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What changed in Taysha Gene Therapies, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Taysha Gene Therapies, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+508 added−599 removedSource: 10-K (2025-02-26) vs 10-K (2024-03-19)

Top changes in Taysha Gene Therapies, Inc.'s 2024 10-K

508 paragraphs added · 599 removed · 417 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

131 edited+38 added−101 removed226 unchanged
Biggest changeThe UT Southwestern Agreement expires on a country-by-country and licensed product-by-licensed product basis upon the expiration of the last valid claim of a licensed patent in such country for such licensed product. After the initial research term, we may terminate the agreement, on an indication-by-indication and licensed product-by-licensed product basis, at any time upon specified written notice to UT Southwestern.
Biggest changeAfter the initial research term, we may terminate the agreement, on an indication-by-indication and licensed product-by-licensed product basis, at any time upon specified written notice to UT Southwestern. Either party may terminate the agreement upon an uncured material breach of the agreement or insolvency of the other party.
Any patents based on these applications, if issued, are expected to expire in 2040, without taking into account any possible patent term adjustment, regulatory extensions, or terminal disclaimers, and assuming payment of all annuity and/or maintenance fees.
Any patents based on these applications, if issued, are expected to expire in 2040, without taking into account any possible patent term adjustment, regulatory extensions, or terminal disclaimers, and assuming payment of all annuity and/or maintenance fees.
Any patents based on these applications, if issued, are expected to expire in 2040, without taking into account any possible patent term adjustment, regulatory extensions, or terminal disclaimers, and assuming payment of all annuity and/or maintenance fees.
Any patents based on these applications, if issued, are expected to expire in 2040, without taking into account any possible patent term adjustment, regulatory extensions, or terminal disclaimers, and assuming payment of all annuity and/or maintenance fees.
We are also subject to additional similar U.S. state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third party payors, including private insurers, or that apply regardless of payor, state and 27 foreign laws which require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the government, state, local and foreign laws which require pharmaceutical companies to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures, state and foreign laws which require the reporting of information related to drug pricing, state, local and foreign laws requiring the registration of pharmaceutical sales representatives, and state and foreign laws governing the privacy and security of health information which, in some cases, differ from each other in significant ways, and may not have the same effect, thus complicating compliance efforts.
We are also subject to additional similar U.S. state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third party payors, including private insurers, or that apply regardless of payor, state and foreign laws which require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the government, state, local and foreign laws which require pharmaceutical companies to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures, state and foreign laws which require the reporting of information related to drug pricing, state, local and foreign laws requiring the registration of pharmaceutical sales representatives, and state and foreign laws governing the privacy and security of health information which, in some cases, differ from each other in significant ways, and may not have the same effect, thus complicating compliance efforts.
Biologics Regulation The process required by the FDA before biological product candidates may be marketed in the United States generally involves the following: • completion of extensive preclinical laboratory tests and animal studies performed in accordance with applicable regulations, including the good laboratory practice, or GLP, regulations; • submission to the FDA of an IND application, which must become effective before clinical trials may begin; • approval by an independent institutional review board, or IRB, or ethics committee at each clinical site before the trial is commenced; 16 • performance of adequate and well-controlled human clinical trials to establish the safety, purity and potency of the proposed biological product candidate for its intended purpose; • preparation of and submission to the FDA of a BLA after completion of all pivotal clinical trials; • a determination by the FDA within 60 days of its receipt of a BLA to file the application for review; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with current Good Manufacturing Practice requirements, or cGMPs, and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with the FDA’s good clinical practices, or GCPs; • satisfactory completion of an FDA Advisory Committee review, if applicable; and • FDA review and approval, or licensure, of a BLA to permit commercial marketing of the product for particular indications for use in the United States.
Biologics Regulation The process required by the FDA before biological product candidates may be marketed in the United States generally involves the following: • completion of extensive preclinical laboratory tests and animal studies performed in accordance with applicable regulations, including the good laboratory practice, or GLP, regulations; • submission to the FDA of an IND application, which must become effective before clinical trials may begin; • approval by an independent institutional review board, or IRB, or ethics committee at each clinical site before the trial is commenced; • performance of adequate and well-controlled human clinical trials to establish the safety, purity and potency of the proposed biological product candidate for its intended purpose; • preparation of and submission to the FDA of a biologics license application, or BLA after completion of all pivotal clinical trials; • a determination by the FDA within 60 days of its receipt of a BLA to file the application for review; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with current Good Manufacturing Practice requirements, or cGMPs, and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with the FDA’s good clinical practices, or GCPs; • satisfactory completion of an FDA Advisory Committee review, if applicable; and • FDA review and approval, or licensure, of a BLA to permit commercial marketing of the product for particular indications for use in the United States.
The vector is delivered directly to the cerebrospinal fluid via intrathecal administration, which facilitates optimal biodistribution and cell transduction within key regions of the CNS. Because of the risks associated with both under- and over-expression of MeCP2, we have combined high-throughput microRNA (miRNA), profiling and genome mining to create miRNA-Responsive Auto-Regulatory Element (miRARE), our novel miRNA target panel.
The vector is delivered directly to the cerebrospinal fluid via intrathecal administration, which facilitates optimal biodistribution and cell transduction within key regions of the CNS. Because of the risks associated with both under- and over-expression of MeCP2, we have combined high-throughput microRNA, or miRNA, profiling and genome mining to create miRNA-Responsive Auto-Regulatory Element, or miRARE, our novel miRNA target panel.
There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, but they are drawn narrowly, and practices that involve remuneration, such as consulting agreements, that may be alleged to be intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exception or safe harbor.
There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, but they are drawn narrowly, and practices that involve remuneration, such as consulting agreements, that may be alleged 23 to be intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exception or safe harbor.
TSHA-102 Rett Syndrome Under the Option Agreement, we also granted to Astellas an exclusive option to obtain an exclusive, worldwide, royalty and milestone- bearing right and license (A) to Exploit any Rett Product (as defined below), and (B) under any intellectual property rights 13 controlled by us or any of our affiliates with respect to such Exploitation, or the Rett Option, and together with the GAN Option, each, an Option.
TSHA-102 Rett Syndrome Under the Option Agreement, we also granted to Astellas an exclusive option to obtain an exclusive, worldwide, royalty and milestone- bearing right and license (A) to Exploit any Rett Product (as defined below), and (B) under any intellectual property rights controlled by us or any of our affiliates with respect to such Exploitation, or the Rett Option, and together with the GAN Option, each, an Option.
There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products, if approved in those countries. Healthcare Reform The United States and some foreign jurisdictions are considering or have enacted a number of reform proposals to change the healthcare system.
There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products, if approved in those countries. 25 Healthcare Reform The United States and some foreign jurisdictions are considering or have enacted a number of reform proposals to change the healthcare system.
A Regenerative Medicine Therapy that is granted accelerated approval and is subject to post-approval requirements may fulfill such requirements through the submission of clinical evidence, clinical studies, patient registries, or other sources of real-world evidence, such as electronic health records; the collection of larger confirmatory data sets; or post-approval monitoring of all patients treated with such therapy prior to its approval.
A 16 Regenerative Medicine Therapy that is granted accelerated approval and is subject to post-approval requirements may fulfill such requirements through the submission of clinical evidence, clinical studies, patient registries, or other sources of real-world evidence, such as electronic health records; the collection of larger confirmatory data sets; or post-approval monitoring of all patients treated with such therapy prior to its approval.
For gene therapies, the investigational product is initially introduced into patients with the target disease or condition. These studies are designed to test the safety, dosage tolerance, absorption, metabolism and distribution of the 17 investigational product in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness. • Phase 2.
For gene therapies, the investigational product is initially introduced into patients with the target disease or condition. These studies are designed to test the safety, dosage tolerance, absorption, metabolism and distribution of the investigational product in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness. • Phase 2.
The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving a BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCPs.
The FDA will not approve an application unless it determines that the manufacturing processes and facilities 15 are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving a BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCPs.
Specifically, the Regulation, which is directly applicable in all EU 22 Member States, introduces a streamlined application procedure through a single-entry point, the "EU portal", the Clinical Trials Information System, or CTIS; a single set of documents to be prepared and submitted for the application; as well as simplified reporting procedures for clinical trial sponsors.
Specifically, the Regulation, which is directly applicable in all EU Member States, introduces a streamlined application procedure through a single-entry point, the "EU portal", the Clinical Trials Information System, or CTIS; a single set of documents to be prepared and submitted for the application; as well as simplified reporting procedures for clinical trial sponsors.
At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price 26 or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
A product is eligible for priority review if it has the potential to provide a significant improvement in the treatment, diagnosis or prevention of a serious disease or condition. For original BLAs, 19 priority review designation means the FDA’s goal is to take action on the marketing application within six months of the 60-day filing date.
A product is eligible for priority review if it has the potential to provide a significant improvement in the treatment, diagnosis or prevention of a serious disease or condition. For original BLAs, priority review designation means the FDA’s goal is to take action on the marketing application within six months of the 60-day filing date.
An MA for an orphan medicinal product may only include indications designated as orphan. For non-orphan indications treated with the same active pharmaceutical ingredient, a separate marketing authorization has to be sought. Orphan medicinal product designation entitles an applicant to incentives such fee reductions or fee waivers, protocol assistance, and access to the centralized marketing authorization procedure.
An MA for an orphan medicinal product may only include indications designated as orphan. For non-orphan indications treated with the same active pharmaceutical ingredient, a separate marketing authorization has to be sought. 22 Orphan medicinal product designation entitles an applicant to incentives such fee reductions or fee waivers, protocol assistance, and access to the centralized marketing authorization procedure.
Currently, there are no approved therapies for SLC13A5 deficiency, and treatment is largely to address symptoms. The estimated prevalence of SLC13A5 deficiency is 1,900 patients in the United States and European Union. TSHA-105 is constructed from a codon-optimized human SLC13A5 gene packaged in a self-complementary AAV9 capsid.
Currently, there are no approved therapies for 7 SLC13A5 deficiency, and treatment is largely to address symptoms. The estimated prevalence of SLC13A5 deficiency is 1,900 patients in the United States and European Union. TSHA-105 is constructed from a codon-optimized human SLC13A5 gene packaged in a self-complementary AAV9 capsid.
To obtain an MA for a product in the EU, an applicant must submit a Marketing Authorization Application, or MAA, either under a centralized procedure administered by the European Medicines Agency, or EMA, or one of the procedures administered by the competent authorities of EU Member States (decentralized procedure, national procedure or mutual recognition procedure).
To obtain an MA for a product in the European Union, an applicant must submit a Marketing Authorization Application, or MAA, either under a centralized procedure administered by the European Medicines Agency, or EMA, or one of the procedures administered by the competent authorities of EU Member States (decentralized procedure, national procedure or mutual recognition procedure).
After the FDA evaluates a BLA and conducts inspections of manufacturing facilities where the investigational product and/or its drug substance will be manufactured, the FDA may issue an approval letter or a Complete Response letter. An approval letter 18 authorizes commercial marketing of the product with specific prescribing information for specific indications.
After the FDA evaluates a BLA and conducts inspections of manufacturing facilities where the investigational product and/or its drug substance will be manufactured, the FDA may issue an approval letter or a Complete Response letter. An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications.
An MA may be granted only to an applicant established in the EU. The centralized procedure provides for the grant of a single MA by the European Commission that is valid throughout the EEA (which is comprised of the 27 EU Member States plus Norway, Iceland and Liechtenstein).
An MA may be granted only to an applicant established in the European Union. The centralized procedure provides for the grant of a single MA by the European Commission that is valid throughout the EEA (which is comprised of the 27 EU Member States plus Norway, Iceland and Liechtenstein).
We, along with third-party contractors, will be required to navigate the various preclinical, clinical and commercial approval requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek approval or licensure of our product candidates. U.S.
We, along with third-party contractors, will be required to navigate the various preclinical, clinical and commercial approval requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek approval or licensure of our product candidates. 13 U.S.
The European Commission or the competent authorities of the EU Member States may decide on justified grounds relating to pharmacovigilance, to proceed with one further five year renewal period for the MA. Once subsequently definitively renewed, the MA shall be valid for an unlimited period.
The European Commission or 20 the competent authorities of the EU Member States may decide on justified grounds relating to pharmacovigilance, to proceed with one further five-year renewal period for the MA. Once subsequently definitively renewed, the MA shall be valid for an unlimited period.
Regulatory authorities, the IRB or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk or that the trial is unlikely to meet its stated objectives.
Regulatory authorities, the IRB or the sponsor may suspend a clinical trial at any time on various grounds, including a 14 finding that the subjects are being exposed to an unacceptable health risk or that the trial is unlikely to meet its stated objectives.
The sponsor of a product candidate for a rare pediatric disease may be eligible for a voucher that can be used to obtain a priority review for a subsequent human drug or biologic application after the date of approval of the rare pediatric disease drug product, referred to as a priority review voucher, or PRV.
The sponsor of a product candidate for a rare pediatric disease may be eligible for a voucher that can be used to obtain a priority review for a 17 subsequent human drug or biologic application after the date of approval of the rare pediatric disease drug product, referred to as a priority review voucher, or PRV.
While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework. In the EU in December 2021, Regulation No 2021/2282 on Health Technology Assessment, or HTA Regulation, was adopted.
While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework. In December 2021, Regulation No 2021/2282 on Health Technology Assessment, or HTA Regulation, was adopted.
We also intend to seek patent protection or rely upon trade secret rights to protect other technologies that may be used to discover and validate targets, and that may be used to manufacture and develop novel gene therapy products.
We also intend to seek patent protection or rely upon trade secret rights to protect other technologies that may be used to discover and validate 11 targets, and that may be used to manufacture and develop novel gene therapy products.
Orphan Designation in the EU In the EU, Regulation (EC) No. 141/2000, as implemented by Regulation (EC) No. 847/2000 provides that a medicinal product can be designated as an orphan medicinal product by the European Commission if its sponsor can establish that: (i) the product is intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions; (ii) either (a) such conditions affect not more than 5 in 10,000 persons in the EU when the application is made, or (b) the product without the benefits derived from orphan status, would not generate sufficient return in the EU to justify the necessary investment in developing 25 the medicinal product; and (iii) there exists no satisfactory authorized method of diagnosis, prevention, or treatment of the condition that has been authorized in the EU, or even if such method exists, the product will be of significant benefit to those affected by that condition.
Orphan Designation in the European Union In the European Union, Regulation (EC) No. 141/2000, as implemented by Regulation (EC) No. 847/2000 provides that a medicinal product can be designated as an orphan medicinal product by the European Commission if its sponsor can establish that: (i) the product is intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions; (ii) either (a) such conditions affect not more than 5 in 10,000 persons in the European Union when the application is made, or (b) the product without the benefits derived from orphan status, would not generate sufficient return in the European Union to justify the necessary investment in developing the medicinal product; and (iii) there exists no satisfactory authorized method of diagnosis, prevention, or treatment of the condition that has been authorized in the European Union, or even if such method exists, the product will be of significant benefit to those affected by that condition.
European Union member states may approve a specific price for a product or it may instead adopt a system of direct or indirect controls on the 28 profitability of the company placing the product on the market.
European Union member states may approve a specific price for a product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the product on the market.
The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. These provisions take effect progressively starting in fiscal year 2023.
The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. These provisions began to take effect progressively starting in fiscal year 2023.
EU Regulation of medicinal products Clinical Trials in the EU Similarly to the United States, the various phases of non-clinical and clinical research in the European Union, or EU are subject to significant regulatory controls.
EU Regulation of medicinal products Clinical Trials in the European Union Similarly to the United States, the various phases of non-clinical and clinical research in the European Union are subject to significant regulatory controls.
Like the decentralized procedure, the mutual recognition procedure is based on the acceptance by the competent authorities of the EU Member States of the 23 MA of a medicinal product by the competent authorities of other EU Member States.
Like the decentralized procedure, the mutual recognition procedure is based on the acceptance by the competent authorities of the EU Member States of the MA of a medicinal product by the competent authorities of other EU Member States.
The grant of marketing authorization in the EU for products containing viable human tissues or cells such as gene therapy medicinal products is governed by Regulation (EC) No. 1394/2007 on ATMPs, read in combination with Directive (EC) No. 2001/83 of the European Parliament and of the Council, commonly known as the Community code on medicinal products.
The grant of marketing authorization in the European Union for products containing viable human tissues or cells such as gene therapy medicinal products is governed by Regulation (EC) No. 1394/2007 on ATMPs, read in combination with Directive (EC) No. 2001/83 of the European Parliament and of the Council, commonly known as the Community code on medicinal products.
Physicians may prescribe legally available products for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA. Such off-label uses are common across medical specialties. Physicians may believe that such off-label uses are the best treatment for many patients in varied 21 circumstances.
Physicians may prescribe legally available products for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA. Such off-label uses are common across medical specialties. Physicians may believe that such off-label uses are the best treatment for many patients in varied 18 circumstances.
Patent will expire on October 27, 2041, assuming all maintenance fees are timely paid. We also in-license from the University of Edinburgh and the University of Glasgow 13 pending patent applications worldwide directed to MECP2 expression cassettes for gene therapy.
Patent will expire on October 27, 2041, assuming all maintenance fees are timely paid. We also in-license from the University of Edinburgh and the University of Glasgow 10 pending patent applications worldwide directed to MECP2 expression cassettes for gene therapy.
We also in-license from the University of North Carolina at Chapel Hill 11 pending patent applications worldwide directed to feedback-enabled synthetic genes that inhibit MECP2 expression and use of these synthetic genes for treating Rett Syndrome.
We also in-license from the University of North Carolina at Chapel Hill 10 pending patent applications worldwide directed to feedback-enabled synthetic genes that inhibit MECP2 expression and use of these synthetic genes for treating Rett Syndrome.
Any patents based on these applications, if issued, are expected to expire in 2041, without taking into account any possible patent term adjustment, regulatory extensions, or terminal disclaimers, and assuming payment of all annuity and/or maintenance fees.
Any patents based on these applications, if issued, are expected to expire in 2042, without taking into account any possible patent term adjustment, regulatory extensions, or terminal disclaimers, and assuming payment of all annuity and/or maintenance fees.
We have also licensed one U.S. patent, one Korean patent, one Israeli patent, one Indian patent and one Australian patent with claims to a CLN1 expression cassettes and vector comprising the same, which will expire in 2038 assuming all maintenance fees are timely paid.
We have also licensed one Korean patent, one Israeli patent, one Indian patent and one Australian patent with claims to a CLN1 expression cassettes and vector comprising the same, which will expire in 2038 assuming all maintenance fees are timely paid.
We also in-license from the University of North Carolina at Chapel Hill 10 pending patent applications worldwide directed to UBE3A-encoding transgene packaged in an AAV vector and methods of using that vector to Angelman Syndrome.
We also in-license from the University of North Carolina at Chapel Hill 8 pending patent applications worldwide directed to UBE3A-encoding transgene packaged in an AAV vector and methods of using that vector to Angelman Syndrome.
Eligible products must target conditions for which there is an unmet medical need (there is no satisfactory method of diagnosis, prevention or treatment in the EU or, if there is, the new medicinal product will bring a major therapeutic advantage) and they must demonstrate the potential to address the unmet medical need by introducing new methods of therapy or improving existing ones.
Eligible products must target conditions for which there is an unmet medical need (there is no satisfactory method of diagnosis, prevention or treatment in the European Union or, if there is, the new medicinal product will bring a major therapeutic advantage) and they must demonstrate the potential to address the unmet medical need by introducing new methods of therapy or improving existing ones.
Similarly, the distribution of medicinal products within the EU is subject to compliance with the applicable EU laws, regulations and guidelines, including the requirement to hold appropriate authorizations for distribution granted by the competent authorities of EU Member States.
Similarly, the distribution of medicinal products within the European Union is subject to compliance with the applicable EU laws, regulations and guidelines, including the requirement to hold appropriate authorizations for distribution granted by the competent authorities of EU Member States.
It is also unclear how such challenges and the healthcare reform measures of the Biden administration will impact the ACA and our business. Other legislative changes have been proposed and adopted since the ACA was enacted, including aggregate reductions of Medicare payments to providers of 2% per fiscal year and reduced payments to several types of Medicare providers.
It is also unclear how such challenges and the healthcare reform measures of the second Trump administration will impact the ACA and our business. Other legislative changes have been proposed and adopted since the ACA was enacted, including aggregate reductions of Medicare payments to providers of 2% per fiscal year and reduced payments to several types of Medicare providers.
In the EU, the advertising and promotion of medicinal products are subject to both EU and EU Member States’ laws governing promotion of medicinal products, interactions with physicians and other healthcare professionals, misleading and comparative advertising and unfair commercial practices.
In the European Union, the advertising and promotion of medicinal products are subject to both European Union and EU Member States’ laws governing promotion of medicinal products, interactions with physicians and other healthcare professionals, misleading and comparative advertising and unfair commercial practices.
Additionally, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, effective January 1, 2024.
Additionally, on March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, effective January 1, 2024.
Manufacturing Regulation in the EU In addition to an MA, various other requirements apply to the manufacturing and placing on the EU market of medicinal products. The manufacturing of medicinal products in the EU requires a manufacturing authorization and import of medicinal products into the EU requires a manufacturing authorization allowing for import.
Manufacturing Regulation in the European Union In addition to an MA, various other requirements apply to the manufacturing and placing on the EU market of medicinal products. The manufacturing of medicinal products in the European Union requires a manufacturing authorization and import of medicinal products into the European Union requires a manufacturing authorization allowing for import.
In the EU, there is a special regime for biosimilars, or biological medicinal products that are similar to a reference medicinal product but that do not meet the definition of a generic medicinal product. For such products, the results of appropriate preclinical or clinical trials must be provided in support of an application for MA.
In the European Union, there is a special regime for biosimilars, or biological medicinal products that are similar to a reference medicinal product but that do not meet the definition of a generic medicinal product. For such products, the results of appropriate preclinical or clinical trials must be provided in support of an application for MA.
Our primary focus is advancing our lead clinical program in Rett syndrome, while our pipeline of CNS programs offers the potential for additional development opportunities in the future.
Our primary focus is advancing our lead TSHA-102 clinical program in Rett syndrome, while our pipeline of CNS programs offers the potential for additional development opportunities in the future.
Data exclusivity, if granted, prevents regulatory authorities in the EU from referencing the innovator’s data to assess a generic application or biosimilar application for eight years from the date of authorization of the innovative product, after which a generic or biosimilar MAA can be submitted, and the innovator’s data may be referenced.
Data exclusivity, if granted, prevents regulatory authorities in the European Union from referencing the innovator’s data to assess a generic application or biosimilar application for eight years from the date of authorization of the innovative product, after which a generic or biosimilar MAA can be submitted, and the innovator’s data may be referenced.
A company may voluntarily remove a product from the register of orphan products. Post-authorization Requirements Where an MA is granted in relation to a medicinal product in the EU, the holder of the MA is required to comply with a range of regulatory requirements applicable to the manufacturing, marketing, promotion and sale of medicinal products.
A company may voluntarily remove a product from the register of orphan products. Post-authorization Requirements Where an MA is granted in relation to a medicinal product in the European Union, the holder of the MA is required to comply with a range of regulatory requirements applicable to the manufacturing, marketing, promotion and sale of medicinal products.
EU Review and approval process In the EU, medicinal products can only be commercialized after a related marketing authorization, or MA, has been granted.
EU Review and approval process In the European Union, medicinal products can only be commercialized after a related marketing authorization, or MA, has been granted.
Additionally the SEC maintains an internet site that contains reports, proxy and information statements and other information. The address of the SEC's website is www.sec.gov . 31
Additionally the SEC maintains an internet site that contains reports, proxy and information statements and other information. The address of the SEC's website is www.sec.gov . 28
Other Programs Taysha has a pipeline of early-stage gene therapy programs targeting CNS diseases that we may progress in the future or advance through potential partnerships. TSHA-113 for Tauopathies We are developing TSHA-113 for the treatment of tauopathies.
Other Programs We have a pipeline of early-stage gene therapy programs targeting CNS diseases that we may progress in the future or advance through potential partnerships. TSHA-113 for Tauopathies We are developing TSHA-113 for the treatment of tauopathies.
Promotional activity that does not comply with the SmPC is considered off-label and is prohibited in the EU. 26 Other Healthcare Laws and Compliance Requirements Pharmaceutical companies are subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which they conduct their business.
Promotional activity that does not comply with the SmPC is considered off-label and is prohibited in the European Union. Other Healthcare Laws and Compliance Requirements Pharmaceutical companies are subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which they conduct their business.
However, there is no guarantee that a product will be considered by the EU’s regulatory authorities to be a new chemical/biological entity, and products may not qualify for data exclusivity.
However, there is no guarantee that a product will be considered by the European Union’s regulatory authorities to be a new chemical/biological entity, and products may not qualify for data exclusivity.
No additional milestone payments were made or triggered in connection with this agreement during the year ended December 31, 2023. The Abeona Rett Agreement expires on a country-by-country and licensed product-by-licensed product basis upon the expiration of the royalty term of a licensed product in such country.
No additional milestone payments were made or triggered in connection with this agreement during the years ended December 31, 2023 and 2024. The Abeona Rett Agreement expires on a country-by-country and licensed product-by-licensed product basis upon the expiration of the last royalty term of a licensed product in such country.
Pediatric Development In the EU, Regulation (EC) No 1901/2006 provides that all MAAs for new medicinal products have to include the results of trials conducted in the pediatric population, in compliance with a pediatric investigation plan, or PIP, agreed with the EMA’s Pediatric Committee, or PDCO.
Pediatric Development In the European Union, Regulation (EC) No 1901/2006 provides that all MAAs for new medicinal products have to include the results of trials conducted in the pediatric population, in compliance with a pediatric investigation plan, or PIP, agreed with the 21 EMA’s Pediatric Committee, or PDCO.
Data and Market Exclusivity in the EU The EU provides opportunities for data and market exclusivity related to MAs. Upon receiving an MA, innovative medicinal products are generally entitled to receive eight years of data exclusivity and 10 years of market exclusivity.
Data and Market Exclusivity in the European Union The European Union provides opportunities for data and market exclusivity related to MAs. Upon receiving an MA, innovative medicinal products are generally entitled to receive eight years of data exclusivity and 10 years of market exclusivity.
The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the EU until 10 years have elapsed from the initial MA of the reference product in the EU.
The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the European Union until 10 years have elapsed from the initial MA of the reference product in the European Union.
In addition, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022, or IRA, into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.
For example, on August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.
In the EU, a “conditional” MA may be granted in cases where all the required safety and efficacy data are not yet available.
In the European Union, a “conditional” MA may be granted in cases where all the required safety and efficacy data are not yet available.
Data from Part A will be assessed by regulatory agencies and the IDMC to determine key elements of Part B of the study, including efficacy endpoints, study duration and the MTD or MAD.
Data from Part A is being assessed by regulatory agencies and the IDMC to determine key elements of Part B of the study, including efficacy endpoints, study duration and the MTD or MAD.
Ongoing and future work is focused on optimal dose and route of administration determination for IND enabling studies. There are an estimated 75,000 patients with Fragile X syndrome in the United States and Europe.
Ongoing and future work is focused on optimal dose and route of administration determination for IND enabling studies. There are an estimated 55,000 patients with Angelman syndrome in the United States and Europe.
Advanced Therapy Medicinal Products in the EU Advanced Therapy Medicinal Products, or ATMPs, include gene therapy products as well as somatic cell therapy products and tissue engineered products.
Advanced Therapy Medicinal Products in the European Union Advanced Therapy Medicinal Products, or ATMPs, include gene therapy products as well as somatic cell therapy products and tissue engineered products.
If our operations are found to be in violation of any of such laws or any other governmental regulations that apply, we may be subject to penalties, including, without limitation, significant civil, criminal and administrative penalties, imprisonment damages, fines, exclusion from government-funded healthcare programs, such as Medicare and Medicaid or similar programs in other countries or jurisdictions, integrity oversight and reporting obligations to resolve allegations of non-compliance, disgorgement, imprisonment, contractual damages, reputational harm, diminished profits and the curtailment or restructuring of our operations.
If our operations are found to be in violation of any of such laws or any other governmental regulations that apply, we may be subject to penalties, including, without limitation, significant civil, criminal and administrative penalties, imprisonment damages, fines, exclusion from government-funded healthcare programs, such as Medicare and Medicaid or similar programs in other countries or jurisdictions, integrity oversight and reporting obligations to resolve allegations of non-compliance, disgorgement, imprisonment, contractual damages, reputational harm, diminished profits and the curtailment or restructuring of our operations. 24 Coverage and Reimbursement Significant uncertainty exists as to the coverage and reimbursement status of any pharmaceutical or biological product for which we obtain regulatory approval.
The estimated addressable patient population with typical Rett syndrome caused by a pathogenic/likely pathogenic MECP2 mutation is between 15,000 and 20,000 patients in the United States, European Union and United Kingdom. 2 Phase 1/2 REVEAL Clinical Trials We currently have two Phase 1/2 clinical trials ongoing for TSHA-102: an adolescent/adult study in the United States and Canada and a pediatric study in the United States.
The estimated addressable patient population with typical Rett syndrome caused by a pathogenic/likely pathogenic MECP2 mutation is between 15,000 and 20,000 patients in the United States, European Union and United Kingdom. 2 Phase 1/2 REVEAL Clinical Trials We currently have two Phase 1/2 clinical trials ongoing for TSHA-102: an adolescent/adult study in the United States and Canada and a pediatric study in the United States, Canada and the United Kingdom, each as described below: IT – Intrathecal; MTD – Maximum Tolerated Dose; MAD – Maximum Administered Dose.
Any patents claiming priority to this PCT application, if issued, are expected to expire in 2042, without taking into account any possible patent term adjustment, regulatory extensions, or terminal disclaimers, and assuming payment of all annuity and/or maintenance fees.
Any patents based on these applications, if issued, are expected to expire in 2042, without taking into account any possible patent term adjustment, regulatory extensions, or terminal disclaimers, and assuming payment of all annuity and/or maintenance fees.
Any patents claiming priority to this PCT application, if issued, are expected to expire in 2042, without taking into account any possible patent term adjustment, regulatory extensions, or terminal disclaimers, and assuming payment of all annuity and/or maintenance fees.
Any patents based on these applications, if issued, are expected to expire in 2042, without taking into account any possible patent term adjustment, regulatory extensions, or terminal disclaimers, and assuming payment of all annuity and/or maintenance fees.
Additional efficacy 3 endpoints also include patient assessments by caregivers using Parental Global Impressions Improvement, or PGI-I, the Rett Syndrome Behavior Questionnaire, or RSBQ, Seizure Diaries and other clinical assessment scales.
Additional efficacy endpoints also include patient assessments by caregivers using Parental Global Impressions Improvement, or PGI-I, Seizure Diaries and other clinical assessment scales.
We tested efficacy of our treatment by delivering TSHA-113 to PS19 mice at three months, six months and nine months of age via intracisterna magna injection. We found that the tau mRNA and protein levels were significantly reduced by TSHA-113 treatment. Consistently, the tau seeding assay showed reduced levels of pathological tau in brains from PS19 mice treated with TSHA-113.
We tested the efficacy of our treatment by delivering TSHA-113 to PS19 mice at three months, six months and nine months of age via intracisterna magna injection. We found that the tau mRNA and protein levels were significantly reduced by TSHA-113 treatment.
None of our employees are represented by a labor union or covered by a collective bargaining agreement. We consider our relationship with our employees to be good. Corporate Information We were incorporated under the laws of the State of Texas in September 2019. In February 2020, we converted to a Delaware corporation.
All of our employees are located in the United States. None of our employees are represented by a labor union or covered by a collective bargaining agreement. We consider our relationship with our employees to be good. 27 Corporate Information We were incorporated under the laws of the State of Texas in September 2019.
TSHA-102 for Rett Syndrome TSHA-102 is a self-complementary intrathecally delivered AAV9 gene transfer therapy in clinical evaluation for Rett syndrome, a rare progressive neurodevelopmental disorder caused by mutations in the X-linked MECP2 gene encoding methyl CpG-binding protein 2 (MeCP2), which is essential for regulating neuronal and synaptic function in the brain.
The stage of development of our Rett syndrome program, including the progress in our ongoing clinical trials, is represented in the table below: TSHA-102 for Rett Syndrome TSHA-102 is a self-complementary intrathecally delivered AAV9 gene transfer therapy in clinical evaluation for Rett syndrome, a rare progressive neurodevelopmental disorder caused by mutations in the X-linked MECP2 gene encoding methyl CpG-binding protein 2, or MeCP2, which is essential for regulating neuronal and synaptic function in the brain.
This assessment is then submitted to the competent authorities of all concerned Member States in which the trial is to be conducted for their review. Part II is assessed separately by the competent authorities and Ethics Committees in each concerned EU Member State. Individual EU Member States retain the power to authorize the conduct of clinical trials on their territory.
This 19 assessment is then submitted to the competent authorities of all concerned Member States in which the trial is to be conducted for their review. Part II is assessed separately by the competent authorities and Ethics Committees in each concerned EU Member State.
In March 2022, our CTA filing for TSHA-102 for the treatment of Rett Syndrome was approved by Health Canada and therefore triggered a regulatory milestone payment in connection with the Rett Agreement. We recorded $1.0 million within research and development expenses in the consolidated statements of operations for the year ended December 31, 2022.
In December 2021 our CTA filing for TSHA-118 for the treatment of CLN1 disease was approved by Health Canada and therefore triggered a regulatory milestone payment in connection with the Abeona CLN1 Agreement. We recorded $3.0 million within research and development expenses in the consolidated statements of operations for the year ended December 31, 2021.
Since its enactment, there have been judicial, Congressional and executive branch challenges to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in the future. For example, on June 17, 2021, the U.S.
Since its enactment, there have been judicial, Congressional and executive branch challenges to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in the future.
The miRARE element includes binding sites for endogenous miRNA, which are responsive to MeCP2 levels to prevent overexpression. By utilizing the miRARE technology, TSHA-102 is designed to mediate levels of MeCP2 in the CNS on a cell-by-cell basis without risk of overexpression.
The miRARE element includes binding sites for endogenous miRNA, which are responsive to MeCP2 levels to prevent overexpression. By utilizing the miRARE technology, TSHA-102 is designed to mediate levels of MeCP2 in the CNS on a cell-by-cell basis to address risks associated with under- and over-expression.
As of February 27, 2024, we in-license five U.S. patents, six foreign patents, six pending Patent Cooperation Treaty, or PCT, applications, 68 pending foreign patent applications and 16 pending United States utility patent applications. Our policy is to file patent applications to protect technology, inventions and improvements to inventions that may be commercially important to the development of our business.
As of February 24, 2024, we in-license five U.S. patents, 14 foreign patents, 54 pending foreign patent applications and 13 pending United States utility patent applications. Our policy is to file patent applications to protect technology, inventions and improvements to inventions that may be commercially important to the development of our business.
Either party may terminate the agreement upon an uncured material breach of the agreement or insolvency of the other party. We may terminate the agreement for convenience. Option Agreement with Astellas On October 21, 2022, or the Effective Date, we entered into an Option Agreement, or the Option Agreement with Audentes Therapeutics, Inc. (d/b/a Astellas Gene Therapy), or Astellas.
Either party may terminate the agreement upon an uncured material breach of the agreement or insolvency of the other party. We may terminate the agreement for convenience upon specified prior written notice to Abeona. Option Agreement with Astellas On October 21, 2022, or the Effective Date, we entered into an Option Agreement, or the Option Agreement with Audentes Therapeutics, Inc.
These so-called Phase 4 studies may be made a condition to approval of the BLA. Concurrent with clinical trials, companies may complete additional animal studies and develop additional information about the characteristics of the product candidate, and must finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
Concurrent with clinical trials, companies may complete additional animal studies and develop additional information about the characteristics of the product candidate, and must finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
Any patents claiming priority to this PCT application, if issued, are expected to expire in 2042, without taking into account any possible patent term adjustment, regulatory extensions, or terminal disclaimers, and assuming payment of all annuity and/or maintenance fees.
Any patents based on this application, if issued, is expected to expire in 2042, without taking into account any possible patent term adjustment, regulatory extensions, or terminal disclaimers, and assuming payment of all annuity and/or maintenance fees. Government Regulation The U.S.
In addition, the IRA, among other things, (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare, and subject drug manufacturers to civil monetary penalties and a potential excise tax by offering a price that is not equal to or less than the negotiated “maximum fair price” for such drugs and biologics under the law, and (ii) imposes rebates with respect to certain drugs and biologics covered under Medicare Part B or Medicare Part D to penalize price increases that outpace inflation.
Department of Health and Human Services, or HHS, to negotiate the price of certain high-expenditure, single-source biologics that have been on the market for at least 11 years covered under Medicare, or the Medicare Drug Price Negotiation and subject drug manufacturers to civil monetary penalties and a potential excise tax by offering a price that is not equal to or less than the negotiated “maximum fair price” for such drugs and biologics under the law, and (ii) imposes rebates with respect to certain drugs and biologics covered under Medicare Part B or Medicare Part D to penalize price increases that outpace inflation.
Patent will expire on November 19, 2041, assuming all maintenance fees are timely paid. TSHA-118 We in-license certain patent rights directed to a palmitoyl-protein thioesterase 1-encoding transgene packaged into an AAV vector, and methods of using that vector to treat CLN1 disease (one of the forms of Batten disease).
TSHA-118 We in-license certain patent rights directed to a palmitoyl-protein thioesterase 1-encoding transgene packaged into an AAV vector, and methods of using that vector to treat CLN1 disease (one of the forms of Batten disease).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeData Privacy Framework and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework), if we cannot implement a valid compliance mechanism for cross-border personal data transfers, or if the requirements for a legally-compliant transfer are too onerous, we may face adverse consequences, including interruption or degradation of our operations, increased exposure to regulatory actions, substantial fines, and injunctions against Processing or transferring personal data from Europe or elsewhere.
Biggest changeIf there is no lawful manner for us to transfer personal data from the EEA, the United Kingdom or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we may face significant adverse consequences, including interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions (such as Europe) at significant expense, increased exposure to regulatory actions, substantial fines, and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against Processing or transferring personal data from Europe or elsewhere.
In addition, we have had limited interactions with the FDA comparable foreign regulatory authorities and cannot be certain how many additional clinical trials of our product candidates will be required or how such trials should be designed.
In addition, we have had limited interactions with the FDA and comparable foreign regulatory authorities and cannot be certain how many additional clinical trials of our product candidates will be required or how such trials should be designed.
We currently rely on third party contract manufacturing organizations, or CMOs, including Catalent, to manufacture our product candidates. We expect to rely on third party manufacturing organizations for our manufacturing needs for the foreseeable future.
We currently rely on third-party contract manufacturing organizations, or CMOs, including Catalent, to manufacture our product candidates. We expect to rely on CMOs for our manufacturing needs for the foreseeable future.
Each EU Member State’s decision is communicated to the sponsor via the centralized EU portal. Once the clinical trial approved, clinical study development may proceed. The CTR foresees a three-year transition period. The extent to which ongoing and new clinical trials will be governed by the CTR varies.
Each EU Member State’s decision is communicated to the sponsor via the centralized EU portal. Once the clinical trial is approved, clinical study development may proceed. The CTR foresees a three-year transition period. The extent to which ongoing and new clinical trials will be governed by the CTR varies.
We are subject to legal proceedings and claims from time to time that may seek material damages or otherwise may have a material adverse effect on our business.
We are subject to legal proceedings and claims from time to time that may seek material damages or otherwise may have a material adverse effect on our business.
Under the Tax Cuts and Jobs, or the Tax Act, as modified by the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, federal NOLs incurred in taxable years beginning after December 31, 2017 may be carried forward indefinitely, but the deductibility of such federal NOLs is limited.
Under the Tax Cuts and Jobs, or the Tax Act, as modified by the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, federal NOLs incurred in taxable years beginning after December 31, 2017 may be carried forward indefinitely, but the deductibility of such federal NOLs is limited.
The success of TSHA-102 or any other product candidates that we develop or otherwise may acquire will depend on several factors, including: • effective INDs from the FDA or comparable foreign applications that allow commencement of our planned clinical trials or future clinical trials for our product candidates; • successful enrollment and completion of clinical trials, including under the FDA’s and comparable foreign regulatory authorities’ current good clinical practices, or GCPs, and current Good Laboratory Practices; • timely and successful completion of preclinical studies, including toxicology studies, biodistribution studies and minimally efficacious dose studies in animals, where applicable, and clinical trials; • sufficiency of our financial and other resources to complete the necessary preclinical studies and clinical trials; 37 • successful development of, or making arrangements with third-party manufacturers for, our commercial manufacturing processes for any of our product candidates that receive regulatory approval; • receipt of timely marketing approvals from applicable regulatory authorities; • launching commercial sales of products, if approved, whether alone or in collaboration with others; • acceptance of the benefits and use of our products, including method of administration, if approved, by patients, the medical community and third-party payors, for their approved indications; • the prevalence and severity of adverse events experienced with TSHA-102 or any other product candidates; • the availability, perceived advantages, cost, safety and efficacy of alternative therapies for any product candidate, and any indications for such product candidate, that we develop; • our ability to produce TSHA-102 or any other product candidates we develop on a commercial scale; • obtaining and maintaining patent, trademark and trade secret protection and regulatory exclusivity for our product candidates and otherwise protecting our rights in our intellectual property portfolio; • maintaining compliance with regulatory requirements, including cGMPs, and complying effectively with other procedures; • obtaining and maintaining third-party coverage and adequate reimbursement and patients’ willingness to pay out-of-pocket in the absence of such coverage and adequate reimbursement; and • maintaining a continued acceptable safety, tolerability and efficacy profile of the products following approval.
The success of TSHA-102 or any other product candidates that we develop or otherwise may acquire will depend on several factors, including: • effective INDs from the FDA or comparable foreign applications that allow commencement of our planned clinical trials or future clinical trials for our product candidates; • successful enrollment and completion of clinical trials, including under the FDA’s and comparable foreign regulatory authorities’ current good clinical practices, or GCPs, and current Good Laboratory Practices; • timely and successful completion of preclinical studies, including toxicology studies, biodistribution studies and minimally efficacious dose studies in animals, where applicable, and clinical trials; • sufficiency of our financial and other resources to complete the necessary preclinical studies and clinical trials; • successful development of, or making arrangements with third-party manufacturers for, our commercial manufacturing processes for any of our product candidates that receive regulatory approval; • receipt of timely marketing approvals from applicable regulatory authorities; • launching commercial sales of products, if approved, whether alone or in collaboration with others; • acceptance of the benefits and use of our products, including method of administration, if approved, by patients, the medical community and third-party payors, for their approved indications; • the prevalence and severity of adverse events experienced with TSHA-102 or any other product candidates; • the availability, perceived advantages, cost, safety and efficacy of alternative therapies for any product candidate, and any indications for such product candidate, that we develop; • our ability to produce TSHA-102 or any other product candidates we develop on a commercial scale; • obtaining and maintaining patent, trademark and trade secret protection and regulatory exclusivity for our product candidates and otherwise protecting our rights in our intellectual property portfolio; • maintaining compliance with regulatory requirements, including cGMPs, and complying effectively with other procedures; • obtaining and maintaining third-party coverage and adequate reimbursement and patients’ willingness to pay out-of-pocket in the absence of such coverage and adequate reimbursement; and • maintaining a continued acceptable safety, tolerability and efficacy profile of the products following approval.
Events that may prevent successful or timely completion of clinical development include: • inability to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation of clinical trials; • delays in sufficiently developing, characterizing or controlling a manufacturing process suitable for advanced clinical trials, including our natural history studies; • delays in developing suitable assays for screening patients for eligibility for trials with respect to certain product candidates; • delays in reaching agreement with the FDA, EMA or other regulatory authorities as to the design or implementation of our clinical trials; • obtaining regulatory approval to commence a clinical trial; • reaching an agreement on acceptable terms with clinical trial sites or prospective contract research organizations, or CROs, the terms of which can be subject to extensive negotiation and may vary significantly among different clinical trial sites; • obtaining IRB approval and positive Ethics Committee opinions at each trial site; • recruiting suitable patients to participate in a clinical trial; • having patients complete a clinical trial or return for post-treatment follow-up; • clinical sites, CROs or other third parties deviating from trial protocol or dropping out of a trial; 40 • failure to perform in accordance with the FDA’s GCP requirements, or applicable regulatory guidelines in other countries; • addressing patient safety concerns that arise during the course of a trial, including occurrence of adverse events associated with the product candidate that are viewed to outweigh its potential benefits; • adding a sufficient number of clinical trial sites; or • manufacturing sufficient quantities of product candidate for use in clinical trials.
Events that may prevent successful or timely completion of clinical development include: • inability to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation of clinical trials; • delays in sufficiently developing, characterizing or controlling a manufacturing process suitable for advanced clinical trials, including our natural history studies; • delays in developing suitable assays for screening patients for eligibility for trials with respect to certain product candidates; • delays in reaching agreement with the FDA, EMA or other regulatory authorities as to the design or implementation of our clinical trials; • obtaining regulatory approval to commence a clinical trial; • reaching an agreement on acceptable terms with clinical trial sites or prospective contract research organizations, or CROs, the terms of which can be subject to extensive negotiation and may vary significantly among different clinical trial sites; • obtaining IRB approval and positive Ethics Committee opinions at each trial site; • recruiting suitable patients to participate in a clinical trial; • having patients complete a clinical trial or return for post-treatment follow-up; • clinical sites, CROs or other third parties deviating from trial protocol or dropping out of a trial; • failure to perform in accordance with the FDA’s GCP requirements, or applicable regulatory guidelines in other countries; • addressing patient safety concerns that arise during the course of a trial, including occurrence of adverse events associated with the product candidate that are viewed to outweigh its potential benefits; • adding a sufficient number of clinical trial sites; or • manufacturing sufficient quantities of product candidate for use in clinical trials.
We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates or significantly increase the cost of such trials, including: • we may experience changes in regulatory requirements or guidance, or receive feedback from regulatory authorities that requires us to modify the design of our clinical trials; • clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon development programs; • the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate; • our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • we or our investigators might have to suspend or terminate clinical trials of our product candidates for various reasons, including non-compliance with regulatory requirements, a finding that our product candidates have undesirable side effects or other unexpected characteristics, or a finding that the participants are being exposed to unacceptable health risks; • the cost of clinical trials of our product candidates may be greater than we anticipate and we may not have funds to cover the costs; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; • regulators may revise the requirements for approving our product candidates, or such requirements may not be as we anticipate; and • any future collaborators that conduct clinical trials may face any of the above issues, and may conduct clinical trials in ways they view as advantageous to them but that are suboptimal for us.
We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates or significantly increase the cost of such trials, including: • we may experience changes in regulatory requirements or guidance, or receive feedback from regulatory authorities that requires us to modify the design of our clinical trials; • clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon development programs; • the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate; • our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • we or our investigators might have to suspend or terminate clinical trials of our product candidates for various reasons, including non-compliance with regulatory requirements, a finding that our product candidates have undesirable side effects or other unexpected characteristics, or a finding that the participants are being exposed to unacceptable health risks; • the cost of clinical trials of our product candidates may be greater than we anticipate and we may not have funds to cover the costs; 37 • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; • regulators may revise the requirements for approving our product candidates, or such requirements may not be as we anticipate; and • any future collaborators that conduct clinical trials may face any of the above issues, and may conduct clinical trials in ways they view as advantageous to them but that are suboptimal for us.
Subject enrollment is affected by other factors including: • the eligibility criteria for the trial in question; • the size of the patient population and process for identifying patients; • the perceived risks and benefits of the product candidate in the trial, including relating to AAV9-based gene therapy approaches and intrathecal delivery systems; • the availability of competing commercially available therapies and other competing therapeutic candidates’ clinical trials; 45 • the willingness of patients to be enrolled in our clinical trials; • the efforts to facilitate timely enrollment in clinical trials; • potential disruptions caused by public health crises, such as pandemics or similar outbreaks, including difficulties in initiating clinical sites, enrolling and retaining participants, diversion of healthcare resources away from clinical trials, travel or quarantine policies that may be implemented, and other factors; • the patient referral practices of physicians; • the ability to monitor patients adequately during and after treatment; and • the proximity and availability of clinical trial sites for prospective patients.
Subject enrollment is affected by other factors including: • the eligibility criteria for the trial in question; • the size of the patient population and process for identifying patients; • the perceived risks and benefits of the product candidate in the trial, including relating to AAV9-based gene therapy approaches and intrathecal delivery systems; • the availability of competing commercially available therapies and other competing therapeutic candidates’ clinical trials; • the willingness of patients to be enrolled in our clinical trials; • the efforts to facilitate timely enrollment in clinical trials; • potential disruptions caused by public health crises, such as pandemics or similar outbreaks, including difficulties in initiating clinical sites, enrolling and retaining participants, diversion of healthcare resources away from clinical trials, travel or quarantine policies that may be implemented, and other factors; • the patient referral practices of physicians; • the ability to monitor patients adequately during and after treatment; and • the proximity and availability of clinical trial sites for prospective patients.
Additionally, if one or more of our product candidates receives marketing approval, and we or others identify undesirable side effects caused by such products, a number of potentially significant negative consequences could result, including: • regulatory authorities may withdraw, vary or suspend approvals of such product; 44 • regulatory authorities may require additional warnings on the labels; • we may be required to create a medication guide outlining the risks of such side effects for distribution to patients or other requirements subject to a REMS or comparable foreign strategies; • we could be sued and held liable for harm caused to patients; • we may not be able to achieve or maintain third-party payor coverage and adequate reimbursement; and • our reputation and physician or patient acceptance of our products may suffer.
Additionally, if one or more of our product candidates receives marketing approval, and we or others identify undesirable side effects caused by such products, a number of potentially significant negative consequences could result, including: • regulatory authorities may withdraw, vary or suspend approvals of such product; • regulatory authorities may require additional warnings on the labels; • we may be required to create a medication guide outlining the risks of such side effects for distribution to patients or other requirements subject to a REMS or comparable foreign strategies; • we could be sued and held liable for harm caused to patients; • we may not be able to achieve or maintain third-party payor coverage and adequate reimbursement; and • our reputation and physician or patient acceptance of our products may suffer.
The FDA may determine that such BLA, if approved, does not meet the eligibility criteria for a PRV, including for the following reasons: • Rett syndrome no longer meets the definition of a rare pediatric disease; • the BLA contains an active ingredient that has been previously approved in a BLA; • the BLA is not deemed eligible for priority review; • the BLA does not rely on clinical data derived from studies examining a pediatric population and dosages of the drug intended for that population (that is, if the BLA does not contain sufficient clinical data to allow for adequate labeling for use by the full range of affected pediatric patients); or 47 • the BLA is approved for a different adult indication than the rare pediatric disease for which TSHA-102 is designated.
The FDA may determine that such BLA, if approved, does not meet the eligibility criteria for a PRV, including for the following reasons: • Rett syndrome no longer meets the definition of a rare pediatric disease; • the BLA contains an active ingredient that has been previously approved in a BLA; • the BLA is not deemed eligible for priority review; • the BLA does not rely on clinical data derived from studies examining a pediatric population and dosages of the drug intended for that population (that is, if the BLA does not contain sufficient clinical data to allow for adequate labeling for use by the full range of affected pediatric patients); or • the BLA is approved for a different adult indication than the rare pediatric disease for which TSHA-102 is designated.
Our future capital requirements will depend on many factors, including: • the scope, progress, costs and results of discovery, preclinical development, laboratory testing and clinical trials for TSHA-102 and any current and future product candidates that we advance; • our ability to access sufficient additional capital on a timely basis and on favorable terms, including with respect to our term loan facility with Trinity Capital; • the extent to which we develop, in-license or acquire other product candidates and technologies in our gene therapy product candidate pipeline; 34 • the costs and timing of process development and manufacturing scale-up activities associated with our product candidates and other programs as we advance them through preclinical and clinical development; • the number and development requirements of product candidates that we may pursue; • the costs, timing and outcome of regulatory review of our product candidates; • our headcount growth and associated costs as we expand our research and development capabilities and establish a commercial infrastructure; • the costs and timing of future commercialization activities, including product manufacturing, marketing, sales, and distribution, for any of our product candidates for which we receive marketing approval; • the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; • the costs incurred in defending ourselves in any legal proceedings that we may be subject to; • the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; and • the costs of operating as a public company.
Our future capital requirements will depend on many factors, including: • the scope, progress, costs and results of discovery, preclinical development, laboratory testing and clinical trials for TSHA-102 and any current and future product candidates that we advance; • our ability to access sufficient additional capital on a timely basis and on favorable terms, including with respect to our term loan facility with Trinity Capital; • the extent to which we develop, in-license or acquire other product candidates and technologies in our gene therapy product candidate pipeline; 31 • the costs and timing of process development and manufacturing scale-up activities associated with our product candidates and other programs as we advance them through preclinical and clinical development; • the number and development requirements of product candidates that we may pursue; • the costs, timing and outcome of regulatory review of our product candidates; • our headcount growth and associated costs as we expand our research and development capabilities and establish a commercial infrastructure; • the costs and timing of future commercialization activities, including product manufacturing, marketing, sales, and distribution, for any of our product candidates for which we receive marketing approval; • the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; • the costs incurred in defending ourselves in any legal proceedings that we may be subject to; • the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; and • the costs of operating as a public company.
Such authorities may impose such a suspension or termination due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, 41 inspection of the clinical trial operations or trial site by the FDA, the competent authorities of EU Member States or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
Such authorities may impose such a suspension or termination due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA, the competent authorities of EU Member States or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
We anticipate that our expenses will increase substantially as we: • continue to advance the preclinical and clinical development of our product candidates and preclinical and discovery programs; • conduct our ongoing clinical trials of TSHA-102 and any other current and future product candidates that we advance; • seek regulatory approval for any product candidates that successfully complete clinical trials; • continue to develop our gene therapy product candidate pipeline and next-generation platforms; • scale up our clinical and regulatory capabilities; • manufacture current good manufacturing practice, or cGMP, material for clinical trials or potential commercial sales; • establish a commercialization infrastructure and scale up internal and external manufacturing and distribution capabilities to commercialize any product candidates for which we may obtain regulatory approval; • adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products; • maintain, expand and protect our intellectual property portfolio; • hire additional clinical, manufacturing quality control, regulatory, manufacturing and scientific and administrative personnel; • add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts; and • incur additional legal, accounting and other expenses in operating as a public company. 33 In 2023, we generated revenue from the Astellas Transactions; however, to date we have not generated any revenue from product sales.
We anticipate that our expenses will increase substantially as we: • continue to advance the preclinical and clinical development of our product candidates and preclinical and discovery programs; • conduct our ongoing clinical trials of TSHA-102 and any other current and future product candidates that we advance; • seek regulatory approval for any product candidates that successfully complete clinical trials; • continue to develop our gene therapy product candidate pipeline and next-generation platforms; • scale up our clinical and regulatory capabilities; • manufacture current good manufacturing practice, or cGMP, material for clinical trials or potential commercial sales; • establish a commercialization infrastructure and scale up internal and external manufacturing and distribution capabilities to commercialize any product candidates for which we may obtain regulatory approval; • adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products; • maintain, expand and protect our intellectual property portfolio; • hire additional clinical, manufacturing quality control, regulatory, manufacturing and scientific and administrative personnel; • add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts; and • incur additional legal, accounting and other expenses in operating as a public company. 30 In 2023, we generated revenue from the Astellas Transactions; however, to date we have not generated any revenue from product sales.
The following examples are illustrative: • others may be able to make products that are similar to or otherwise competitive with our product candidates but that are not covered by the claims of our current or future patents; • an in-license necessary for the manufacture, use, sale, offer for sale or importation of one or more of our product candidates may be terminated by the licensor; • we or future collaborators might not have been the first to make the inventions covered by our issued or future issued patents or our pending patent applications; • we or future collaborators might not have been the first to file patent applications covering certain of our inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our pending patent applications will not lead to issued patents; • issued patents that we own or in-license may be held invalid or unenforceable as a result of legal challenges by our competitors; • issued patents that we own or in-license may not provide coverage for all aspects of our product candidates in all countries; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may not develop additional proprietary technologies that are patentable; and 66 • the patents of others may have an adverse effect on our business.
The following examples are illustrative: • others may be able to make products that are similar to or otherwise competitive with our product candidates but that are not covered by the claims of our current or future patents; • an in-license necessary for the manufacture, use, sale, offer for sale or importation of one or more of our product candidates may be terminated by the licensor; • we or future collaborators might not have been the first to make the inventions covered by our issued or future issued patents or our pending patent applications; • we or future collaborators might not have been the first to file patent applications covering certain of our inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our pending patent applications will not lead to issued patents; • issued patents that we own or in-license may be held invalid or unenforceable as a result of legal challenges by our competitors; • issued patents that we own or in-license may not provide coverage for all aspects of our product candidates in all countries; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may not develop additional proprietary technologies that are patentable; and 62 • the patents of others may have an adverse effect on our business.
As a result, UT Southwestern may have competing interests with respect to their priorities and resources. 32 • Negative public opinion of gene therapy and increased regulatory scrutiny of gene therapy and genetic research may adversely impact the development or commercial success of our current and future product candidates. • We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively. • Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain. • We may be subject to legal proceedings from time to time which seek material damages. • Our term loan agreement contains restrictions that potentially limit our flexibility in operating our business, and we may be required to make a prepayment or repay our outstanding indebtedness earlier than we expect. • If we are unable to obtain or protect intellectual property rights related to any of our product candidates, we may not be able to compete effectively in our market.
As a result, UT Southwestern may have competing interests with respect to their priorities and resources. 29 • Negative public opinion of gene therapy and increased regulatory scrutiny of gene therapy and genetic research may adversely impact the development or commercial success of our current and future product candidates. • We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively. • Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain. • We may be subject to legal proceedings from time to time which seek material damages. • Our term loan agreement contains restrictions that potentially limit our flexibility in operating our business, and we may be required to make a prepayment or repay our outstanding indebtedness earlier than we expect. • If we are unable to obtain or protect intellectual property rights related to any of our product candidates, we may not be able to compete effectively in our market.
The period of market exclusivity may, however, be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria on the basis of which it received orphan medicinal product destination, including where it can be demonstrated on the basis of available evidence that the original orphan medicinal product is sufficiently profitable not to justify maintenance of market exclusivity or where 46 the prevalence of the condition has increased above the threshold.
The period of market exclusivity may, however, be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria on the basis of which it received orphan medicinal product destination, including where it can be demonstrated on the basis of available evidence that the original orphan medicinal product is sufficiently profitable not to justify maintenance of market exclusivity or where the prevalence of the condition has increased above the threshold.
We have not always been able in the past and may be unable in the future to detect, anticipate, measure or prevent threats or techniques used to detect or exploit vulnerabilities in our (or our third parties’) information technology, services, communications or 80 software, or cause Security Breaches, because such threats and techniques change frequently, are often sophisticated in nature, and may not be detected until after an incident has occurred.
We have not always been able in the past and may be unable in the future to detect, anticipate, measure or prevent threats or techniques used to detect or exploit vulnerabilities in our (or our third parties’) information technology, services, communications or software, or cause security breaches, because such threats and techniques change frequently, are often sophisticated in nature, and may not be detected until after an incident has occurred.
If adopted in the form proposed, the recent European Commission proposals to revise the existing EU laws governing authorization of medicinal products may result in a decrease in data and market exclusivity opportunities for our product candidates in the EU and make them open to generic or biosimilar competition earlier than is currently the case with a related reduction in reimbursement status.
If adopted in the form proposed, the recent European Commission proposals to revise the existing EU laws governing authorization of medicinal products may result in a decrease in data and market exclusivity opportunities for our product candidates in the European Union and make them open to generic or biosimilar competition earlier than is currently the case with a related reduction in reimbursement status.
Average review times at the agency have fluctuated in recent years as a result. In addition, government funding of the U.S. Securities and Exchange Commission, or SEC, and other government agencies on which our operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictable.
Average review times at the agency have fluctuated in recent years as a 67 result. In addition, government funding of the U.S. Securities and Exchange Commission, or SEC, and other government agencies on which our operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictable.
The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including: • the efficacy, safety and potential advantages compared to alternative treatments; • our ability to offer our products for sale at competitive prices; • the convenience and ease of administration compared to alternative treatments; • product labeling or product insert requirements of the FDA or foreign regulatory authorities, including any limitations or warnings contained in a product’s approved labeling, including any black box warning or REMS or comparable foreign strategy; • the willingness of the target patient population to try new treatments and of physicians to prescribe these treatments; • our ability to hire and retain a sales force in the United States; 52 • the strength of marketing and distribution support; • the availability of third-party coverage and adequate reimbursement for TSHA-102 and any other product candidates, once approved; • the prevalence and severity of any side effects; and • any restrictions on the use of our products together with other medications.
The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including: • the efficacy, safety and potential advantages compared to alternative treatments; • our ability to offer our products for sale at competitive prices; • the convenience and ease of administration compared to alternative treatments; • product labeling or product insert requirements of the FDA or foreign regulatory authorities, including any limitations or warnings contained in a product’s approved labeling, including any black box warning or REMS or comparable foreign strategy; • the willingness of the target patient population to try new treatments and of physicians to prescribe these treatments; • our ability to hire and retain a sales force in the United States; 48 • the strength of marketing and distribution support; • the availability of third-party coverage and adequate reimbursement for TSHA-102 and any other product candidates, once approved; • the prevalence and severity of any side effects; and • any restrictions on the use of our products together with other medications.
In addition, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which regulates corporate acquisitions by prohibiting Delaware corporations from engaging in specified business combinations with particular stockholders of those companies. These provisions could discourage potential acquisition proposals and could delay or prevent a change of control transaction.
In addition, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which regulates corporate acquisitions by prohibiting Delaware corporations from engaging in specified business combinations with particular stockholders of those companies. These provisions could discourage potential acquisition proposals and could delay or 71 prevent a change of control transaction.
Any of these factors could cause us to experience 82 an effective tax rate significantly different from previous periods or our current expectations and may result in tax obligations in excess of amounts accrued in our financial statements. We might not be able to utilize a significant portion of our net operating loss carryforwards.
Any of these factors could cause us to experience an effective tax rate significantly different from previous periods or our current expectations and may result in tax obligations in excess of amounts accrued in our financial statements. We might not be able to utilize a significant portion of our net operating loss carryforwards.
For example, in 2003, trials using early versions of murine gamma-retroviral vectors, which integrate with, and thereby alter, the host cell’s DNA, have led to several well-publicized adverse events, including reported cases of leukemia. Although none of our current product candidates utilize murine gamma-retroviral vectors, our product candidates use AAV9 viral vectors.
For example, in 2003, trials using early versions of murine gamma-retroviral vectors, which integrate with, and thereby alter, the host cell’s DNA, led to several well-publicized adverse events, including reported cases of leukemia. Although none of our current product candidates utilize murine gamma-retroviral vectors, our product candidates use AAV9 viral vectors.
Our use of this technology could result in additional compliance costs, regulatory investigations and actions, and lawsuits. If we are unable to use generative AI, it could make our business less efficient and result in competitive disadvantages. In the ordinary course of business, we may transfer personal data from Europe and other jurisdictions to the United States or other countries.
Our use of this technology could result in additional compliance costs, regulatory investigations and actions, and lawsuits. If we are unable to use generative AI, it could make our business less efficient and result in competitive disadvantages. In the ordinary course of business, we transfer personal data from Europe and other jurisdictions to the United States or other countries.
Even if we eventually complete clinical testing and receive approval of a BLA or foreign marketing application for TSHA-102 or any future product candidates, the FDA, European Commission or the applicable foreign regulatory authority may grant approval or other marketing authorization contingent on the performance of costly additional clinical trials, including post-marketing 42 clinical trials.
Even if we eventually complete clinical testing and receive approval of a BLA or foreign marketing application for TSHA-102 or any future product candidates, the FDA, European Commission or the applicable foreign regulatory authority may grant approval or other marketing authorization contingent on the performance of costly additional clinical trials, including post-marketing clinical trials.
Moreover, despite our efforts, we may not be successful in achieving compliance if our personnel, partners or vendors do not comply with applicable data privacy and security laws and Data Protection Obligations. We publish privacy policies, marketing materials and other statements, such as compliance with certain certifications or self-regulatory principles, regarding data privacy and security.
Moreover, despite our efforts, we may not be successful in achieving compliance if our personnel, partners or vendors do not comply with applicable data privacy and security laws and Data Protection Obligations. We publish privacy policies, whitepapers, marketing materials and other statements, such as compliance with certain certifications or self-regulatory principles, regarding data privacy and security.
Violations of these laws and regulations could result in 81 fines, criminal sanctions against us, our officers, or our employees, the closing down of facilities, including those of our suppliers and manufacturers, requirements to obtain export licenses, cessation of business activities in sanctioned countries, implementation of compliance programs, and prohibitions on the conduct of our business.
Violations of these laws and regulations could result in fines, criminal sanctions against us, our officers, or our employees, the closing down of facilities, including those of our suppliers and manufacturers, requirements to obtain export licenses, cessation of business activities in sanctioned countries, implementation of compliance programs, and prohibitions on the conduct of our business.
Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials even after achieving promising results in preclinical testing and earlier-stage clinical trials. Data obtained from preclinical and clinical activities are subject to varying interpretations, which may delay, limit or prevent regulatory approval.
Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials even after achieving promising results in preclinical testing and earlier-stage clinical trials. Data obtained from preclinical and 39 clinical activities are subject to varying interpretations, which may delay, limit or prevent regulatory approval.
The regulatory requirements that will govern any novel gene therapy product candidates we develop are not entirely clear and are subject to change. Within the broader genetic medicine field, very few therapeutic products have received marketing authorization 38 from the FDA or the European Commission.
The regulatory requirements that will govern any novel gene therapy product candidates we develop are not entirely clear and are subject to change. Within the broader genetic medicine field, very few therapeutic products have received marketing authorization from the FDA or the European Commission.
These additional costs could negatively affect our financial results. In addition, changing laws, regulations and standards relating to corporate governance and public disclosure, including regulations implemented by the SEC and the Nasdaq Stock Market, may increase legal and financial compliance costs and make some activities more time-consuming.
These additional costs could negatively affect our financial results. In addition, changing laws, regulations and standards relating to corporate governance and public disclosure, 79 including regulations implemented by the SEC and the Nasdaq Stock Market, may increase legal and financial compliance costs and make some activities more time-consuming.
In the EU, a medicinal product can be designated as an orphan medicinal product by the European Commission if its sponsor can establish that: (i) the product is intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions; (ii) either (a) such conditions affect not more than 5 in 10,000 persons in the EU when the application is made, or (b) the product without the benefits derived from orphan status, would not generate sufficient return in the EU to justify the necessary investment in developing the medicinal product; and (iii) there exists no satisfactory authorized method of diagnosis, prevention, or treatment of the condition that has been authorized in the EU, or even if such method exists, the product will be of significant benefit to those affected by that condition.
In the European Union, a medicinal product can be designated as an orphan medicinal product by the European Commission if its sponsor can establish that: (i) the product is intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions; (ii) either (a) such conditions affect not more than 5 in 10,000 persons in the European Union when the application is made, or (b) the product without the benefits derived from orphan status, would not generate sufficient return in the European Union to justify the necessary investment in developing the medicinal product; and (iii) there exists no satisfactory authorized method of diagnosis, prevention, or treatment of the condition that has been authorized in the European Union, or even if such method exists, the product will be of significant benefit to those affected by that condition.
An event of default will also occur if, among other things, a material adverse change in our business, operations, or condition occurs, which could potentially include a material impairment of the prospect of our repayment of any portion of the amounts we owe under the Term Loan Agreement.
An event of default will also occur if, among other things, a material adverse change in our business, operations, or condition occurs, which could potentially include a material impairment of the prospect of our repayment of any portion of the amounts we owe under the Trinity Term Loan Agreement.
Neither we nor any current or future collaborator is permitted to market any drug product candidates in the United States until we receive regulatory approval of a BLA from the FDA, and we cannot market it in the European Union until we receive approval for a MAA from the European Commission, or other required regulatory approval in other countries.
Neither we 38 nor any current or future collaborator is permitted to market any drug product candidates in the United States until we receive regulatory approval of a BLA from the FDA, and we cannot market it in the European Union until we receive approval for a MAA from the European Commission, or other required regulatory approval in other countries.
Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their implementing regulations, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information on health plans, healthcare clearinghouses and certain healthcare providers, known as “covered entities”, and their respective HIPAA “business associates”, which are independent contractors that 67 perform certain services for or on behalf of covered entities involving the use or disclosure of individually identifiable health information, as well as their covered subcontractors.
Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their implementing regulations, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information on health plans, healthcare clearinghouses and certain healthcare providers, known as “covered entities”, and their respective HIPAA “business associates”, which are independent contractors that perform certain services for or on behalf of covered entities involving the use or disclosure of individually identifiable 63 health information, as well as their covered subcontractors.
We and the third-parties we rely are subject to a variety of evolving threats, including but not limited to social engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunction, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fire, flood, attacks enhanced or facilitated by AI, and other similar threats.
We and the third-parties we rely are subject to a variety of evolving threats, including but not limited to social engineering attacks (including through deep fakes, which are increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunction, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fire, flood, attacks enhanced or facilitated by AI, and other similar threats.
If we do not receive marketing approvals for any product candidate we develop, we may not be able to continue our operations. We intend to identify and develop novel gene therapy product candidates, which makes it difficult to predict the time, cost and potential success of product candidate development.
If we do not receive marketing approvals for any product candidate we develop, we may not be able to continue our operations. 34 We intend to identify and develop novel gene therapy product candidates, which makes it difficult to predict the time, cost and potential success of product candidate development.
To the extent that the results of the trials are not satisfactory to the FDA or foreign regulatory authorities for support of a marketing application, we may be required to expend significant resources, which may not be available to us, to conduct additional trials in support of potential approval of our product candidates.
To the extent that the results of the trials are not satisfactory to the FDA or 36 foreign regulatory authorities for support of a marketing application, we may be required to expend significant resources, which may not be available to us, to conduct additional trials in support of potential approval of our product candidates.
Moreover, the FDA and comparable foreign regulatory require us to comply with standards, commonly referred to as GCPs, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected.
Moreover, the FDA and comparable foreign regulatory authorities require us to comply with standards, commonly referred to as GCPs, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected.
Our product candidates may fail to show the desired safety and efficacy in clinical development despite positive results in preclinical studies or having successfully advanced through initial clinical trials. Our Phase 1/2 clinical trials of TSHA-102 will involve small patient populations.
Our product candidates may fail to show the desired safety and efficacy in clinical development despite positive results in preclinical studies or having successfully advanced through initial clinical trials. Our Phase 1/2 clinical trials of TSHA-102 involve small patient populations.
Failure to commence or complete, or delays in, our planned clinical trials, could prevent us from or delay us in commercializing our product candidates. The disorders we seek to treat have low prevalence and it may be difficult to identify and enroll patients with these disorders.
Failure to commence or complete, or delays in, our planned clinical trials, could prevent us from or delay us in commercializing our product candidates. 41 The disorders we seek to treat have low prevalence and it may be difficult to identify and enroll patients with these disorders.
However, a marketing application for TSHA-102, if approved, may not meet the eligibility criteria for a PRV or the rare pediatric disease designation program may sunset before FDA is able consider us for a voucher. We have received rare pediatric disease designation for TSHA-102 for the treatment of Rett syndrome.
However, a marketing application for TSHA-102, if approved, may not meet the eligibility criteria for a PRV or the rare pediatric disease designation program may sunset before FDA is able to consider us for a voucher. We have received rare pediatric disease designation for TSHA-102 for the treatment of Rett syndrome.
The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, on committees of our board of directors or as members of senior management. 83 Item 1B. Unresolve d Staff Comments. None.
The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, on committees of our board of directors or as members of senior management. Item 1B. Unresolve d Staff Comments. None.
We are conducting our Phase adolescent and adult 1/2 clinical trial of TSHA-102 in Canada and may in the future choose to conduct additional clinical trials outside the United States, including in the United Kingdom, European Union or other foreign jurisdictions.
We are conducting our Phase 1/2 adolescent and adult clinical trial of TSHA-102 in Canada and our Phase 1/2 pediatric clinical trial of TSHA-102 in the United Kingdom and Canada and may in the future choose to conduct additional clinical trials outside the United States, including in the United Kingdom, European Union or other foreign jurisdictions.
Absent any extension through federal legislation, if the BLA for TSHA-102 is not approved prior to September 30, 2026 for any reason, regardless of whether it meets the criteria for a rare pediatric disease PRV, it will not be eligible for a PRV.
Absent any extension through federal legislation, if the BLA for TSHA-102 is not approved prior to September 30, 2026 for any reason, regardless of whether it meets the criteria for a rare pediatric disease PRV, it will not be eligible for a PRVs.
Our employees and personnel use generative artificial intelligence (AI) technologies to perform their work, and the disclosure and use of personal data in generative AI technologies is subject to various privacy laws and other privacy obligations. Governments have passed and are likely to pass additional laws regulating generative AI.
Our employees and personnel use generative artificial intelligence, or AI, technologies to perform their work, and the disclosure and use of personal data in generative AI technologies is subject to various privacy laws and other privacy obligations. Governments have passed and are likely to pass additional laws regulating generative AI.
In cases where data from clinical trials conducted outside the United States are intended to serve as the sole basis for marketing approval in the United States, the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the United States population and United States medical practice; (ii) the trials were performed by clinical investigators of recognized competence and (iii) the data may be considered valid without the need for an on-site inspection by the FDA or, if the FDA considers such an inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means.
In cases where data from clinical trials conducted outside the United States are intended to serve as the sole basis for marketing approval in the United States, the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the U.S. population and U.S. medical practice; (ii) the trials were performed by clinical investigators of recognized competence and (iii) the data may be considered valid without the need for an on-site inspection by the FDA or, if the FDA considers such an inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means.
We may not be able to continue to identify and develop new product candidates, including from our next-generation platform technologies, in addition to the pipeline of product candidates that we have established through our collaboration with UT Southwestern.
We may not be able to continue to 44 identify and develop new product candidates, including from our next-generation platform technologies, in addition to the pipeline of product candidates that we have established through our collaboration with UT Southwestern.
Factors that may inhibit our efforts to market our products on our own include: • our inability to recruit, train and retain adequate numbers of effective sales and marketing personnel; • the inability of sales personnel to obtain access to physicians in order to educate physicians about our product candidates, once approved; 53 • the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and • unforeseen costs and expenses associated with creating an independent sales and marketing organization.
Factors that may inhibit our efforts to market our products on our own include: • our inability to recruit, train and retain adequate numbers of effective sales and marketing personnel; • the inability of sales personnel to obtain access to physicians in order to educate physicians about our product candidates, once approved; 49 • the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and • unforeseen costs and expenses associated with creating an independent sales and marketing organization.
Even if we are authorized to sell and market TSHA-102 in one or more markets, there is no assurance that we will be able to successfully market TSHA-102 or that TSHA-102 will achieve market acceptance sufficient to generate profits.
Even if we are authorized to sell and market TSHA-102 in one or more markets, there is no assurance that we will be able to successfully market 33 TSHA-102 or that TSHA-102 will achieve market acceptance sufficient to generate profits.
Future or past business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies.
Future or past business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems 76 and technologies.
There can be no assurance that TSHA-102 or any other product candidate, if approved for sale in the United States or in other countries, will be considered medically reasonable and necessary, that it will be considered cost-effective by third-party payors, that coverage or an adequate level of reimbursement will be available or that reimbursement policies and practices in the United States and 56 in foreign countries where our products are sold will not adversely affect our ability to sell our product candidates profitably, if they are approved for sale.
There can be no assurance that TSHA-102 or any other product candidate, if approved for sale in the United States or in other countries, will be considered medically reasonable and necessary, that it will be considered cost-effective by third-party payors, that coverage or an adequate level of reimbursement will be available or that reimbursement policies and practices in the United States and 52 in foreign countries where our products are sold will not adversely affect our ability to sell our product candidates profitably, if they are approved for sale.
Furthermore, if our suppliers fail to meet contractual requirements, and we are unable to secure one or more replacement suppliers capable of production at a substantially equivalent cost, our clinical trials may be delayed or we could lose potential revenue. 51 We depend on third-party suppliers for materials used in the manufacture of our product candidates, and the loss of these third-party suppliers or their inability to supply us with adequate materials could harm our business.
Furthermore, if our suppliers fail to meet contractual requirements, and we are unable to secure one or more replacement suppliers capable of production at a substantially equivalent cost, our clinical trials may be delayed or we could lose potential revenue. 47 We depend on third-party suppliers for materials used in the manufacture of our product candidates, and the loss of these third-party suppliers or their inability to supply us with adequate materials could harm our business.
Under the FDCA, we will need to request a rare pediatric disease PRV in our original BLA for TSHA-102, and any other candidates for which we submit a marketing application.
Under the FDCA, we will need to request a rare 43 pediatric disease PRV in our original BLA for TSHA-102, and any other candidates for which we submit a marketing application.
As a result, the market price of our 75 common stock and the voting and other rights of our stockholders may be adversely affected. An issuance of shares of preferred stock may result in the loss of voting control to other stockholders.
As a result, the market price of our common stock and the voting and other rights of our stockholders may be adversely affected. An issuance of shares of preferred stock may result in the loss of voting control to other stockholders.
The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. These provisions take effect progressively starting in fiscal year 2023.
The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. These provisions began to take effect progressively starting in fiscal year 2023.
We have financed our operations with $589.0 million in gross proceeds from equity financings, including from pre-IPO private placements of convertible preferred stock, our initial public offering, or the IPO, and subsequent sales of common stock in public and private securities offerings, from our previous loan agreement with Silicon Valley Bank and our current loan agreement with Trinity Capital and from the option agreement dated October 21, 2022, or the Option Agreement, with Audentes Therapeutics, Inc.
We have financed our operations with $671.0 million in gross proceeds from equity financings, including from pre-IPO private placements of convertible preferred stock, our initial public offering, or the IPO, and subsequent sales of common stock in public and private securities offerings, from our previous loan agreement with Silicon Valley Bank and our current loan agreement with Trinity Capital and from the option agreement dated October 21, 2022, or the Option Agreement, with Audentes Therapeutics, Inc.
If we are unable to successfully develop and commercialize TSHA-102 due to failure to obtain regulatory approval for TSHA-102, to successfully market TSHA-102, to generate profits from the sale of TSHA-102, or due to other risk factors outlined in this report, it would have material adverse effects on our business, financial condition, and results of operations as TSHA-102 is currently our sole product candidate.
If we are unable to successfully develop and commercialize TSHA-102 due to failure to obtain regulatory approval for TSHA-102, to successfully market TSHA-102, to generate profits from the sale of TSHA-102, or due to other risk factors outlined in this report, it would have material adverse effects on our business, financial condition, and results of operations as TSHA-102 is currently our sole product candidate in clinical development.
Mergers and acquisitions in the pharmaceutical and biotechnology industries could result in even more resources being concentrated among a small number of our competitors. 54 We will face competition from other drugs or from other non-drug products currently approved or that will be approved in the future in the neurology field, including for the treatment of diseases and disorders in the therapeutic categories we intend to target.
Mergers and acquisitions in the pharmaceutical and biotechnology industries could result in even more resources being concentrated among a small number of our competitors. 50 We will face competition from other drugs or from other non-drug products currently approved or that will be approved in the future in the neurology field, including for the treatment of diseases and disorders in the therapeutic categories we intend to target.
Any of the foregoing could prevent us from commercializing our other product candidates, which could have a material adverse effect on our operating results and overall financial condition. 61 In addition, intellectual property rights that we in-license in the future may be sublicenses under intellectual property owned by third parties, in some cases through multiple tiers.
Any of the foregoing could prevent us from commercializing our other product candidates, which could have a material adverse effect on our operating results and overall financial condition. 57 In addition, intellectual property rights that we in-license in the future may be sublicenses under intellectual property owned by third parties, in some cases through multiple tiers.
Orphan medicinal product designation entitles an applicant to incentives such fee reductions or fee waivers, protocol assistance, and access to the centralized marketing authorization procedure.
Orphan medicinal product designation entitles an applicant to incentives such as fee reductions or fee waivers, protocol assistance, and access to the centralized marketing authorization procedure.
Additionally, companies that transfer personal data out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activist groups. Some European regulators have ordered certain companies to suspend or permanently cease certain transfers out of Europe for allegedly violating the EU GDPR’s cross-border data transfer limitations.
Additionally, companies that transfer personal data out of the EEA and United Kingdom to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activist groups. Some European regulators have ordered certain companies to suspend or permanently cease certain transfers out of Europe for allegedly violating the EU GDPR’s cross-border data transfer limitations.
This could result in a delay in approval, or rejection, of our marketing applications by the FDA or comparable foreign regulatory authority and may ultimately lead to the denial of marketing approval of TSHA-102 or any other product candidates. 58 We also expect to rely on other third parties to store and distribute product supplies for our clinical trials.
This could result in a delay in approval, or rejection, of our marketing applications by the FDA or comparable foreign regulatory authority and may ultimately lead to the denial of marketing approval of TSHA-102 or any other product candidates. 54 We also expect to rely on other third parties to store and distribute product supplies for our clinical trials.
Minassian were to leave UT Southwestern or to otherwise no longer be meaningfully involved with us, our preclinical research and development capabilities may be substantially reduced. 57 Further, under the UT Southwestern Agreement, UT Southwestern is primarily responsible for prosecuting and maintaining our licensed intellectual property, and it may fail to properly prosecute, maintain or defend such intellectual property.
Minassian were to leave UT Southwestern or to otherwise no longer be meaningfully involved with us, our preclinical research and development capabilities may be substantially reduced. 53 Further, under the UT Southwestern Agreement, UT Southwestern is primarily responsible for prosecuting and maintaining our licensed intellectual property, and it may fail to properly prosecute, maintain or defend such intellectual property.
If a patent holder believes that one of our product candidates infringes its patent, the patent 63 holder may sue us even if we have received patent protection for our technology. Moreover, we may face patent infringement claims from non-practicing entities that have no relevant drug revenue and against whom our own patent portfolio may thus have no deterrent effect.
If a patent holder believes that one of our product candidates infringes its patent, the patent 59 holder may sue us even if we have received patent protection for our technology. Moreover, we may face patent infringement claims from non-practicing entities that have no relevant drug revenue and against whom our own patent portfolio may thus have no deterrent effect.
We are currently conducting our Phase 1/2 adolescent and adult trial of TSHA-102 in Canada and plan to conduct in the future additional clinical trials for our product candidates outside the United States, and the FDA and similar foreign regulatory authorities may not accept data from such trials.
We are currently conducting our Phase 1/2 adolescent and adult trial of TSHA-102 in Canada and our Phase 1/2 pediatric trial of TSHA-102 in the United Kingdom and Canada and plan to conduct in the future additional clinical trials for our product candidates outside the United States, and the FDA and similar foreign regulatory authorities may not accept data from such trials.
We are heavily reliant upon licenses to certain patent rights and proprietary technology for the development of our product candidates, in particular the UT Southwestern Agreement and our license agreements with Queen’s University and Abeona. These license agreements impose diligence, development and commercialization timelines and milestone payment, royalty, insurance and other obligations on us.
We are heavily reliant upon licenses to certain patent rights and proprietary technology for the development of our product candidates, in particular the UT Southwestern Agreement and our license agreement with Abeona. These license agreements impose diligence, development and commercialization timelines and milestone payment, royalty, insurance and other obligations on us.
Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license. 65 Some countries also have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties.
Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license. 61 Some countries also have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties.
We are subject to export control and import laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations and various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Controls. Exports of our product candidates outside of the U.S. must be made in compliance with these laws and regulations.
We are subject to export control and import laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations and various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Controls. Exports of our product candidates outside of the United States must be made in compliance with these laws and regulations.
In the case of a continuing event of default under the Trinity Term Loan Agreement, the Trinity Lenders could elect to declare all amounts outstanding to be immediately due and payable, proceed against the collateral in which we granted the Trinity 35 Lenders a security interest under the Term Loan Agreement, or otherwise exercise the rights of a secured creditor.
In the case of a continuing event of default under the Trinity Term Loan Agreement, the Trinity Lenders could elect to declare all amounts outstanding to be immediately due and payable, proceed against the collateral in which we granted the 32 Trinity Lenders a security interest under the Trinity Term Loan Agreement, or otherwise exercise the rights of a secured creditor.
In addition, the clinical trial requirements of the FDA, the EU, national competent authorities of EU Member States and other regulatory authorities and the criteria these regulators use to determine the safety and efficacy of a product candidate vary substantially according to the type, complexity, novelty, and intended use and market of the potential products.
In addition, the clinical trial requirements of the FDA, the European Union, national competent authorities of EU Member States and other regulatory authorities and the criteria these regulators use to determine the safety and efficacy of a product candidate vary substantially according to the type, complexity, novelty, and intended use and market of the potential products.
The term of the research funding portion of the UT Southwestern Agreement, under which we have the ability to acquire exclusive rights to additional gene therapy products for rare, monogenic CNS indications, has been extended to extend research funding pursuant to sponsored research agreements on a program-by-program basis.
The term of the research funding portion of the UT Southwestern Agreement, under which we have the ability to acquire exclusive rights to additional gene therapy products for rare, monogenic CNS indications, has been extended to expand research funding pursuant to sponsored research agreements on a program-by-program basis.
Regulatory requirements can vary widely from country to country and could delay or prevent the introduction of our products in those countries. We do not have any product candidates approved for sale in any jurisdiction, including in international markets, and we do not have experience in obtaining 69 regulatory approval in international markets.
Regulatory requirements can vary widely 65 from country to country and could delay or prevent the introduction of our products in those countries. We do not have any product candidates approved for sale in any jurisdiction, including in international markets, and we do not have experience in obtaining regulatory approval in international markets.
For example, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (CPRA) (collectively, CCPA), applies to personal data of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosure in privacy notices and honor requests of California residents certain rights.
For example, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020, or, collectively, the CCPA, applies to personal data of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosure in privacy notices and honor requests of California residents certain rights.
If we or our manufacturers were to fail to comply with the FDA, EU or other regulatory authority requirements, it could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension, variation or withdrawal of approvals, license revocation, seizures or recalls of product candidates or products, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our product candidates.
If we or our manufacturers were to fail to comply with the FDA, European Union or other regulatory authority requirements, it could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension, variation or withdrawal of approvals, license revocation, seizures or recalls of product candidates or products, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our product candidates.
While we believe that there are alternate sources of supply for our program materials that can satisfy our clinical and commercial requirements, identifying and establishing relationships with such sources, if necessary, would result in delays and additional costs, both of which could be significant.
While we believe that there are alternative sources of supply for our program materials that can satisfy our clinical and commercial requirements, identifying and establishing relationships with such sources, if necessary, would result in delays and additional costs, both of which could be significant.
Legislators, policymakers and healthcare insurance funds in the EU and the United Kingdom may continue to propose and implement cost-containing measures to keep healthcare costs down, particularly due to the financial strain that the COVID-19 pandemic has placed on national healthcare systems of European countries.
Legislators, policymakers and healthcare insurance funds in the European Union and the United Kingdom may continue to propose and implement cost-containing measures to keep healthcare costs down, particularly due to the financial strain that the COVID-19 pandemic has placed on national healthcare systems of European countries.
If any future collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program could be delayed, diminished or terminated. 59 We face significant competition in seeking appropriate collaborators.
If any future collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program could be delayed, diminished or terminated. 55 We face significant competition in seeking appropriate collaborators.
If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed. 60 We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems.
If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed. 56 We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur information technology team works with our incident response team to help the Company mitigate and remediate cybersecurity incidents of which they are notified. In addition, the Company’s incident response plan includes reporting to the Audit Committee of the board of directors for certain cybersecurity incidents.
Biggest changeOur cybersecurity incident response plan is designed to escalate certain cybersecurity incidents to members of our legal team depending on the circumstances. Our information technology team works with our incident response team to help the Company mitigate and remediate cybersecurity incidents of which they are notified.
Depending on the environment and systems, we implement and maintain various technical, physical, and organizational measures, processes, standards, and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example: incident detection and response, employee training, access controls, cyber insurance, and systems monitoring.
Depending on the environment, systems, and data, we implement and maintain various technical, physical, and organizational measures, processes, standards, and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example: incident detection and response, employee training, access controls, cyber insurance, and systems monitoring.
Our information technology team, led by our Vice President of Engineering and Operations, helps identify, assess, and manage our cybersecurity threats and risks. Our information technology team assesses risks from cybersecurity threats by monitoring and evaluating our threat environment using various methods including, for example analyzing threat reports, conducting audits, and using intelligence feeds.
Our information technology team, led by our Vice President of Information Technology, helps identify, assess, and manage our cybersecurity threats and risks. Our information technology team assesses risks from cybersecurity threats by monitoring and evaluating our threat environment using various methods including, for example analyzing threat reports, conducting audits, and using intelligence feeds.
Our cybersecurity risk assessment and management processes are implemented by certain Company management, including our Compliance Officer and Vice President of Engineering and Operations, both of whom have previously served in management roles at other public biotechnology companies.
Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our Compliance Officer and Vice President of Information Technology, both of whom have previously served in management roles at other public biotechnology companies.
Risk Factors in this Annual Report on Form 10-K, including “If our, or our vendors’, information technology systems or data is or were compromised, we could experience adverse consequences resulting from such compromise, including, but not limited to regulatory investigations or action; litigation; fines and penalties; interruptions to our operations such as our clinical trials; claims that we breached our data privacy and security laws; harm to our reputation; a loss of customers or sales; and other adverse consequences.” Governance Our board of directors addresses our cybersecurity risk management as part of its general oversight function.
Risk Factors in this Annual Report on Form 10-K, including “If our information technology systems or those third parties with whom we work or our data are or were compromised, we could experience adverse consequences resulting from such compromise, including, but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions to 80 our operations such as our clinical trials; claims that we breached our data privacy and security laws; reputational harm; a loss of customers or sales; and other adverse consequences.” Governance Our board of directors addresses our cybersecurity risk management as part of its general oversight function.
Company management is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into our overall risk management strategy, and communicating key priorities to relevant personnel.
Company management is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into our overall risk management strategy, and communicating key priorities to relevant personnel. Company management is responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports.
Removed
Company management is responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports. 84 Our cybersecurity incident response plan is designed to escalate certain cybersecurity incidents to members of our legal team depending on the circumstances.
Added
In addition, the Company’s incident response plan includes reporting to the Audit Committee of the board of directors for certain cybersecurity incidents.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe complaint asserts claims against certain of the Company’s current and former directors for breach of fiduciary duty and unjust enrichment relating to the Company’s August 2023 Private Placement.
Biggest changeIn October 2024, the lead plaintiff filed an amended complaint asserting claims relating to the Company’s August 2023 Private Placement against (i) certain of the Company’s current and former directors and officers for breach of fiduciary duty and unjust enrichment; and (ii) certain participants in the Company’s August 2023 Private Placement for aiding and abetting breach of fiduciary duty and unjust enrichment.
The Company has not recorded a liability related to this lawsuit because, at this time, the Company is unable to reasonably estimate possible losses or gains or determine whether an unfavorable outcome is either probable or remote. From time to time, we may be involved in additional legal or regulatory proceedings.
The Company has not recorded a liability related to these lawsuits because, at this time, the Company is unable to reasonably estimate possible losses or gains or determine whether an unfavorable outcome is either probable or remote. From time to time, we may be involved in additional legal or regulatory proceedings.
Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. Item 4. Mine Safe ty Disclosures. Not applicable. 85 PART II
Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. 81 Item 4. Mine Safe ty Disclosures. Not applicable. 82 PART II
The complaint seeks an unspecified award of damages in the Company’s favor, plus pre-judgment and post-judgement interest, and an award to the plaintiff for the costs and disbursement of the action, including fees for his attorneys, experts, and accountants.
The complaints seek an unspecified award of damages in the Company’s favor, plus pre-judgment and post-judgment interest, and an award to the plaintiffs for the costs and disbursement of the action, including fees for their attorneys and experts.
Item 3. Legal Proceedings. In January 2024, the Company was named a nominal defendant in a putative stockholder derivative action filed by a stockholder of the Company in the Court of Chancery of the State of Delaware.
Item 3. Legal Proceedings. In January 2024 and April 2024, the Company was named a nominal defendant in two putative stockholder derivative actions filed by stockholders of the Company in the Court of Chancery of the State of Delaware. The lawsuits have since been consolidated and a lead plaintiff has been appointed.
Added
The board of directors of the Company has formed a special litigation committee to investigate the claims and allegations in the amended complaint. On January 27, 2025, the court entered an order staying the litigation until June 30, 2025, while the special litigation committee conducts its investigation.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeMarket Information for Common Stock Our common stock is listed on The Nasdaq Global Market under the symbol “TSHA.” Holders of Record As of March 19, 2024, we had 40 holders of record of our common stock, which excludes stockholders whose shares were held in nominee or street name by brokers.
Biggest changeMarket Information for Common Stock Our common stock is listed on The Nasdaq Global Market under the symbol “TSHA.” Holders of Record As of February 24, 2025, we had 38 holders of record of our common stock, which excludes stockholders whose shares were held in nominee or street name by brokers.
Dividend Policy We have never paid cash dividends on any of our capital stock and currently intend to retain our future earnings, if any, to fund the development and growth of our business. Issuer Purchases of Equity Securities None. Item 6. [Reserved]. 86
Dividend Policy We have never paid cash dividends on any of our capital stock and currently intend to retain our future earnings, if any, to fund the development and growth of our business. Issuer Purchases of Equity Securities None. Item 6. [Reserved]. 83

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeCash Flows The following table shows a summary of our cash flows for the years ended December 31, 2023 and 2022 (in thousands): For the Year Ended December 31, 2023 2022 Net cash used in operating activities $ (73,018 ) $ (88,390 ) Net cash used in investing activities (7,352 ) (24,930 ) Net cash provided by financing activities 136,393 52,097 Net change in cash, cash equivalents and restricted cash $ 56,023 $ (61,223 ) Operating Activities For the year ended December 31, 2023, our net cash used in operating activities of $73.0 million primarily consisted of a net loss of $111.6 million, primarily attributable to our spending on research and development expenses.
Biggest changeIf we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. 93 Cash Flows The following table shows a summary of our cash flows for the years ended December 31, 2024 and 2023 (in thousands): For the Year Ended December 31, 2024 2023 Net cash used in operating activities $ (81,225 ) $ (73,018 ) Net cash used in investing activities (363 ) (7,352 ) Net cash provided by financing activities 76,684 136,393 Net change in cash, cash equivalents and restricted cash $ (4,904 ) $ 56,023 Operating Activities For the year ended December 31, 2024, our net cash used in operating activities of $81.2 million primarily consisted of a net loss of $89.3 million, primarily attributable to our spending on research and development expenses.
On August 14, 2023, we entered into a Securities Purchase Agreement, or the August 2023 Securities Purchase Agreement, with certain institutional and other accredited investors, or the Purchasers, pursuant to which we agreed to sell and issue to the Purchasers in a private placement transaction, or the August 2023 Private Placement, that closed on August 16, 2023: (i) 122,412,376 shares of our common stock and (ii) with respect to certain Purchasers, pre-funded warrants, or the Pre-Funded Warrants, to purchase 44,250,978 shares of common stock in lieu of shares of common stock.
On August 14, 2023, we entered into a Securities Purchase Agreement, or the August 2023 Securities Purchase Agreement, with certain institutional and other accredited investors, or the Purchasers, pursuant to which we agreed to sell and issue to the Purchasers in a private placement transaction, or the August 2023 Private Placement, that closed on August 16, 2023: (i) 122,412,376 shares of our common stock and (ii) with respect to certain Purchasers, pre-funded warrants, or the 2023 Pre-Funded Warrants, to purchase 44,250,978 shares of common stock in lieu of shares of common stock.
The fair value was determined to be $13.95 million or $1.92 per share. The $16.1 million difference between the $30.0 million paid by Astellas and the fair market value of shares issued was allocated to the transaction price of the Option Agreement.
The fair value was determined to be $13.95 million or $1.92 per share. The $16.1 95 million difference between the $30.0 million paid by Astellas and the fair market value of shares issued was allocated to the transaction price of the Option Agreement.
Our future funding requirements will depend on many factors, including, but not limited to: • the scope, progress, costs and results of discovery, preclinical development, laboratory testing and clinical trials for TSHA-102 and any current and future product candidates that we advance; • our ability to access sufficient additional capital on a timely basis and on favorable terms; • the extent to which we develop, in-license or acquire other product candidates and technologies in our gene therapy product candidate pipeline; • the costs and timing of process development and manufacturing scale-up activities associated with our product candidates and other programs as we advance them through preclinical and clinical development; • the number and development requirements of product candidates that we may pursue; • the costs, timing and outcome of regulatory review of our product candidates; • our headcount growth and associated costs as we expand our research and development capabilities and establish a commercial infrastructure; 95 • the costs and timing of future commercialization activities, including product manufacturing, marketing, sales, and distribution, for any of our product candidates for which we receive marketing approval; • the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; • the costs incurred in defending ourselves in any legal proceedings that we may be subject to; • the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; and • the costs of operating as a public company.
Our future funding requirements will depend on many factors, including, but not limited to: • the scope, progress, costs and results of discovery, preclinical development, laboratory testing and clinical trials for TSHA-102 and any current and future product candidates that we advance; • our ability to access sufficient additional capital on a timely basis and on favorable terms; • the extent to which we develop, in-license or acquire other product candidates and technologies in our gene therapy product candidate pipeline; • the costs and timing of process development and manufacturing scale-up activities associated with our product candidates and other programs as we advance them through preclinical and clinical development; • the number and development requirements of product candidates that we may pursue; • the costs, timing and outcome of regulatory review of our product candidates; • our headcount growth and associated costs as we expand our research and development capabilities and establish a commercial infrastructure; • the costs and timing of future commercialization activities, including product manufacturing, marketing, sales, and distribution, for any of our product candidates for which we receive marketing approval; • the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; • the costs incurred in defending ourselves in any legal proceedings that we may be subject to; • the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; and • the costs of operating as a public company.
Research and development expenses include or could include: • employee-related expenses, including salaries, bonuses, benefits, stock-based compensation, other related costs for those employees involved in research and development efforts; • license maintenance fees and milestone fees incurred in connection with various license agreements; • external research and development expenses incurred under agreements with consultants, contract research organizations, or CROs, investigative sites and consultants to conduct our preclinical studies; • costs related to manufacturing material for our preclinical studies and clinical trials, including fees paid to contract manufacturing organizations, or CMOs; • laboratory supplies and research materials; • costs related to compliance with regulatory requirements; and • facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent, maintenance of facilities, insurance and equipment.
Research and development expenses include or could include: • employee-related expenses, including salaries, bonuses, benefits, stock-based compensation, other related costs for those employees involved in research and development efforts; • license maintenance fees and milestone fees incurred in connection with various license agreements; • external research and development expenses incurred under agreements with consultants, contract research organizations, or CROs, investigative sites and consultants to conduct our preclinical studies; • costs related to manufacturing material for our preclinical studies and clinical trials, including fees paid to contract manufacturing organizations, or CMOs; • laboratory supplies and research materials; 87 • costs related to compliance with regulatory requirements; and • facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent, maintenance of facilities, insurance and equipment.
Subject to certain extensions, the GAN Option was exercisable from the Effective Date through a specified period of time following Astellas’ receipt of (i) the formal minutes from the 89 Type B end-of-Phase 2 meeting between us and the FDA in response to our meeting request sent to the FDA on September 19, 2022 for the 120 GAN Product, (ii) all written feedback from the FDA with respect to the Type B end-of-Phase 2 Meeting, and (iii) all briefing documents sent by us to the FDA with respect to the Type B end-of-Phase 2 Meeting.
Subject to certain extensions, the GAN Option was exercisable from the Effective Date through a specified period of time following Astellas’ receipt of (i) the formal minutes from the Type B end-of-Phase 2 meeting between us and the FDA in response to our meeting request sent to the FDA on September 19, 2022 for the 120 GAN Product, (ii) all written feedback from the FDA with respect to the Type B end-of-Phase 2 Meeting, and (iii) all briefing documents sent by us to the FDA with respect to the Type B end-of-Phase 2 Meeting.
We also anticipate that our general and administrative expenses as a result of payments for accounting, audit, legal, consulting services, as well as costs associated with maintaining compliance with Nasdaq listing rules and SEC requirements, director and officer liability insurance, investor and public relations activities and other expenses associated with operating as a public company may increase in the near future.
We anticipate that our general and administrative expenses as a result of payments for accounting, audit, legal, consulting services, as well as costs associated with maintaining compliance with Nasdaq listing rules and SEC requirements, director and officer liability insurance, investor and public relations activities and other expenses associated with operating as a public company may increase in the near future.
In April 2023, we entered into a securities purchase agreement, or the SSI Securities Purchase Agreement, with two affiliates of SSI Strategy Holdings LLC, or SSI, named therein, or the SSI Investors, pursuant to which we agreed to issue and sell to the SSI 94 Investors in a private placement, or the SSI Private Placement, 705,218 shares of our common stock, or the SSI Shares, and warrants, or the SSI Warrants, to purchase an aggregate of 525,000 shares of our common stock, or the Warrant Shares.
In April 2023, we entered into a securities purchase agreement, or the SSI Securities Purchase Agreement, with two affiliates of SSI Strategy Holdings LLC, or SSI, named therein, or the SSI Investors, pursuant to which we agreed to issue and sell to the SSI Investors in a private placement, or the SSI Private Placement, 705,218 shares of our common stock, or the SSI Shares, and warrants, or the SSI Warrants, to purchase an aggregate of 525,000 shares of our common stock, or the Warrant Shares.
While our significant accounting policies are more fully described in Note 2 to our audited consolidated financial statements located in Part IV, Item 15 of this Annual Report on Form 10-K, we believe the following are the critical accounting policies used in the preparation of our financial statements that require significant estimates and judgments.
While our significant accounting policies are more fully described in Note 2 to our audited consolidated financial statements located in Part IV, Item 15 of this Annual Report on Form 10-K, we believe 94 the following are the critical accounting policies used in the preparation of our financial statements that require significant estimates and judgments.
Royalties are payable on a licensed 88 product-by-licensed product and country-by-country basis until the latest of the expiration or revocation or complete rejection of the last licensed patent covering such licensed product in the country where the licensed product is sold, the loss of market exclusivity in such country where the product is sold, or, if no licensed product exists in such country and no market exclusivity exists in such country, ten years from first commercial sale of such licensed product in such country.
Royalties are payable on a licensed product-by-licensed product and country-by-country basis until the latest of the expiration or revocation or complete rejection of the last licensed patent covering such licensed product in the country where the licensed product is sold, the loss of market exclusivity in such country where the product is sold, or, if no licensed product exists in such country and no market exclusivity exists in such country, ten years from first commercial sale of such licensed product in such country.
In addition, we expect to incur legal fees in connection with the shareholder derivative lawsuit against certain of our current and former directors in the Court of Chancery of the State of Delaware. See “Part II, Item 8, Note 13—Commitments and Contingencies” in this Annual Report.
In addition, we expect to incur legal fees in connection with the shareholder derivative lawsuit against 88 certain of our current and former directors in the Court of Chancery of the State of Delaware. See “Part II, Item 8, Note 13—Commitments and Contingencies” in this Annual Report.
Our future expenses may vary significantly each period based on factors such as: • expenses incurred to conduct preclinical studies required to advance our product candidates into clinical development; • per patient trial costs, including based on the number of doses that patients received; • the number of patients who enroll in each trial; • the number of trials required for approval; • the number of sites included in the trials; • the countries in which the trials are conducted; • the length of time required to enroll eligible patients; • the drop-out or discontinuation rates of patients; • potential additional safety monitoring requested by regulatory agencies; • the duration of patient participation in the trials and follow-up; • the phase of development of the product candidate; • third-party contractors failing to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • the cost to manufacture our product candidates; • regulators or institutional review boards, or IRBs requiring that we or our investigators suspend or terminate clinical development for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; and • the efficacy and safety profile of our product candidates.
Our future expenses may vary significantly each period based on factors such as: • expenses incurred to conduct preclinical studies required to advance our product candidates into clinical development; • per patient trial costs, including based on the number of doses that patients received; • the number of patients who enroll in each trial; • the number of trials required for approval; • the number of sites included in the trials; • the countries in which the trials are conducted; • the length of time required to enroll eligible patients; • the drop-out or discontinuation rates of patients; • potential additional safety monitoring requested by regulatory agencies; • the duration of patient participation in the trials and follow-up; • the phase of development of the product candidate; • third-party contractors failing to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • the cost to manufacture our product candidates; • the ability of our CMOs to manufacture our product candidates; • regulators or institutional review boards requiring that we or our investigators suspend or terminate clinical development for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; and • the efficacy and safety profile of our product candidates.
Either party may terminate the agreement upon an uncured material breach of the agreement or insolvency of the other party. We may terminate the agreement for convenience upon specified prior written notice to Abeona. Option Agreement with Astellas On the Effective Date we entered into the Option Agreement with Astellas.
Either party may terminate the agreement upon an uncured material breach of the agreement or insolvency of the other party. We may terminate the agreement for convenience upon specified prior written notice to Abeona. 86 Option Agreement with Astellas On the Effective Date we entered into the Option Agreement with Astellas.
On August 12, 2021, or the Closing Date, we entered into a Loan and Security Agreement, or the Term Loan Agreement, with the lenders party thereto from time to time, or the Lenders and Silicon Valley Bank, as administrative agent and collateral agent for the Lenders, or the Agent.
On August 12, 2021, or the Closing Date, we entered into a Loan and Security Agreement, or the Term Loan Agreement, with the lenders party thereto from time to time, or the Lenders and Silicon Valley Bank, as administrative agent and collateral agent 90 for the Lenders, or the Agent.
Expected volatility is based on the historical 97 share volatility of a set of comparable publicly traded companies over a period of time equal to the expected term of the options. Due to the lack of historical exercise history, the expected term of our stock options is determined using the “simplified” method.
Expected volatility is based on the historical share volatility of a set of comparable publicly traded companies over a period of time equal to the expected term of the options. Due to the lack of historical exercise history, the expected term of our stock options is determined using the “simplified” method.
We calculated the discounted cash flows of the Success Fee liability, then adjusted for the probability of achievement of certain corporate development value-inflection milestones. 99 Recent Accounting Pronouncements See Note 2 to our audited consolidated financial statements located in Part IV, Item 15 of this Annual Report on Form 10-K for a description of recent accounting pronouncements applicable to our financial statements.
We calculated the discounted cash flows of the Success Fee liability, then adjusted for the probability of achievement of certain corporate development value-inflection milestones. 96 Recent Accounting Pronouncements See Note 2 to our audited consolidated financial statements located in Part IV, Item 15 of this Annual Report on Form 10-K for a description of recent accounting pronouncements applicable to our financial statements.
Impairment of Long-lived Assets Impairment of long-lived assets are the result of an asset group's carrying value exceeding the fair value. In November 2022, we decided not to continue building out our manufacturing facility in North Carolina. We recorded a non-cash, non-recurring 91 impairment charge related to the construction in progress and right-of-use lease assets at the manufacturing facility.
Impairment of Long-lived Assets Impairment of long-lived assets are the result of an asset group's carrying value exceeding the fair value. In November 2022, we decided not to continue building out our manufacturing facility in North Carolina. We recorded a non-cash impairment charge related to the construction in progress and right-of-use lease assets at the manufacturing facility.
No interest expense was recorded on the Trinity Term Loan for the period ended December 31, 2023 due to the election of the fair value option. Liquidity and Capital Resources Overview Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses.
No interest expense was recorded on the Trinity Term Loan for the period ended December 31, 2024 due to the election of the fair value option. Liquidity and Capital Resources Overview Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses.
No other shares of common stock have been issued and sold pursuant to the Sales Agreement as of December 31, 2023. On October 21, 2022, we entered into the Option Agreement with Astellas granting Astellas an exclusive option to obtain exclusive, worldwide, royalty and milestone-bearing rights and licenses related to TSHA-120 and TSHA-102.
No other shares of common stock have been issued and sold pursuant to the Sales Agreement as of December 31, 2024. On October 21, 2022, we entered into the Option Agreement with Astellas granting Astellas an exclusive option to obtain exclusive, worldwide, royalty and milestone-bearing rights and licenses related to TSHA-120 and TSHA-102.
No additional milestone payments were made or triggered in connection with this agreement during the year ended December 31, 2023. The Abeona Rett Agreement expires on a country-by-country and licensed product-by-licensed product basis upon the expiration of the royalty term of a licensed product in such country.
No additional milestone payments were made or triggered in connection with this agreement during the years ended December 31, 2023 and 2024. The Abeona Rett Agreement expires on a country-by-country and licensed product-by-licensed product basis upon the expiration of the royalty term of a licensed product in such country.
These leases are described in further detail in Note 5 to our audited consolidated financial statements located in Part IV, Item 15 of this Annual Report on Form 10-K. Our most significant purchase commitments consist of $11.7 million in cancellable purchase obligations to our CROs and other clinical trial vendors.
These leases are described in further detail in Note 5 to our 92 audited consolidated financial statements located in Part IV, Item 15 of this Annual Report on Form 10-K. Our most significant purchase commitments consist of $12.5 million in cancellable purchase obligations to our CROs and other clinical trial vendors.
Components of Results of Operations Revenue Revenue for the year ended December 31, 2023 was derived from the Astellas Transactions. We recognize revenue as research and development activities related to our Rett program are performed.
Components of Results of Operations Revenue Revenue for the years ended December 31, 2024 and 2023 was derived from the Astellas Transactions. We recognize revenue as research and development activities related to our Rett program are performed.
If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts. As of December 31, 2023, our material cash requirements consisted of $31.8 million in total lease payments under our noncancelable leases for equipment, laboratory space and office space.
If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts. As of December 31, 2024, our material cash requirements consisted of $28.6 million in total lease payments under our noncancelable leases for equipment, laboratory space and office space.
Through December 31, 2023, we have funded our operations primarily through: (i) the sale of equity, raising an aggregate of $589.0 million of gross proceeds from our initial public offering, or the IPO, sales of common stock pursuant to our Sales Agreement (as defined below), our October 2022 follow-on offering and our 2023 private placements; (ii) pre-IPO private placements of our convertible preferred stock; (iii) our Term Loan Agreement and subsequently the Trinity Term Loan Agreement (each as defined below); and (iv) the Astellas Transactions (as defined below).
Through December 31, 2024, we have funded our operations primarily through: (i) the sale of equity, raising an aggregate of $671.0 million of gross proceeds from our initial public offering, or the IPO, sales of common stock pursuant to our Sales Agreement (as defined below), our October 2022 follow-on offering, our 2023 private placement and our June 2024 Offering (as defined below); (ii) pre-IPO private placements of our convertible preferred stock; (iii) our Term Loan Agreement (as defined below) and subsequently the Trinity Term Loan Agreement (as defined below); and (iv) the Astellas Transactions.
The Trinity Term Loan Agreement provides for, on the 93 Trinity Closing Date, $40.0 million aggregate principal amount of term loans, or, collectively, the Trinity Term Loans. We drew the Trinity Term Loans in full on the Trinity Closing Date.
The Trinity Term Loan Agreement provided for, on the Trinity Closing Date, $40.0 million aggregate principal amount of term loans, or, collectively, the Trinity Term Loans. We drew the Trinity Term Loans in full on the Trinity Closing Date.
Additional cash used in operating activities of $18.0 million, resulting from changes in operating assets and liabilities was primarily due to a decrease in deferred revenue related to the Astellas Transactions.
Additional cash used in operating activities of $12.4 million, resulting from changes in operating assets and liabilities was primarily due to a decrease in deferred revenue related to the Astellas Transactions.
Since our inception, our operations have focused on organizing and staffing our company, business planning, raising capital and entering into collaboration agreements for conducting preclinical and clinical development activities for our product candidates. Both of our lead product candidates are still in the clinical stage.
Since our inception, our operations have focused on organizing and staffing our company, business planning, raising capital and entering into collaboration agreements for conducting preclinical and clinical development activities for our product candidates. Our lead product candidate is still in the clinical stage.
The loan repayment schedule provided for interest only payments until August 31, 2024, followed by consecutive monthly payments of principal and interest. All unpaid principal and accrued and unpaid interest with respect to each term loan was due and payable in full on August 1, 2026.
The loan repayment schedule provided for interest only payments until August 31, 2024, followed by consecutive monthly payments of principal and interest. All unpaid principal and accrued and unpaid interest with respect to each term loan was due and payable in full on August 1, 2026. On the Trinity Closing Date, we entered the Trinity Term Loan Agreement.
The expense is primarily due to the substantial increase in the fair value of the common stock underlying the Pre-Funded Warrants from the date of issuance through the date the warrants were reclassified into equity, which resulted in a non-recurring expense of $34.5 million.
The expense for the year ended December 31, 2023 is primarily due to the substantial increase in the fair value of the common stock underlying the Pre-Funded Warrants from the date of issuance through the date the warrants were reclassified into equity, which resulted in a non-recurring expense of $34.5 million.
Other Income (Expense) Change in fair value of warrant liability Change in fair value of warrant liability was a non-cash expense totaling $34.7 million for the year ended December 31, 2023 related to the Pre-Funded Warrants and SSI Warrants (as defined below).
Other Income (Expense) Change in fair value of warrant liability Change in fair value of warrant liability was a non-cash gain totaling less than $0.1 million for the year ended December 31, 2024 related to the SSI Warrants (as defined below) compared to a non-cash expense totaling $34.7 million for the year ended December 31, 2023 related to the 2023 Pre-Funded Warrants and the SSI Warrants.
In connection with the Abeona CLN1 Agreement, we obtained an exclusive, worldwide, royalty-bearing license, with the right to grant sublicenses under certain patents, know-how and materials originally developed by the University of North Carolina at Chapel Hill and Abeona to research, develop, manufacture, have manufactured, use, and commercialize licensed products for gene therapy for the prevention, treatment, or diagnosis of CLN1 Disease (one of the forms of Batten disease) in humans.
In connection with the Abeona CLN1 Agreement, we obtained an exclusive, worldwide, royalty-bearing license, with the right to grant sublicenses under certain patents, know-how and materials originally developed by the University of North Carolina at Chapel Hill and Abeona to research, develop, manufacture, have manufactured, use, and commercialize licensed products for gene therapy for the prevention, treatment, or diagnosis of CLN1 Disease (one of the forms of Batten disease) in humans. 85 Subject to certain obligations of Abeona, we are obligated to use commercially reasonable efforts to develop at least one product and commercialize at least one product in the United States.
On October 26, 2022, we entered into the Underwriting Agreement, to issue and sell 14,000,000 shares of our common stock, par value $0.00001 per share, in an underwritten public offering pursuant to effective registration statement on Form S-3 and a related prospectus and prospectus supplement.
We also granted Astellas certain registration rights with respect to the Private Placement Shares. 91 On October 26, 2022, we entered into the Underwriting Agreement, to issue and sell 14,000,000 shares of our common stock, par value $0.00001 per share, in an underwritten public offering pursuant to effective registration statement on Form S-3 and a related prospectus and prospectus supplement.
Financing Activities During the year ended December 31, 2023, financing activities provided $136.4 million of cash, which was primarily attributable to the proceeds from the August 2023 Private Placement.
Financing Activities During the year ended December 31, 2024, financing activities provided $76.7 million of cash, which was primarily attributable to the closing of the June 2024 Offering. During the year ended December 31, 2023, financing activities provided $136.4 million of cash, which was primarily attributable to the proceeds from the August 2023 Private Placement.
Change in fair value of term loan We elected the fair value option for the Trinity Term Loan and changes to fair value, other than changes that are directly attributable to instrument-specific credit risk, are recorded as a component of other income (expense). The change in fair value was $1.5 million for the year ended December 31, 2023.
Change in fair value of term loan We elected the fair value option for the Trinity Term Loan and changes to fair value, other than changes that are directly attributed to instrument-specific credit risk, were recorded as a component of other income (expense). The change in fair value was $4.6 million for the year ended December 31, 2024.
Through December 31, 2023, we have funded our operations with $589.0 million in gross proceeds from equity financings, including from pre-IPO private placements of convertible preferred stock, our IPO, and subsequent sales of common stock in public and private securities offerings, our term loans and the Astellas Transactions.
Through December 31, 2024, we have funded our operations primarily through equity financings, raising an aggregate of $671.0 million in gross proceeds from equity financings, including from pre-IPO private placements of convertible preferred stock, our IPO, and subsequent sales of common stock in public and private securities offerings, our term loans and the Astellas Transactions.
The Private Placement closed on October 24, 2022. Pursuant to the Securities Purchase Agreement, in connection with the Private Placement, Astellas has the right to designate one individual to attend all meetings of the Board in a non-voting observer capacity. We also granted Astellas certain registration rights with respect to the Private Placement Shares.
The Private Placement closed on October 24, 2022. Pursuant to the Securities Purchase Agreement, in connection with the Private Placement, Astellas has the right to designate one individual to attend all meetings of the Board in a non-voting observer capacity.
Revenue for the years ended December 31, 2023 and 2022 was derived entirely from the Astellas Transactions. The revenue recorded for the year ended December 31, 2023 is the result of Rett syndrome research and development activities performed during the year of $13.2 million and the expiration of the material right associated with the GAN Option of $2.3 million.
The revenue recorded for the year ended December 31, 2023 is the result of Rett syndrome research and development activities performed during the year of $13.2 million and the expiration of the material right associated with the GAN Option of $2.3 million.
For the year ended December 31, 2022, our net cash used in operating activities of $88.4 million primarily consisted of a net loss of $166.0 million, primarily attributable to our spending on research and development expenses.
For the year ended December 31, 2023, our net cash used in operating activities of $73.0 million primarily consisted of a net loss of $111.6 million, primarily attributable to our spending on research and development expenses.
Investing Activities During the year ended December 31, 2023, investing activities used $7.4 million of cash primarily attributable to capital expenditures related to the close out of our in-house manufacturing facility project and payment of a milestone license fee. 96 During the year ended December 31, 2022, investing activities used $24.9 million of cash primarily attributable to up-front license fee payments of $4.3 million and capital expenditures related to our North Carolina manufacturing facility.
During the year ended December 31, 2023, investing activities used $7.4 million of cash primarily attributable to capital expenditures related to the close out of our in-house manufacturing facility project and payment of a milestone license fee.
The Trinity Term Loans contains various embedded features and the election of the fair value option allows us to bypass analysis of potential embedded derivatives and further analysis of bifurcation of any recognized financial liabilities.
We determined that we are eligible to elect the fair value option under ASC 825, Financial Instruments . The Trinity Term Loans contains various embedded features and the election of the fair value option allows us to bypass analysis of potential embedded derivatives and further analysis of bifurcation of any recognized financial liabilities.
We reduced our research and development and general and administrative 90 spend from 2021 to 2022 but plan to increase our research and development expenses, particularly with respect to the Rett clinical trials, for the foreseeable future as we continue the development of our product candidates and manufacturing processes and conduct discovery and research activities for our preclinical programs.
We have increased, and expect to continue to increase for the foreseeable future, our research and development expenses, particularly with respect to our Rett clinical trials, as we continue the development of our product candidates and manufacturing processes and conduct discovery and research activities for our preclinical programs.
The assessment of our ability to meet our future obligations is inherently judgmental, subjective and susceptible to change. Because of the numerous risks and uncertainties associated with research, development and commercialization of biological products, we are unable to estimate the exact amount of our operating capital requirements.
Because of the numerous risks and uncertainties associated with research, development and commercialization of biological products, we are unable to estimate the exact amount of our operating capital requirements.
We do not know when, or if, we will generate any revenue from our product candidates, and we do not expect to generate significant revenue unless and until we obtain regulatory approval of, and commercialize, our product candidates. Our expenses decreased from 2021 to 2022 as a result of our program prioritization efforts and reduced headcount.
We do not know when, or if, we will generate any revenue from our product candidates, and we do not expect to generate significant revenue unless and until we obtain regulatory approval of, and commercialize, our product candidates.
Results of Operations Results of Operations for the Year Ended December 31, 2023 and 2022 The following table summarizes our results of operations for the years ended December 31, 2023 and 2022 (in thousands): For the Year Ended December 31, 2023 2022 Revenue $ 15,451 $ 2,502 Operating expenses: Research and development 56,778 91,169 General and administrative 30,047 37,360 Impairment of long-lived assets 1,065 36,420 Total operating expenses 87,890 164,949 Loss from operations (72,439 ) (162,447 ) Other income (expense): Change in fair value of warrant liability (34,718 ) — Loss on debt extinguishment (1,398 ) — Change in fair value of term loan (1,538 ) — Interest income 3,572 249 Interest expense (4,998 ) (3,798 ) Other expense (47 ) (18 ) Total other expense, net (39,127 ) (3,567 ) Net loss $ (111,566 ) $ (166,014 ) Revenue Revenue was $15.5 million for the year ended December 31, 2023, compared to $2.5 million for the year ended December 31, 2022.
Results of Operations Results of Operations for the Year Ended December 31, 2024 and 2023 The following table summarizes our results of operations for the years ended December 31, 2024 and 2023 (in thousands): For the Year Ended December 31, 2024 2023 Revenue $ 8,333 $ 15,451 Operating expenses: Research and development 66,001 56,778 General and administrative 28,953 30,047 Impairment of long-lived assets 4,838 1,065 Total operating expenses 99,792 87,890 Loss from operations (91,459 ) (72,439 ) Other income (expense): Change in fair value of warrant liability 16 (34,718 ) Change in fair value of term loan (4,583 ) (1,538 ) Loss on debt extinguishment — (1,398 ) Interest income 6,940 3,572 Interest expense (102 ) (4,998 ) Other expense (110 ) (47 ) Total other income (expense), net 2,161 (39,127 ) Net loss $ (89,298 ) $ (111,566 ) Revenue Revenue was $8.3 million for the year ended December 31, 2024, compared to $15.5 million for the year ended December 31, 2023.
During the year ended December 31, 2023, we determined that the total estimated costs to be incurred to satisfy the performance obligation associated with the Rett research and development activities had increased from the cost estimate used for the year ended December 31, 2022. 98 Fair Value Option On November 13, 2023 we entered into the Trinity Term Loan Agreement with the Trinity Lenders.
During the year ended December 31, 2024, we determined that the total estimated costs to be incurred to satisfy the performance obligation associated with the Rett research and development activities had increased from the cost estimate used for the year ended December 31, 2023.
The increase of $1.2 million was primarily attributable to higher interest expense incurred under the Term Loan Agreement with Silicon Valley Bank due to higher interest rates on the Term Loan during the year ended December 31, 2023 compared to the prior year.
Interest expense Interest expense was $0.1 million for the year ended December 31, 2024, compared to $5.0 million for the year ended December 31, 2023. The decrease of $4.9 million was primarily attributable to interest expense incurred under the Term Loan Agreement with Silicon Valley Bank during the year ended December 31, 2023.
Interest income Interest income was $3.6 million for the year ended December 31, 2023 compared to $0.2 million for the year ended December 31, 2022. The increase in income is primarily attributable to dividends earned from our money market fund and interest earned on our savings account following the investment of proceeds raised in our August 2023 Private Placement.
The increase in income is primarily attributable to dividends earned from our money market fund and interest earned on our savings account following the investment of proceeds raised in our August 2023 Private Placement and our June 2024 Offering.
We are obligated to pay Abeona up to $26.0 million in regulatory-related milestones and up to $30.0 million in sales-related milestones per licensed product and high single-digit royalties on net sales of licensed products.
In connection with the license grant, we paid Abeona a one-time upfront license fee of $3.0 million during fiscal year 2020. We are obligated to pay Abeona up to $26.0 million in regulatory-related milestones and up to $30.0 million in sales-related milestones per licensed product and high single-digit royalties on net sales of licensed products.
As of December 31, 2023, we had cash and cash equivalents of $143.9 million.
As of December 31, 2024, we had cash and cash equivalents of $139.0 million.
Interest expense Interest expense was $5.0 million for the year ended December 31, 2023, compared to $3.8 million for the year ended December 31, 2022.
Interest income Interest income was $6.9 million for the year ended December 31, 2024 compared to $3.6 million for the year ended December 31, 2023.
Our net losses were $111.6 million for the year ended December 31, 2023 and $166.0 million for the year ended December 31, 2022. As of December 31, 2023, we had an accumulated 87 deficit of $513.0 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future.
As of December 31, 2024, we had an accumulated deficit of $602.3 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future.
Funding Requirements To date, we have not generated any revenues from the commercial sale of approved drug products, and we do not expect to generate substantial revenue for at least the next few years.
The total net proceeds received from the June 2024 Offering were $76.7 million after deducting underwriting discounts, commissions and other offering expenses payable by us. Funding Requirements To date, we have not generated any revenues from the commercial sale of approved drug products, and we do not expect to generate substantial revenue for at least the next few years.
We may terminate the agreement for convenience upon specified prior written notice to Abeona.
Either party may terminate the agreement upon an uncured material breach of the agreement or insolvency of the other party. We may terminate the agreement for convenience upon specified prior written notice to Abeona.
The Trinity Term Loan Agreement provides for, on the Trinity Closing Date, $40.0 million aggregate principal amount of Trinity Term Loans. We drew the Trinity Term Loans in full on the Trinity Closing Date. We determined that we are eligible to elect the fair value option under ASC 825, Financial Instruments .
Fair Value Option On November 13, 2023 we entered into the Trinity Term Loan Agreement with the Trinity Lenders. The Trinity Term Loan Agreement provides for, on the Trinity Closing Date, $40.0 million aggregate principal amount of Trinity Term Loans. We drew the Trinity Term Loans in full on the Trinity Closing Date.
The interest rate applicable to the Trinity Term Loans is the greater of (a) the WSJ Prime Rate plus 4.50% or (b) 12.75% per annum.
The Trinity Term Loan Agreement provides for, on the Trinity Closing Date, $40.0 million aggregate principal amount of the Trinity Term Loans. We drew the Trinity Term Loans in full on the Trinity Closing Date. The interest rate applicable to the Trinity Term Loans is the greater of (a) the WSJ Prime Rate plus 4.50% or (b) 12.75% per annum.
We believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital requirements into 2026. We will require additional capital to fund the research and development of our product candidates, to fund our manufacturing activities, to fund precommercial activities of our programs and for working capital and general corporate purposes.
We believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital requirements into the fourth quarter of 2026.
We leverage this experience, our manufacturing process and a clinically and commercially proven AAV9 capsid in an effort to rapidly translate treatments from bench to bedside.
We leverage this experience, our manufacturing process and a clinically and commercially proven AAV9 capsid in an effort to rapidly translate treatments from bench to bedside. We currently are conducting two Phase 1/2 clinical trials for TSHA-102: an adolescent/adult study in the United States and Canada and a pediatric study in the United States.
In February 2024, we received Innovative Licensing and Access Pathway (ILAP) designation for TSHA-102 from U.K. MHRA. The ILAP aims to facilitate patient access to novel treatments by accelerating time to market through opportunities for enhanced engagements with U.K. regulatory and other stakeholders. We have a limited operating history.
The ILAP aims to facilitate patient access to novel treatments by accelerating time to market through opportunities for enhanced engagements with U.K. regulatory authorities and other stakeholders. In April 2024, the FDA granted Regenerative Medicine Advanced Therapy, or RMAT, designation for TSHA-102 in Rett syndrome.
The revenue recorded for the year ended December 31, 2022 is the result of Rett research and development activities performed from November 2022 through December 2022. Research and Development Expenses Research and development expenses were $56.8 million for the year ended December 31, 2023, compared to $91.2 million for the year ended December 31, 2022.
Revenue for the years ended December 31, 2024 and 2023 was derived entirely from the Astellas Transactions. The revenue recorded for the year ended December 31, 2024 is the result of Rett syndrome research and development activities performed during the year of $8.3 million.
Accordingly, the information contained herein may be different than you might obtain from other public companies in which you hold equity interests.
We have taken advantage of certain reduced reporting requirements in this Annual Report on Form 10-K and our other filings with the SEC. Accordingly, the information contained herein may be different than you might obtain from other public companies in which you hold equity interests.
In December 2022, we recorded a non-cash, non-recurring impairment charge of $36.4 million related to our manufacturing facility which will be marketed for sale or sub-lease.
Impairment of Long-lived Assets We recorded a non-cash impairment charge of $4.8 million related to our manufacturing facility and assets previously classified as held for sale which were marketed for sale or sublease for the year ended December 31, 2024.
We submitted a clinical trial application, or CTA, to the United Kingdom’s Medicines and Healthcare Products Regulatory Agency, or MHRA, for pediatric patients with Rett syndrome and submitted an IND application for pediatric patients with Rett syndrome to the FDA for TSHA-102 early in the third quarter of 2023.
We also received CTA clearance from the United Kingdom’s Medicines and Healthcare Products Regulatory Agency, or U.K. MHRA, in early 2024 for pediatric patients with Rett syndrome. In February 2024, we received Innovative Licensing and Access Pathway, or ILAP, designation for TSHA-102 from the U.K. MHRA.
The proceeds of the Trinity Term Loans (as defined below) were used to repay our obligations under the Term Loan Agreement. The Term Loan Agreement was terminated concurrently with entry into the Trinity Term Loan Agreement. Since our inception, we have incurred significant operating losses.
The Term Loan Agreement with Silicon Valley Bank was terminated concurrently with entry into the Trinity Term Loan Agreement. Since our inception, we have incurred significant operating losses. Our net losses were $89.3 million for the year ended December 31, 2024 and $111.6 million for the year ended December 31, 2023.
The net loss of $166.0 million was partially offset by $59.1 million in adjustments for non-cash items as a result of the $36.4 million impairment charge related to the North Carolina manufacturing facility and stock-based compensation expense of $18.0 million.
The net loss of $89.3 million was partially offset by $20.5 million in adjustments for non-cash items and other adjustments to reconcile net loss to net cash used in operating activities, primarily due to stock-based compensation expense and impairment of long-lived assets.
The Abeona CLN1 Agreement expires on a country-by-country and licensed product-by-licensed product basis upon the expiration of the royalty term of a licensed product in such country. Either party may terminate the agreement upon an uncured material breach of the agreement or insolvency of the other party.
In December 2021 a regulatory milestone was triggered in connection with the Abeona CLN1 Agreement. No additional milestone payments were made or triggered during the years ended December 31, 2023 and 2024. The Abeona CLN1 Agreement expires on a country-by-country and licensed product-by-licensed product basis upon the expiration of the royalty term of a licensed product in such country.
The net loss was also partially offset by a source of cash of $18.5 million from the change in our operating assets and liabilities, primarily resulting from an increase in deferred revenue related to the Astellas Transactions.
Additional cash used in operating activities of $18.0 million, resulting from changes in operating assets and liabilities was primarily due to a decrease in deferred revenue related to the Astellas Transactions. Investing Activities During the year ended December 31, 2024, investing activities used $0.4 million of cash primarily attributable to the purchase of lab equipment.
This was partially offset by an increase of $11.9 million in expenses related to ongoing clinical trial efforts in the Rett REVEAL adolescent/adult and pediatric studies. General and Administrative Expenses General and administrative expenses were $30.0 million for the year ended December 31, 2023, compared to $37.4 million for the year ended December 31, 2022.
The $9.2 million increase was primarily driven by higher GMP batch activities during the year ended December 31, 2024, which is representative of the intended commercial manufacturing process for TSHA-102 in Rett syndrome and additional clinical trial activities in the TSHA-102 Phase 1/2 REVEAL clinical trials for the year ended December 31, 2024. 89 General and Administrative Expenses General and administrative expenses were $29.0 million for the year ended December 31, 2024, compared to $30.0 million for the year ended December 31, 2023.
In September 2023, we recorded a non-cash, non-recurring impairment charge related to equipment classified as held for sale.
We recorded non-cash impairment charges of $1.1 million related to assets held for sale and construction in progress for the year ended December 31, 2023.
Removed
In March 2022, we announced strategic pipeline prioritization initiatives focused on giant axonal neuropathy, or GAN, and Rett syndrome, and we have subsequently further paused substantially all other research and development activities to increase operational efficiency.
Added
In addition, we received approval to expand the pediatric study into the United Kingdom in 2024 following clearance of the CTA by the U.K. MHRA and received approval to expand the pediatric study into Canada in 2024 following clearance of the CTA by Health Canada.
Removed
Further, in September 2023, we announced that subsequent to the receipt of Type C meeting feedback from the United States Food and Drug Administration, or FDA, regarding a registrational path for TSHA-120, we were discontinuing the development of our TSHA-120 program in evaluation for the treatment of GAN.
Added
In early 2025, we announced the completion of dosing of the 10 patients in Part A, the dose escalation portion of both REVEAL Phase 1/2 trials, that is expected to serve as primary dataset to support advancement toward the Part B registrational trial.
Removed
We initiated the transfer of the FDA Investigational New Drug, or IND, application and investigational clinical trial material for TSHA-120 in GAN to clinical trial collaborator National Institute of Neurological Disorders and Stroke (NINDS), creating an opportunity for continued clinical evaluation of TSHA-120 in GAN.
Added
Cohort one (low dose cohort of 5.7x10 14 total vg) consists of four patients and cohort two (high dose cohort of 1x10 15 total vg) consists of six patients across both REVEAL trials.
Removed
Additionally, we initiated discussions with the originating advocacy organization regarding TSHA-120 in an effort to transfer rights back to the advocacy organization to move the program forward.
Added
In early 2025, we announced TSHA-102 was generally well-tolerated with no serious adverse events (SAEs) or dose-limiting toxicities (DLTs) related to TSHA-102 in the 10 pediatric, adolescent and adult patients dosed across the two REVEAL Phase 1/2 trials as of the February 17, 2025, data cutoff.
Removed
We are evaluating TSHA-102 in the REVEAL Phase 1/2 clinical trial, which is an open-label, dose escalation, randomized, multicenter study that is examining the safety and efficacy of TSHA-102 in adult female patients with Rett syndrome. We dosed the first two adult patients with Rett syndrome in 2023.
Added
We have received orphan drug designation and rare pediatric disease designation from the United States Food and Drug Administration, or FDA, and orphan drug designation from the European Commission for TSHA-102 for the treatment of Rett syndrome. We also received Fast Track Designation from the FDA for TSHA-102 for the treatment of Rett syndrome.
Removed
There have been no treatment-emergent serious adverse events as of the 35-week assessment post-treatment for the first Rett adult patient treated. In addition, there have been no treatment-emergent serious adverse events as of the 19-week assessment post-treatment for the second Rett adult patient treated.
Added
Sponsor companies receiving RMAT designation can benefit from increased interactions with the FDA involving senior managers, with the goal of expediting drug development. We completed a CMC-focused Type D with the FDA in the fourth quarter of 2024.

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Other TSHA 10-K year-over-year comparisons