' Option[21](index=21&type=chunk) - Additional paid-in capital increased from **$412,077 thousand** to **$416,161 thousand**, reflecting proceeds from equity issuances and stock-based compensation[21](index=21&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(26,963) | $(18,066) | | Net cash used in investing activities | $(106,077) | $26,045 | | Net cash provided by financing activities | $1,738 | $42,016 | | Net increase (decrease) in cash and restricted cash | $(131,302) | $49,995 | | Cash and cash equivalents and restricted cash - end of period | $32,241 | $90,326 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [1. Organization and Nature of the Business](index=10&type=section&id=1.%20Organization%20and%20Nature%20of%20the%20Business) - Protara Therapeutics, Inc. is a clinical-stage biopharmaceutical company focused on cancer and rare diseases, with development programs for TARA-002 (non-muscle invasive bladder cancer and lymphatic malformations) and IV Choline Chloride (patients receiving parenteral support)[25](index=25&type=chunk) - The Company has no current or near-term revenues and will require additional capital to fund its drug development efforts, though current financial resources are deemed sufficient for at least the next twelve months[26](index=26&type=chunk)[27](index=27&type=chunk) [2. Summary of Significant Accounting Policies](index=10&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) - The financial statements are unaudited and prepared in accordance with GAAP and SEC rules for interim statements, and should be read with the 2024 Annual Report on Form 10-K[36](index=36&type=chunk) - Stock-based compensation for stock options, RSUs, and ESPP is measured at fair value on grant date and recognized over the vesting period, using models like Black-Scholes for options and ESPP[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) - The Company is evaluating new FASB ASUs (2023-09 on Income Tax Disclosures and 2024-03 on Expense Disaggregation Disclosures) but does not anticipate a material impact on its consolidated financial statements from ASU 2023-09[38](index=38&type=chunk)[39](index=39&type=chunk) [3. Fair Value of Financial Instruments](index=11&type=section&id=3.%20Fair%20Value%20of%20Financial%20Instruments) - Fair value measurements are categorized into a three-level hierarchy based on input observability (Level 1: quoted prices in active markets; Level 2: observable inputs other than Level 1; Level 3: unobservable inputs)[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) Fair Value of Financial Assets (in thousands) | Financial Asset (in thousands) | Level 1 (June 30, 2025) | Level 2 (June 30, 2025) | Total (June 30, 2025) | | :----------------------------- | :---------------------- | :---------------------- | :-------------------- | | Money market funds | $30,983 | - | $30,983 | | Restricted cash (money market funds) | $745 | - | $745 | | Corporate bonds | - | $81,141 | $81,141 | | U.S. Treasury securities | $32,971 | - | $32,971 | | **Total** | **$64,699** | **$81,141** | **$145,840** | Fair Value of Financial Assets (in thousands) | Financial Asset (in thousands) | Level 1 (Dec 31, 2024) | Level 2 (Dec 31, 2024) | Total (Dec 31, 2024) | | :----------------------------- | :--------------------- | :--------------------- | :------------------- | | Money market funds | $162,297 | - | $162,297 | | Restricted cash (money market funds) | $745 | - | $745 | | U.S. Treasury securities | $7,494 | - | $7,494 | | **Total** | **$170,536** | **-** | **$170,536** | [4. Marketable Debt Securities](index=13&type=section&id=4.%20Marketable%20Debt%20Securities) - All marketable debt securities are classified as available-for-sale, with unrealized gains and losses reported in accumulated other comprehensive income (loss)[52](index=52&type=chunk) Marketable Debt Securities (in thousands) | Marketable Debt Securities (in thousands) | Amortized Cost (June 30, 2025) | Unrealized Gains (June 30, 2025) | Unrealized Losses (June 30, 2025) | Estimated Fair Value (June 30, 2025) | | :---------------------------------------- | :----------------------------- | :------------------------------- | :-------------------------------- | :----------------------------------- | | U.S. Treasury securities (current) | $27,920 | $31 | $(1) | $27,950 | | U.S. Treasury securities (non-current) | $5,001 | $20 | - | $5,021 | | Corporate bonds (current) | $62,790 | $17 | $(37) | $62,770 | | Corporate bonds (non-current) | $18,324 | $52 | $(5) | $18,371 | | **Total** | **$114,035** | **$120** | **$(43)** | **$114,112** | Interest and Investment Income (in thousands) | Interest and Investment Income (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Interest income | $1,223 | $1,130 | $2,778 | $1,809 | | Accretion of discount (Amortization of premium), net | $389 | $7 | $555 | $75 | | Dividend income | $14 | $11 | $22 | $20 | | **Total** | **$1,626** | **$1,148** | **$3,355** | **$1,904** | [5. Prepaid Expenses and Other Current Assets](index=17&type=section&id=5.%20Prepaid%20Expenses%20and%20Other%20Current%20Assets) Prepaid Expenses and Other Current Assets (in thousands) | Prepaid Expenses and Other Current Assets (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Prepaid research and development | $1,279 | $853 | | Prepaid insurance | $318 | $622 | | Accrued interest on marketable debt securities | $890 | - | | Other prepaid expenses and current assets | $388 | $298 | | **Total** | **$2,875** | **$1,863** | [6. Other Assets](index=17&type=section&id=6.%20Other%20Assets) Other Assets (in thousands) | Other Assets (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Prepaid research and development, non-current | $3,039 | $3,245 | | Other non-current assets | $29 | $27 | | **Total** | **$3,068** | **$3,272** | [7. Accrued Expenses and Other Current Liabilities](index=17&type=section&id=7.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Accrued Expenses and Other Current Liabilities (in thousands) | Accrued Expenses and Other Current Liabilities (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------------------- | :------------ | :---------------- | | Research and development costs | $1,445 | $2,740 | | Employee costs | $1,484 | $2,533 | | Other expenses | $334 | $135 | | **Total** | **$3,263** | **$5,408** | [8. Leases](index=17&type=section&id=8.%20Leases) - Operating lease expense was **$338 thousand** for both three-month periods ended June 30, 2025 and 2024, and **$676 thousand** for both six-month periods[63](index=63&type=chunk)[64](index=64&type=chunk) - As of June 30, 2025, the weighted-average remaining lease term for operating leases was 37 months, with a weighted-average discount rate of 7.0%[65](index=65&type=chunk) Operating Lease Payments (in thousands) | Operating Lease Payments (in thousands) | Amount | | :------------------------------------ | :----- | | 2025 (excluding six months ended June 30, 2025) | $715 | | 2026 | $1,429 | | 2027 | $1,429 | | 2028 | $718 | | 2029 | $87 | | **Total future operating lease payments** | **$4,378** | | Less: imputed interest | $430 | | **Present value of future minimum lease payments** | **$3,948** | [9. Commitments and Contingencies](index=19&type=section&id=9.%20Commitments%20and%20Contingencies) - The Company has commitments under license and collaboration agreements, lease agreements, and employment agreements, including annual payments, milestone payments, and royalties[66](index=66&type=chunk) - Management believes that the ultimate outcome of any legal proceedings and claims arising in the ordinary course of business would not have a material adverse impact on the Company's financial position or results of operations[67](index=67&type=chunk) [10. Stockholders' Equity](index=19&type=section&id=10.%20Stockholders'%20Equity) - As of June 30, 2025, **38,581,863 shares** of common stock were issued and outstanding, up from 35,044,772 at December 31, 2024[69](index=69&type=chunk) - During the six months ended June 30, 2025, approximately **2,376 shares of Series 1 Convertible Preferred Stock** were converted into **2,376,244 shares of common stock**, reducing outstanding preferred shares to 5,615[71](index=71&type=chunk)[72](index=72&type=chunk) - The April 2024 Private Placement generated net proceeds of approximately **$41,964 thousand** from the sale of common stock and pre-funded warrants, with associated common warrants exercisable at $5.25 per share[75](index=75&type=chunk) - The December 2024 Public Offering resulted in net proceeds of approximately **$93.4 million**, and the partial exercise of the Underwriters' Option in January 2025 generated an additional **$2.5 million** net proceeds[86](index=86&type=chunk)[90](index=90&type=chunk) [11. Stock-Based Compensation](index=23&type=section&id=11.%20Stock-Based%20Compensation) - The Company operates several equity incentive plans (2014, 2017, 2020 Inducement, 2024 EIP) and an Employee Stock Purchase Plan (2024 ESPP) to grant stock options, RSUs, and other awards[91](index=91&type=chunk)[97](index=97&type=chunk)[100](index=100&type=chunk)[102](index=102&type=chunk)[104](index=104&type=chunk) - The 2024 EIP was amended to increase shares available for grant by **2,800,000** to **4,300,000 shares**[102](index=102&type=chunk) RSU Activity | RSU Activity | Non-vested as of Dec 31, 2024 | Granted | Forfeited | Vested | Non-vested as of June 30, 2025 | | :------------- | :---------------------------- | :------ | :-------- | :----- | :----------------------------- | | Restricted Stock Units | 295,914 | 355,131 | (9,689) | (130,411) | 510,945 | | Weighted Average Grant Date Fair Value | $2.69 | $4.27 | $3.41 | $3.32 | $3.61 | Stock Option Activity | Stock Option Activity | Outstanding as of Dec 31, 2024 | Granted | Exercised | Forfeited | Outstanding as of June 30, 2025 | | :-------------------- | :----------------------------- | :------ | :-------- | :-------- | :------------------------------ | | Options | 3,855,478 | 1,735,363 | (2,842) | (24,972) | 5,563,027 | | Weighted Average Exercise Price | $7.30 | $4.17 | $2.91 | $3.46 | $6.34 | Stock-Based Compensation Expense (in thousands) | Stock-Based Compensation Expense (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Stock options | $736 | $953 | $1,448 | $2,028 | | Restricted stock units | $167 | $111 | $288 | $262 | | **Total** | **$903** | **$1,064** | **$1,736** | **$2,290** | [12. Net Income (Loss) per Common Share](index=29&type=section&id=12.%20Net%20Income%20(Loss)%20per%20Common%20Share) Net Income (Loss) per Common Share (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) attributable to common stockholders (in thousands) | $(14,960) | $(9,513) | $(26,874) | $(20,608) | | Weighted-average shares outstanding, basic and diluted | 42,270,855 | 21,233,163 | 41,493,714 | 16,327,056 | | Net income (loss) per share, basic and diluted | $(0.35) | $(0.45) | $(0.65) | $(1.26) | - Due to net loss positions, basic and diluted EPS are the same, as potential common equivalent shares (April 2024 Common Warrants, Series 1 Convertible Preferred Stock, Stock options, Restricted stock units) were anti-dilutive[115](index=115&type=chunk) [13. Segment Information](index=29&type=section&id=13.%20Segment%20Information) - The Company operates as a single reportable segment, with the CEO acting as the chief operating decision maker (CODM) who reviews consolidated net income (loss) and total consolidated assets[116](index=116&type=chunk) Research and Development Expenses (in thousands) | Research and Development Expenses (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | TARA-002 in NMIBC | $4,898 | $2,164 | $8,455 | $4,954 | | TARA-002 in LMs | $477 | $598 | $1,027 | $1,531 | | IV Choline Chloride | $1,852 | $539 | $4,367 | $797 | | Other research and development | $3,317 | $2,849 | $5,651 | $6,242 | | **Total R&D Expenses** | **$10,770** | **$6,387** | **$19,918** | **$14,135** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Protara Therapeutics' financial condition, operational results, clinical trial progress, and liquidity for the reported periods [Overview](index=31&type=section&id=Overview) - Protara Therapeutics is a clinical-stage biopharmaceutical company developing transformative therapies for cancer and rare diseases, with a portfolio including TARA-002 for non-muscle invasive bladder cancer (NMIBC) and lymphatic malformations (LMs), and IV Choline Chloride for patients on parenteral support (PS)[121](index=121&type=chunk)[122](index=122&type=chunk) - TARA-002 in NMIBC: Interim data from ADVANCED-2 trial showed a **100% complete response (CR) rate** at any time in BCG-Unresponsive patients (5/5), with CR rates of **100% at six months**, **80% at nine months**, and **67% at 12 months**. For BCG-Naïve patients, the CR rate at any time was **76% (16/21)**[126](index=126&type=chunk)[127](index=127&type=chunk) - IV Choline Chloride: FDA alignment on a registrational path for a broader indication as a source of choline for PS patients. THRIVE-1 study found **78% of PS patients were choline deficient**. A registrational Phase 3 clinical trial (THRIVE-3) is planned for Q3 2025, with EU-CTR approval already secured[133](index=133&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk) - TARA-002 in LMs: STARBORN-1 Phase 2 trial interim data showed **two out of three patients achieved a complete response** after one injection. An interim update is expected in Q4 2025[137](index=137&type=chunk)[138](index=138&type=chunk) - The Company has an accumulated deficit of approximately **$271.9 million** as of June 30, 2025, and expects to incur significant operating losses as it advances product candidates[141](index=141&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Results of Operations (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | | :-------------------- | :------------------------------- | :------------------------------- | :----- | | Research and development | $10,770 | $6,387 | $4,383 | | General and administrative | $5,816 | $4,274 | $1,542 | | Total operating expenses | $16,586 | $10,661 | $5,925 | | Net income (loss) | $(14,960) | $(9,513) | $(5,447) | | Interest and investment income | $1,626 | $1,148 | $478 | - Research and development expenses increased by **$4.4 million** for the three months ended June 30, 2025, primarily due to increased direct expenses for ADVANCED-2 NMIBC clinical trial and startup costs for THRIVE-3 IV Choline Chloride clinical trial[151](index=151&type=chunk) Results of Operations (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :-------------------- | :----------------------------- | :----------------------------- | :----- | | Research and development | $19,918 | $14,135 | $5,783 | | General and administrative | $10,792 | $8,377 | $2,415 | | Total operating expenses | $30,710 | $22,512 | $8,198 | | Net income (loss) | $(26,874) | $(20,608) | $(6,266) | | Interest and investment income | $3,355 | $1,904 | $1,451 | | Other income | $481 | - | $481 | - General and administrative expenses increased by **$2.4 million** for the six months ended June 30, 2025, mainly due to higher personnel-related expenses and market development costs[156](index=156&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, unrestricted cash, cash equivalents, and marketable debt securities totaled **$145.6 million**, down from **$170.3 million** at December 31, 2024[158](index=158&type=chunk) - Net cash used in operating activities increased to **$(27.0) million** for the six months ended June 30, 2025, compared to **$(18.1) million** in the prior year, driven by increased net loss and working capital adjustments[164](index=164&type=chunk) - Net cash used in investing activities was **$(106.1) million** for the six months ended June 30, 2025, a significant change from **$26.0 million** provided in the prior year, primarily due to increased purchases of marketable debt securities[165](index=165&type=chunk) - Net cash provided by financing activities decreased to **$1.7 million** for the six months ended June 30, 2025, from **$42.0 million** in the prior year, reflecting proceeds from the Underwriters' Option exercise versus the 2024 April Private Placement[166](index=166&type=chunk) - The Company believes its current financial resources are sufficient for at least twelve months from the filing date, but acknowledges capital market volatility and economic conditions may impact future capital availability[160](index=160&type=chunk)[162](index=162&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section confirms no applicable quantitative and qualitative disclosures about market risk for the reporting period - Not applicable for this reporting period[174](index=174&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management evaluated disclosure controls and procedures, concluding their effectiveness with no material changes in internal control over financial reporting - Management, including the principal executive and financial officers, evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025, and concluded they were effective at a reasonable assurance level[175](index=175&type=chunk)[176](index=176&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[178](index=178&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in legal proceedings expected to have a material adverse effect on its business - The Company is not currently involved in any legal proceedings deemed to have a material adverse effect on its business[180](index=180&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported from the prior Annual Report on Form 10-K - No material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[181](index=181&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported for the period - None to report[182](index=182&type=chunk) [Item 3. Defaults Upon Senior Securities](index=42&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - None to report[183](index=183&type=chunk) [Item 4. Mine Safety Disclosures](index=42&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to the company - Not applicable[184](index=184&type=chunk) [Item 5. Other Information](index=42&type=section&id=Item%205.%20Other%20Information) CEO Jesse Shefferman terminated a Rule 10b5-1 trading arrangement on June 11, 2025 - CEO Jesse Shefferman terminated a Rule 10b5-1 trading arrangement on June 11, 2025, which had provided for the sale of up to 76,501 shares of common stock[185](index=185&type=chunk) - No other director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[186](index=186&type=chunk) [Item 6. Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Quarterly Report, including employment agreements and certifications Exhibits | Exhibit No. | Description | | :------------ | :---------- | | 10.1† | Executive Employment Agreement with Leonardo Nicacio, M.D. | | 10.2*† | Executive Employment Agreement with William Conkling. | | 10.3*† | 2024 Equity Incentive Plan, as Amended. | | 31.1* | Certification of Principal Executive Officer. | | 31.2* | Certification of Principal Financial Officer. | | 32.1** | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350. | | 101.INS* | Interactive Data Files (Inline XBRL). | | 104 | Cover Page Interactive Data File. | [SIGNATURES](index=44&type=section&id=SIGNATURES) The report includes duly authorized signatures from the CEO and CFO, affirming the filing on August 11, 2025 - The report was signed by Jesse Shefferman, Chief Executive Officer, and Patrick Fabbio, Chief Financial Officer, on August 11, 2025[196](index=196&type=chunk)

Exhibit 99.1 Theriva™ Biologics Reports Second Quarter 2025 Operational Highlights and Financial Results - Released positive topline data from the VIRAGE Phase 2b study of VCN-01 (zabilugene almadenorepvec); expanded data to be presented at the European Society for Medical Oncology (ESMO) 2025 Congress in October - - VCN-01 demonstrates potential in retinoblastoma with Phase 1 safety and clinical outcome data presented at the American Society of Clinical Oncology (ASCO) 2025 Annual Meeting - - Cash and cash ...

PART I. FINANCIAL INFORMATION [Item 1. Condensed Unaudited Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Unaudited%20Financial%20Statements) This section presents the unaudited condensed financial statements, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, collaboration agreements, license arrangements, commitments, and other financial details for the periods ended June 30, 2025, and December 31, 2024 [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) | (In thousands) | June 30, 2025 | December 31, 2024 | Change | % Change | | :--------------------------------- | :------------ | :---------------- | :----- | :------- | | **Assets** | | | | | | Cash and cash equivalents | $77,159 | $149,336 | $(72,177) | -48.3% | | Marketable securities (current) | $216,066 | $275,541 | $(59,475) | -21.6% | | Total current assets | $303,287 | $434,932 | $(131,645) | -30.3% | | Marketable securities (long-term) | $123,806 | $80,583 | $43,223 | 53.6% | | Total assets | $473,637 | $560,384 | $(86,747) | -15.5% | | **Liabilities** | | | | | | Accounts payable | $8,700 | $4,386 | $4,314 | 98.4% | | Accrued and other current liabilities | $19,190 | $18,869 | $321 | 1.7% | | Total current liabilities | $34,677 | $29,149 | $5,528 | 19.0% | | Total liabilities | $52,747 | $49,778 | $2,969 | 6.0% | | **Stockholders' Equity** | | | | | | Total stockholders' equity | $420,890 | $510,606 | $(89,716) | -17.6% | | Total liabilities and stockholders' equity | $473,637 | $560,384 | $(86,747) | -15.5% | [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations) | (In thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (3M) | % Change (3M) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (6M) | % Change (6M) | | :--------------------------------- | :------------------------------- | :------------------------------- | :------------ | :-------------- | :----------------------------- | :----------------------------- | :------------ | :-------------- | | Collaboration and license revenue | $15 | $5 | $10 | 200.0% | $29 | $33 | $(4) | -12.1% | | Research and development | $47,951 | $31,860 | $16,091 | 50.5% | $88,650 | $59,727 | $28,923 | 48.4% | | General and administrative | $11,520 | $10,601 | $919 | 8.7% | $24,456 | $20,898 | $3,558 | 17.0% | | Total operating expenses | $59,471 | $42,461 | $17,010 | 40.1% | $113,106 | $80,625 | $32,481 | 40.3% | | Loss from operations | $(59,456) | $(42,456) | $(17,000) | 40.0% | $(113,077) | $(80,592) | $(32,485) | 40.3% | | Interest income | $4,859 | $7,548 | $(2,689) | -35.6% | $10,441 | $13,293 | $(2,852) | -21.5% | | Net loss | $(54,658) | $(34,953) | $(19,705) | 56.4% | $(102,630) | $(67,354) | $(35,276) | 52.4% | | Net loss per share, basic and diluted | $(0.98) | $(0.63) | $(0.35) | 55.6% | $(1.84) | $(1.29) | $(0.55) | 42.6% | [Condensed Statements of Comprehensive Loss](index=6&type=section&id=Condensed%20Statements%20of%20Comprehensive%20Loss) | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (3M) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (6M) | | :--------------- | :------------------------------- | :------------------------------- | :---------- | :----------------------------- | :----------------------------- | :---------- | | Net loss | $(54,658) | $(34,953) | $(19,705) | $(102,630) | $(67,354) | $(35,276) | | Net unrealized gain/(loss) on marketable securities | $5 | $(184) | $189 | $108 | $(309) | $417 | | Total comprehensive loss | $(54,653) | $(35,137) | $(19,516) | $(102,522) | $(67,663) | $(34,859) | [Condensed Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Statements%20of%20Stockholders%27%20Equity) Total stockholders' equity decreased from **$510.6 million** at December 31, 2024, to **$420.9 million** at June 30, 2025, primarily due to a net loss of **$102.6 million** for the six months ended June 30, 2025, partially offset by stock-based compensation expense and common stock issuances[19](index=19&type=chunk)[12](index=12&type=chunk) Key Changes in Stockholders' Equity (Six Months Ended June 30, 2025) | Item | Amount (in thousands) | | :-------------------------------------- | :-------------------- | | Balances at December 31, 2024 | $510,606 | | Stock-based compensation expense | $11,944 | | Net unrealized gain on marketable securities | $108 | | Net loss | $(102,630) | | Balances at June 30, 2025 | $420,890 | [Condensed Statements of Cash Flows](index=9&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | % Change | | :------------------------------------ | :----------------------------- | :----------------------------- | :----- | :------- | | Net cash used in operating activities | $(91,135) | $(59,331) | $(31,804) | 53.6% | | Net cash provided by (used in) investing activities | $18,096 | $(336,797) | $354,893 | 105.4% | | Net cash provided by financing activities | $862 | $336,081 | $(335,219) | -99.7% | | Net decrease in cash and cash equivalents | $(72,177) | $(60,047) | $(12,130) | 20.2% | | Cash and cash equivalents, end of period | $77,159 | $189,061 | $(111,902) | -59.2% | [Notes to Unaudited Condensed Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) [Note 1. The Company](index=10&type=section&id=Note%201.%20The%20Company) 4D Molecular Therapeutics, Inc. is a late-stage biotechnology company focused on developing durable and disease-targeted therapeutics, having completed a public offering in February 2024 and anticipating continued operating losses and future funding needs despite current liquidity - 4D Molecular Therapeutics, Inc. is a late-stage biotechnology company focused on advancing durable and disease-targeted therapeutics[28](index=28&type=chunk) - In February 2024, the Company completed a public offering, raising net proceeds of **$281.2 million**, with an additional **$34.9 million** in March 2024 from underwriters exercising their option[29](index=29&type=chunk)[30](index=30&type=chunk) - The Company had an accumulated deficit of **$678.8 million** as of June 30, 2025, and expects operating losses and negative cash flows to continue[31](index=31&type=chunk) - Current cash, cash equivalents, and marketable securities are believed to be sufficient to fund planned operations for at least one year, but additional funding will be required[31](index=31&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=11&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) The financial statements are prepared in accordance with U.S. GAAP and SEC interim reporting rules, with management using estimates and judgments, operating as a single segment, managing credit risk, and evaluating new accounting pronouncements - The condensed financial statements are prepared under U.S. GAAP and SEC interim reporting rules, with certain information condensed or omitted compared to annual statements[32](index=32&type=chunk)[33](index=33&type=chunk) - Management's estimates and judgments are crucial for financial reporting, covering areas like useful lives, contract terms, stock options, and derivative instruments[35](index=35&type=chunk) - The Company operates as a single segment, focusing on the discovery, development, and commercialization of medicines[37](index=37&type=chunk) - Credit risk is managed through an investment policy limiting purchases to high-quality issuers and restricting single-issuer investments[38](index=38&type=chunk) - The Company is evaluating the impact of recently issued accounting pronouncements: ASU 2024-03 (Expense Disaggregation Disclosures) effective for fiscal years beginning after December 15, 2026, and ASU 2023-09 (Improvements to Income Tax Disclosures) effective for annual periods beginning after December 15, 2024[43](index=43&type=chunk)[44](index=44&type=chunk) [Note 3. Fair Value Measurements and Marketable Securities](index=13&type=section&id=Note%203.%20Fair%20Value%20Measurements%20and%20Marketable%20Securities) The Company's financial assets are primarily measured at fair value using Level 1 and Level 2 inputs, while a Level 3 derivative liability is valued using a present value analysis, with marketable securities showing aggregate unrealized gains and losses Fair Value of Financial Assets (in thousands) | Asset Type | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Cash | $7,086 | $6,715 | | Money market funds (Level 1) | $62,635 | $142,621 | | Certificates of deposit (Level 2) | $16,385 | $47,647 | | Commercial paper (Level 2) | $51,425 | $60,202 | | U.S. Treasuries (Level 2) | $56,674 | $32,110 | | Corporate bonds (Level 2) | $222,826 | $216,165 | | Total | $417,031 | $505,460 | - The derivative liability is a Level 3 measurement, valued using a present value analysis with multiple scenarios, considering factors like change of control payment, probability of event, product status, and discount rate[46](index=46&type=chunk)[127](index=127&type=chunk) Marketable Securities Unrealized Gains and Losses (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :---------------------------------------------------------------- | :------------ | :---------------- | | Aggregate fair value of marketable securities in a continuous loss position for less than twelve months | $114,697 | $69,947 | | Aggregate fair value of marketable securities in unrealized gain position | $225,175 | $286,177 | | Total marketable securities | $339,872 | $356,124 | [Note 4. Property and Equipment, Net](index=15&type=section&id=Note%204.%20Property%20and%20Equipment%2C%20Net) Property and equipment, net, decreased from **$19.5 million** at December 31, 2024, to **$17.5 million** at June 30, 2025, primarily due to increased accumulated depreciation and amortization Property and Equipment, Net (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Machinery and equipment | $14,488 | $14,172 | | Leasehold improvements | $18,467 | $17,763 | | Construction in progress | $128 | $1,182 | | Total property and equipment | $36,307 | $36,119 | | Less: Accumulated depreciation and amortization | $(18,802) | $(16,585) | | Property and equipment, net | $17,505 | $19,534 | - Depreciation expense was **$1.3 million** for the three months ended June 30, 2025 (up from **$1.2 million** in 2024) and **$2.6 million** for the six months ended June 30, 2025 (up from **$2.4 million** in 2024)[52](index=52&type=chunk) [Note 5. Accrued and Other Current Liabilities](index=16&type=section&id=Note%205.%20Accrued%20and%20Other%20Current%20Liabilities) Accrued and other current liabilities increased slightly from **$18.9 million** at December 31, 2024, to **$19.2 million** at June 30, 2025, driven by increases in accrued clinical and preclinical study costs, consulting and professional fees, and restructuring expenses Accrued and Other Current Liabilities (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Payroll and related expenses | $6,861 | $8,106 | | Accrued clinical and preclinical study costs | $8,277 | $7,977 | | Consulting and professional | $3,032 | $2,672 | | Restructuring expenses | $918 | $0 | | Total accrued and other current liabilities | $19,190 | $18,869 | [Note 6. Research and Collaboration Arrangements](index=16&type=section&id=Note%206.%20Research%20and%20Collaboration%20Arrangements) Collaboration revenue was immaterial and solely from the Cystic Fibrosis Foundation, with ongoing agreements with uniQure and Arbor Biotechnologies, and the CFF agreement involving milestone-based funding and an embedded derivative for a change of control provision Collaboration and License Revenue (in thousands) | Source | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cystic Fibrosis Foundation | $15 | $5 | $29 | $33 | | Total revenue | $15 | $5 | $29 | $33 | - The uniQure Agreement was amended in 2019, eliminating the exclusivity clause and modifying milestone/royalty terms, with no revenues recognized under uniQure agreements for the three and six months ended June 30, 2025 and 2024[61](index=61&type=chunk)[62](index=62&type=chunk)[69](index=69&type=chunk) - The CFF Agreement provides funding for cystic fibrosis research, with milestone payments totaling **$1.8 million** achieved as of June 30, 2025, and future payments contingent on commercial sales and a change of control, the latter being an embedded derivative[70](index=70&type=chunk)[72](index=72&type=chunk)[78](index=78&type=chunk) - The Arbor Agreement, signed in December 2023, is a co-development and co-commercialization agreement for up to six genetic medicine products for CNS indications, with no R&D expenses incurred related to this agreement during the three and six months ended June 30, 2025[79](index=79&type=chunk)[81](index=81&type=chunk) [Note 7. License Arrangements](index=20&type=section&id=Note%207.%20License%20Arrangements) The Astellas License Agreement was terminated in July 2025, while the Aevitas Agreement involves contingent milestone and royalty payments for sCFH rights, and the Company holds exclusive license agreements with the Regents of the University of California for core technologies - The Astellas License Agreement, signed in July 2023 for the 4D Vector, was terminated by AGT for convenience in July 2025, with no expected charges related to this termination[82](index=82&type=chunk)[83](index=83&type=chunk)[137](index=137&type=chunk) - The Aevitas Agreement (April 2023) acquired worldwide rights to sCFH for 4D-175, with potential future milestone payments up to **$144.1 million** and low single-digit royalties, with no liability recorded as of June 30, 2025, as milestones were not deemed probable[84](index=84&type=chunk)[85](index=85&type=chunk) - The Company has exclusive license agreements with the Regents of the University of California for core technologies, including Therapeutic Vector Evolution, involving annual license fees, development milestones up to **$3.1 million**, low single-digit royalties, and mid-teens to mid-twenties sublicense consideration[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) [Note 8. Commitments and Contingencies](index=21&type=section&id=Note%208.%20Commitments%20and%20Contingencies) The Company has operating lease commitments for office, laboratory, and warehouse space in Emeryville, California, with total future minimum lease payments of **$30.4 million**, and no material legal proceedings outstanding - The Company has operating lease commitments for office, laboratory, and warehouse space in Emeryville, California, including the 5980 Horton Lease (expires August 2026), 5858 Horton Lease (extended to December 2030), 5858 Horton Expansion Lease (through December 2030), and Warehouse Lease (through December 2029)[91](index=91&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk) Operating Lease Costs (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating lease cost | $1,344 | $698 | $2,688 | $1,397 | | Variable lease cost | $648 | $354 | $1,422 | $707 | | Total | $1,992 | $1,052 | $4,110 | $2,104 | - As of June 30, 2025, the weighted-average remaining lease term is **5.3 years**, and the weighted-average discount rate is **10.8%**, with total future minimum lease payments of **$30.4 million**[96](index=96&type=chunk) - The Company enters into indemnification agreements in the ordinary course of business and with its directors and officers, and no material legal proceedings were outstanding as of June 30, 2025[97](index=97&type=chunk)[98](index=98&type=chunk) [Note 9. Income Taxes](index=23&type=section&id=Note%209.%20Income%20Taxes) No federal or state income tax provision was recorded due to recurring net losses and a full valuation allowance against deferred tax assets, and the recently enacted One Big Beautiful Bill Act is being assessed for future implications - No federal or state income tax provision was recorded for the three and six months ended June 30, 2025 and 2024, due to recurring net losses[99](index=99&type=chunk) - A full valuation allowance has been taken against net deferred tax assets, as realization of the benefit is not considered more likely than not[99](index=99&type=chunk) - The One Big Beautiful Bill Act, enacted in July 2025, is being assessed for implications on U.S. tax laws, but no material impact is expected on current year financial statements[100](index=100&type=chunk) [Note 10. Common Stock](index=24&type=section&id=Note%2010.%20Common%20Stock) As of June 30, 2025, the Company had **46.7 million** shares of common stock issued and outstanding, with **22.8 million** shares reserved for future issuance, and does not intend to pay dividends, while the Cystic Fibrosis Foundation provided **$14.0 million** in funding for the 4D-710 program - As of June 30, 2025, **46,700,242 shares** of common stock were issued and outstanding, with **300,000,000 shares** authorized[12](index=12&type=chunk)[101](index=101&type=chunk) - The Company has reserved **22,796,483 shares** of common stock for future issuance as of June 30, 2025, an increase from **20,813,800 shares** at December 31, 2024[102](index=102&type=chunk) - The Company does not currently intend to pay dividends on its common stock[101](index=101&type=chunk) - The Cystic Fibrosis Foundation provided **$14.0 million** in funding for the 4D-710 development program, with the commitment fulfilled as of June 30, 2025[102](index=102&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) - The Jefferies ATM offering program was terminated on May 31, 2024, after selling **1,684,550 shares** for net proceeds of **$34.4 million**, and no shares were sold under the Leerink ATM offering program for the six months ended June 30, 2025[105](index=105&type=chunk)[106](index=106&type=chunk) [Note 11. Stock-based Compensation](index=25&type=section&id=Note%2011.%20Stock-based%20Compensation) The Company has three equity incentive plans and an ESPP, with **725,101 RSUs** unvested and **10,445,483 stock options** outstanding as of June 30, 2025, and total stock-based compensation expense for the six months ended June 30, 2025, was **$11.9 million** - The 2025 Employment Inducement Plan reserved **500,000 shares** for new employee grants, with **451,700 shares** available as of June 30, 2025[107](index=107&type=chunk) - The 2020 Equity Incentive Award Plan had **1,431,952 shares** available for grant as of June 30, 2025, after automatic annual increases[108](index=108&type=chunk) - As of June 30, 2025, **725,101 Restricted Stock Units (RSUs)** were unvested, and **10,445,483 stock options** were outstanding, with **5,493,360 exercisable**[114](index=114&type=chunk)[115](index=115&type=chunk) Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $2,498 | $3,196 | $6,479 | $6,231 | | General and administrative | $2,460 | $2,877 | $5,465 | $5,817 | | Total stock-based compensation expense | $4,958 | $6,073 | $11,944 | $12,048 | [Note 12. Common Stock Warrants](index=28&type=section&id=Note%2012.%20Common%20Stock%20Warrants) The Company has various common stock warrants, including pre-funded warrants issued in February 2024 and exchanged in November/December 2024, totaling **9,385,000 shares** issuable upon exercise, which are immediately exercisable at a nominal price and classified as stockholders' equity - A warrant for **23,669 shares** issued in May 2018 was fully vested upon issuance and exercised in May 2025, and another warrant for **30,000 shares** issued in December 2020 vests over four years and expires in 2027[119](index=119&type=chunk)[120](index=120&type=chunk) - In February 2024, the Company sold pre-funded warrants to purchase **3,583,476 shares**, generating **$99.4 million** in net proceeds, and in November and December 2024, additional pre-funded warrants for **6,310,000 shares** were issued in exchange for common stock[122](index=122&type=chunk)[123](index=123&type=chunk) - The pre-funded warrants have a nominal exercise price (**$0.0001 per share**), are immediately exercisable, and are classified as a component of stockholders' equity[122](index=122&type=chunk)[123](index=123&type=chunk) [Note 13. Net Loss Per Share, Basic and Diluted](index=29&type=section&id=Note%2013.%20Net%20Loss%20Per%20Share%2C%20Basic%20and%20Diluted) The Company reported a basic and diluted net loss per share of **$(0.98)** for the three months and **$(1.84)** for the six months ended June 30, 2025, with potentially dilutive securities excluded due to the net loss Net Loss Per Share, Basic and Diluted | (In thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(54,658) | $(34,953) | $(102,630) | $(67,354) | | Weighted-average shares outstanding | 55,927,091 | 55,282,754 | 55,836,075 | 52,277,369 | | Net loss per share, basic and diluted | $(0.98) | $(0.63) | $(1.84) | $(1.29) | - Potentially dilutive securities, including **11,750,245 shares** as of June 30, 2025 (options, RSUs, ESPP, warrants), were excluded from diluted net loss per share calculation because their inclusion would have been antidilutive[126](index=126&type=chunk) [Note 14. Derivative Liability](index=29&type=section&id=Note%2014.%20Derivative%20Liability) An embedded derivative from the CFF Agreement's change of control provision is remeasured to fair value each period, resulting in a derivative liability of **$0.3 million** as of June 30, 2025, with changes recorded in other income (expense), net - An embedded derivative arises from the change of control provision in the CFF Agreement, requiring bifurcation and separate accounting as a derivative liability[127](index=127&type=chunk) - The fair value of the derivative liability was **$0.3 million** as of June 30, 2025, down from **$0.4 million** at December 31, 2024, with the change in fair value recorded in other income (expense), net[128](index=128&type=chunk)[49](index=49&type=chunk) - Valuation uses a present value analysis with multiple scenarios, incorporating estimates for change of control payment (zero to **$18.9 million**), probability of event (**5.0% to 50.0%**), product status at change of control (**4.8% to 17.2%**), and a **15% discount rate**[127](index=127&type=chunk) [Note 15. Related Party Transactions](index=30&type=section&id=Note%2015.%20Related%20Party%20Transactions) The Company entered into a research and option agreement with Reignite Therapeutics Inc., founded by its CEO, for developing adenovirus capsids, with payments to Reignite for R&D expenses totaling **$0.5 million** for the six months ended June 30, 2025 - The Company entered into a research and option agreement with Reignite Therapeutics Inc., a company founded by its CEO, to develop high-capacity, helper-dependent adenovirus capsids[129](index=129&type=chunk) - Payments to Reignite for research and development expenses were **$0.4 million** for the three months ended June 30, 2025, and **$0.5 million** for the six months ended June 30, 2025[130](index=130&type=chunk) - The Company has an option to acquire up to three capsids from the program, with an exercise fee of **$1.0 million** per selected capsid, totaling a maximum of **$3.0 million**[129](index=129&type=chunk) [Note 16. 401(k) Plan](index=30&type=section&id=Note%2016.%20401(k)%20Plan) The Company's 401(k) plan allows eligible employees to make contributions, with company contributions totaling **$1.1 million** for the six months ended June 30, 2025, an increase from the prior year 401(k) Contribution Expenses (in thousands) | Period | 2025 | 2024 | | :------------------------------- | :--- | :--- | | Three Months Ended June 30, | $500 | $400 | | Six Months Ended June 30, | $1,100 | $800 | [Note 17. Segment Information](index=30&type=section&id=Note%2017.%20Segment%20Information) The Company operates as a single operating and reportable segment focused on therapeutics, with all long-lived assets and revenue in the United States, and research and development expenses significantly increased due to trials, payroll, and facilities costs - The Company operates in a single operating and reportable segment, encompassing all activities related to the discovery, development, and commercialization of durable and disease-targeted therapeutics[133](index=133&type=chunk) Disaggregated Research and Development Expenses (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development trials and consumables expenses | $23,426 | $14,162 | $39,586 | $25,781 | | Payroll and personnel expenses | $17,871 | $13,158 | $35,099 | $25,591 | | Facilities and other research and development expenses | $6,654 | $4,540 | $13,965 | $8,355 | | Total research and development expenses | $47,951 | $31,860 | $88,650 | $59,727 | [Note 18. Subsequent Events](index=31&type=section&id=Note%2018.%20Subsequent%20Events) In July 2025, the Company announced a workforce reduction of approximately **25%** of roles, expecting **$3.0 million** in cash expenses and **$15 million** in annual cash compensation cost savings, while the Astellas License Agreement was also terminated - On July 2, 2025, the Company announced a workforce reduction of approximately **25%** of current and planned roles, primarily in early-stage research and development and support functions[136](index=136&type=chunk) - The workforce reduction is expected to incur approximately **$3.0 million** in cash expenses (severance, benefits, termination costs) in Q3 2025, and provide annual cash compensation cost savings of approximately **$15 million**[136](index=136&type=chunk)[154](index=154&type=chunk) - In July 2025, Astellas Gene Therapies, Inc. terminated the Astellas License Agreement for convenience, with no expected charges to the Company[137](index=137&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and operational results, highlighting a strategic pipeline prioritization focusing on 4D-150 and 4D-710, with a workforce reduction in July 2025 to streamline operations and offset increased Phase 3 costs, and anticipating further funding needs despite current liquidity [Overview](index=32&type=section&id=Overview) The Company is a late-stage biotechnology company prioritizing 4D-150 for wet AMD and DME, and 4D-710 for cystic fibrosis, with significant net losses and an accumulated deficit, expecting to finance operations through equity sales, debt, or collaborations - The Company is a late-stage biotechnology company focused on advancing 4D-150 for wet AMD and DME, and 4D-710 for cystic fibrosis, as core pipeline priorities[139](index=139&type=chunk)[140](index=140&type=chunk) - 4D-150 is in Phase 3 clinical trials for wet AMD (4FRONT-1 and 4FRONT-2, with 52-week topline data expected in H1 2027 and H2 2027, respectively) and has shown positive 60-week results in DME (SPECTRA trial), demonstrating **78% reduction in treatment burden**[141](index=141&type=chunk)[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk) - 4D-710 is in Phase 1 clinical trial for cystic fibrosis, with an interim data update expected in Q4 2025[145](index=145&type=chunk) - Net losses were **$54.7 million** and **$102.6 million** for the three and six months ended June 30, 2025, respectively, with an accumulated deficit of **$678.8 million**[150](index=150&type=chunk) - The Company has no approved products and expects to finance operations through equity sales, debt, or collaborations, anticipating continued operating losses[151](index=151&type=chunk)[152](index=152&type=chunk) [Workforce Reduction](index=33&type=section&id=Workforce%20Reduction) On July 2, 2025, the Company announced a workforce reduction of approximately **25%** of roles, primarily in early-stage R&D and support functions, expecting **$3.0 million** in cash expenses and **$15 million** in annual cash compensation cost savings, while maintaining sufficient liquidity for planned expenses - On July 2, 2025, the Company announced a workforce reduction of approximately **25%** of current and planned roles, primarily in early-stage R&D and support functions[154](index=154&type=chunk) - The reduction is expected to result in approximately **$3.0 million** in cash expenses (severance, benefits, termination costs) in Q3 2025, and annual cash compensation cost savings of approximately **$15 million**[154](index=154&type=chunk) - As of June 30, 2025, the Company had **$417.0 million** in cash, cash equivalents, and marketable securities, sufficient to support planned expenses for 4D-150 Phase 3 trials, BLA preparation, and 4D-710 development[154](index=154&type=chunk) [Components of Results of Operations](index=34&type=section&id=Components%20of%20Results%20of%20Operations) Revenue is generated from collaboration and license agreements, while R&D expenses are expensed as incurred, G&A expenses are expected to remain stable or decline, and other income primarily includes interest income and derivative liability adjustments - Revenue is generated from collaboration and license agreements, primarily upfront and milestone payments and expense reimbursement, with no product sales revenue generated to date[155](index=155&type=chunk) - Research and development expenses include personnel costs, lab supplies, fees to CROs/CMOs, technology licenses, and allocated facility costs, which are expensed as incurred and not allocated by product candidate[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk) - General and administrative expenses consist of personnel costs (executive, finance, legal, HR), professional fees, and allocated overhead, and are expected to remain relatively stable or decline due to operational streamlining[162](index=162&type=chunk)[163](index=163&type=chunk) - Other income, net, primarily comprises interest income from cash equivalents and marketable securities, and adjustments for changes in the fair value of derivative liability[164](index=164&type=chunk) [Comparison of the Three and Six Months Ended June 30, 2025 and 2024](index=35&type=section&id=Comparison%20of%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | % Change | | :--------------------------------- | :------------------------------- | :------------------------------- | :------- | :------- | | Collaboration and license revenue | $15 | $5 | $10 | 200% | | Research and development | $47,951 | $31,860 | $16,091 | 51% | | General and administrative | $11,520 | $10,601 | $919 | 9% | | Total operating expenses | $59,471 | $42,461 | $17,010 | 40% | | Loss from operations | $(59,456) | $(42,456) | $(17,000) | 40% | | Other Income, Net | $4,798 | $7,503 | $(2,705) | (36)% | | Net loss | $(54,658) | $(34,953) | $(19,705) | 56% | | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :--------------------------------- | :----------------------------- | :----------------------------- | :------- | :------- | | Collaboration and license revenue | $29 | $33 | $(4) | (12)% | | Research and development | $88,650 | $59,727 | $28,923 | 48% | | General and administrative | $24,456 | $20,898 | $3,558 | 17% | | Total operating expenses | $113,106 | $80,625 | $32,481 | 40% | | Loss from operations | $(113,077) | $(80,592) | $(32,485) | 40% | | Other Income, Net | $10,447 | $13,238 | $(2,791) | (21)% | | Net loss | $(102,630) | $(67,354) | $(35,276) | 52% | - Research and development expenses increased by **$16.1 million (51%)** for the three months and **$28.9 million (48%)** for the six months ended June 30, 2025, primarily due to increased clinical trial activity for 4D-150, higher payroll, and increased facilities/IT expenses[169](index=169&type=chunk)[172](index=172&type=chunk) - General and administrative expenses increased by **$0.9 million (9%)** for the three months and **$3.6 million (17%)** for the six months ended June 30, 2025, mainly due to higher legal fees, consulting services for public company compliance, IT system implementations, and increased G&A headcount[169](index=169&type=chunk)[173](index=173&type=chunk) - Other income, net, decreased by **$2.7 million (36%)** for the three months and **$2.8 million (21%)** for the six months ended June 30, 2025, attributable to lower balances of cash equivalents and marketable securities[170](index=170&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) The Company has historically funded operations through equity sales, with **$417.0 million** in cash, cash equivalents, and marketable securities as of June 30, 2025, believed to be sufficient for at least one year, but expects continued net losses and substantial additional funding needs - The Company has historically funded operations through equity sales, including IPO (**$204.7 million** net), 2021 Offering (**$111.1 million** net), 2023 Offering (**$129.2 million** net), and 2024 Offering (**$281.2 million** net, plus **$34.9 million** from option exercise)[171](index=171&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk)[177](index=177&type=chunk)[179](index=179&type=chunk)[180](index=180&type=chunk) - As of June 30, 2025, cash, cash equivalents, and marketable securities totaled **$417.0 million**, which is believed to be sufficient to fund planned operations for at least one year[182](index=182&type=chunk)[186](index=186&type=chunk) - The Company expects continued net losses and will require substantial additional funding through equity, debt, or collaborations to support ongoing R&D, commercialization, and potential manufacturing capacity expansion[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) Summary of Cash Flows (in thousands) | Category | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(91,135) | $(59,331) | | Net cash provided by (used in) investing activities | $18,096 | $(336,797) | | Net cash provided by financing activities | $862 | $336,081 | | Net decrease in cash and cash equivalents | $(72,177) | $(60,047) | - Net cash used in operating activities increased to **$91.1 million** for the six months ended June 30, 2025, from **$59.3 million** in the prior year, primarily due to increased net loss[192](index=192&type=chunk)[193](index=193&type=chunk) - Net cash provided by investing activities was **$18.1 million** for the six months ended June 30, 2025, a significant change from **$336.8 million** used in the prior year, driven by higher maturities of marketable securities[195](index=195&type=chunk)[196](index=196&type=chunk) - Net cash provided by financing activities decreased substantially to **$0.9 million** for the six months ended June 30, 2025, from **$336.1 million** in the prior year, due to the absence of large public offerings[197](index=197&type=chunk)[198](index=198&type=chunk) [Contractual Obligations, Commitments and Contingencies](index=41&type=section&id=Contractual%20Obligations%2C%20Commitments%20and%20Contingencies) The Company's principal commitments consist of operating lease obligations for its facilities and service agreements with third parties, which generally allow for termination upon notice - The Company's principal commitments as of June 30, 2025, consist of obligations under operating leases for its headquarters and other facilities[200](index=200&type=chunk) - The Company also enters into service agreements with CROs, CMOs, and other third parties, which generally provide for termination upon notice with specified amounts due[199](index=199&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=41&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) No changes were made to the Company's critical accounting policies and significant judgments and estimates during the three and six months ended June 30, 2025, as disclosed in the Annual Report on Form 10-K for 2024 - No changes were made to the Company's critical accounting policies and significant judgments and estimates during the three and six months ended June 30, 2025, as disclosed in the Annual Report on Form 10-K for 2024[202](index=202&type=chunk) [Recent Accounting Pronouncements](index=42&type=section&id=Recent%20Accounting%20Pronouncements) Information on recent accounting pronouncements is provided in Note 2, Summary of Significant Accounting Policies, of the condensed financial statements - Information on recent accounting pronouncements is provided in Note 2, Summary of Significant Accounting Policies, of the condensed financial statements[203](index=203&type=chunk) [Off-Balance Sheet Arrangements](index=42&type=section&id=Off-Balance%20Sheet%20Arrangements) The Company has not engaged in any off-balance sheet arrangements since its inception - The Company has not engaged in any off-balance sheet arrangements since its inception[204](index=204&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The Company's primary market risk is interest rate sensitivity, affecting its **$417.0 million** in cash, cash equivalents, and marketable securities, but an immediate **10%** change in interest rates is not expected to materially affect their fair value, and inflation has not had a significant impact - The Company's market risk primarily stems from interest rate sensitivity, impacting its **$417.0 million** in cash, cash equivalents, and marketable securities as of June 30, 2025[205](index=205&type=chunk) - Due to the short to medium-term maturities of these financial instruments, an immediate **10%** change in interest rates is not expected to have a material effect on their fair value[205](index=205&type=chunk) - Inflation or interest rate changes have not had a significant impact on the Company's results of operations for any periods presented[206](index=206&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management evaluated the effectiveness of the Company's disclosure controls and procedures as of June 30, 2025, concluding they were effective at a reasonable assurance level, with no material changes in internal control over financial reporting during the quarter - The Company maintains disclosure controls and procedures designed to ensure timely and accurate reporting of information required under the Exchange Act[207](index=207&type=chunk) - As of June 30, 2025, management, with the participation of the principal executive and financial officers, concluded that the disclosure controls and procedures were effective at the reasonable assurance level[208](index=208&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[209](index=209&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from Note 8, Commitments and Contingencies, in the condensed financial statements, which states there are no material legal proceedings outstanding as of June 30, 2025 - Legal proceedings information is incorporated by reference from Note 8, Commitments and Contingencies, in the financial statements[211](index=211&type=chunk) - As of June 30, 2025, there are no material legal proceedings outstanding[98](index=98&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks associated with investing in the Company's common stock, covering its limited operating history, recurring net losses, substantial capital requirements, and the inherent uncertainties of novel AAV genetic medicine technology development, alongside manufacturing complexities, competition, intellectual property protection, operational risks, and broader economic conditions [Risk Factor Summary](index=43&type=section&id=Risk%20Factor%20Summary) The Company faces risks from its limited operating history, recurring net losses, substantial capital requirements, and the inherent uncertainties of novel AAV genetic medicine technology development, including potential clinical trial failures, regulatory challenges, manufacturing complexities, intense competition, and intellectual property protection issues - The Company is in late-stage drug development with a limited operating history and no approved products, making future success difficult to predict[215](index=215&type=chunk)[216](index=216&type=chunk) - Recurring net losses are expected to continue, requiring substantial additional capital that may not be available on acceptable terms, potentially delaying or eliminating R&D programs[215](index=215&type=chunk)[217](index=217&type=chunk)[221](index=221&type=chunk) - Product candidates are based on novel AAV genetic medicine technology with limited regulatory and clinical experience, leading to unpredictable development timelines and costs[215](index=215&type=chunk)[235](index=235&type=chunk) - Clinical trials may fail to demonstrate safety and efficacy, preventing or delaying regulatory approval and commercialization[215](index=215&type=chunk)[276](index=276&type=chunk) - Gene therapies are complex to manufacture, posing risks of production problems, supply limitations, and delays[219](index=219&type=chunk)[298](index=298&type=chunk) - Success depends on protecting intellectual property, which is subject to challenges, invalidation, and enforcement difficulties[219](index=219&type=chunk)[383](index=383&type=chunk) [Risks Related to Our Limited Operating History, Financial Condition and Capital Requirements](index=45&type=section&id=Risks%20Related%20to%20Our%20Limited%20Operating%20History%2C%20Financial%20Condition%20and%20Capital%20Requirements) The Company has a limited operating history with no approved products or product revenue, incurring recurring net losses and requiring substantial additional capital, with quarterly operating results expected to fluctuate significantly - The Company has a limited operating history since September 2013, no products approved for commercial sale, and has not generated product revenue, making future success and viability highly uncertain[216](index=216&type=chunk) - The Company has incurred recurring net losses (**$54.7 million** and **$102.6 million** for Q2 and H1 2025, respectively) and expects significant losses to continue, with an accumulated deficit of **$678.8 million** as of June 30, 2025[217](index=217&type=chunk)[218](index=218&type=chunk) - Substantial additional capital is required to finance operations, and failure to raise funds on acceptable terms could force delays, reductions, or termination of R&D programs or commercialization efforts[221](index=221&type=chunk)[225](index=225&type=chunk)[227](index=227&type=chunk) - Quarterly operating results may fluctuate significantly due to factors like clinical trial timing, regulatory approvals, manufacturing costs, and macroeconomic trends, potentially causing stock price volatility[231](index=231&type=chunk)[232](index=232&type=chunk)[234](index=234&type=chunk) [Risks Related to the Research, Discovery, Development and Commercialization of Our Product Candidates](index=49&type=section&id=Risks%20Related%20to%20the%20Research%2C%20Discovery%2C%20Development%20and%20Commercialization%20of%20Our%20Product%20Candidates) Product candidates rely on novel AAV genetic medicine technology with unpredictable development timelines and costs, facing risks from adverse public perception, undesirable side effects, clinical trial failures, intense competition, and challenges in market acceptance and regulatory approvals across multiple jurisdictions - All product candidates rely on novel AAV genetic medicine technology, with limited regulatory and clinical experience, making development time and cost difficult to predict and potentially longer/more expensive[235](index=235&type=chunk) - Adverse public perception or regulatory scrutiny of genetic medicine technology could negatively impact development progress, commercial success, and clinical trial enrollment[243](index=243&type=chunk)[244](index=244&type=chunk)[246](index=246&type=chunk) - Product candidates may cause undesirable side effects, leading to clinical trial delays/halts, restrictive labels, denial of approval, or significant negative post-approval consequences like product recalls or liability claims[247](index=247&type=chunk)[249](index=249&type=chunk)[250](index=250&type=chunk) - The Company has no approved products or product sales revenue and profitability depends on successful development, regulatory approval, and commercialization, which is highly uncertain and may take several years, if ever[251](index=251&type=chunk)[252](index=252&type=chunk)[253](index=253&type=chunk)[254](index=254&type=chunk) - Clinical trials are expensive, time-consuming, and subject to substantial delays or termination due to factors like patient enrollment difficulties, regulatory holds, manufacturing issues, or adverse events[256](index=256&type=chunk)[257](index=257&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk)[261](index=261&type=chunk)[262](index=262&type=chunk) - Interim or preliminary data from studies are subject to change upon comprehensive review and audit, and differences from final data could seriously harm the business[282](index=282&type=chunk)[283](index=283&type=chunk)[284](index=284&type=chunk) - Failure to create a pipeline of additional product candidates or develop commercially successful products through the Therapeutic Vector Evolution platform would limit commercial opportunity[285](index=285&type=chunk) - The Company faces substantial competition from major pharmaceutical and biotechnology companies with greater resources and expertise, potentially leading to competitors developing products more successfully or rendering the Company's candidates obsolete[286](index=286&type=chunk)[287](index=287&type=chunk)[289](index=289&type=chunk) - Inability to establish internal sales and marketing capabilities or secure third-party agreements for commercialization would hinder product sales and revenue generation[290](index=290&type=chunk)[291](index=291&type=chunk)[292](index=292&type=chunk)[293](index=293&type=chunk) - Even with marketing approval, product candidates may fail to achieve market acceptance by physicians, patients, and payors due to factors like efficacy, safety, pricing, and competition[294](index=294&type=chunk)[296](index=296&type=chunk)[297](index=297&type=chunk) - Public health crises (e.g., pandemics) and disruptions at regulatory agencies (e.g., funding shortages, trade restrictions) could adversely affect preclinical/clinical trials, business operations, and timely regulatory approvals[271](index=271&type=chunk)[272](index=272&type=chunk)[274](index=274&type=chunk)[275](index=275&type=chunk) - The Company has received Fast Track, Orphan Drug, RMAT, and PRIME designations for certain product candidates (e.g., 4D-310, 4D-710, 4D-150), but these do not guarantee faster review, approval, or market exclusivity[328](index=328&type=chunk)[329](index=329&type=chunk)[331](index=331&type=chunk)[333](index=333&type=chunk)[336](index=336&type=chunk)[338](index=338&type=chunk) - Failure to obtain regulatory approval in multiple jurisdictions would limit market opportunities and seriously harm the business[342](index=342&type=chunk) - Enacted and future healthcare legislation (e.g., ACA, IRA, OBBB Act) and regulations may increase the difficulty and cost of obtaining marketing approval, affect pricing, and reduce reimbursement, impacting profitability[343](index=343&type=chunk)[346](index=346&type=chunk)[348](index=348&type=chunk)[349](index=349&type=chunk)[352](index=352&type=chunk)[354](index=354&type=chunk) - Successful commercialization depends on obtaining and maintaining coverage and adequate reimbursement from governmental authorities and private health insurers, which is uncertain and can be a lengthy, costly process[358](index=358&type=chunk)[360](index=360&type=chunk)[361](index=361&type=chunk)[362](index=362&type=chunk) [Risks Related to Manufacturing](index=63&type=section&id=Risks%20Related%20to%20Manufacturing) Gene therapies are complex to manufacture, posing risks of production problems, supply limitations, and delays in development or regulatory approvals, with reliance on third-party manufacturers and suppliers entailing additional risks - Gene therapies are complex to manufacture, and production problems (e.g., product defects, contamination, insufficient inventory) could delay development, regulatory approvals, or limit product supply[298](index=298&type=chunk)[299](index=299&type=chunk)[309](index=309&type=chunk) - Delays in obtaining regulatory approval for manufacturing processes or disruptions in internal/contract manufacturing facilities (e.g., non-compliance with cGMP) could delay commercialization efforts[302](index=302&type=chunk)[303](index=303&type=chunk) - Developing internal manufacturing capabilities requires significant resources and management time, and failure to achieve operating efficiencies or manage employee shortages could delay product development timelines[304](index=304&type=chunk)[305](index=305&type=chunk) - Reliance on third-party manufacturers and suppliers for product candidates and raw materials (e.g., plasmids) entails risks of non-satisfactory performance, supply disruptions, increased costs, and quality issues[306](index=306&type=chunk)[308](index=308&type=chunk)[310](index=310&type=chunk)[311](index=311&type=chunk) [Risks Related to Regulatory Approval and Other Legal Compliance Matters](index=66&type=section&id=Risks%20Related%20to%20Regulatory%20Approval%20and%20Other%20Legal%20Compliance%20Matters) The Company faces lengthy, expensive, and unpredictable regulatory approval processes, with approved products remaining subject to ongoing scrutiny, and business operations are subject to healthcare regulatory laws, environmental, health & safety laws, and animal welfare regulations, with non-compliance potentially leading to significant penalties and reputational harm - The regulatory approval processes (FDA, EMA, etc.) are lengthy, expensive, and unpredictable, and failure to obtain approval for product candidates would prevent revenue generation[313](index=313&type=chunk)[314](index=314&type=chunk)[317](index=317&type=chunk) - Even with approval, products remain subject to ongoing regulatory scrutiny, including cGMP compliance, labeling, promotion, and post-marketing studies, and non-compliance can lead to sanctions or market withdrawal[321](index=321&type=chunk)[322](index=322&type=chunk)[323](index=323&type=chunk)[324](index=324&type=chunk)[325](index=325&type=chunk) - Business operations and relationships are subject to healthcare regulatory laws (e.g., Anti-Kickback Statute, False Claims Act, HIPAA), and non-compliance could result in significant penalties, exclusion from healthcare programs, and reputational harm[366](index=366&type=chunk)[367](index=367&type=chunk)[368](index=368&type=chunk) - The Company's research involves hazardous materials, exposing it to environmental and health & safety laws, and non-compliance or accidents could lead to significant costs, liabilities, and operational disruptions[371](index=371&type=chunk)[504](index=504&type=chunk)[505](index=505&type=chunk) - Compliance with animal welfare regulations for research animals could increase operating costs and lead to penalties or adverse publicity if violated[372](index=372&type=chunk) [Risks Related to Our Reliance on Third Parties](index=79&type=section&id=Risks%20Related%20to%20Our%20Reliance%20on%20Third%20Parties) Reliance on third parties for clinical trials, research, and preclinical testing reduces control and poses risks of unsatisfactory performance, missed deadlines, or non-compliance, while dependence on collaborations carries risks of resource discretion, intellectual property disputes, and program termination, and sharing trade secrets increases misappropriation risk - Reliance on third parties (CROs, CMOs, clinical investigators) for clinical trials, research, and preclinical testing reduces control and poses risks of unsatisfactory performance, missed deadlines, or non-compliance with regulatory requirements, potentially delaying product development and approvals[373](index=373&type=chunk)[374](index=374&type=chunk)[375](index=375&type=chunk)[376](index=376&type=chunk) - Dependence on collaborations for R&D and commercialization of product candidates carries risks, including collaborators' discretion over resources, intellectual property disputes, delays, or termination of programs[377](index=377&type=chunk)[378](index=378&type=chunk)[379](index=379&type=chunk)[381](index=381&type=chunk) - Sharing trade secrets with third parties (collaborators, contractors) increases the risk of misappropriation, unauthorized disclosure, or independent discovery by competitors, which could harm the Company's competitive position[420](index=420&type=chunk) [Risks Related to Our Intellectual Property](index=82&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) Commercial success depends on obtaining and maintaining patent and trade secret protection, which is subject to challenges, invalidation, enforcement difficulties, and potential expiration before commercialization, with global protection being challenging and costly, and the Company facing risks of infringement claims or loss of rights from third-party licenses - Commercial success depends on obtaining and maintaining patent and trade secret protection for product candidates and technologies, but patent applications may not issue, issued patents may be challenged or invalidated, and protection may not be sufficient against competitors[383](index=383&type=chunk)[384](index=384&type=chunk)[385](index=385&type=chunk)[387](index=387&type=chunk)[389](index=389&type=chunk) - The lives of patents may not be sufficient to effectively protect product candidates, as patents might expire before or shortly after commercialization, opening the door to competition[395](index=395&type=chunk) - Changes in U.S. or foreign patent laws (e.g., Leahy-Smith Act, EU Patent Package) could diminish the value of patents, increase prosecution costs, and weaken enforcement capabilities[398](index=398&type=chunk)[399](index=399&type=chunk)[400](index=400&type=chunk)[401](index=401&type=chunk) - Protecting intellectual property rights globally is challenging and expensive, with varying levels of protection in different countries, potentially allowing competitors to use inventions where patent protection is weak or absent[402](index=402&type=chunk)[403](index=403&type=chunk)[404](index=404&type=chunk) - The Company may face claims challenging inventorship or ownership of patents and other intellectual property, leading to costly litigation, loss of rights, or diversion of management attention[406](index=406&type=chunk) - Failure to comply with procedural, documentary, and fee payment requirements of patent agencies can result in abandonment or lapse of patent rights[407](index=407&type=chunk) - Inability to protect the confidentiality of trade secrets (unpatented know-how, technology) through agreements and security measures could seriously harm the business, as monitoring unauthorized uses is difficult and enforcement is costly[408](index=408&type=chunk)[409](index=409&type=chunk)[410](index=410&type=chunk)[411](index=411&type=chunk) - Rights to develop and commercialize product candidates are subject to third-party licenses, and failure to comply with license terms or inability to obtain future necessary licenses could result in loss of rights or technology[412](index=412&type=chunk)[413](index=413&type=chunk)[414](index=414&type=chunk)[415](index=415&type=chunk) - Litigation or third-party claims of intellectual property infringement are costly, time-consuming, and could prevent product sales, require licensing, or result in damages[427](index=427&type=chunk)[428](index=428&type=chunk)[431](index=431&type=chunk)[433](index=433&type=chunk)[434](index=434&type=chunk) - The Company may be subject to claims of wrongfully hiring employees from competitors or using/disclosing confidential information of former employers, leading to litigation and potential loss of intellectual property rights[444](index=444&type=chunk)[445](index=445&type=chunk) [Risks Related to Our Operations](index=97&type=section&id=Risks%20Related%20to%20Our%20Operations) The Company is highly dependent on key personnel, faces challenges in managing future growth, is vulnerable to unfavorable global economic conditions, and its IT systems are susceptible to security breaches, while compliance with data protection laws and changes in tax laws pose additional risks - The Company is highly dependent on key managerial, scientific, and medical personnel, and failure to attract, motivate, and retain qualified individuals in a competitive environment could delay product development and harm the business[446](index=446&type=chunk)[447](index=447&type=chunk)[448](index=448&type=chunk) - Future growth will require expanding the organization, which may lead to difficulties in managing increased responsibilities, recruiting employees, and maintaining operational controls[449](index=449&type=chunk)[450](index=450&type=chunk)[452](index=452&type=chunk) - Unfavorable global economic conditions (e.g., inflation, geopolitical conflicts) could adversely affect business, financial condition, and results of operations, potentially straining manufacturers/suppliers or impacting capital raising[453](index=453&type=chunk) - Engaging in acquisitions or strategic partnerships may increase capital requirements, dilute stockholders, incur debt, assume liabilities, and divert management attention[454](index=454&type=chunk)[455](index=455&type=chunk) - Information technology systems, both internal and third-party, are vulnerable to security breaches and disruptions (e.g., cyberattacks, natural disasters), which could lead to loss of confidential information, development delays, liability, and reputational harm[456](index=456&type=chunk)[457](index=457&type=chunk)[458](index=458&type=chunk)[460](index=460&type=chunk)[461](index=461&type=chunk) - Actual or perceived failures to comply with evolving data protection, privacy, and security laws (e.g., HIPAA, CCPA, GDPR) could result in investigations, fines, legal liability, and damage to reputation[464](index=464&type=chunk)[465](index=465&type=chunk)[466](index=466&type=chunk)[467](index=467&type=chunk)[468](index=468&type=chunk)[472](index=472&type=chunk) - The ability to use net operating loss carryforwards (NOLs) and other tax attributes may be limited due to past or future 'ownership changes' under U.S. tax law (Sections 382 and 383 of the Code)[473](index=473&type=chunk) - Changes in tax laws or regulations, or adverse interpretations thereof, could negatively impact the Company's domestic and international business operations and financial performance[474](index=474&type=chunk)[475](index=475&type=chunk) [Risks Related to Ownership of Our Common Stock](index=103&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) The market price of common stock may be volatile due to various factors, with substantial sales by insiders or through equity plans potentially causing declines, and insiders holding significant influence over company matters, while operating as a public company incurs substantial costs and regulatory compliance burdens - The market price of the common stock may be volatile due to clinical trial results, competitive developments, regulatory changes, financing efforts, and general market conditions, potentially leading to substantial losses for investors[476](index=476&type=chunk)[477](index=477&type=chunk) - Sales of a substantial number of common stock shares in the public market, including from equity incentive plans or pre-funded warrants, could cause the market price to decline significantly[479](index=479&type=chunk)[480](index=480&type=chunk)[481](index=481&type=chunk)[482](index=482&type=chunk) - Insiders (directors, executive officers, >5% stockholders) beneficially own approximately **55%** of outstanding common stock, giving them substantial influence over management and stockholder-approved matters, potentially delaying or preventing a change of control[484](index=484&type=chunk) - Operating as a public company incurs significant costs and requires substantial management time for compliance with SEC and Nasdaq rules, including Section 404 of Sarbanes-Oxley, with potential sanctions for non-compliance[485](index=485&type=chunk)[486](index=486&type=chunk)[487](index=487&type=chunk) - Provisions in the Company's certificate of incorporation, bylaws, and Delaware law (e.g., staggered board, limitations on stockholder actions) could discourage, delay, or prevent a change in control or management, depressing the stock price[488](index=488&type=chunk)[489](index=489&type=chunk)[490](index=490&type=chunk) - The Company does not intend to pay dividends on common stock, meaning investor returns will depend solely on stock price appreciation[496](index=496&type=chunk) [General Risk Factors](index=108&type=section&id=General%20Risk%20Factors) Legal proceedings, product liability lawsuits, and misconduct by employees or partners could lead to significant costs, liabilities, and reputational harm, while non-compliance with environmental, health, and safety laws, and increased focus on ESG matters, also pose financial and reputational risks - Legal proceedings or claims, even if unmeritorious, could be costly, time-consuming, divert management attention, and harm the Company's reputation[498](index=498&type=chunk) - Product liability lawsuits, arising from clinical testing or commercialization, could result in substantial liabilitie

[Executive Summary](index=1&type=section&id=Executive%20Summary) 4D Molecular Therapeutics reported Q2 2025 financial results, highlighted operational advancements, and outlined upcoming milestones, including accelerating the 4D-150 program for wet AMD and presenting positive 60-week data for 4D-150 in DME - 4D Molecular Therapeutics reported Q2 2025 financial results, highlighted operational advancements, and outlined upcoming milestones, including accelerating the 4D-150 program for wet AMD and presenting positive 60-week data for 4D-150 in DME[1](index=1&type=chunk)[2](index=2&type=chunk)[3](index=3&type=chunk) - The 4D-150 program for wet AMD saw accelerated timelines, with **4FRONT-1 data expected H1 2027** (from H2 2027) and **4FRONT-2 initiated ahead of schedule**[3](index=3&type=chunk)[5](index=5&type=chunk) - Positive **60-week data** from the SPECTRA trial in DME supported favorable tolerability, sustained durability, and meaningful treatment burden reduction[3](index=3&type=chunk)[5](index=5&type=chunk) - FDA and EMA aligned that a single successful **Phase 3 study** could support approval for 4D-150 in DME[3](index=3&type=chunk) - The company streamlined its organization with a **25% workforce reduction** to focus on late-stage execution, extending its cash runway into **2028**[3](index=3&type=chunk)[5](index=5&type=chunk)[6](index=6&type=chunk) [Recent Corporate Highlights & Operational Milestones](index=1&type=section&id=Recent%20Corporate%20Highlights%20%26%20Operational%20Milestones) [Organizational Streamlining](index=1&type=section&id=Organizational%20Streamlining) 4DMT streamlined its organization by reducing its workforce by approximately 25% in July 2025, primarily impacting early-stage R&D and support functions, projecting $15 million in annual cash compensation cost savings and extending its cash runway into 2028 - Workforce reduction: Approximately **25%** of current and planned roles in **July 2025**, primarily in early-stage research and development and support functions[6](index=6&type=chunk) - Cost savings: Expected annual cash compensation cost savings of approximately **$15 million**[6](index=6&type=chunk) - Cash runway: The workforce reduction supports the Company's cash runway into **2028**, as previously guided[5](index=5&type=chunk)[6](index=6&type=chunk) [4D-150 Program (Ophthalmology)](index=1&type=section&id=4D-150%20Program%20%28Ophthalmology%29) The 4D-150 program demonstrated significant progress with accelerated timelines for its Phase 3 trials in wet AMD, including earlier data readouts and ahead-of-schedule initiation of 4FRONT-2, while for DME, positive 60-week SPECTRA data confirmed favorable tolerability and substantial reduction in injection burden, leading to regulatory alignment for a single Phase 3 study and RMAT designation [4D-150 for Wet Age-related Macular Degeneration (Wet AMD)](index=1&type=section&id=4D-150%20for%20Wet%20Age-related%20Macular%20Degeneration%20%28Wet%20AMD%29) - **4FRONT-1 data readout**: Expected to accelerate to **H1 2027** from H2 2027[5](index=5&type=chunk) - **4FRONT-2 initiation**: The second **Phase 3 trial** was initiated in **June 2025**, ahead of schedule[8](index=8&type=chunk) - **4FRONT-2 data readout**: **52-week topline data** for 4FRONT-2 are expected in **H2 2027**[8](index=8&type=chunk) - Enrollment: Initial enrollment and site activation for **4FRONT-1** have exceeded initial projections, reflecting strong engagement[6](index=6&type=chunk)[7](index=7&type=chunk) [4D-150 for Diabetic Macular Edema (DME)](index=2&type=section&id=4D-150%20for%20Diabetic%20Macular%20Edema%20%28DME%29) - **SPECTRA 60-week results**: 4D-150 continues to be well-tolerated, with no intraocular inflammation observed and all patients currently off corticosteroids[8](index=8&type=chunk) - Clinical activity (**Phase 3 dose**): Demonstrated strong signals of clinical activity with a sustained gain of **BCVA of +9.7 letters** and reduction of **CST of -174 µm** from baseline[8](index=8&type=chunk) - Injection burden reduction (**Phase 3 dose**): Achieved **78% reduction** in injection burden vs. projected on-label aflibercept 2mg Q8W[8](index=8&type=chunk) - Regulatory alignment: FDA and EMA are aligned that a single **Phase 3 clinical trial** could be acceptable for marketing authorization submission[8](index=8&type=chunk) - Designation: Received **Regenerative Medicine Advanced Therapy (RMAT) designation** from the FDA for 4D-150 for the treatment of DME[8](index=8&type=chunk) [Pulmonology Program (4D-710 for Cystic Fibrosis)](index=3&type=section&id=Pulmonology%20Program%20%284D-710%20for%20Cystic%20Fibrosis%29) The pulmonology program for 4D-710 in Cystic Fibrosis Lung Disease completed enrollment for Cohort 4 of its Phase 1 AEROW clinical trial, bringing the total to 16 participants, with interim data and a program update anticipated in Q4 2025 - **AEROW trial enrollment**: Completed enrollment of **Cohort 4 (n=6)** in **Phase 1 stage**, completing total enrollment of **n=16 participants**[14](index=14&type=chunk) - Upcoming milestone: Interim data from AEROW clinical trial and program update expected in **Q4 2025**[14](index=14&type=chunk) [Q2 2025 Financial Results](index=3&type=section&id=Q2%202025%20Financial%20Results) [Cash Position](index=3&type=section&id=Cash%20Position) As of June 30, 2025, 4DMT reported $417 million in cash, cash equivalents, and marketable securities, a decrease from $505 million at the end of 2024, primarily due to operational cash usage, with this balance projected to fund planned operations into 2028 Cash, Cash Equivalents and Marketable Securities | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------- | :----------------------------- | :------------------------------- | | Cash, cash equivalents and marketable securities | $417,031 | $505,460 | - The net decrease in cash was primarily a result of cash used in operations[9](index=9&type=chunk) - Cash, cash equivalents and marketable securities are expected to be sufficient to fund planned operations into **2028**[9](index=9&type=chunk) [Statements of Operations](index=3&type=section&id=Statements%20of%20Operations) For Q2 2025, 4DMT's net loss widened to $54.7 million (vs. $35.0 million in Q2 2024), driven by a significant increase in R&D expenses to $48.0 million (vs. $31.9 million) due to the initiation of the 4D-150 Phase 3 trial, with G&A expenses also increasing to $11.5 million (vs. $10.6 million), resulting in a net loss per share of $(0.98) Q2 2025 Statements of Operations Highlights | Metric (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | YoY Change | | :-------------------- | :------------------------------- | :------------------------------- | :--------- | | Collaboration and license revenue | $15 | $5 | +$10 | | Research and development expenses | $47,951 | $31,860 | +$16,091 | | General and administrative expenses | $11,520 | $10,601 | +$919 | | Total operating expenses | $59,471 | $42,461 | +$17,010 | | Loss from operations | $(59,456) | $(42,456) | -$(17,000) | | Other income, net | $4,798 | $7,503 | -$(2,705) | | Net loss | $(54,658) | $(34,953) | -$(19,705) | | Net loss per share, basic and diluted | $(0.98) | $(0.63) | -$(0.35) | - Research and development expenses increased primarily due to the initiation of the first **Phase 3 clinical trial of 4D-150** in wet AMD, including increased personnel and professional services[10](index=10&type=chunk) - General and administrative expenses increased primarily due to increased use of professional services[11](index=11&type=chunk) [Balance Sheet Data](index=6&type=section&id=Balance%20Sheet%20Data) As of June 30, 2025, total assets decreased to $473.6 million from $560.4 million at year-end 2024, while total liabilities slightly increased to $52.7 million, with the accumulated deficit growing to $678.8 million, leading to a reduction in total stockholders' equity to $420.9 million Balance Sheet Data Highlights | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total assets | $473,637 | $560,384 | | Total liabilities | $52,747 | $49,778 | | Accumulated deficit | $(678,825) | $(576,195) | | Total stockholders' equity | $420,890 | $510,606 | [About 4D Molecular Therapeutics (4DMT)](index=3&type=section&id=About%204DMT) - **4DMT** is a leading late-stage biotechnology company advancing durable and disease-targeted therapeutics with potential to transform treatment paradigms[12](index=12&type=chunk) - Lead product candidate **4D-150** is designed as a backbone therapy for blinding retinal vascular diseases (wet AMD, DME) to provide multi-year sustained delivery of anti-VEGF with a single, safe, intravitreal injection[12](index=12&type=chunk) - Second product candidate **4D-710** is the first known genetic medicine to demonstrate successful delivery and expression of the CFTR transgene in the lungs of people with cystic fibrosis after aerosol delivery[12](index=12&type=chunk) - All product candidates are in clinical or preclinical development and have not yet been approved for marketing by regulatory authorities[13](index=13&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) - This press release contains forward-looking statements regarding therapeutic potential, clinical benefits, development plans, regulatory interactions, financial performance, and anticipated cash runway[14](index=14&type=chunk)[15](index=15&type=chunk) - Statements are based on management's current expectations and beliefs and are subject to risks, uncertainties, and important factors that may cause actual events or results to differ materially, as described in SEC filings[15](index=15&type=chunk) - **4D Molecular Therapeutics** explicitly disclaims any obligation to update any forward-looking statements[15](index=15&type=chunk) [Contacts](index=6&type=section&id=Contacts) - Media Contact: Jenn Gordon, dna Communications, Media@4DMT.com[20](index=20&type=chunk) - Investors Contact: Julian Pei, Head of Investor Relations and Strategic Finance, Investor.Relations@4DMT.com[20](index=20&type=chunk)

[Executive Summary & Business Outlook](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Outlook) This section summarizes Protara Therapeutics' Q2 2025 financial results, business updates, and pipeline milestones [Q2 2025 Financial Results and Business Update](index=1&type=section&id=Q2%202025%20Financial%20Results%20and%20Business%20Update) Protara Therapeutics announced Q2 2025 financial results and business updates, outlining pipeline progress and key upcoming milestones - Protara Therapeutics is a clinical-stage company developing **transformative therapies** for cancer and rare diseases[2](index=2&type=chunk) - CEO Jesse Shefferman stated the company is **well-positioned to advance its pipeline** in the second half of the year[3](index=3&type=chunk) - Interim results from the ADVANCED-2 trial of TARA-002 in non-muscle invasive bladder cancer (NMIBC) are expected in **1Q 2026**[3](index=3&type=chunk) - The company is on track to dose the first patient in the THRIVE-3 registrational trial of IV Choline Chloride by **end of 3Q 2025**[3](index=3&type=chunk) - An interim update from the STARBORN-1 trial in pediatric lymphatic malformations (LMs) is expected in **4Q 2025**[3](index=3&type=chunk) [Recent Progress and Pipeline Updates](index=1&type=section&id=Recent%20Progress%20and%20Pipeline%20Updates) This section details recent advancements and updates across Protara Therapeutics' clinical pipeline, including TARA-002 and IV Choline Chloride programs [TARA-002 in Non-Muscle Invasive Bladder Cancer (NMIBC)](index=1&type=section&id=TARA-002%20in%20Non-Muscle%20Invasive%20Bladder%20Cancer%20(NMIBC)) Protara Therapeutics expects interim analysis from approximately 25 six-month evaluable BCG-Unresponsive NMIBC patients in the ADVANCED-2 trial in 1Q 2026, while also exploring subcutaneous dosing and combination treatments - Interim analysis from approximately **25 six-month evaluable BCG-Unresponsive NMIBC patients** in the ADVANCED-2 trial is expected at a medical conference in **1Q 2026**[5](index=5&type=chunk)[6](index=6&type=chunk) - An update on next steps in the BCG-Naïve program is expected in **2H 2025**, following discussions with the U.S. Food and Drug Administration (FDA)[6](index=6&type=chunk) - Protara continues to investigate **subcutaneous dosing** and explore **combination treatments** with TARA-002 in NMIBC patients with CIS[6](index=6&type=chunk) [IV Choline Chloride for Patients on Parenteral Support (PS)](index=2&type=section&id=IV%20Choline%20Chloride%20for%20Patients%20on%20Parenteral%20Support%20(PS)) The company is on track to dose the first patient in the THRIVE-3 registrational Phase 3 clinical trial in 3Q 2025, with EU enrollment commencing soon, and IV Choline Chloride holding Fast Track designation - First patient dosing in THRIVE-3, a registrational Phase 3 clinical trial, is on track for the **third quarter of 2025**[7](index=7&type=chunk) - Enrollment across the EU is expected to begin in the coming months following recent clinical trial approval by the European Union Clinical Trials Regulation[7](index=7&type=chunk) - THRIVE-3 is a seamless Phase 2b/3 trial, including a dose confirmation portion (n=24) and a double-blinded, randomized, placebo-controlled portion (n=105)[7](index=7&type=chunk) - IV Choline Chloride was previously granted **Fast Track designation** by the FDA[7](index=7&type=chunk) [TARA-002 in Lymphatic Malformations (LMs)](index=2&type=section&id=TARA-002%20in%20Lymphatic%20Malformations%20(LMs)) Dosing continues in the Phase 2 STARBORN-1 trial for pediatric LMs, with an interim update anticipated in 4Q 2025, following promising safety cohort results - Dosing remains ongoing in the Phase 2 STARBORN-1 trial of TARA-002 in pediatric patients with macrocystic and mixed cystic LMs[8](index=8&type=chunk) - An interim update from the STARBORN-1 trial is intended to be provided in the **fourth quarter of 2025**[8](index=8&type=chunk) - The study's first safety cohort showed **promising results**, and TARA-002 was generally well-tolerated[8](index=8&type=chunk) [Corporate Update & Financial Highlights](index=2&type=section&id=Corporate%20Update%20%26%20Financial%20Highlights) This section covers Protara Therapeutics' recent operational achievements and its financial position as of Q2 2025 [Operational Highlights](index=2&type=section&id=Operational%20Highlights) Protara strengthened its leadership with the appointment of William 'Bill' Conkling as Chief Commercial Officer and gained broader market recognition by joining the Russell 3000 Index - William 'Bill' Conkling was appointed as **Chief Commercial Officer** in June 2025, bringing over two decades of experience in developing and commercializing novel cancer and rare disease therapeutics[11](index=11&type=chunk) - Protara was added as a member of the broad-market **Russell 3000 Index**, effective June 30, 2025[11](index=11&type=chunk) [Financial Position & Outlook](index=2&type=section&id=Financial%20Position%20%26%20Outlook) As of June 30, 2025, Protara reported approximately $146 million in cash, cash equivalents, and investments, providing an expected funding runway into mid-2027 Cash, Cash Equivalents and Investments | Metric | Amount (as of June 30, 2025, in millions) | | :----- | :--------------------------------------- | | Unrestricted Cash, Cash Equivalents and Marketable Debt Securities | $145.6 | | Expected Funding Runway | Into mid-2027 | [Second Quarter 2025 Financial Performance](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Performance) Protara experienced increased operating expenses in Q2 2025, leading to a higher net loss of $15.0 million, though net loss per share decreased to $(0.35) due to increased shares outstanding Operating Expenses (Q2 2025 vs. Q2 2024) | Expense Category | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY, in thousands) | % Change (YoY) | Primary Reason for Increase | | :---------------- | :--------------------- | :--------------------- | :------------------------- | :------------- | :-------------------------- | | Research and development | $10,770 | $6,387 | +$4,383 | +68.6% | Clinical trial activities for TARA-002 and IV Choline Chloride (+$3.9M) | | General and administrative | $5,816 | $4,274 | +$1,542 | +36.1% | Personnel-related expenses (+$0.6M), market development-related expenses (+$0.5M) | Net Loss and EPS (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (YoY, in millions) | | :----- | :-------------------- | :-------------------- | :------------------------ | | Net Loss | $(14.960) | $(9.513) | $(5.447) | | Net Loss per Share (in dollars) | $(0.35) | $(0.45) | +$0.10 | | Weighted-average shares outstanding | 42,270,855 | 21,233,163 | +21,037,692 | [Product and Disease Overviews](index=2&type=section&id=Product%20and%20Disease%20Overviews) This section provides detailed information on Protara Therapeutics' investigational products, TARA-002 and IV Choline Chloride, and the diseases they target [About TARA-002](index=2&type=section&id=About%20TARA-002) TARA-002 is an investigational cell therapy for NMIBC and LMs, derived from the same master cell bank as OK-432, hypothesized to activate immune responses - TARA-002 is an investigational cell therapy in development for the treatment of **NMIBC and LMs**[10](index=10&type=chunk) - It has been granted **Rare Pediatric Disease Designation** by the U.S. Food and Drug Administration for LMs[10](index=10&type=chunk) - TARA-002 was developed from the same master cell bank of genetically distinct group A Streptococcus pyogenes as OK-432 (Picibanil®), with manufacturing comparability shown[10](index=10&type=chunk) - It is hypothesized to activate innate and adaptive immune cells, producing a pro-inflammatory response and directly killing tumor cells to enhance the antitumor immune response[12](index=12&type=chunk) [About Non-Muscle Invasive Bladder Cancer (NMIBC)](index=3&type=section&id=About%20Non-Muscle%20Invasive%20Bladder%20Cancer%20(NMIBC)) NMIBC is the 6th most common cancer in the United States, accounting for approximately 80% of bladder cancer diagnoses, defined as cancer confined to the bladder's inner lining - Bladder cancer is the **6th most common cancer** in the United States, with NMIBC representing approximately **80% of bladder cancer diagnoses**[13](index=13&type=chunk) - Approximately **65,000 patients** are diagnosed with NMIBC in the United States each year[13](index=13&type=chunk) - NMIBC is cancer found in the tissue that lines the inner surface of the bladder that has not spread into the bladder muscle[13](index=13&type=chunk) [About Lymphatic Malformations (LMs)](index=3&type=section&id=About%20Lymphatic%20Malformations%20(LMs)) LMs are rare, congenital lymphatic vessel malformations, often diagnosed in early childhood and primarily located in the head and neck, causing significant morbidities - LMs are rare, congenital malformations of lymphatic vessels resulting in the failure of these structures to connect or drain into the venous system[14](index=14&type=chunk) - Most LMs are present in the head and neck region, with **over 50% detected at birth** and **90% diagnosed before the age of three years**[14](index=14&type=chunk) - Common morbidities include compression of the upper aerodigestive tract, intralesional bleeding, impingement on critical structures, recurrent infection, and cosmetic/functional disabilities[14](index=14&type=chunk) [About IV Choline Chloride](index=3&type=section&id=About%20IV%20Choline%20Chloride) IV Choline Chloride is an investigational intravenous phospholipid substrate replacement therapy for choline-deficient patients on parenteral support, holding FDA Orphan Drug and Fast Track designations with patents expiring in 2041 - IV Choline Chloride is an investigational, intravenous phospholipid substrate replacement therapy for patients receiving parenteral support (PS)[15](index=15&type=chunk) - Choline is an important substrate for phospholipids critical for healthy liver function, gene expression, cell membrane signaling, brain development, neurotransmission, muscle function, and bone health[15](index=15&type=chunk) - Approximately **78% of patients dependent on PS are choline-deficient**, and of those, approximately **63% have some degree of liver dysfunction**[15](index=15&type=chunk) - It has been granted **Orphan Drug Designation** by the FDA for prevention/treatment of choline deficiency in long-term PN and **Fast Track Designation** as a source of choline[15](index=15&type=chunk) - U.S. patents claiming a choline composition and method for treating choline deficiency with a choline composition have terms expiring in **2041**[15](index=15&type=chunk) [About Protara Therapeutics, Inc.](index=3&type=section&id=About%20Protara%20Therapeutics%2C%20Inc.) Protara Therapeutics is a clinical-stage biotechnology company dedicated to advancing transformative therapies for cancer and rare diseases, with a portfolio including TARA-002 and IV Choline Chloride - Protara is a clinical-stage biotechnology company committed to advancing **transformative therapies** for people with cancer and rare diseases[16](index=16&type=chunk) - The company's portfolio includes lead candidate **TARA-002** for NMIBC and LMs, and **IV Choline Chloride** for patients on parenteral nutrition[16](index=16&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section provides a disclaimer regarding forward-looking statements, highlighting inherent risks and uncertainties that could cause actual results to differ materially [Disclaimer and Risk Factors](index=4&type=section&id=Disclaimer%20and%20Risk%20Factors) Statements regarding future events are "forward-looking statements" subject to risks and uncertainties, and Protara disclaims any obligation to update them, except as required by law - Statements regarding matters that are not historical facts are "**forward-looking statements**" within the meaning of the Private Securities Litigation Reform Act of 1995[17](index=17&type=chunk) - Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied[17](index=17&type=chunk) - Factors contributing to uncertainty include risks related to financial guidance, development programs, market conditions, strategic plans, financing, and general economic, industry, market, regulatory, political or public health conditions[17](index=17&type=chunk) - Protara undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law[17](index=17&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) This section presents Protara Therapeutics' unaudited condensed consolidated financial statements, including balance sheets and statements of operations, for relevant periods [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows Protara's financial position as of June 30, 2025, with total assets decreasing by $24.5 million to $156.9 million, primarily due to reduced cash and cash equivalents, partially offset by increased marketable debt securities Unaudited Condensed Consolidated Balance Sheets (Selected Items, in thousands) | Item | June 30, 2025 | December 31, 2024 | Change (vs. Dec 31, 2024, in thousands) | | :-------------------------------- | :------------ | :---------------- | :--------------------------------------- | | Cash and cash equivalents | $31,496 | $162,798 | $(131,302) | | Marketable debt securities (current) | $90,720 | $7,494 | +$83,226 | | Marketable debt securities (non-current) | $23,392 | $- | +$23,392 | | Total current assets | $125,091 | $172,155 | $(47,064) | | Total assets | $156,933 | $181,454 | $(24,521) | | Total current liabilities | $9,761 | $10,961 | $(1,200) | | Total liabilities | $12,510 | $14,320 | $(1,810) | | Total stockholders' equity | $144,423 | $167,134 | $(22,711) | [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the three months ended June 30, 2025, Protara reported a net loss of $14.960 million, an increase from the prior year, driven by higher operating expenses, though net loss per share decreased to $(0.35) due to increased shares outstanding Unaudited Condensed Consolidated Statements of Operations (Selected Items, Three Months Ended, in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (YoY, in thousands) | % Change (YoY) | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------- | :------------- | | Research and development | $10,770 | $6,387 | +$4,383 | +68.6% | | General and administrative | $5,816 | $4,274 | +$1,542 | +36.1% | | Total operating expenses | $16,586 | $10,661 | +$5,925 | +55.6% | | Interest and investment income (expense) | $1,626 | $1,148 | +$478 | +41.6% | | Net income (loss, in thousands) | $(14,960) | $(9,513) | $(5,447) | +57.3% (loss increased) | | Net income (loss) per share, basic and diluted (in dollars) | $(0.35) | $(0.45) | +$0.10 | -22.2% (loss per share decreased) | | Weighted-average shares outstanding, basic and diluted | 42,270,855 | 21,233,163 | +21,037,692 | +99.1% | Unaudited Condensed Consolidated Statements of Operations (Selected Items, Six Months Ended, in thousands) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (YoY, in thousands) | % Change (YoY) | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------------- | :------------- | | Research and development | $19,918 | $14,135 | +$5,783 | +40.9% | | General and administrative | $10,792 | $8,377 | +$2,415 | +28.8% | | Total operating expenses | $30,710 | $22,512 | +$8,198 | +36.4% | | Interest and investment income (expense) | $3,355 | $1,904 | +$1,451 | +76.2% | | Net income (loss, in thousands) | $(26,874) | $(20,608) | $(6,266) | +30.4% (loss increased) | | Net income (loss) per share, basic and diluted (in dollars) | $(0.65) | $(1.26) | +$0.61 | -48.4% (loss per share decreased) | | Weighted-average shares outstanding, basic and diluted | 41,493,714 | 16,327,056 | +25,166,658 | +154.1% | [Company Contact](index=7&type=section&id=Company%20Contact) This section provides contact information for Protara Therapeutics [Investor Relations Contact Information](index=7&type=section&id=Investor%20Relations%20Contact%20Information) This section provides the contact details for Protara Therapeutics' investor relations - Company Contact: Justine O'Malley, Protara Therapeutics, Justine.OMalley@protaratx.com, 646-817-2836[22](index=22&type=chunk)