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What changed in Voyager Therapeutics, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Voyager Therapeutics, 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.

+685 added−631 removedSource: 10-K (2024-12-31) vs 10-K (2024-02-28)

Top changes in Voyager Therapeutics, Inc.'s 2024 10-K

685 paragraphs added · 631 removed · 453 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

195 edited+99 added−83 removed213 unchanged
Biggest changePatents that grant from these patent families are generally expected to commence expiration in 2039, 2041, and 2042, subject to possible patent term extensions. 33 Table of Contents Trademark Protection ​ We own trademark registrations in the United States for the marks VOYAGER THERAPEUTICS, the VOYAGER THERAPEUTICS Logo, and VOYAGER (with design elements), and registrations in the European Union and United Kingdon for VOYAGER (with design elements) for “pharmaceutical research and development in the field of gene therapy.” We also own registrations in the United States, the European Union, and United Kingdom for VOYAGER (with design elements), and pending applications in the United States for VOYAGER and VOYAGER (with design elements) for goods including, among other, biological preparations for gene therapy for the treatment of various diseases.
Biggest changePatents that grant from these patent families are generally expected to commence expiration in 2039, 2041, and 2042, subject to possible patent term extensions. ​ Trademark Protection ​ We have registered trademarks and service marks or pending trademarks and service mark applications in the United States and a number of other countries for the in the marks VOYAGER and VOYAGER (with design elements), which we presently use or may use in connection with our pharmaceutical research and development services and our biological preparations for gene therapy for the treatment of various diseases. ​ We also own registrations in the United States and United Kingdom, for the mark TRACER for services including, among others, “research and development of platform technologies for genetic delivery of therapies and pharmaceutical via adeno-associated virus (AAV) capsids.” 32 Table of Contents ​ In connection with the ongoing development and advancement of our products and services in the U.S. and in various international jurisdictions, we routinely seek to create protection for our marks and enhance their value by pursuing trademarks and service marks where available and when appropriate.
In the event we exercise our 2023 Co-Co Option, the parties have also agreed that Neurocrine is entitled to receive (in addition to its 50% share of profits) 50% of our share of profits until our obligation to repay 50% of all development costs incurred by Neurocrine in connection with the GBA1 Program prior to such exercise have been paid off out of such 50% of our share of profits.
In the event we exercise our 2023 Co-Co Option, the parties have also agreed that Neurocrine is entitled to receive (in addition to its 50% share of profits) 50% of our share of profits until our obligation to repay 50% of all development costs incurred by Neurocrine in connection with the GBA1 Program prior to such exercise have been paid off out of our 50% share of profits.
If a working group or subcommittee cannot agree on a matter within its purview within a specified time, such matter is to be referred sequentially to the JSC and then the executive officers of the parties.
If a working group or subcommittee cannot agree on a matter within its purview within a specified time, such matter is to be referred sequentially to the JSC and then the executive officers of the parties.
Candidate Selection The parties have committed to agree on a list of up to eight target genes, or Targets, from which Neurocrine has the right to nominate Targets for the two 2019 Discovery Programs. The Targets nominated for the 2019 Discovery Programs must be approved by a consensus of the JSC or the executive officers.
Candidate Selection The parties have committed to agree on a list of up to eight target genes from which Neurocrine has the right to nominate targets for the two 2019 Discovery Programs. The targets nominated for the 2019 Discovery Programs must be approved by a consensus of the JSC or the executive officers.
The FDA will seek to ensure the sponsor of a breakthrough therapy product candidate receives intensive guidance on an efficient development program, intensive involvement of senior managers and experienced staff on a proactive, collaborative and cross-disciplinary review and rolling review. ● Priority review .
The FDA will seek to ensure the sponsor of a breakthrough therapy product candidate receives intensive guidance on an efficient development program, involvement of senior managers and experienced staff on a proactive, collaborative and cross-disciplinary review and rolling review. ​ ● Priority review .
From and after the first IND application filing for the Novartis HD Program, the parties have agreed that Novartis will assume sole responsibility for the development and commercialization of Novartis HD Program Products, including all further preclinical and clinical development and any commercialization of the Novartis HD Program products and product candidates. ​ With respect to each of the Novartis SMA Program Products and Novartis HD Program Products, Novartis is obligated to use commercially reasonable efforts to develop and obtain regulatory approval for at least one of each such product in the United States and in certain other international markets specified in the 2023 Novartis Collaboration Agreement. ​ Intellectual Property ​ Under the terms of the 2023 Novartis Collaboration Agreement, each party owns the entire right, title, and interest in and to all patents or know-how controlled by such party and existing as of or before the 2023 Novartis Collaboration Agreement Effective Date, or invented, authored, discovered, developed, created or acquired solely by or on behalf of such party after the 2023 Novartis Collaboration Effective Date outside of its activities under the 2023 Novartis Collaboration Agreement. ​ We and Novartis have further agreed that all know-how created by either or both parties in the performance of the activities as undertaken pursuant to the performance of the Novartis HD Program plan or in the course of development, manufacture and commercialization of Novartis HD Program Products and all patent rights covering such know-how, or collectively, the 2023 Novartis Arising IP, is to be owned as follows: (i) we solely own all 2023 Novartis Arising IP comprised of know-how or other intellectual property rights related to any TRACER Capsid, including the use or manufacture of any TRACER Capsid, and that is created jointly by our representatives and representatives of Novartis or created solely by representatives of Novartis through the use of our confidential information; and (ii) with respect to all other 2023 Novartis Arising IP, (A) we solely own all such 2023 Novartis Arising IP created solely by our representatives, (B) Novartis solely owns all such 2023 Novartis Arising IP created solely by Novartis representatives; and (C) the parties jointly own all such 2023 Novartis Arising IP created jointly by representatives of both Novartis and us. ​ Exclusivity ​ Subject to certain limitations and exceptions, we have agreed during the 2023 Novartis Collaboration Term not to (i) conduct any wholly-owned program or program on behalf of a third party that is directed to the development or commercialization of any capsids for use in any therapeutic product containing a capsid in combination with a payload designed to have therapeutic effect on the gene agreed between the parties as the target of the Novartis SMA Program when packaged into a capsid and delivered to the appropriate cells; (ii) develop or commercialize any competing Novartis HD Program Product intended to have a therapeutic effect on genes agreed between the parties as the targets of the Novartis HD Program; or (iii) grant any third party any right, license, option, covenant not to assert or similar right, under any patents or know-how controlled by us or our affiliates (excluding an acquiring entity) as of the 2023 Novartis Collaboration Agreement Effective Date or during the 2023 Novartis Collaboration Term, that would enable a third party to do any of the foregoing. ​ 15 Table of Contents Termination ​ Unless earlier terminated, with respect to any licensed product(s) under the 2023 Novartis Collaboration Agreement, on a country-by-country basis, the 2023 Novartis Collaboration Agreement expires upon the expiration of the last-to-expire royalty term with respect to such licensed product in such country in the territory, or the 2023 Novartis Collaboration Term.
From and after the first IND application filing for the Novartis HD Program, the parties have agreed that Novartis will assume sole responsibility for the development and 14 Table of Contents commercialization of Novartis HD Program Products, including all further preclinical and clinical development and any commercialization of the Novartis HD Program products and product candidates. ​ With respect to each of the Novartis SMA Program Products and Novartis HD Program Products, Novartis is obligated to use commercially reasonable efforts to develop and obtain regulatory approval for at least one of each such product in the United States and in certain other international markets specified in the 2023 Novartis Collaboration Agreement. ​ Intellectual Property ​ Under the terms of the 2023 Novartis Collaboration Agreement, each party owns the entire right, title, and interest in and to all patents or know-how controlled by such party and existing as of or before the 2023 Novartis Collaboration Agreement Effective Date, or invented, authored, discovered, developed, created or acquired solely by or on behalf of such party after the 2023 Novartis Collaboration Effective Date outside of its activities under the 2023 Novartis Collaboration Agreement. ​ We and Novartis have further agreed that all know-how created by either or both parties in the performance of the activities as undertaken pursuant to the performance of the Novartis HD Program plan or in the course of development, manufacture and commercialization of Novartis HD Program Products and all patent rights covering such know-how, or collectively, the 2023 Novartis Arising IP, is to be owned as follows: (i) we solely own all 2023 Novartis Arising IP comprised of know-how or other intellectual property rights related to any TRACER Capsid, including the use or manufacture of any TRACER Capsid, and that is created jointly by our representatives and representatives of Novartis or created solely by representatives of Novartis through the use of our confidential information; and (b) with respect to all other 2023 Novartis Arising IP, (i) we solely own all such 2023 Novartis Arising IP created solely by our representatives, (ii) Novartis solely owns all such 2023 Novartis Arising IP created solely by Novartis representatives; and (iii) the parties jointly own all such 2023 Novartis Arising IP created jointly by representatives of both Novartis and us. ​ Exclusivity ​ Subject to certain limitations and exceptions, we have agreed during the 2023 Novartis Collaboration Term not to (a) conduct any wholly-owned program or program on behalf of a third party that is directed to the development or commercialization of any capsids for use in any therapeutic product containing a capsid in combination with a payload designed to have therapeutic effect on the gene agreed between the parties as the target of the Novartis SMA Program when packaged into a capsid and delivered to the appropriate cells; (b) develop or commercialize any competing Novartis HD Program Product intended to have a therapeutic effect on genes agreed between the parties as the targets of the Novartis HD Program; or (c) grant any third party any right, license, option, covenant not to assert or similar right, under any patents or know-how controlled by us or our affiliates (excluding an acquiring entity) as of the 2023 Novartis Collaboration Agreement Effective Date or during the 2023 Novartis Collaboration Term, that would enable a third party to do any of the foregoing. ​ 15 Table of Contents Termination ​ Unless earlier terminated, with respect to any licensed product(s) under the 2023 Novartis Collaboration Agreement, on a country-by-country basis, the 2023 Novartis Collaboration Agreement expires upon the expiration of the last-to-expire royalty term with respect to such licensed product in such country in the territory, or the 2023 Novartis Collaboration Term.
Generally, pivotal trials are Phase 3 trials, but they may be Phase 2 trials if the design provides a well-controlled and reliable assessment of clinical benefit, particularly in an area of unmet medical need or rare patient population. ​ In December 2022, with the passage of the Food and Drug Omnibus Reform Act, or FDORA, Congress required sponsors to develop and submit a diversity action plan for each Phase 3 clinical trial or any other “pivotal study” of a new drug or biological product.
Generally, pivotal trials are Phase 3 trials, but they may be Phase 2 trials if the design provides a well-controlled and reliable assessment of clinical benefit, particularly in an area of unmet medical need or rare patient population. ​ In December 2022, with the passage of the Food and Drug Omnibus Reform Act, or FDORA, Congress required sponsors to develop and submit a diversity action plan, or DAP, for each Phase 3 clinical trial or any other “pivotal study” of a new drug or biological product.
Pursuant to mutually-agreed development plans, during the period beginning on the Neurocrine Effective Date and ending on the third anniversary of the Neurocrine Effective Date, which period may be extended upon mutual written agreement of us and Neurocrine, or the 2023 Discovery Period, and as overseen by the Joint Steering Committee, or JSC, that oversees our ongoing collaboration with Neurocrine, we are responsible for identifying capsids meeting target criteria, producing development candidates, and conducting other non-clinical activities regarding the 2023 Collaboration Products.
Pursuant to mutually-agreed development plans, during the period beginning on the Neurocrine Effective Date and ending on the third anniversary of the Neurocrine Effective Date, which period may be extended upon mutual written agreement of us and Neurocrine, or the 2023 Discovery Period, and as overseen by the Joint Steering Committee that oversees our ongoing collaboration with Neurocrine, we are responsible for identifying capsids meeting target criteria, producing development candidates, and conducting other non-clinical activities regarding the 2023 Collaboration Products.
The parties agreed that each 2019 Co-Co Agreement would provide us the right to terminate for any reason upon prior written notice to Neurocrine and Neurocrine the right to terminate in certain circumstances upon our change of control. ​ Governance Our research and development activities under the 2019 Neurocrine Collaboration Agreement are to be conducted pursuant to plans agreed to by the parties, on a program-by-program basis, and overseen by the JSC, which is composed of an equal number of representatives from the parties.
The parties agreed that the 2019 Co-Co Agreement would provide us the right to terminate for any reason upon prior written notice to Neurocrine and Neurocrine the right to terminate in certain circumstances upon our change of control. ​ Governance Our research and development activities under the 2019 Neurocrine Collaboration Agreement are to be conducted pursuant to plans agreed to by the parties, on a program-by-program basis, and overseen by the JSC, which is composed of an equal number of representatives from the parties.
Unless otherwise required by regulation, the pediatric data requirements generally do not apply to products with orphan designation, although the FDA has taken steps to limit what is considers abuse of this statutory exemption in the PREA by announcing that is does not intend to grant any additional orphan drug designations for rare pediatric subpopulations of what is otherwise a common disease.
Unless otherwise required by regulation, the pediatric data requirements generally do not apply to products with orphan designation although FDA has taken steps to limit what it considers abuse of this statutory exemption in PREA by announcing that it does not intend to grant any additional orphan drug designations for rare pediatric subpopulations of what is otherwise a common disease.
From and after the first IND application filing for the Novartis HD Program, we and Novartis have agreed that Novartis will assume sole responsibility for the development and commercialization of gene therapy products and product candidates under the Novartis HD Program, including all further preclinical and clinical development and any commercialization of the Novartis HD Program products and product candidates. ​ Collaboration Programs and Licensing Agreements 2023 Novartis Collaboration Agreement ​ On December 28, 2023, or the 2023 Novartis Collaboration Agreement Effective Date, we entered into the 2023 Novartis Collaboration Agreement, with Novartis to (a) provide rights to Novartis with respect to certain TRACER Capsids for use in the research, development, and commercialization by Novartis of AAV gene therapy products and product candidates, comprising such TRACER Capsids and payloads intended for the treatment of spinal muscular atrophy, or the Novartis SMA Program, and (b) collaborate to develop AAV gene therapy products and product candidates under the Novartis HD Program, in each case, leveraging TRACER Capsids and other intellectual property controlled by us. ​ Novartis SMA Program and Novartis HD Program Licenses ​ Under the terms of the 2023 Novartis Collaboration Agreement, we granted to Novartis and its affiliates: ​ ● a non-exclusive, non-transferable, non-sublicensable (except in limited circumstances for contractors), worldwide, royalty-free right and license under any patents or know-how controlled by us and related to the TRACER Capsids to evaluate the same for use in the development of a product or product candidate under the Novartis SMA Program, or a Novartis SMA Program Product, comprising such a TRACER Capsid and a payload selected by Novartis during the period beginning on the 2023 Novartis Collaboration Agreement Effective Date and ending on the third anniversary of the 2023 Novartis Collaboration Agreement Effective Date; ​ ● an exclusive (even as to us), sublicensable, non-transferable, worldwide, royalty-bearing right and license under any patents or know-how controlled by us and relating to the selected TRACER Capsids to exploit the same as incorporated into a Novartis SMA Program Product for all human and veterinary diagnostic, prophylactic and therapeutic uses during the 2023 Novartis Collaboration Term (as defined below); and ​ ● an exclusive (even as to us), non-transferable, sublicensable, worldwide, royalty-bearing right and license under any patents and know-how controlled by us and relating to the development of a product or product candidate under the Novartis HD Program, or a Novartis HD Program Product to exploit the same for all human and veterinary diagnostic, prophylactic and therapeutic uses during the 2023 Novartis Collaboration Term. ​ Governance ​ We and Novartis have agreed to manage the Novartis HD Program through a joint steering committee until dissolved after the first IND application filing for a Novartis HD Program Product.
From and after the first IND application filing for the Novartis HD Program, we and Novartis have agreed that Novartis will assume sole responsibility for the development and commercialization of gene therapy products and 13 Table of Contents product candidates under the Novartis HD Program, including all further preclinical and clinical development and any commercialization of the Novartis HD Program products and product candidates. ​ Collaboration Programs and Licensing Agreements 2023 Novartis Collaboration Agreement ​ On December 28, 2023, or the 2023 Novartis Collaboration Agreement Effective Date, we entered into the 2023 Novartis Collaboration Agreement, with Novartis to (a) provide rights to Novartis with respect to certain TRACER Capsids for use in the research, development, and commercialization by Novartis of AAV gene therapy products and product candidates, comprising such TRACER Capsids and payloads intended for the treatment of spinal muscular atrophy, or the Novartis SMA Program, and (b) collaborate to develop AAV gene therapy products and product candidates under the Novartis HD Program, in each case, leveraging TRACER Capsids and other intellectual property controlled by us. ​ Novartis SMA Program and Novartis HD Program Licenses ​ Under the terms of the 2023 Novartis Collaboration Agreement, we granted to Novartis and its affiliates: ​ ● a non-exclusive, non-transferable, non-sublicensable (except in limited circumstances for contractors), worldwide, royalty-free right and license under any patents or know-how controlled by us and related to the TRACER Capsids to evaluate the same for use in the development of a product or product candidate under the Novartis SMA Program, or a Novartis SMA Program Product, comprising such a TRACER Capsid and a payload selected by Novartis during the period beginning on the 2023 Novartis Collaboration Agreement Effective Date and ending on the third anniversary of the 2023 Novartis Collaboration Agreement Effective Date; ​ ● an exclusive (even as to us), sublicensable, non-transferable, worldwide, royalty-bearing right and license under any patents or know-how controlled by us and relating to the selected TRACER Capsids to exploit the same as incorporated into a Novartis SMA Program Product for all human and veterinary diagnostic, prophylactic and therapeutic uses during the 2023 Novartis Collaboration Term (as defined below); and ​ ● an exclusive (even as to us), non-transferable, sublicensable, worldwide, royalty-bearing right and license under any patents and know-how controlled by us and relating to the development of a product or product candidate under the Novartis HD Program, or a Novartis HD Program Product to exploit the same for all human and veterinary diagnostic, prophylactic and therapeutic uses during the 2023 Novartis Collaboration Term. ​ Governance ​ We and Novartis have agreed to manage the Novartis HD Program through a Joint Steering Committee until dissolved after the first IND application filing for a Novartis HD Program Product.
Many of our programs are derived from our TRACER™ (Tropism Redirection of AAV by Cell-type-specific Expression of RNA) adeno-associated virus, or AAV, capsid discovery platform, which we have used to generate novel capsids, or TRACER Capsids, and identify associated receptors to potentially enable high brain penetration with genetic medicines following intravenous dosing.
Many of our programs are derived from our TRACER™ (Tropism Redirection of AAV by Cell-type-specific Expression of RNA) adeno-associated virus, or AAV, capsid discovery platform, which we have used to generate novel capsids, or TRACER Capsids, and identify associated receptors to potentially enable high brain penetration with genetic medicines following intravenous, or IV, dosing.
Patents that grant from these patent families are generally expected to commence expiration in 2042, subject to possible patent term extensions. ​ We own one pending patent family with one patent application directed to cannula delivery system and methods of use.
Patents that grant from these patent families are generally expected to commence expiration in 2042 and 2043, subject to possible patent term extensions. ​ We own one pending patent family with one patent application directed to cannula delivery system and methods of use.
Alexion is also required to use commercially reasonable efforts to commercialize each Alexion Licensed CNS Product in the United States and at least one Alexion Major Market Country where Alexion or its designated affiliates or sublicensees has received regulatory approval for such Alexion Licensed CNS Product, subject to certain limitations. ​ Intellectual Property ​ Under the terms of the Alexion Agreement, each of the parties owns the entire right, title, and interest in and to all patents or know-how controlled by such party and existing as of or before the effective date of the Alexion Agreement, or invented, developed, created, generated or acquired solely by or on behalf of such party after such effective date. ​ Exclusivity ​ Subject to certain specified exceptions, any patents and know-how that are invented or otherwise developed jointly by or on behalf of the parties during the term of the Alexion Agreement and in the course of our and Alexion’s activities under the Alexion Agreement will follow inventorship under U.S. patent law.
Alexion is also required to use commercially reasonable efforts to commercialize each Alexion Licensed CNS Product in the United States and at least one Alexion Major Market Country where Alexion or its designated affiliates or sublicensees has received regulatory approval for such Alexion Licensed CNS Product, subject to certain limitations. ​ 25 Table of Contents Intellectual Property ​ Under the terms of the Alexion Agreement, each of the parties owns the entire right, title, and interest in and to all patents or know-how controlled by such party and existing as of or before the effective date of the Alexion Agreement, or invented, developed, created, generated or acquired solely by or on behalf of such party after such effective date. ​ Exclusivity ​ Subject to certain specified exceptions, any patents and know-how that are invented or otherwise developed jointly by or on behalf of the parties during the term of the Alexion Agreement and in the course of our and Alexion’s activities under the Alexion Agreement will follow inventorship under U.S. patent law.
We presented data at the ASGCT 2023 Meeting summarizing the mouse findings and additional data from an NHP study showing that the administration of a reporter transgene via a single, intravenous dose using two novel BBB-penetrant AAV capsids demonstrated substantially improved biodistribution and gene expression compared to conventional AAV9 in the putamen and substantia nigra, two areas of the brain that are affected in Parkinson’s disease.
We presented data at the ASGCT 2023 Meeting summarizing the mouse findings and additional data from an NHP study showing that the administration of a reporter transgene via a single, IV dose using two novel BBB-penetrant AAV capsids demonstrated substantially improved biodistribution and gene expression compared to conventional AAV9 in the putamen and substantia nigra, two areas of the brain that are affected in Parkinson’s disease.
We and Novartis have further agreed 14 Table of Contents that day-to-day activities of both the Novartis SMA Program and the Novartis HD Program shall be managed through designees from each of us and Novartis, acting as alliance managers. ​ Development, Regulatory Approval, Commercialization and Diligence. ​ Under the 2023 Novartis Collaboration Agreement, Novartis is solely responsible for, and has sole decision-making authority with respect to, at its own expense, the exploitation of a Novartis SMA Program Product. ​ With respect to the Novartis HD Program, the parties have agreed to conduct research and pre-clinical development of Novartis HD Program Products pursuant to a research plan, with Novartis reimbursing us for our activities thereunder in accordance with the agreed-to budget.
We and Novartis have further agreed that day-to-day activities of both the Novartis SMA Program and the Novartis HD Program shall be managed through designees from each of us and Novartis, acting as alliance managers. ​ Development, Regulatory Approval, Commercialization and Diligence. ​ Under the 2023 Novartis Collaboration Agreement, Novartis is solely responsible for, and has sole decision-making authority with respect to, at its own expense, the exploitation of a Novartis SMA Program Product. ​ With respect to the Novartis HD Program, the parties have agreed to conduct research and pre-clinical development of Novartis HD Program Products pursuant to a research plan, with Novartis reimbursing us for our activities thereunder in accordance with the agreed-to budget.
The parties have further agreed that all know-how created by either or both parties in the performance of the activities as undertaken pursuant to a development plan during the 2023 Discovery Period or in the course of development, manufacture and commercialization of Collaboration Candidates or products and all patent rights covering such know-how, or collectively the 2023 Neurocrine Arising IP, is to be owned as follows: (a) we solely own all 2023 Neurocrine Arising IP created jointly by representatives of us and Neurocrine that constitutes capsid know-how and capsid patent rights, and 2023 Neurocrine Arising IP created solely by representatives of Neurocrine through the use of our confidential information, including unpublished sequence information for our capsids; and (b) with respect to all other 2023 Neurocrine Arising IP, (x) we solely own all such 2023 Neurocrine Arising IP created solely by our representatives, (y) Neurocrine solely owns all such 2023 Neurocrine Arising IP created solely by Neurocrine representatives; and (z) the parties jointly own all such 2023 Neurocrine Arising IP created jointly by representatives of both Neurocrine and us. 2023 Neurocrine Arising IP owned by us is included in the license granted from us to Neurocrine described above. ​ Exclusivity ​ During the term of the 2023 Neurocrine Collaboration Agreement, neither party nor any of its respective affiliates is permitted to directly or indirectly develop, manufacture or commercialize any other gene therapy product directed to a target under any 2023 Neurocrine Program, or grant any affiliate or third party a license or sublicense to enable any third-party to do so, subject to specified exceptions, including the parties’ conduct of certain basic research, provided that Neurocrine or its affiliates may develop competitive products that do not contain an adeno-associated virus as the viral vector. ​ Termination ​ Unless earlier terminated, the 2023 Neurocrine Collaboration Agreement expires on the later of (a) the expiration of the last to expire 2023 Royalty Term with respect to all 2023 Collaboration Products worldwide or (b) the expiration or termination of any 2023 Co-Co Agreement.
The parties have further agreed that all know-how created by either or both parties in the performance of the activities as undertaken pursuant to a development plan during the 2023 Discovery Period or in the course of development, manufacture and commercialization of Collaboration Candidates or products and all patent rights covering such know-how, or collectively the 2023 Neurocrine Arising IP, is to be owned as follows: (a) we solely own all 2023 Neurocrine Arising IP created jointly by representatives of us and Neurocrine that constitutes capsid know-how and capsid patent rights, and 2023 Neurocrine Arising IP created solely by representatives of Neurocrine through the use of our confidential information, including unpublished sequence information for our capsids; and (b) with respect to all other 2023 Neurocrine Arising IP, (i) we solely own all such 2023 Neurocrine Arising IP created solely by our representatives, (ii) Neurocrine solely owns all such 2023 Neurocrine Arising IP created solely by Neurocrine representatives; and (iii) the parties jointly own all such 2023 Neurocrine Arising IP created jointly by representatives of both Neurocrine and us. 2023 Neurocrine Arising IP owned by us is included in the license granted from us to Neurocrine described above. ​ Exclusivity ​ During the term of the 2023 Neurocrine Collaboration Agreement, neither party nor any of its respective affiliates is permitted to directly or indirectly develop, manufacture or commercialize any other gene therapy product directed to a target under any 2023 Neurocrine Program, or grant any affiliate or third party a license or sublicense to enable any third-party to do so, subject to specified exceptions, including the parties’ conduct of certain basic research, provided that Neurocrine or its affiliates may develop competitive products that do not contain an adeno-associated virus as the viral vector. ​ Termination ​ Unless earlier terminated, the 2023 Neurocrine Collaboration Agreement expires on the later of (a) the expiration of the last to expire 2023 Royalty Term with respect to all 2023 Collaboration Products worldwide or (b) the expiration or termination of any 2023 Co-Co Agreement.
Production difficulties caused by unforeseen events may delay the availability of material for our clinical studies. To meet the requirements of our current and planned future trials we have developed a proprietary HEK 293 transient transfection manufacturing process that is scalable for large scale AAV manufacturing – both for preclinical research activities and clinical and commercial manufacturing.
Production difficulties caused by unforeseen events may delay the availability of material for our clinical studies. To meet the requirements of our current and planned future AAV gene therapy trials we have developed a proprietary HEK 293 transient transfection manufacturing process that is scalable for large scale AAV manufacturing – both for preclinical research activities and clinical and commercial manufacturing.
We anticipate delivering GBA1 via intravenous administration of an AAV gene therapy to enable widespread distribution to multiple affected brain regions and to avoid the need for more invasive approaches. We believe that the measurement of the Gcase substrates such as glucosylsphingosine as cerebrospinal fluid biomarkers may facilitate efficient clinical demonstration of proof-of-biology.
We anticipate delivering GBA1 via IV administration of an AAV gene therapy to enable widespread distribution to multiple affected brain regions and to avoid the need for more invasive approaches. We believe that the measurement of the Gcase substrates such as glucosylsphingosine as cerebrospinal fluid biomarkers may facilitate efficient clinical demonstration of proof-of-biology.
Certain countries outside of the United States have a similar process that requires the submission of a clinical trial application much like the IND prior to the commencement of human clinical trials in these countries. ​ If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution. ​ 48 Table of Contents Our Corporate Information ​ We were incorporated under the laws of Delaware in June 2013.
Certain countries outside of the United States have a similar process that requires the submission of a clinical trial application much like the IND prior to the commencement of human clinical trials in these countries. ​ If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution. ​ Our Corporate Information ​ We were incorporated under the laws of Delaware in June 2013.
If the executive officers are not able to resolve the matter, then (a) with respect to the GBA1 Program, subject to specified exceptions, (x) Neurocrine has the right to resolve such matter prior to our exercise of our 2023 Co-Co Option for the GBA1 Program or in the event we elect not to exercise our 2023 Co-Co Option, and (y) following the exercise by us of our 2023 Co-Co Option for the GBA1 Program, depending on the subject of such matter, either Neurocrine, in certain instances, or the parties jointly or the JSC, in other instances, would have the right to resolve such matter, and (b) with respect to the 2023 Discovery Programs, subject to specified exceptions, Neurocrine has the right to decide any unresolved matters relating to a 2023 Discovery Program that are within the JSC’s authority. ​ Candidate Selection ​ Either party may notify the JSC of any gene therapy product candidate that includes a Voyager capsid and a payload that is being developed under a 2023 Neurocrine Program, or a Collaboration Candidate, that it desires to nominate as a development candidate.
If the executive officers are not able to resolve the matter, then (a) with respect to the GBA1 Program, subject to specified exceptions, (i) Neurocrine has the right to resolve such matter prior to our exercise of our 2023 Co-Co Option for the GBA1 Program or in the event we elect not to exercise our 2023 Co-Co Option, and (ii) following the exercise by us of our 2023 Co-Co Option for the GBA1 Program, depending on the subject of such matter, either Neurocrine, in certain instances, or the parties jointly or the JSC, in other instances, would have the right to resolve such matter, and (b) with respect to the 2023 Discovery Programs, subject to specified exceptions, Neurocrine has the right to decide any unresolved matters relating to a 2023 Discovery Program that are within the JSC’s authority. ​ Candidate Selection ​ Either party may notify the JSC of any gene therapy product candidate that includes a Voyager capsid and a payload that is being developed under a 2023 Neurocrine Program, or a Collaboration Candidate, that it desires to nominate as a development candidate.
We are no longer eligible to 24 Table of Contents receive milestone or royalty payments for the VY-AADC Program in light of the partial termination of the 2019 Neurocrine Collaboration Agreement with respect to the VY-AADC Program. ​ Neurocrine has also agreed to pay us royalties, based on future net sales of the 2019 Collaboration Products.
We are no 23 Table of Contents longer eligible to receive milestone or royalty payments for the VY-AADC Program in light of the partial termination of the 2019 Neurocrine Collaboration Agreement with respect to the VY-AADC Program. ​ Neurocrine has also agreed to pay us royalties, based on future net sales of the 2019 Collaboration Products.
Patents that grant from these patent families are generally expected to commence expiration in 2034 and 2036, subject to possible patent term extensions. ​ We have non-exclusively licensed three pending patent families directed to microRNA detargeting from the University of Pennsylvania. These families of patent applications are pending in the United States and internationally and comprise 41 applications.
Patents that grant from these patent families are generally expected to commence expiration in 2034 and 2036, subject to possible patent term extensions. ​ We have non-exclusively licensed three pending patent families directed to microRNA detargeting from the University of Pennsylvania. These families of patent applications are pending in the United States and internationally and comprise at least 41 applications.
More recently, we conducted preclinical studies in NHPs with intravenous injection and achieved target FXN expression levels within sensory ganglia and the heart. The levels of FXN expression observed in the brain using an AAV vector were, on average, greater than FXN levels present in control normal human brain tissue.
More recently, we conducted preclinical studies in NHPs with IV injection and achieved target FXN expression levels within sensory ganglia and the heart. The levels of FXN expression observed in the brain using an AAV vector were, on average, greater than FXN levels present in control normal human brain tissue.
Although we expect to rely on contract manufacturers, we have personnel with manufacturing and quality experience to oversee our contract manufacturers. ​ Intellectual Property ​ Overview ​ We strive to protect the proprietary technology, inventions, and know-how to enhance improvements that are commercially important to the development of our business, including seeking, maintaining, and defending patent rights, whether developed internally or licensed from third parties.
Although we expect to rely on contract manufacturers, we have personnel with manufacturing and quality experience to oversee our contract manufacturers. ​ 28 Table of Contents Intellectual Property ​ Overview ​ We strive to protect the proprietary technology, inventions, and know-how to enhance improvements that are commercially important to the development of our business, including seeking, maintaining, and defending patent rights, whether developed internally or licensed from third parties.
Accelerated approval means that a product candidate may be approved on the basis of adequate and well controlled clinical trials establishing that the product candidate has an effect on a surrogate endpoint that is reasonably likely to predict a clinical benefit, or on the basis of an effect on a clinical endpoint other than survival or irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity and prevalence of the condition and the availability or lack of alternative treatments.
Accelerated approval means that a product candidate may be approved on the basis of adequate and well controlled clinical trials establishing that the product candidate has an effect on a surrogate endpoint that is reasonably likely to predict a clinical benefit, or on the basis of an effect on a clinical endpoint other than survival or irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity and prevalence of the condition and the availability or lack of alternative 42 Table of Contents treatments.
The updates are intended to help pave the way for more efficient clinical trials to facilitate the development of medical products. The draft guidance is adopted from the International Council for Harmonisation’s recently updated E6(R3) draft guideline that was developed to enable the incorporation of rapidly 37 Table of Contents developing technological and methodological innovations into the clinical trial enterprise.
The updates are intended to help pave the way for more efficient clinical trials to facilitate the development of medical products. The draft guidance is adopted from the International Council for Harmonisation’s recently updated E6(R3) draft guideline that was developed to enable the incorporation of rapidly developing technological and methodological innovations into the clinical trial enterprise.
ODD must be requested before 43 Table of Contents submitting a BLA. After the FDA grants ODD, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. ODD entitles a party to financial incentives such as opportunities for grant funding towards clinical study costs, tax advantages, and user-fee waivers.
ODD must be requested before submitting a BLA. After the FDA grants ODD, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. ODD entitles a party to financial incentives such as opportunities for grant funding towards clinical study costs, tax advantages, and user-fee waivers.
For example, with enactment of the Tax Cuts and Jobs Act of 2017, or the TCJA, which was signed by President Trump on December 22, 2017, Congress repealed the “individual mandate.” The repeal of this provision, which requires most Americans to carry a minimal level of health insurance, became effective in 2019.
For example, with enactment of the Tax Cuts and Jobs Act of 2017, 46 Table of Contents or the TCJA, which was signed by President Trump on December 22, 2017, Congress repealed the “individual mandate.” The repeal of this provision, which requires most Americans to carry a minimal level of health insurance, became effective in 2019.
Even if a product is considered to be a reference product eligible for exclusivity, however, another company could market a competing version of that product if the FDA approves a full BLA for such product containing 44 Table of Contents the sponsor’s own preclinical data and data from adequate and well controlled clinical trials to demonstrate the safety, purity, and potency of their product.
Even if a product is considered to be a reference product eligible for exclusivity, however, another company could market a competing version of that product if the FDA approves a full BLA for such product containing the sponsor’s own preclinical data and data from adequate and well controlled clinical trials to demonstrate the safety, purity, and potency of their product.
Approximately 53 of our employees have either an MD or PhD degree. We have never had a work stoppage, and none of our employees is represented by a labor organization or under any collective-bargaining arrangements.
Approximately 57 of our employees have either an MD or PhD degree. We have never had a work stoppage, and none of our employees is represented by a labor organization or under any collective-bargaining arrangements.
The FDA may prevent or limit further marketing of a product based on the results of post-marketing studies, clinical trials, or surveillance programs. After approval, some 41 Table of Contents types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval.
The FDA may prevent or limit further marketing of a product based on the results of post-marketing studies, clinical trials, or surveillance programs. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval.
With respect to both licensed and company-owned intellectual property, we cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of our existing patents or any patents that may be granted to us in the future will be commercially useful in protecting our commercial products and methods of using or manufacturing the same. ​ We own at least 422 pending patent applications and at least 79 patents have issued in the United States and foreign jurisdictions.
With respect to both licensed and company-owned intellectual property, we cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of our existing patents or any patents that may be granted to us in the future will be commercially useful in protecting our commercial products and methods of using or manufacturing the same. ​ We own at least 421 pending patent applications and at least 113 patents have issued in the United States and foreign jurisdictions.
GBA1 mutations can decrease the activity of Gcase, leading to the accumulation of Gcase substrates which is linked to alpha-synuclein aggregates, which are thought to be toxic to neurons. ​ Our Treatment Approach We believe that restoring Gcase activity may attenuate disease progression and potentially slow neurodegeneration.
GBA1 mutations can decrease the activity of Gcase, leading to the accumulation of Gcase substrates which is linked to alpha-synuclein aggregates, which are thought to be toxic to neurons. ​ 12 Table of Contents Our Treatment Approach We believe that restoring Gcase activity may attenuate disease progression and potentially slow neurodegeneration.
Nonetheless, from a practical perspective, a sponsor’s failure to follow the FDA’s recommendations for design of a clinical program may put the program at significant risk of failure. ​ Gene Therapy Products ​ We expect that the procedures and standards applied to gene therapy products will be applied to any product candidates we may develop.
Nonetheless, from a practical perspective, a sponsor’s failure to follow the FDA’s recommendations for design of a clinical program may put the program at significant risk of failure. 37 Table of Contents ​ Gene Therapy Products ​ We expect that the procedures and standards applied to gene therapy products will be applied to any gene therapy product candidates we may develop.
Huntington’s disease is an autosomal dominant disorder, which means that an 13 Table of Contents individual is at risk of inheriting the disease if only one parent is affected. While the exact function of the HTT gene in healthy individuals is unknown, it is essential for normal development before birth.
Huntington’s disease is an autosomal dominant disorder, which means that an individual is at risk of inheriting the disease if only one parent is affected. While the exact function of the HTT gene in healthy individuals is unknown, it is essential for normal development before birth.
Our competitors also may obtain FDA or other regulatory approval for their product candidates more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. ​ Manufacturing ​ The manufacture of gene therapy products is technically complex, and necessitates substantial expertise and capital investment.
Our competitors also may obtain FDA or other regulatory approval for their product candidates more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. ​ Manufacturing ​ The manufacture of gene therapy, non-viral therapeutic, and other biological products is technically complex, and necessitates substantial expertise and capital investment.
We continuously innovate and develop advanced manufacturing technologies to enable high yields and product quality, and we manufacture preclinical AAV material for large animal studies at our onsite, state-of-the-art chemistry, manufacturing, and controls, or CMC, 29 Table of Contents development facility.
We continuously innovate and develop advanced manufacturing technologies to enable high yields and product quality, and we manufacture preclinical AAV material for large animal studies at our onsite, state-of-the-art chemistry, manufacturing, and controls, or CMC, development facility.
The FDA’s regulations also require, among other things, the investigation and correction of any deviations from cGMP and the imposition of reporting and documentation requirements upon the sponsor and any third-party manufacturers involved in producing the approved product. 39 Table of Contents Pediatric Studies Under the Pediatric Research Equity Act of 2003, or PREA, a BLA or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.
The FDA’s regulations also require, among other things, the investigation and correction of any deviations from cGMP and the imposition of reporting and documentation requirements upon the sponsor and any third-party manufacturers involved in producing the approved product. 38 Table of Contents Pediatric Studies Under the Pediatric Research Equity Act of 2003, or PREA, a BLA or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective, unless granted a deferral or waiver.
The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. During the biological product approval process, the FDA also will determine whether a 40 Table of Contents REMS is necessary to assure the safe use of the biological product.
The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. During the biological product approval process, the FDA also will determine whether a REMS is necessary to assure the safe use of the biological product.
Some of these programs have been advanced in a vectorized setting, such as our anti-amyloid program, while others have been advanced in a non-vectorized setting, such as the anti-tau antibody program. ​ Separately, we have identified receptors for some of our TRACER Capsids as well as ligands for a particular receptor and are conducting experiments to evaluate the potential to leverage our receptors to shuttle non-viral genetic medicines across the BBB.
Some of these programs have been advanced in a vectorized setting, such as our anti-amyloid program, while others have been advanced in a non-vectorized setting, such as the anti-tau antibody program. ​ Separately, we have identified receptors for some of our TRACER Capsids and are conducting experiments to evaluate the potential to leverage these receptors to shuttle non-viral genetic medicines across the BBB.
A company, institution, or organization which takes responsibility for the initiation and management of a clinical development program for such products, and for their regulatory approval, is typically referred to as a sponsor. ​ The process required by the FDA before a biological product may be marketed in the United States generally involves the following: ​ ● completion of nonclinical laboratory tests and animal studies according to the FDA’s GLPs and applicable requirements for the humane use of laboratory animals or other applicable regulations; ​ ● preparation of clinical trial material in accordance with cGMPs; ​ ● design of a clinical protocol and submission to the FDA of an application for an IND, which must become effective before human clinical trials may begin; ​ ● approval by an independent institutional review board, or IRB, or ethics committee representing each clinical trial site before each clinical trial may be initiated; ​ ● performance of adequate and well-controlled human clinical trials according to the FDA’s good clinical practices, or GCPs, and any additional requirements for the protection of human research subjects and their health information, to establish the safety, purity, potency, and efficacy, of the proposed biological product for its intended use; ​ ● submission to the FDA of a BLA for marketing approval that includes substantive evidence of safety, purity, and potency from results of nonclinical testing and clinical studies, including payment of application user fees; ​ ● satisfactory completion of an FDA inspection prior to BLA approval of the manufacturing facility or facilities where the biological product is produced to assess compliance with cGMP, to assure that the facilities, methods and controls are adequate to preserve the biological product’s identity, strength, quality and purity; ​ ● potential FDA inspection of the nonclinical and clinical study sites that generated the data in support of the BLA; ​ ● potential FDA Advisory Committee meeting to elicit expert input on critical issues; ​ ● FDA review and approval, or licensure, of the BLA; and ​ ● compliance with any post approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, and the potential requirement to conduct post approval studies. ​ Preclinical Studies ​ Before a sponsor begins testing a product candidate with potential therapeutic value in humans, the product candidate enters the preclinical testing stage.
A company, institution, or organization which takes responsibility for the initiation and management of a clinical development program for such products, and for their regulatory approval, is typically referred to as a sponsor. ​ The process required by the FDA before a biological product may be marketed in the United States generally involves the following: ​ ● completion of nonclinical laboratory tests and animal studies according to the FDA’s GLPs and applicable requirements for the humane use of laboratory animals or other applicable regulations; ​ ● preparation of clinical trial material in accordance with cGMPs; ​ ● design of a clinical protocol and submission to the FDA of an application for an IND, which must become effective before human clinical trials may begin; ​ ● approval by an independent institutional review board, or IRB, or ethics committee representing each clinical trial site before each clinical trial may be initiated; ​ 33 Table of Contents ● performance of adequate and well-controlled human clinical trials according to the FDA’s good clinical practices, or GCPs, and any additional requirements for the protection of human research subjects and their health information, to establish the safety, purity, potency, and efficacy, of the proposed biological product for its intended use; ​ ● submission to the FDA of a BLA for marketing approval that includes substantive evidence of safety, purity, and potency from results of nonclinical testing and clinical studies, including payment of application user fees; ​ ● satisfactory completion of an FDA inspection prior to BLA approval of the manufacturing facility or facilities where the biological product is produced to assess compliance with cGMP, to assure that the facilities, methods and controls are adequate to preserve the biological product’s identity, strength, quality and purity; ​ ● potential FDA inspection of the nonclinical and clinical study sites that generated the data in support of the BLA; ​ ● potential FDA Advisory Committee meeting to elicit expert input on critical issues; ​ ● p ayment of user application and program fees pursuant to the Prescription Drug User Fee Act, or PDUFA; ​ ● FDA review and approval of the BLA , authorizing licensure of the biological product for marketing of the product in the US for one or more indications ; and ​ ● compliance with any post approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, and the potential requirement to conduct post approval studies. ​ Preclinical Studies ​ Before a sponsor begins testing a product candidate with potential therapeutic value in humans, the product candidate enters the preclinical testing stage.
The parties have agreed that the 2023 Co-Co Agreement will provide us the right to terminate the 2023 Co-Co Agreement for any reason upon prior written notice to Neurocrine and provide Neurocrine the right to 19 Table of Contents terminate or amend the 2023 Co-Co Agreement upon a change of control under certain circumstances.
The parties have agreed that the 2023 Co-Co Agreement will provide us the right to terminate the 2023 Co-Co Agreement for any reason upon prior written notice to Neurocrine and provide Neurocrine the right to terminate or amend the 2023 Co-Co Agreement upon a change of control under certain circumstances.
Neurocrine may terminate the 2023 Neurocrine Collaboration Agreement with respect to a given 2023 Collaboration Product by providing written notice of termination to us within thirty days after complete readout of any clinical trial if the results of such clinical trial fail to meet the pre-specified primary endpoint(s) set forth in the applicable protocol or if there is a safety finding during the clinical trial relating to such 2023 Collaboration Product that either (a) is substantially irreversible or not monitorable in patients or (b) results in Neurocrine’s decision to designate such 2023 Collaboration Product as a terminated product under the 2023 Collaboration Agreement.
Neurocrine may terminate the 2023 Neurocrine Collaboration Agreement with respect to a given 2023 Collaboration Product by providing written notice of termination to us within thirty days after complete readout of any clinical trial if the results of such clinical trial fail to meet the pre-specified primary endpoint(s) set forth in the applicable protocol or if there is a safety finding during the clinical trial relating to such 2023 Collaboration Product that either (i) is substantially irreversible or not monitorable in 21 Table of Contents patients or (ii) results in Neurocrine’s decision to designate such 2023 Collaboration Product as a terminated product under the 2023 Collaboration Agreement.
On January 23, 2023, the FDA announced that, in matters beyond the scope of that court order, the FDA will continue to apply its existing regulations tying orphan-drug exclusivity to the uses or indications for which the orphan drug was approved.
On January 23, 2023, the FDA announced that, in matters beyond the scope of the Catalyst court order, the FDA will continue to apply its existing regulations tying orphan-drug exclusivity to the uses or indications for which the orphan drug is approved.
Subject to certain specified exceptions, any patents and know-how that are invented or otherwise developed jointly by or on behalf of the parties during the term of the 2022 Novartis Option and License Agreement and in the course of the parties’ activities under the 2022 Novartis Option and License Agreement will follow inventorship under U.S. patent law. ​ Exclusivity ​ Subject to certain limitations and exceptions, we have agreed (a) during the Novartis Research Term, not to conduct any internal program or program on behalf of a third party that is directed to the development or commercialization of any of our capsids, or grant any third party or affiliate any right or license under our rights in such capsids, to exploit any therapeutic product containing a capsid in combination with a payload designed to have therapeutic effect on any of the Novartis Targets; and (b) after Novartis’ exercise of Novartis License Options, not to grant any third party or affiliate any right or license under our patents to exploit any Novartis Licensed Capsid for the applicable Novartis Target. 18 Table of Contents ​ Termination ​ Unless earlier terminated, the 2022 Novartis Option and License Agreement expires on the expiration of the last-to-expire royalty term with respect to all Novartis Licensed Products in all countries.
Subject to certain specified exceptions, any patents and know-how that are invented or otherwise developed jointly by or on behalf of the parties during the term of the 2022 Novartis Option and License Agreement and in the course of the parties’ activities under the 2022 Novartis Option and License Agreement will follow inventorship under U.S. patent law. ​ Exclusivity ​ Subject to certain limitations and exceptions, we have agreed (a) during the Novartis Research Term, not to conduct any internal program or program on behalf of a third party that is directed to the development or commercialization of any of our capsids, or grant any third party or affiliate any right or license under our rights in such capsids, to exploit any therapeutic product containing a capsid in combination with a payload designed to have therapeutic effect on any of the Novartis Licensed Targets; and (b) not to grant any third party or affiliate any right or license under our patents to exploit any Novartis Licensed Capsid for any of the Novartis Licensed Targets. ​ Termination ​ Unless earlier terminated, the 2022 Novartis Option and License Agreement expires on the expiration of the last-to-expire royalty term with respect to all Novartis Licensed Products in all countries.
The 2023 Collaboration Agreement provides for aggregate development milestone payments from Neurocrine to us for 2023 Collaboration Products under (a) the GBA1 Program of up to $985.0 20 Table of Contents million; and (b) each of the three 2023 Discovery Programs of up to $175.0 million for each 2023 Discovery Program.
The 2023 Collaboration Agreement provides for aggregate development milestone payments from Neurocrine to us for 2023 Collaboration Products under (a) the GBA1 Program of up to $985.0 million; and (b) each of the three 2023 Discovery Programs of up to $175.0 million for each 2023 Discovery Program.
Following the Transition Event, the parties shall negotiate the manufacturing and supply responsibilities, subject to the terms of any applicable 2019 Co-Co Agreement. ​ Financial Terms Under the terms of the 2019 Neurocrine Collaboration Agreement, Neurocrine has paid us an upfront payment of $115.0 million.
Following the Transition Event, the parties shall negotiate the manufacturing and supply responsibilities, subject to the terms of the 2019 Co-Co Agreement, if applicable. ​ Financial Terms Under the terms of the 2019 Neurocrine Collaboration Agreement, Neurocrine paid us an upfront payment of $115.0 million.
Our policy is to file patent applications to protect technology, inventions and improvements to inventions that are commercially important to the development of our business.
Our policy is to file patent applications to protect technology, inventions and improvements to inventions that are commercially important to the development of our product candidates and business.
Patents that grant from these patent families are generally expected to commence expiration in 2036, with some later filed applications commencing expiration in 2038, 2039, and 2040, all of which are subject to possible patent term extensions. ​ GBA1 Gene Therapy ​ We own three pending patent families with 17 pending patent applications directed to AAVs encoding GBA1 for the treatment of Parkinson’s disease, Gaucher disease, and dementia with Lewy Bodies.
Patents that grant from these patent families are generally expected to commence expiration in 2036, with some later filed applications commencing expiration in 2038, 2039, 2040, and 2044, all of which are subject to possible patent term extensions. ​ GBA1 Gene Therapy ​ We own eight pending patent families with 27 pending patent applications directed to AAVs encoding GBA1 for the treatment of Parkinson’s disease, Gaucher disease, and dementia with Lewy Bodies.
Preclinical Studies In March 2024, we will present data at the AD/PD 2024 Conference demonstrating that a single intravenous administration of our tau silencing gene therapy in mice expressing human tau resulted in broad AAV distribution across multiple brain regions and dose-dependent reductions in tau mRNA levels of up to 90%, which were associated with robust reductions in human tau protein levels across the brain.
Preclinical Studies In March 2024, we presented data at the AD/PD 2024 Conference demonstrating that a single IV administration of our tau silencing gene therapy in mice expressing human tau resulted in broad AAV distribution across multiple brain regions and dose-dependent reductions in tau mRNA levels of up to 90%, which were associated with robust reductions in human tau protein levels across the brain.
The regulatory requirements applicable to biological product development, approval and marketing are subject to change, and regulations and administrative guidance often are revised or reinterpreted by the agencies in ways that may have a significant impact on our business. 34 Table of Contents U.S. Government Regulation ​ U.S.
The regulatory requirements applicable to biological product development, approval and marketing are subject to change, and regulations and administrative guidance often are revised or reinterpreted by the agencies in ways that may have a significant impact on our business. ​ U.S. Government Regulation ​ U.S.
Alexion is required to use commercially reasonable efforts to develop and obtain regulatory approval for at least one Alexion Licensed CNS Product for which Pfizer exercised its Pfizer License Option in (a) the United States and (b) at least one of the following countries: the United Kingdom, France, Germany, Italy, Spain and Japan, each of which we refer to as an Alexion Major Market Country, subject to certain limitations.
Alexion is required to use commercially reasonable efforts to develop and obtain regulatory approval for at least one Alexion Licensed CNS Product in (a) the United States and (b) at least one of the following countries: the United Kingdom, France, Germany, Italy, Spain and Japan, each of which we refer to as an Alexion Major Market Country, subject to certain limitations.
Preclinical tests include laboratory evaluations of product chemistry, formulation and stability, as well as other studies to evaluate, among other things, the toxicity of the product candidate. 35 Table of Contents These studies are generally referred to as IND-enabling studies.
Preclinical tests include laboratory evaluations of product chemistry, formulation and stability, as well as other studies to evaluate, among other things, the toxicity of the product candidate. These studies are generally referred to as IND-enabling studies.
As a result, submission of an IND may not result in the FDA allowing clinical trials to commence. ​ Following commencement of a clinical trial under an IND, the FDA may also place a clinical hold or partial clinical hold on that trial.
As a result, submission of an IND may not result in the FDA allowing clinical trials to commence. ​ 34 Table of Contents Following commencement of a clinical trial under an IND, the FDA may also place a clinical hold or partial clinical hold on that trial.
Clinical trials are conducted under written clinical trial protocols detailing, among other things, the objectives of the trial, inclusion and exclusion criteria, the parameters to be used in monitoring safety and the effectiveness criteria to be 36 Table of Contents evaluated.
Clinical trials are conducted under written clinical trial protocols detailing, among other things, the objectives of the trial, inclusion and exclusion criteria, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated.
In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials. ● With the passage of FDORA in December 2022, Congress modified certain provisions governing accelerated approval of drug and biologic products.
In addition, the FDA currently requires as a condition for accelerated approval pre-approval of all promotional materials. ​ With the passage of FDORA, Congress modified certain provisions governing accelerated approval of drug and biologic products.
Patents that grant from this patent family are generally expected to commence expiration in 2036, subject to possible patent term extensions. ​ Vector and Genome Engineering ​ We own three patent families with 43 issued patents (including 15 patents in European countries) and 41 patent applications directed to engineering of the vector genome.
Patents that grant from this patent family are generally expected to commence expiration in 2036, subject to possible patent term extensions. ​ Vector and Genome Engineering ​ We own three patent families with 52 issued patents (including 15 patents in European countries) and 36 patent applications directed to engineering of the vector genome.
Patents that grant from this patent family are generally expected to commence expiration in 2040, subject to possible patent term extensions. ​ Production; Chemistry, Manufacturing, and Controls ​ We own 21 pending patent families with two granted patents and at least 64 pending patent applications directed to AAV production and CMC.
Patents that grant from this patent family are generally expected to commence expiration in 2040, subject to possible patent term extensions. ​ Production; Chemistry, Manufacturing, and Controls ​ We own 21 pending patent families with 10 granted patents and at least 55 pending patent applications directed to AAV production and CMC.
On a country-by-country and 2023 Neurocrine Program-by-2023 Neurocrine Program basis, the parties have agreed royalty payments would commence on the first commercial sale of a 2023 Collaboration Product in such country and terminate upon the latest of (a) the expiration, invalidation or the abandonment of the last patent covering the composition of the 2023 Collaboration Product or its approved method of use in such country, (b) ten years from the first commercial sale of the 2023 Collaboration Product in such country and (c) the expiration of regulatory exclusivity in such country, or the 2023 Royalty Term.
On a country-by-country and 2023 Neurocrine Program-by-2023 Neurocrine Program basis, the parties have agreed royalty payments would commence on the first commercial sale of a 2023 Collaboration Product in such country and terminate upon the latest of (x) the expiration, invalidation or the abandonment of the last patent covering the composition of the 2023 Collaboration Product or its approved method of use in such country, (y) ten years from the first commercial sale of the 2023 Collaboration Product in such country and (z) the expiration of regulatory exclusivity in such country, or the 2023 Royalty Term.
We co-own one pending patent family with nine granted patents and ten pending patent applications directed to AAV production and CMC.
We co-own one pending patent family with ten granted patents and eight pending patent applications directed to AAV production and CMC.
Our new manufacturing process is being transferred to our contract manufacturing organizations to enable clinical current good manufacturing practice, or, cGMP manufacturing. ​ We presently contract with third parties for the manufacturing of our program materials. We currently have no plans to build our own clinical or commercial scale cGMP manufacturing capabilities.
Our current AAV gene therapy manufacturing process is being transferred to our contract manufacturing organizations to enable clinical current good manufacturing practice, or cGMP manufacturing. ​ We presently contract with third parties for the manufacturing of our program materials. We currently have no plans to build our own clinical or commercial scale cGMP manufacturing capabilities.
If a CRL is issued, the sponsor will have one year to respond to the deficiencies identified by the FDA, at which time the FDA can deem the application withdrawn or, in its discretion, grant the sponsor an additional six-month extension to respond.
If a CRL is issued, the sponsor will have one year to respond to the deficiencies identified by the FDA, at which time the FDA can deem the application withdrawn or, in its discretion, grant the sponsor an additional six-month 40 Table of Contents extension to respond.
We believe that we are in material compliance with applicable environmental laws and that continued compliance therewith will not have a material adverse effect on our business. We cannot predict, however, how changes in these laws may affect our future operations.
We believe that we are in material compliance with applicable environmental laws 48 Table of Contents and that continued compliance therewith will not have a material adverse effect on our business. We cannot predict, however, how changes in these laws may affect our future operations.
Patents that grant from this patent family are generally expected to commence expiration in 2031, subject to possible patent term extensions. ​ We have non-exclusively licensed two pending patent families from Ablexis, LLC. These families of patents and patent applications are pending and/or granted in the United States and other territories and comprise 50 granted patents and 6 applications.
Patents that grant from this patent family are generally expected to commence expiration in 2031, subject to possible patent term extensions. ​ We have non-exclusively licensed two pending patent families from Ablexis, LLC. These families of patents and patent applications are pending and/or granted in the United States and other territories and comprise 52 granted patents and one pending application.
We agreed, were we to exercise a 2019 Co-Co Option, to enter into a cost- and profit-sharing arrangement with Neurocrine, or a 2019 Co-Co Agreement, and (a) jointly develop and commercialize 2019 Collaboration Products for such 2019 Neurocrine Program, or 2019 Co-Co Products, (b) share in its costs, profits and losses, and (c) forfeit certain milestones and royalties on net sales in the United States during the effective period of the applicable 2019 Co-Co Agreement.
We agreed, were we to exercise the 2019 Co-Co Option, to enter into a cost- and profit-sharing arrangement with Neurocrine, or the 2019 Co-Co Agreement, and (a) jointly develop and commercialize 2019 Collaboration Products for the FA Program, or 2019 Co-Co Products, (b) share 22 Table of Contents in its costs, profits and losses, and (c) forfeit certain milestones and royalties on net sales in the United States during the effective period of the 2019 Co-Co Agreement.
For AAV vectors specifically, the FDA typically recommends that sponsors continue to monitor participants for potential gene therapy-related adverse events for up to a five-year period.
For AAV vectors specifically, the FDA has typically recommended that sponsors continue to monitor participants for potential gene therapy-related adverse events for up to a five-year period.
There have been several recent United States congressional inquiries, as well as proposed and enacted state and federal legislation designed to, among other things, bring more transparency to pharmaceutical pricing, review the 46 Table of Contents relationship between pricing and manufacturer patient programs, and reduce the costs of pharmaceuticals under Medicare and Medicaid.
There have been United States congressional inquiries, as well as proposed and enacted state and federal legislation designed to, among other things, bring more transparency to pharmaceutical pricing, review the relationship between pricing and manufacturer patient programs, and reduce the costs of pharmaceuticals under Medicare and Medicaid.
Such royalty percentages, for net sales in and outside the United States, range from (a) for the GBA1 Program, the low double-digits to twenty and the high single-digits to mid-teens, respectively, and (b) for each 2023 Discovery Program, high single-digits to mid-teens and mid-single digits to low double-digits, respectively.
Such royalty percentages, for net sales in and outside the United States, range from (a) for the GBA1 Program, 20 Table of Contents the low double-digits to twenty and the high single-digits to mid-teens, respectively, and (b) for each 2023 Discovery Program, high single-digits to mid-teens and mid-single digits to low double-digits, respectively.
TRACER allows us to identify proprietary AAV capsids, the outer viral protein shells that enclose genetic material that makes up the vector payload. TRACER employs directed evolution to facilitate the selection of AAV capsids with enhanced tissue delivery characteristics, such as more effective delivery across the BBB and cell-specific transduction.
TRACER allows us to identify proprietary AAV capsids, the outer viral protein shells that enclose genetic material that makes up the vector payload. TRACER facilitates the selection of AAV capsids with enhanced tissue delivery characteristics, such as more effective delivery across the BBB and cell-specific transduction.
When a foreign clinical study is conducted under an IND, all IND requirements must be met unless waived. When a foreign clinical study is not conducted under an IND, the sponsor must ensure that the study complies with certain regulatory requirements of the FDA in order to use the study as support for an IND or application for marketing approval.
When a foreign clinical study is conducted under an IND, all IND requirements must be met unless waived. When a foreign clinical study is not conducted under an IND, the sponsor must ensure that the study complies with certain regulatory requirements of the FDA in order to use the study as support for an NDA or a BLA.
Neurocrine may terminate the 2023 Neurocrine Collaboration Agreement in its entirety or on a 2023 Neurocrine Program-by-2023 Neurocrine Program and/or country-by-country 21 Table of Contents basis by providing at least (a) 180-day advance notice if such notice is provided prior to the first commercial sale of any 2023 Collaboration Product to which the termination applies or (b) one-year advance notice if such notice is provided after the first commercial sale of any product to which the termination applies.
Neurocrine may terminate the 2023 Neurocrine Collaboration Agreement in its entirety or on a 2023 Neurocrine Program-by-2023 Neurocrine Program and/or country-by-country basis by providing at least (x) 180-day advance notice if such notice is provided prior to the first commercial sale of any 2023 Collaboration Product to which the termination applies or (y) one-year advance notice if such notice is provided after the first commercial sale of any product to which the termination applies.
The IRB, which must operate in compliance with FDA regulations, must review and approve, among other things, the study protocol and informed consent information to be provided to study subjects before the study can commence at the institution and must monitor the trial until completed.
The IRB, which must operate in compliance with Health and Human Services, or HHS, and FDA regulations, must review and approve, among other things, the study protocol and informed consent information to be provided to study subjects before the study can commence at the institution and must monitor the trial until completed.
Patents that grant from these patent families are generally expected to commence expiration in 2037 and 2038, subject to possible patent term extensions. ​ Licensed Intellectual Property ​ We have obtained exclusive licenses and non-exclusive licenses to patents directed to both compositions of matter and methods of use. ​ We have licensed six families of patents and patent applications, in the field of gene therapy for human diseases, directed to RNAi constructs as vector payloads, their design and use in the treatment of neurological disorders from the University of Massachusetts.
Patents that grant from this patent family are generally expected to commence expiration in 2039, subject to possible patent term extensions. ​ Licensed Intellectual Property ​ We have obtained exclusive licenses and non-exclusive licenses to patents directed to both compositions of matter and methods of use. ​ We have licensed four families of patents and patent applications, in the field of gene therapy for human diseases, directed to RNAi constructs as vector payloads, their design and use in the treatment of neurological disorders from the University of Massachusetts.
The disease causes memory loss and may escalate to decreased independence, communication challenges, behavioral disorders such as paranoia and anxiety, and lack of physical control. In 2023, the total cost of caring for people living with Alzheimer’s and other dementias in the United States is estimated at $345 billion.
The disease causes memory loss and may escalate to decreased independence, communication challenges, behavioral disorders such as paranoia and anxiety, and lack of physical control. In 2023, the total cost of caring for people living with Alzheimer’s and other dementias in the U.S. was estimated at $345 billion.
We co-own at least 42 pending patent applications and at least 12 patents have issued from these co-owned families in the United States and foreign jurisdictions. At least ten patent applications have been filed and are pending in the United States and foreign jurisdictions by or on behalf of universities which have granted us exclusive license rights to the technology.
We co-own at least 33 pending patent applications and at least 13 patents have issued from these co-owned families in the United States and foreign jurisdictions. At least nine patent applications have been filed and are pending in the United States and foreign jurisdictions by or on behalf of universities which have granted us exclusive license rights to the technology.
Patents that grant from these pending provisional and non-provisional applications are generally expected to commence expiration in 2044 and 2045, subject to possible patent term extensions. ​ We also own four patent families pending in the United States and foreign jurisdictions directed to capsid variants generated using other methodologies.
Patents that grant from these pending provisional and non-provisional applications are generally expected to commence expiration in 2042, 2043, 2044, and 2045, subject to possible patent term extensions. ​ We also own one patent family pending in the United States and foreign jurisdictions directed to capsid variants generated using other methodologies.
Patents that grant from these patent families are generally expected to expire between 2024 and 2036, subject to possible patent term extensions. ​ We have exclusively licensed one family of patents and patent applications directed to AAV capsids from the University of Massachusetts. In this pending patent family, there are 15 granted patents and three pending patent applications.
Patents that grant from these patent families are generally expected to expire between 2025 and 2036, subject to possible patent term extensions. ​ We have exclusively licensed one family of patents and patent applications directed to AAV capsids from the University of Massachusetts. In this pending patent family, there are 14 granted patents and two pending patent applications.
If the executive officers are not able to resolve the matter, then (a) with respect to each Legacy Program, subject to specified exceptions, (x) Neurocrine has the right to resolve such matter prior to our exercise of our 2019 Co-Co Option with regard to such 2019 Co-Co Product or if such 2019 Co-Co Option expires or goes unexercised and (y) following the timely exercise by us of our 2019 Co-Co Option, depending on the subject of such matter, either Neurocrine, in certain instances, or the parties jointly or the JSC, in other instances, would have the right to resolve such matter, and (b) with respect to 2019 Discovery Programs, subject to specified exceptions, Neurocrine has the right to resolve such matter.
If the executive officers are not able to resolve the matter, then (a) with respect to the FA Program, subject to specified exceptions, (i) Neurocrine has the right to resolve such matter prior to our exercise of the 2019 Co-Co Option with regard to an applicable 2019 Co-Co Product or if the 2019 Co-Co Option expires or goes unexercised and (ii) following the timely exercise by us of the 2019 Co-Co Option, depending on the subject of such matter, either Neurocrine, in certain instances, or the parties jointly or the JSC, in other instances, would have the right to resolve such matter, and (b) with respect to 2019 Discovery Programs, subject to specified exceptions, Neurocrine has the right to resolve such matter.
We have also granted Novartis a non-exclusive license, effective upon an exercise of a Novartis License Option and in addition to its options for target-exclusive licenses under certain of our intellectual property described above, on a Novartis Licensed Capsid-by-Novartis Licensed Capsid basis, under certain of our know-how to exploit the applicable Novartis Licensed Capsid as incorporated into Novartis Licensed Products containing the corresponding Novartis Payload. ​ Financial ​ Under the terms of the 2022 Novartis Option and License Agreement, Novartis paid us an upfront payment of $54.0 million.
We have also granted Novartis a non-exclusive license, in addition to its target-exclusive licenses, under certain of our intellectual property described above, on a Novartis Licensed Capsid-by-Novartis Licensed Capsid basis, under certain of our know-how to exploit the applicable Novartis Licensed Capsid as incorporated into Novartis Licensed Products containing a payload directed to the corresponding Novartis Licensed Target. ​ 17 Table of Contents Financial ​ Under the terms of the 2022 Novartis Option and License Agreement, Novartis paid us an upfront payment of $54.0 million.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeInc. in collaboration with Teijin Limited, Roche Genentech Inc. in collaboration with AC Immune SA, Eisai Co., Ltd., Janssen Pharmaceuticals, Inc., UCB S.A., Bristol Myers Squibb Company in collaboration with Prothera Inc., along with several other companies, as well as an antisense oligonucleotide program being developed by Ionis in collaboration with Biogen; ● Our program for a monogenic form of ALS will potentially compete with Tofersen being developed by Biogen, in collaboration with Ionis, and gene therapies being developed by Novartis Gene Therapies, Inc. and uniQure, Inc.; and ● Our TRACER discovery platform will potentially compete with a variety of companies developing AAV capsids, including: 4D Molecular Therapeutics, Inc., Affinia Therapeutics Inc., Apertura Gene Therapy, LLC, Capsida Biotherapeutics, Inc., Capsigen, Inc., Dyno Therapeutics, Inc., Kate Therapeutics, Inc., and Shape Therapeutics Inc.
Biggest changeWe expect that our TRACER discovery platform, non-viral therapeutics platform, and clinical and preclinical programs will compete with a variety of therapies in development, including: ● Our anti-tau antibody and tau silencing gene therapy programs for AD will potentially compete with tau antibodies being developed by Lundbeck LLC , Merck & Co. , Inc. in collaboration with Teijin Limited, Eisai Co., Ltd., Janssen Pharmaceuticals, Inc., UCB S.A., Bristol-Myers Squibb Company in collaboration with Prothena Corporation plc , along with several other companies, as well as an antisense oligonucleotide program being developed by Ionis in collaboration with Biogen; ● Our program for a monogenic form of ALS will potentially compete with tofersen being developed by Biogen, in collaboration with Ionis, and gene therapies being developed by Novartis Gene Therapies, Inc. and uniQure, Inc.; and ● Our TRACER discovery platform will potentially compete with a variety of companies developing AAV capsids, including: 4D Molecular Therapeutics, Inc., Affinia Therapeutics Inc., Apertura Gene Therapy, LLC, Capsida Biotherapeutics, Inc., Capsigen, Inc., Dyno Therapeutics, Inc., Kate Therapeutics, Inc., Sangamo Therapeutics, Inc., and Shape Therapeutics Inc. ● O ur non-viral therapeutics platform will potential compete with a variety of companies developing non-viral shuttles for the delivery of genetic medicines to the CNS, including: ABL Bio, Inc. in collaboration with Sanofi S.A., Aliada Therapeutics, Inc.
For example, on January 8, 2023, we entered into a second collaboration agreement, or the 2023 Neurocrine Collaboration Agreement, with Neurocrine for the research, development, manufacture and commercialization of gene therapy products directed to the gene that encodes GBA1, for the treatment of Parkinson’s disease and other diseases associated with GBA1, or the GBA1 Program, and three new programs focused on the research, development, manufacture and commercialization of gene therapies designed to address central nervous system diseases or conditions associated with rare genetic targets, or the 2023 Discovery Programs, and, collectively with the GBA1 Program, the 2023 Neurocrine Programs.
For example, on January 8, 2023, we entered into a second collaboration agreement, or the 2023 Neurocrine Collaboration Agreement, with Neurocrine for the research, development, manufacture and commercialization of gene therapy products directed to the gene that encodes GBA1, for the treatment of Parkinson’s disease and other diseases associated with the GBA1 Program and three new programs focused on the research, development, manufacture and commercialization of gene therapies designed to address central nervous system diseases or conditions associated with rare genetic targets, or the 2023 Discovery Programs, and, collectively with the GBA1 Program, the 2023 Neurocrine Programs.
In the event we exercise our 2023 Co-Co Option, the parties have also agreed that Neurocrine is entitled to receive (in addition to its 50% share of profits) 50% of our share of profits until our obligation to repay 50% of all development costs incurred by Neurocrine in connection with the GBA1 Program prior to such exercise have been paid off out of such 50% of our share of profits.
In the event we exercise our 2023 Co-Co Option, the parties have also agreed that Neurocrine is entitled to receive (in addition to its 50% share of profits) 50% of our share of profits until our obligation to repay 50% of all development costs incurred by Neurocrine in connection with the GBA1 Program prior to such exercise have been paid off out of our 50% share of profits.
Other events that may prevent successful or timely completion of clinical development include: ● delays in reaching a consensus with regulatory authorities or collaborators on trial design, implementation, management , or other aspects of the clinical trial; ● delays in reaching agreement on acceptable terms with prospective CROs and clinical trial sites; ● delays in opening clinical trial sites or obtaining required IRB or independent ethics committee approval at each clinical trial site; 60 Table of Contents ● as a result of a serious adverse event, or SAE, or after an inspection of our clinical trial operations or trial sites or the decision by us or our collaborators, or the requirement of regulators or IRBs to suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; ● failure by us, our collaboration partners, any CROs we engage, or any other third parties to adhere to clinical trial protocols or regulatory requirements; ● failure by us, our collaboration partners, any CROs we engage, or any other third parties to perform in accordance with the FDA’s good clinical practices, or GCPs, or applicable regulatory guidelines in the European Union; ● failure by physicians to adhere to delivery protocols leading to variable results; ● delays in the testing, validation, manufacturing and delivery of our product candidates to the clinical sites, including delays by third parties with whom we have contracted to perform certain of those functions; ● insufficient or inadequate supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates; ● delays in having patients complete participation in a trial or return for post-treatment follow-up; ● clinical trial sites or patients dropping out of a trial at a rate higher than we anticipate; ● selection of clinical endpoints that require prolonged periods of clinical observation or analysis of the resulting data; ● receipt of negative or inconclusive clinical trial results; ● occurrence of SAEs associated with the product candidate that are viewed to outweigh its potential benefits; ● occurrence of SAEs in trials of the same class of agents conducted by other sponsors; ● changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; or ● the cost of clinical trials of our product candidates may be greater than we anticipate.
Other events that may prevent successful or timely completion of clinical development include: ● delays in reaching a consensus with regulatory authorities or collaborators on trial design, implementation, management , or other aspects of the clinical trial; ● delays in reaching agreement on acceptable terms with prospective CROs and clinical trial sites; ● delays in opening clinical trial sites or obtaining required IRB or independent ethics committee approval at each clinical trial site; ● as a result of a serious adverse event, or SAE, or after an inspection of our clinical trial operations or trial sites or the decision by us or our collaborators, or the requirement of regulators or IRBs to suspend or 61 Table of Contents terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; ● failure by us, our collaboration partners, any CROs we engage, or any other third parties to adhere to clinical trial protocols or regulatory requirements; ● failure by us, our collaboration partners, any CROs we engage, or any other third parties to perform in accordance with the FDA’s good clinical practices, or GCPs, or applicable regulatory guidelines in the European Union; ● failure by physicians to adhere to delivery protocols leading to variable results; ● delays in the testing, validation, manufacturing and delivery of our product candidates to the clinical sites, including delays by third parties with whom we have contracted to perform certain of those functions; ● insufficient or inadequate supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates; ● delays in having patients complete participation in a trial or return for post-treatment follow-up; ● clinical trial sites or patients dropping out of a trial at a rate higher than we anticipate; ● selection of clinical endpoints that require prolonged periods of clinical observation or analysis of the resulting data; ● receipt of negative or inconclusive clinical trial results; ● occurrence of SAEs associated with the product candidate that are viewed to outweigh its potential benefits; ● occurrence of SAEs in trials of the same class of agents conducted by other sponsors; ● changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; or ● the cost of clinical trials of our product candidates may be greater than we anticipate.
Restrictions under applicable federal and state healthcare laws and regulations include the following: ● the federal Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation or arranging of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid; ● the federal False Claims Act imposes criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, false or fraudulent claims for payment by a federal healthcare program or making a false statement or record material to payment of a false claim or avoiding, decreasing or concealing an obligation to pay money to the federal government, with potential liability including mandatory treble damages and significant per-claim penalties; 84 Table of Contents ● the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and its implementing regulations, also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; ● the federal Physician Payments Sunshine Act requires applicable manufacturers of covered products to report payments and other transfers of value to physicians, other healthcare providers, and teaching hospitals; and ● analogous state and foreign laws and regulations, such as state anti-kickback, false claims, and transparency laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers.
Restrictions under applicable federal and state healthcare laws and regulations include the following: ● the federal Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation or arranging of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid; ● the federal False Claims Act imposes criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, false or fraudulent claims for payment by a federal healthcare program or making a false statement or record material to payment of a false claim or avoiding, decreasing or concealing an obligation to pay money to the federal government, with potential liability including mandatory treble damages and significant per-claim penalties; ● the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and its implementing regulations, also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; ● the federal Physician Payments Sunshine Act requires applicable manufacturers of covered products to report payments and other transfers of value to physicians, other healthcare providers, and teaching hospitals; and ● analogous state and foreign laws and regulations, such as state anti-kickback, false claims, and transparency laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers.
Even if the FDA accepted such data, it could require us to modify our planned clinical trials to receive clearance to initiate such trials in the United States or to continue such trials once initiated. 57 Table of Contents Other risks inherent in conducting international clinical trials or using international trial sites include: ● foreign regulatory requirements that could restrict or limit our ability to conduct our clinical trials; ● the administrative burden of complying with a variety of foreign laws, medical standards and regulatory requirements, including the regulation of pharmaceutical and biotechnology products and treatment; ● the failure of enrolled patients to adhere to clinical protocols or inadequate collection and assessment of clinical data as a result of differences in healthcare services or cultural customs; ● foreign exchange fluctuations; ● diminished or loss of protection of intellectual property in the relevant jurisdiction; and ● political, economic, environmental, and health risks relevant to specific foreign countries, including risks related to natural disasters or disease outbreaks.
Even if the FDA accepted such data, it could require us to modify our planned clinical trials to receive clearance to initiate such trials in the United States or to continue such trials once initiated. ​ Other risks inherent in conducting international clinical trials or using international trial sites include: ● foreign regulatory requirements, differences in healthcare services, and differences in cultural customs that could restrict or limit our ability to conduct our clinical trials; ● the administrative burden of complying with a variety of foreign laws, medical standards and regulatory requirements, including the regulation of pharmaceutical and biotechnology products and treatment; ● the failure of enrolled patients to adhere to clinical protocols or inadequate collection and assessment of clinical data as a result of differences in healthcare services or cultural customs; 58 Table of Contents ● foreign exchange fluctuations; ● diminished or loss of protection of intellectual property in the relevant jurisdiction; and ● political, economic, environmental, and health risks relevant to specific foreign countries, including risks related to natural disasters or disease outbreaks.
To date, there have been several recent U.S. congressional inquiries, as well as proposed and enacted state and federal legislation designed to, among other things, bring more transparency to pharmaceutical pricing, review the relationship between pricing and manufacturer patient programs, reduce the costs of pharmaceuticals under Medicare and Medicaid, and reform government program reimbursement methodologies for products.
To date, there have been several U.S. congressional inquiries, as well as proposed and enacted state and federal legislation designed to, among other things, bring more transparency to pharmaceutical pricing, review the relationship between pricing and manufacturer patient programs, reduce the costs of pharmaceuticals under Medicare and Medicaid, and reform government program reimbursement methodologies for products.
For example, in December 2022, with the passage of Food and Drug Omnibus Reform Act, known was FDORA, Congress required sponsors to develop and submit a diversity action plan for each Phase 3 clinical trial or any other “pivotal study” of a new drug or biological product.
For example, in December 2022, with the passage of Food and Drug Omnibus Reform Act, known was FDORA, Congress required sponsors to develop and submit a diversity action plan, or DAP, for each Phase 3 clinical trial or any other “pivotal study” of a new drug or biological product.
If we fail to comply with applicable regulatory requirements following approval of any of our product candidates, a regulatory authority may: ● issue a warning letter asserting that we are in violation of the law; ● seek an injunction or impose administrative, civil or criminal penalties or monetary fines; 67 Table of Contents ● suspend or withdraw regulatory approval; ● suspend any ongoing clinical trials; ● refuse to approve a pending BLA or comparable foreign marketing application, or any supplements thereto, submitted by us or our collaboration partners; ● restrict the marketing or manufacturing of the product; ● seize or detain the product or otherwise require the withdrawal of the product from the market; ● refuse to permit the import or export of products; or ● refuse to allow us to enter into supply contracts, including government contracts.
If we fail to comply with applicable regulatory requirements following approval of any of our product candidates, a regulatory authority may: ● issue a warning letter asserting that we are in violation of the law; ● seek an injunction or impose administrative, civil or criminal penalties or monetary fines; ● suspend or withdraw regulatory approval; 70 Table of Contents ● suspend any ongoing clinical trials; ● refuse to approve a pending BLA or comparable foreign marketing application, or any supplements thereto, submitted by us or our collaboration partners; ● restrict the marketing or manufacturing of the product; ● seize or detain the product or otherwise require the withdrawal of the product from the market; ● refuse to permit the import or export of products; or ● refuse to allow us to enter into supply contracts, including government contracts.
We expect that we will be subject to additional risks in commercializing our product candidates outside the United States, including: ● different regulatory requirements for approval of drugs and biologics in foreign countries; ● reduced or loss of protection under our intellectual property rights; ● unexpected changes in tariffs, trade barriers and regulatory requirements; ● economic weakness, including inflation, or political instability in particular foreign economies and markets; ● compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; ● foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country; ● workforce uncertainty in countries where labor unrest is more common than in the United States; ● shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; ● business interruptions resulting from geopolitical actions, including war and terrorism, from natural disasters including earthquakes, typhoons, floods and fires, or from economic, social, or political instability; and ● greater difficulty with enforcing our contracts in jurisdictions outside of the United States.
We expect that we will be subject to additional risks in commercializing our product candidates outside the United States, including: ● different regulatory requirements for approval of drugs and biologics in foreign countries; ● reduced or loss of protection under our intellectual property rights; ● unexpected changes in tariffs, trade barriers and regulatory requirements; ● economic weakness, including inflation, or political instability in particular foreign economies and markets; ● compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; ● foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country; ● workforce uncertainty in countries where labor unrest is more common than in the United States; ● shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; 97 Table of Contents ● business interruptions resulting from geopolitical actions, including war and terrorism, from natural disasters including earthquakes, typhoons, floods and fires, or from economic, social, or political instability; and ● greater difficulty with enforcing our contracts in jurisdictions outside of the United States.
Our ability to generate future revenues from product sales depends heavily on our and our collaborators’ and licensors’ success in: ● completing preclinical and clinical development of our product candidates or product candidates incorporating our licensed capsids or other technologies and identifying new product candidates; 51 Table of Contents ● seeking and obtaining regulatory and marketing approvals for product candidates for which we or they complete clinical trials; ● launching and commercializing product candidates for which we or they obtain regulatory and marketing approval by establishing a sales, marketing and distribution infrastructure or, alternatively, collaborating with a commercialization partner; ● obtaining and maintaining adequate coverage and reimbursement by government and third-party payors for our product candidates if and when approved; ● maintaining and enhancing a sustainable, scalable, reproducible and transferable manufacturing process for our vectors and product candidates; ● establishing and maintaining supply and manufacturing relationships with third parties that have the financial, operating and technical capabilities to provide adequate products and services, in both amount and quality, to support clinical development and the market demand for our or their product candidates, if and when approved; ● obtaining an adequate level of market acceptance of our or their product candidates as a viable treatment option; ● addressing any competing technological and market developments; ● implementing additional internal systems and infrastructure, as needed; ● negotiating favorable terms in any collaboration, option, licensing, or other arrangements into which we may enter and performing our obligations in such collaborations; ● obtaining, maintaining, protecting, enforcing and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how; ● avoiding and defending against third-party claims of interference or infringement; and ● attracting, hiring and ret aining qualified personnel.
Our ability to generate future revenues from product sales depends heavily on our and our collaborators’ and licensors’ success in: ● completing preclinical and clinical development of our product candidates or product candidates incorporating our licensed capsids or other technologies and identifying new product candidates; ● seeking and obtaining regulatory and marketing approvals for product candidates for which we or they complete clinical development; ● launching and commercializing product candidates for which we or they obtain regulatory and marketing approval by establishing a sales, marketing and distribution infrastructure or, alternatively, collaborating with a commercialization partner; ● obtaining and maintaining adequate coverage and reimbursement by government and third-party payors for our product candidates if and when approved; ● maintaining and enhancing a sustainable, scalable, reproducible and transferable manufacturing process for our vectors and product candidates; ● establishing and maintaining supply and manufacturing relationships with third parties that have the financial, operating and technical capabilities to provide adequate products and services, in both amount and quality, to support clinical development and the market demand for our or their product candidates, if and when approved; ● obtaining an adequate level of market acceptance of our or their product candidates as viable treatment options; ● addressing any competing technological and market developments; ● implementing additional internal systems and infrastructure, as needed; ● negotiating favorable terms in any collaboration, option, licensing, or other arrangements into which we may enter and performing our obligations in such collaborations; 52 Table of Contents ● obtaining, maintaining, protecting, enforcing and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how; ● avoiding and defending against third-party claims of interference or infringement; and ● attracting, hiring and ret aining qualified personnel.
Among other things, these provisions: ● establish a classified board of directors such that only one of three classes of members of the board is elected each year; ● allow the authorized number of our directors to be changed only by resolution of our board of directors; ● limit the manner in which stockholders can remove directors from the board; ● establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our board of directors; ● require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent; ● limit who may call stockholder meetings; 108 Table of Contents ● authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a stockholder rights plan, or so-called “poison pill,” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and ● require the approval of the holders of at least 75% of the votes that all our stockholders would be entitled to cast to amend or repeal certain provisions of our amended and restated certificate of incorporation or bylaws.
Among other things, these provisions: ● establish a classified board of directors such that only one of three classes of members of the board is elected each year; ● allow the authorized number of our directors to be changed only by resolution of our board of directors; ● limit the manner in which stockholders can remove directors from the board; ● establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our board of directors; ● require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent; ● limit who may call stockholder meetings; ● authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a stockholder rights plan, or so-called “poison pill,” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and ● require the approval of the holders of at least 75% of the votes that all our stockholders would be entitled to cast to amend or repeal certain provisions of our amended and restated certificate of incorporation or bylaws.
In connection with our VY-HTT01 Program for the treatment of Huntington’s disease, for example, we were unable to predict what the FDA would require and were unable to obtain a second pre-IND meeting with the FDA to discuss the product candidate’s regulatory pathway with the FDA.
In connection with our VY-HTT01 Program for the treatment of Huntington’s disease, for example, we were unable to successfully predict what the FDA would require and were unable to obtain a second pre-IND meeting with the FDA to discuss the product candidate’s regulatory pathway with the FDA.
The market price for our common stock may be influenced by many factors, including: ● our success in commercializing any product candidates for which we obtain marketing approval; ● regulatory action and results of clinical trials of our product candidates or those of our competitors; ● the success of competitive products or technologies; ● the results of clinical trials of our product candidates; ● the results of clinical trials of product candidates of our competitors; ● the commencement, termination, and success of our collaborations, including the ability or willingness of our collaboration partners to fulfill their obligations to us; ● regulatory or legal developments in the United States and other countries; ● developments or disputes concerning patent applications, issued patents or other proprietary rights; ● the recruitment or departure of key personnel; ● the level of expenses related to any of our product candidates or clinical development programs; ● the results of our efforts to discover, develop, acquire or in-license additional product candidates or technologies, the cost of commercializing such product candidates, and the cost of development of any such product candidates or technologies; 106 Table of Contents ● actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; ● variations in our financial results or those of companies that are perceived to be similar to us; ● the ability to secure third-party reimbursement for our product candidates; ● changes in the structure of healthcare payment systems; ● market conditions in the pharmaceutical and biotechnology sectors; ● general economic, industry and market conditions, including interest rates and inflation; and ● other factors described in this “Risk Factors” section and elsewhere in this Annual Report on Form 10-K.
The market price for our common stock may be influenced by many factors, including: ● regulatory action and results of clinical trials of our product candidates or those of our competitors; ● the success of competitive products or technologies; ● the results of clinical trials of our product candidates; ● the results of clinical trials of product candidates of our competitors; 109 Table of Contents ● the commencement, termination, and success of our collaborations, including the ability or willingness of our collaboration partners to fulfill their obligations to us; ● regulatory or legal developments in the United States and other countries; ● developments or disputes concerning patent applications, issued patents or other proprietary rights; ● the recruitment or departure of key personnel; ● the level of expenses related to any of our product candidates or clinical development programs; ● the results of our efforts to discover, develop, acquire or in-license additional product candidates or technologies, the cost of commercializing such product candidates, and the cost of development of any such product candidates or technologies; ● actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; ● variations in our financial results or those of companies that are perceived to be similar to us; ● o ur success in commercializing any product candidates for which we obtain marketing approval; ● the ability to secure third-party reimbursement for our product candidates; ● changes in the structure of healthcare payment systems; ● market conditions in the pharmaceutical and biotechnology sectors; ● general economic, industry and market conditions, including interest rates and inflation; and ● other factors described in this “Risk Factors” section and elsewhere in this Annual Report on Form 10-K.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, or a loss of cash in response to ransom threats, we could incur liability, our competitive and financial position and the market perception of the effectiveness of our security measures could be harmed, our credibility could be damaged, and the further development and commercialization of our product candidates could be delayed. 110 Table of Contents ITEM 1B.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, or a loss of cash in response to ransom threats, we could incur liability, our competitive and financial position and the market perception of the effectiveness of our security measures could be harmed, our credibility could be damaged, and the further development and commercialization of our product candidates could be delayed. 114 Table of Contents ITEM 1B.
Patient enrollment and trial completion are affected by many factors including: ​ ● perceived risks and benefits of proprietary antibody and AAV gene therapy approaches for the treatment of neurological and other diseases; ● formulation changes to our product candidates, which may require us to conduct additional clinical studies to bridge our modified product candidates to earlier versions; ● size of the patient population and process for identifying patients; ● design of the trial protocol; ● eligibility and exclusion criteria; ● patients with preexisting antibodies to the gene therapy vector that preclude their participation in the trial; ● perceived risks and benefits of the product candidate under study; ● availability of competing therapies and clinical trials; ● severity of the disease under investigation; 59 Table of Contents ● availability of genetic testing for potential patients; ● proximity and availability of clinical trial sites for prospective patients; ● lack of adequate compensation of patients; ● ability to obtain and maintain patient consent; ● risk that enrolled patients will drop out before completion of the trial; ● our ability to locate appropriately trained physicians to conduct such clinical trials, particularly for clinical trials requiring lengthy and highly complex surgical protocols, the performance of which may only be possible at major academic medical centers or specialized surgical centers; ● willingness of patients to participate in a placebo-controlled trial; ● patient referral practices of physicians; and ● ability to monitor patients adequately during and after treatment.
Patient enrollment and trial completion are affected by many factors including: ​ ● perceived risks and benefits of proprietary antibody , AAV gene therapy , and non-viral therapeutic approaches for the treatment of neurological and other diseases; ● formulation changes to our product candidates, which may require us to conduct additional clinical studies to bridge our modified product candidates to earlier versions; ● size of the patient population and process for identifying patients; ● design of the trial protocol; ● eligibility and exclusion criteria; ● patients with preexisting antibodies to the gene therapy vector that preclude their participation in the trial; ● perceived risks and benefits of the product candidate under study; ● availability of competing therapies and clinical trials; ● severity of the disease under investigation; ● availability of genetic testing for potential patients; 60 Table of Contents ● proximity and availability of clinical trial sites for prospective patients; ● lack of adequate compensation of patients; ● ability to obtain and maintain patient consent; ● risk that enrolled patients will drop out before completion of the trial; ● our ability to locate appropriately trained physicians to conduct such clinical trials, particularly for clinical trials requiring lengthy and highly complex surgical protocols, the performance of which may only be possible at major academic medical centers or specialized surgical centers; ● willingness of patients to participate in a placebo-controlled trial; ● patient referral practices of physicians; and ● ability to monitor patients adequately during and after treatment.
Our amended and restated certificate of incorporation provides that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers and employees to us or our stockholders, (c) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, our certificate of incorporation or our bylaws or (d) any action asserting a claim that is governed by the internal affairs doctrine, in each case subject to the Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein.
Our amended and restated certificate of incorporation provides that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers and employees to us or our stockholders, (c) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, our certificate of incorporation or our bylaws or (d) any action asserting a claim that is governed by the internal affairs doctrine, in each case subject to the Court of 112 Table of Contents Chancery having personal jurisdiction over the indispensable parties named as defendants therein.
Further, we plan to seek marketing approvals in the United States, the European Union and other jurisdictions, which may require that we conduct clinical trials in foreign countries.
Further, we plan to seek marketing approvals in the United States, Canada, the European Union and other jurisdictions, which may require that we conduct clinical trials in foreign countries.
We do not have any committed external source of funds other than the amounts we are entitled to receive from our collaboration partners Neurocrine and Novartis for the reimbursement of certain research and development expenses, the achievement of specified regulatory and commercial milestones, and royalty payments under the 2019 Neurocrine Collaboration Agreement, the 2023 Neurocrine Collaboration Agreement, and the 2023 Novartis Collaboration Agreement and the amounts we are entitled to receive from our licensees Alexion and Novartis for the achievement of specified development, regulatory, and commercialization milestones and royalty payments under the applicable option and license agreements.
We do not have any committed external source of funds other than the amounts we are entitled to receive from our collaboration partners, Neurocrine and Novartis, and licensees for the reimbursement of certain research and development expenses, potential option exercises, the achievement of specified regulatory and commercial milestones, and royalty payments under the 2019 Neurocrine Collaboration Agreement, the 2023 Neurocrine Collaboration Agreement, and the 2023 Novartis Collaboration Agreement and the amounts we are entitled to receive from our licensees Alexion and Novartis for the achievement of specified development, regulatory, and commercialization milestones and royalty payments under the applicable option and license agreements.
Clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do, which could impair our ability to successfully commercialize our product candidates and may harm our business, financial condition, results of operations and prospects. 61 Table of Contents Additionally, if the results of our clinical trials are inconclusive or if there are safety concerns or SAEs associated with our product candidates, we may: ● be delayed in obtaining marketing approval for our product candidates, if we are able to do so at all; ● obtain approval for indications or patient populations that are not as broad as intended or desired; ● obtain approval with labeling that includes significant use or distribution restrictions or safety warnings; ● be subject to changes in the way the product is administered; ● be required to perform additional clinical trials to support approval or be subject to additional post-marketing testing requirements; ● have regulatory authorities withdraw, or suspend, their approval of the product or impose restrictions on its distribution in the form of a Risk Evaluation and Mitigation Strategy, or REMS; ● be subject to the addition of labeling statements, such as warnings or contraindications; ● be sued or otherwise become party to dispute proceedings; or ● experience damage to our reputation.
Clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do, which could impair our ability to successfully commercialize our product candidates and may harm our business, financial condition, results of operations and prospects. 62 Table of Contents Additionally, if the results of our clinical trials are inconclusive or if there are safety concerns or SAEs associated with our product candidates, we may: ● be delayed in obtaining marketing approval for our product candidates, if we are able to do so at all; ● obtain approval for indications or patient populations that are not as broad as intended or desired; ● obtain approval with labeling that includes significant use or distribution restrictions, safety warnings or contraindications ; ● be subject to changes in the way the product is administered; ● be required to perform additional clinical trials to support approval or be subject to additional post-marketing testing requirements; ● have regulatory authorities withdraw, or suspend, their approval of the product or impose restrictions on its distribution in the form of a Risk Evaluation and Mitigation Strategy, or REMS; ● be sued or otherwise become party to dispute proceedings; or ● experience damage to our reputation.
Further, if discovered in a timely manner, our efforts to enforce rights to protect against these types of breaches may not be possible under law, or may not be successful if commenced. It is also possible that, as we grow and establish ourselves in multiple geographic areas, alignment and/or compliance with company polices may not be consistently maintained.
Further, if discovered in a timely manner, our efforts to enforce rights to protect against these types of breaches may not be possible under law, or may not be successful if commenced. It is also possible that, as we grow and establish ourselves in multiple geographic areas, alignment and/or compliance with company policies may not be consistently maintained.
Upon our receipt of topline data from the first Phase 1 clinical trial for a product 89 Table of Contents candidate being developed pursuant to the GBA1 Program, we will have the option to either: (1) co-commercialize collaboration products in the GBA1 Program with Neurocrine in the United States under a 50/50 cost- and profit-sharing arrangement and receive milestones and royalties based on ex-U.S. sales, or (2) retain the right to receive milestone payments and royalties based on global sales pursuant to the full global commercial rights granted to Neurocrine.
Upon our receipt of topline data from the first Phase 1 clinical trial for a product candidate being developed pursuant to the GBA1 Program, we will have the option to either: (1) co-commercialize collaboration products in the GBA1 Program with Neurocrine in the United States under a 50/50 cost- and profit-sharing arrangement and receive milestones and royalties based on ex-U.S. sales, or (2) retain the right to receive milestone payments and royalties based on global sales pursuant to the full global commercial rights granted to Neurocrine.
Any of these occurrences may harm our ability to develop other product candidates and may harm our business, financial condition and prospects significantly. 62 Table of Contents Additionally, if any of our product candidates receives marketing approval, the FDA could require us to adopt a REMS to ensure that the benefits outweigh its risks.
Any of these occurrences may harm our ability to develop other product candidates and may harm our business, financial condition and prospects significantly. 63 Table of Contents Additionally, if any of our product candidates receives marketing approval, the FDA could require us to adopt a REMS to ensure that the benefits outweigh its risks.
We could be forced, including by court order, to cease developing, manufacturing and commercializing the infringing technology or product candidates. In addition, we could be found liable for monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed a patent or other intellectual property right.
We could be forced, including by court order, to cease developing, manufacturing and commercializing the infringing technology or product candidates. In addition, we could be found liable for monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed a patent or other intellectual property rights.
While we have not experienced any such material system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations or the operations of those third parties with which we contract, it could result in a material disruption of our development programs and our business operations, whether due to a loss of our trade secrets or other proprietary information or other similar disruptions, and could require a substantial expenditure of resources to remedy.
While we have not experienced 113 Table of Contents any such material system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations or the operations of those third parties with which we contract, it could result in a material disruption of our development programs and our business operations, whether due to a loss of our trade secrets or other proprietary information or other similar disruptions, and could require a substantial expenditure of resources to remedy.
If we or our manufacturers were to fail to comply with the FDA, EMA, or other regulatory authority, it could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension 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, EMA, or other regulatory authority, it could result in sanctions being imposed on us, including clinical holds, 80 Table of Contents fines, injunctions, civil penalties, delays, suspension 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.
Accordingly, such reforms, if enacted, could have an adverse effect on anticipated revenue from that we, or our collaborators, may successfully develop and for which we, or they, may obtain marketing approval and may affect our overall financial condition and ability to develop or commercialize product candidates.
Accordingly, such reforms, if enacted, could have an adverse effect on anticipated revenue from product candidates that we may successfully develop and for which we may obtain marketing approval and may affect our overall financial condition and ability to develop or commercialize product candidates.
The exclusivity period in the European Union can be reduced to nine years if a 63 Table of Contents product no longer meets the criteria for orphan drug designation or if the product is sufficiently profitable so that market exclusivity is no longer justified.
The exclusivity period in the European Union can be reduced to nine years if a 64 Table of Contents product no longer meets the criteria for orphan drug designation or if the product is sufficiently profitable so that market exclusivity is no longer justified.
Further, we could face heightened risks with respect to obtaining marketing authorization in the UK as a result of the withdrawal of the UK from the EU, commonly referred to as Brexit. The UK is no longer part of the European Single Market and EU Customs Union.
Additionally, we could face heightened risks with respect to obtaining marketing authorization in the UK as a result of the withdrawal of the UK from the EU, commonly referred to as Brexit. The UK is no longer part of the European Single Market and EU Customs Union.
For example, we completed a private placement of 2,145,002 shares of our common stock to Novartis and an underwritten public offering of 7,777,778 shares of our common stock and pre-funded warrants to purchase up to 3,333,333 shares of our common stock in January 2024.
In January 2024, we completed a private placement of 2,145,002 shares of our common stock to Novartis and an underwritten public offering of 7,777,778 shares of our common stock and pre-funded warrants to purchase up to 3,333,333 shares of our common stock.
The 86 Table of Contents GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including requirements relating to processing health and other sensitive data, obtaining consent of the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third-party processors.
The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including requirements relating to processing health and other sensitive data, obtaining consent of the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third-party processors.
Because we currently rely on certain third parties to manufacture all or part of our product candidates and to perform quality testing, and because we collaborate with various organizations and academic institutions for the advancement of our proprietary antibody program and gene therapy and vectorized antibody platforms and programs, we must, at times, share our proprietary technology and confidential information, including trade secrets, with them.
Because we currently rely on certain third parties to manufacture all or part of our product candidates and to perform quality testing, and because we collaborate with various organizations and academic institutions for the advancement of our proprietary antibody program and gene therapy, vectorized antibody, and non-viral therapeutic platforms and programs, we must, at times, share our proprietary technology and confidential information, including trade secrets, with them.
Regardless of merit or eventual outcome, liability claims may result in: ● decreased demand for any product candidates that we may develop; ● loss of revenue; 87 Table of Contents ● substantial monetary awards to trial participants or patients; ● significant time and costs to defend the related litigation; ● withdrawal of clinical trial participants; ● the inability to commercialize any product candidates that we may develop; and ● injury to our reputation and significant negative media attention.
Regardless of merit or eventual outcome, liability claims may result in: ● decreased demand for any product candidates that we may develop; ● loss of revenue; ● substantial monetary awards to trial participants or patients; ● significant time and costs to defend the related litigation; ● withdrawal of clinical trial participants; ● the inability to commercialize any product candidates that we may develop; and ● injury to our reputation and significant negative media attention.
The availability of the PTAB as a lower-cost, faster and potentially more potent tribunal for challenging patents could therefore increase the likelihood that our own licensed patents will be challenged, thereby increasing the uncertainties and costs of maintaining and enforcing them. Moreover, if such challenges occur, we may not have the right to control the defense.
The availability of the PTAB as a lower-cost, faster and potentially more potent tribunal for challenging patents could therefore increase the likelihood that our owned or licensed patents will be challenged, thereby increasing the uncertainties and costs of maintaining and enforcing them. Moreover, if such challenges occur, we may not have the right to control the defense.
We expect to experience pricing pressures in connection with the sale of any of our product candidates due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative changes. The downward pressure on healthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become intense.
We expect to experience pricing pressures in connection with the sale of any of our product candidates due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative changes. The downward pressure on 95 Table of Contents healthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become intense.
If we are unable to obtain such supplies, we may be unable to complete such preclinical testing and studies in a timely manner or at all. For example, some of our IND-enabling toxicology, capsid discovery, and other studies require certain non-human primates, or NHPs, that are customarily imported from outside the United States.
If we are unable to obtain such supplies, we may be unable to complete such preclinical testing and studies in a timely manner or at all. For example, some of our IND-enabling toxicology, capsid discovery, and other studies require certain NHPs that are customarily imported from outside the United States.
Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments.
Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities. In addition, there could be 104 Table of Contents public announcements of the results of hearings, motions or other interim proceedings or developments.
Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive, and uncertain process that takes years to complete. We may never generate the necessary data or results required to maintain the financial support of our collaborators or obtain marketing approval and achieve product 53 Table of Contents sales.
Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive, and uncertain process that takes years to complete. We may never generate the necessary data or results required to maintain the financial support of our collaborators or obtain marketing approval and achieve product sales.
The inability to recruit, or loss of services of, certain executives, key employees, consultants or advisors, may impede the progress of our research, development and commercialization objectives and could harm our business, financial condition, results of operations and prospects. If we are unable to manage expected growth in the scale and complexity of our operations, our performance may suffer.
The inability to recruit, or loss of services of, certain executives, key employees, consultants or advisors, may impede the progress of our research, development and commercialization objectives and could harm our business, financial condition, results of operations and prospects. 83 Table of Contents If we are unable to manage expected growth in the scale and complexity of our operations, our performance may suffer.
Without an internal team or the support of a third party to perform marketing and sales functions, we may be unable to compete successfully against these more established companies. ​ Our efforts to educate the medical community and third-party payors on the benefits of our product candidates may require significant resources and may never be successful.
Without an internal team or the support of a third party to perform marketing and sales functions, we may be unable to compete successfully against these more established companies. ​ 93 Table of Contents Our efforts to educate the medical community and third-party payors on the benefits of our product candidates may require significant resources and may never be successful.
Accordingly, sales of our product candidates will depend substantially, both domestically and abroad, on the extent to which the costs of our product candidates will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or will be reimbursed by government authorities, private health coverage insurers and other 90 Table of Contents third-party payors.
Accordingly, sales of our product candidates will depend substantially, both domestically and abroad, on the extent to which the costs of our product candidates will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or will be reimbursed by government authorities, private health coverage insurers and other third-party payors.
The FCPA also obligates companies whose securities are listed in the United States to comply with certain accounting provisions requiring the company to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of 94 Table of Contents internal accounting controls for international operations.
The FCPA also obligates companies whose securities are listed in the United States to comply with certain accounting provisions requiring the company to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations.
If we are unable to raise capital or enter into business development transactions when needed or on acceptable terms, we could be forced to delay, reduce or eliminate certain of our research and development programs or any future commercialization efforts. ​ 52 Table of Contents Our operations have consumed significant amounts of cash since inception.
If we are unable to raise capital or enter into business development transactions when needed or on acceptable terms, we could be forced to delay, reduce or eliminate certain of our research and development programs or any future commercialization efforts. ​ Our operations have consumed significant amounts of cash since inception.
Risks Related to the Development and Regulatory Approval of Our Product Candidates Our AAV gene therapy and other biological therapy product candidates are based on a proprietary technology and, in several disease areas, unvalidated treatment approaches, which makes it difficult and potentially infeasible to predict the duration and cost of development of, and subsequently obtaining regulatory approval for, our product candidates .
Risks Related to the Development and Regulatory Approval of Our Product Candidates Our AAV gene therapy, non-viral therapeutic, and other biological therapy product candidates are based on a proprietary technology and, in several disease areas, unvalidated treatment approaches, which makes it difficult and potentially infeasible to predict the duration and cost of development of, and subsequently obtaining regulatory approval for, our product candidates .
We have also built an onsite, state-of-the-art process research and development facility to enable the manufacturing of preclinical AAV gene therapy vectors for large animal studies including IND enabling GLP toxicology materials. We are currently assessing our manufacturing capabilities, and we do not currently have our own clinical or commercial scale manufacturing.
We have also built an onsite, state-of-the-art process research and development facility to enable the manufacturing of preclinical AAV gene therapy vectors for large animal studies including IND enabling GLP toxicology materials. We do not currently have our own clinical or commercial scale manufacturing.
In particular, our success will depend upon physicians who specialize in the treatment of genetic diseases targeted by our product candidates, prescribing treatments that involve the use of our 93 Table of Contents product candidates in lieu of, or in addition to, existing treatments with which they are familiar and for which greater clinical data may be available.
In particular, our success will depend upon physicians who specialize in the treatment of genetic diseases targeted by our product candidates, prescribing treatments that involve the use of our product candidates in lieu of, or in addition to, existing treatments with which they are familiar and for which greater clinical data may be available.
In addition to the foregoing, the risks associated with patent rights that we license from third parties will also apply to patent rights we own or may own in the future. 95 Table of Contents Further, in many of our license agreements we are responsible for bringing any actions against any third party for infringing on the patents we have licensed.
In addition to the foregoing, the risks associated with patent rights that we license from third parties will also apply to patent rights we own or may own in the future. Further, in many of our license agreements we are responsible for bringing any actions against any third party for infringing on the patents we have licensed.
The agreements under which we currently license intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible to multiple interpretations.
The agreements under which we currently in-license intellectual property or technology from, or out-license our intellectual property to, third parties are complex, and certain provisions in such agreements may be susceptible to multiple interpretations.
Termination may also result in unfavorable terms associated with such termination or may result in obligations on our part to license or grant back intellectual property rights to prior licensors. Furthermore, the research resulting in certain of our licensed patent rights and technology was funded by the U.S. government.
Termination may also result in unfavorable terms associated with such termination or may result in obligations on our part to license or grant back intellectual property rights to prior licensors. 99 Table of Contents Furthermore, the research resulting in certain of our licensed patent rights and technology was funded by the U.S. government.
In the United States, for example, the application user fee to obtain FDA review of a marketing application is more than $4.0 million, and may be higher in the future.
In the United States, for example, the application user fee to obtain FDA review of a marketing application is more than $4.3 million and may be higher in the future.
If our collaborations or option and license transactions do not result in the successful development and commercialization of products, or if one of our collaborators, optionees, or licensees terminates its agreement with us, we may not receive any future research funding or milestone or royalty payments under 74 Table of Contents the collaboration or option and license transactions.
If our collaborations or option and license transactions do not result in the successful development and commercialization of products, or if one of our collaborators, optionees, or licensees terminates its agreement with us, we may not receive any future research funding or milestone or royalty payments under the collaboration or option and license transactions.
We and our collaborators will control only certain aspects of our third-party service providers’ activities. Nevertheless, we and our collaborators will be responsible for ensuring that each of our preclinical studies and clinical trials is 75 Table of Contents conducted in accordance with the applicable protocol, legal, quality, regulatory and scientific standards.
We and our collaborators will control only certain aspects of our third-party service providers’ activities. Nevertheless, we and our collaborators will be responsible for ensuring that each of our preclinical studies and clinical trials is conducted in accordance with the applicable protocol, legal, quality, regulatory and scientific standards.
Such an occurrence may cause our business, financial condition, results of operations and prospects to be harmed. Additionally, if supply from any third-party manufacturers is delayed or interrupted, there could be a significant disruption in the supply of our clinical or commercial material.
Such an occurrence may cause our business, financial condition, results of operations and prospects to be harmed. 81 Table of Contents Additionally, if supply from any third-party manufacturers is delayed or interrupted, there could be a significant disruption in the supply of our clinical or commercial material.
In addition, our trade secrets may otherwise become known or be independently discovered by competitors. Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could harm our business.
In addition, our trade secrets may otherwise become known or be independently discovered by competitors. 103 Table of Contents Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could harm our business.
Some of our clinical trials were conducted with small patient populations and were not blinded or placebo-controlled, making it difficult to predict whether the favorable results that we observed in such trials will be sustained or repeated in larger and more advanced clinical trials.
Some of our clinical trials were conducted with small patient populations and were not blinded or placebo-controlled, making it difficult to predict whether the favorable results that we observed in such trials will be sustained or 57 Table of Contents repeated in larger and more advanced clinical trials.
Additionally, there may be significant delays in obtaining coverage and reimbursement for newly approved drugs and biologics, and coverage may be more limited than the purposes for which the drug is approved by the FDA or comparable foreign regulatory authorities. There is significant uncertainty related to third-party coverage and reimbursement of newly approved products.
Additionally, there may be significant delays in obtaining coverage and reimbursement for newly approved drugs and biologics, and coverage may be more limited than the purposes for which the drug is approved by the FDA or comparable foreign regulatory authorities. 94 Table of Contents There is significant uncertainty related to third-party coverage and reimbursement of newly approved products.
Any ruling of a similar scope in other countries could affect the scope of our intellectual property rights. The ambiguities and changing law in all countries as to patenting genetic material may directly affect our ability to secure and/or maintain patent protection for our gene therapy products.
Any ruling of a similar scope in other countries could affect the scope of our 106 Table of Contents intellectual property rights. The ambiguities and changing law in all countries as to patenting genetic material may directly affect our ability to secure and/or maintain patent protection for our gene therapy products.
Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor’s discovery of our proprietary technology and confidential information or other unauthorized use or disclosure would impair our competitive position and may harm our business, financial condition, results of operations and prospects.
Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor’s discovery of our 108 Table of Contents proprietary technology and confidential information or other unauthorized use or disclosure would impair our competitive position and may harm our business, financial condition, results of operations and prospects.
Our relationship with any current or future collaborators, optionees, or licensees may pose several risks, including the following: ● collaborators, optionees, and licensees have significant discretion in determining the amount and timing of the efforts and resources that they will apply to these collaborations and option and license transactions; ● collaborators, optionees, or licensees may not perform their obligations as expected or desired; ● the preclinical studies and clinical trials conducted as part of these collaborations or by our licensees may not be successful; ● collaborators, optionees, or licensees may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on preclinical study or clinical trial results, changes in the collaborators’, optionees’, or licensees’ strategic focus or available funding or external factors, such as an acquisition, which divert resources or create competing priorities; ● collaborators, optionees, or licensees may delay preclinical studies and clinical trials, provide insufficient funding for preclinical studies and clinical trials, stop a preclinical study or clinical trial or abandon a product candidate, repeat or conduct new preclinical studies or clinical trials or require a new formulation of a product candidate for preclinical studies or clinical trials; 73 Table of Contents ● we may not have access to, or may be restricted from disclosing, certain information regarding product candidates being developed or commercialized under a collaboration or by a licensee and, consequently, may have limited ability to inform our stockholders about the status of such product candidates; ● collaborators, optionees, or licensees could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators, optionees, or licensees believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; ● product candidates developed in collaboration with us or by a licensee may be viewed by our collaborators or licensees as competitive with their own product candidates or products, which may cause collaborators or licensees to cease to devote resources to the commercialization of our product candidates; ● a collaborator or licensee with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of any such product candidate; ● disagreements with collaborators, optionees, or licensees, including disagreements over proprietary rights, contract interpretation or the preferred course of development of any product candidates, may cause delays or termination of the research, development or commercialization of such product candidates, may lead to additional responsibilities or expenses for us with respect to such product candidates (in the case of collaborations) or may result in litigation or arbitration, any of which would be time-consuming and expensive; ● in collaboration, licensing, and option arrangements where we have licensed intellectual property rights to collaborators, licensees, and optionees who have the right to control prosecution of the licensed intellectual property rights, disputes may arise with respect to the prosecution strategy for the relevant intellectual property rights, which may impair our ability to pursue our preferred prosecution strategy or achieve the desired protection from any relevant patents; ● collaborators, optionees, or licensees may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; ● disputes may arise with respect to the ownership or inventorship of intellectual property developed pursuant to our collaborations or option and license transactions; ● collaborators, optionees, or licensees may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; ● the terms of our collaboration or license agreement may restrict us from entering into certain relationships with other third parties, thereby limiting our options; and ● collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.
Moreover, an unsuccessful outcome in any clinical trial for which our collaborator, optionee, or licensee is responsible could be harmful to the public perception and prospects of our proprietary antibody program and gene therapy and vectorized antibody platforms. 76 Table of Contents Our relationship with any current or future collaborators, optionees, or licensees may pose several risks, including the following: ● collaborators, optionees, and licensees have significant discretion in determining the amount and timing of the efforts and resources that they will apply to these collaborations and option and license transactions; ● collaborators, optionees, or licensees may not perform their obligations as expected or desired; ● the preclinical studies and clinical trials conducted as part of these collaborations or by our licensees may not be successful; ● collaborators, optionees, or licensees may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on preclinical study or clinical trial results, changes in the collaborators’, optionees’, or licensees’ strategic focus or available funding or external factors, such as an acquisition, which divert resources or create competing priorities; ● collaborators, optionees, or licensees may delay preclinical studies and clinical trials, provide insufficient funding for preclinical studies and clinical trials, stop a preclinical study or clinical trial or abandon a product candidate, repeat or conduct new preclinical studies or clinical trials or require a new formulation of a product candidate for preclinical studies or clinical trials; ● we may not have access to, or may be restricted from disclosing, certain information regarding product candidates being developed or commercialized under a collaboration or by a licensee and, consequently, may have limited ability to inform our stockholders about the status of such product candidates; ● collaborators, optionees, or licensees could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators, optionees, or licensees believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; ● product candidates developed in collaboration with us or by a licensee may be viewed by our collaborators or licensees as competitive with their own product candidates or products, which may cause collaborators or licensees to cease to devote resources to the commercialization of our product candidates; ● a collaborator or licensee with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of any such product candidate; ● disagreements with collaborators, optionees, or licensees, including disagreements over proprietary rights, contract interpretation or the preferred course of development of any product candidates, may cause delays or termination of the research, development or commercialization of such product candidates, may lead to additional responsibilities or expenses for us with respect to such product candidates (in the case of collaborations) or may result in litigation or arbitration, any of which would be time-consuming and expensive; ● in collaboration, licensing, and option arrangements where we have licensed intellectual property rights to collaborators, licensees, and optionees who have the right to control prosecution of the licensed intellectual property rights, disputes may arise with respect to the prosecution strategy for the relevant intellectual property rights, which may impair our ability to pursue our preferred prosecution strategy or achieve the desired protection from any relevant patents; 77 Table of Contents ● collaborators, optionees, or licensees may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; ● disputes may arise with respect to the ownership or inventorship of intellectual property developed pursuant to our collaborations or option and license transactions; ● collaborators, optionees, or licensees may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; ● the terms of our collaboration or license agreement may restrict us from entering into certain relationships with other third parties, thereby limiting our options; and ● collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.
Applicable legislation in the EU also requires sponsors to either conduct clinical trials in a pediatric population in accordance with a Pediatric Investigation Plan approved by the 66 Table of Contents Pediatric Committee of the European Medicines Agency, or EMA, or to obtain a waiver or deferral from the conduct of these studies by this Committee.
Applicable legislation in the EU also requires sponsors to either conduct clinical trials in a pediatric population in accordance with a Pediatric Investigation Plan approved by the Pediatric Committee of the European Medicines Agency, or EMA, or to obtain a waiver or deferral from the conduct of these studies by this Committee.
As a result, capital appreciation, if any, of our common stock will be the sole source of gain for our stockholders for the foreseeable future. 109 Table of Contents General Risk Factors We might not be able to utilize a significant portion of our net operating loss carryforwards.
As a result, capital appreciation, if any, of our common stock will be the sole source of gain for our stockholders for the foreseeable future. General Risk Factors We might not be able to utilize a significant portion of our net operating loss carryforwards.
We are developing and implementing a corporate compliance program designed to ensure that we will market and sell any future products that we successfully develop from our product candidates in compliance with all applicable laws and regulations, but we cannot guarantee that this program will protect us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.
We are developing and implementing a corporate compliance program designed to ensure that we will market and sell any future products that we successfully develop from our product candidates in compliance with all applicable laws and regulations, but we cannot guarantee that this program will protect us from governmental investigations or 88 Table of Contents other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.
A failure of one or more clinical trials can occur at any stage of testing. Our product candidates may fail to show the 56 Table of Contents desired safety and efficacy in preclinical testing or clinical development despite demonstrating promising results in earlier preclinical studies or clinical trials.
A failure of one or more clinical trials can occur at any stage of testing. Our product candidates may fail to show the desired safety and efficacy in preclinical testing or clinical development despite demonstrating promising results in earlier preclinical studies or clinical trials.
Any changes in the manufacturing of components of the raw materials we use could result in unanticipated or unfavorable effects on our manufacturing processes, including delays. ​ 77 Table of Contents Delays in obtaining regulatory approval of our or our collaborators’ manufacturing processes and facilities or disruptions in such manufacturing processes may delay or disrupt our commercialization efforts.
Any changes in the manufacturing of components of the raw materials we use could result in unanticipated or unfavorable effects on our manufacturing processes, including delays. Delays in obtaining regulatory approval of our or our collaborators’ manufacturing processes and facilities or disruptions in such manufacturing processes may delay or disrupt our commercialization efforts.
It is difficult to predict what third-party payors will decide with respect to the coverage 91 Table of Contents and reimbursement for our product candidates, especially given that the cost of our product candidates is likely to be very high and pricing of such products is highly uncertain.
It is difficult to predict what third-party payors will decide with respect to the coverage and reimbursement for our product candidates, especially given that the cost of our product candidates is likely to be very high and pricing of such products is highly uncertain.
Any product that we commercialize may not gain acceptance by physicians, patients, health care payors and others in the medical community. If these products do not achieve an adequate level of acceptance, we may not generate significant product revenue and may not become 92 Table of Contents profitable.
Any product that we commercialize may not gain acceptance by physicians, patients, health care payors and others in the medical community. If these products do not achieve an adequate level of acceptance, we may not generate significant product revenue and may not become profitable.
Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing or, in some cases, only upon issuance or not at all.
Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing or, in some cases, only 100 Table of Contents upon issuance or not at all.
As a result, in October 2020, the FDA notified us that the IND application for the planned Phase 1 and Phase 2 clinical trial to evaluate VY-HTT01 had been put on clinical hold. ​ 58 Table of Contents In addition, the FDA’s and other regulatory authorities’ policies with respect to clinical trials may change and additional government regulations may be enacted.
As a result, in October 2020, the FDA notified us that the IND application for the planned Phase 1 and Phase 2 clinical trial to evaluate VY-HTT01 had been put on clinical hold. ​ In addition, the FDA’s and other regulatory authorities’ policies with respect to clinical trials may change and additional government regulations may be enacted.
Payments made to physicians in certain European Union Member States must be publicly disclosed and often must be the subject of prior notification and approval by the physician’s employer, his or her competent professional 85 Table of Contents organization and/or the regulatory authorities of the individual European Union Member States.
Payments made to physicians in certain European Union Member States must be publicly disclosed and often must be the subject of prior notification and approval by the physician’s employer, his or her competent professional organization and/or the regulatory authorities of the individual European Union Member States.
We may be unable to successfully implement these tasks on a larger scale and, accordingly, may not achieve our research, development and growth goals. ​ 80 Table of Contents Our employees, principal investigators, consultants and commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading.
We may be unable to successfully implement these tasks on a larger scale and, accordingly, may not achieve our research, development and growth goals. Our employees, principal investigators, consultants and commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading.
RMAT designation is within the discretion of the FDA. Accordingly, even if we believe one of our other product candidates meets the criteria for RMAT designation, the FDA may disagree and instead determine not to make such designation.
RMAT designation is within the discretion of the FDA. Accordingly, even if we believe one of our other product candidates meets the criteria for RMAT designation, the FDA may disagree and instead determine not to make 66 Table of Contents such designation.
We are aware of several companies focused on developing their proprietary antibodies or AAV gene therapies in various indications, as well as several companies addressing other methods for modifying genes and regulating gene expression.
We are aware of several companies focused on developing their proprietary antibodies, AAV gene therapies, or non-viral therapeutics in various indications, as well as several companies addressing other methods for modifying genes and regulating gene expression.
We, our collaborators, and our third-party service providers are required to comply with the FDA’s good laboratory practices, or GLPs, and GCPs for conducting, recording and reporting the results of IND-enabling preclinical studies and clinical studies to assure that the data and reported results are credible and accurate and that the rights, integrity and confidentiality of clinical trial participants are protected.
We, our collaborators, and our third-party service providers are required to comply with the FDA’s GLPs, and GCPs for conducting, recording and reporting the results of IND-enabling preclinical studies and clinical studies to assure that the data and reported results are credible and accurate and that the rights, integrity and confidentiality of clinical trial participants are protected.
We may not prevail in any lawsuits that we 99 Table of Contents initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. 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.
We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. 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.
For example: ● others may be able to make antibody or gene therapy products that are similar to our product candidates but that are not covered by the claims of the patents that we own, license or may access in the future; ● we, or our license partners or current or future collaborators, might not have been the first to make the inventions covered by the issued patent or pending patent application that we license or may own in the future; ● we, or our license partners or current or future collaborators, might not have been the first to file patent applications covering certain of our or their inventions; ● others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our owned or licensed intellectual property rights; ● it is possible that our pending patent applications or those that we may own in the future will not lead to issued patents; ● issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors; ● 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; ● the patents of others may have an adverse effect on our business; and 104 Table of Contents ● we may choose not to file a patent for certain inventions, trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.
For example: ● others may be able to make antibody, gene therapy, or non-viral therapeutic products that are similar to our product candidates but that are not covered by the claims of the patents that we own, license or may access in the future; ● we, or our license partners or current or future collaborators, might not have been the first to make the inventions covered by the issued patent or pending patent application that we license or may own in the future; ● we, or our license partners or current or future collaborators, might not have been the first to file patent applications covering certain of our or their inventions; ● others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our owned or licensed intellectual property rights; 107 Table of Contents ● it is possible that our pending patent applications or those that we may own in the future will not lead to issued patents , or result in issued patents with a scope of protection that could be designed around or circumvented by our competitors ; ● issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors; ● 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; ● the patents of others may have an adverse effect on our business; and ● we may choose not to file a patent for certain inventions, trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.
We may not be aware of all third-party intellectual property rights potentially relating to our product candidates, particularly due to the competitive and rapidly-evolving gene therapy patent landscape.
We may not be aware of all third-party intellectual property rights potentially relating to our product candidates, particularly due to the competitive and rapidly-evolving gene therapy and non-viral therapeutic patent landscape.
To date, all of our revenue has been derived from our ongoing collaborations and licensing agreements with Neurocrine, Novartis, Alexion and Sangamo and from our prior collaborations with Sanofi Genzyme Corporation, AbbVie Biotechnology Ltd and AbbVie Ireland Unlimited Company.
To date, substantially all of our revenue has been derived from our ongoing collaborations and licensing agreements with Neurocrine, Novartis, and Alexion and from our prior collaborations with Sanofi Genzyme, AbbVie Biotechnology Ltd and AbbVie Ireland Unlimited Company.
In July 2020, the European Court of Justice invalidated the Privacy Shield program, a voluntary self-certification privacy protection mechanism that facilitated transfers of personal data from the European Union to the United States.
In July 2020, the European Court of Justice invalidated the Privacy Shield program, a voluntary self- 90 Table of Contents certification privacy protection mechanism that facilitated transfers of personal data from the European Union to the United States.
We also have an effective registration statement on Form S-3 for the sale of up to $300.0 million in aggregate of an indeterminate number of shares of common stock and preferred stock, an indeterminate principal amount of debt securities, and an indeterminate number of depositary shares, subscription rights, warrants, purchase contract and units, of which we have reserved $75.0 million for the offering, issuance, and sale of common stock through at-the-market offerings or negotiated transactions under a sales agreement we entered into with Cowen and Company, LLC, on November 8, 2022.
We also have an effective registration statement on Form S-3 for the sale of up to $300.0 million in aggregate of an indeterminate number of shares of common stock and preferred stock, an indeterminate principal amount of debt securities, and an indeterminate number of depositary shares, subscription rights, warrants, purchase contract and units, pursuant to which we have issued and sold approximately $100.0 million of securities in January 2024 and under which we have reserved $75.0 million for the offering, issuance, and sale of common stock through at-the-market offerings or negotiated transactions under a sales agreement we entered into with Cowen and Company, LLC, on November 8, 2022.
We could experience manufacturing problems that result in delays in the development or commercialization of our product candidates or otherwise harm our business. The manufacture of gene therapy products is technically complex and necessitates substantial expertise and capital investment. Production difficulties caused by unforeseen events may delay the availability of material for our clinical studies.
We could experience manufacturing problems that result in delays in the development or commercialization of our product candidates or otherwise harm our business. The manufacture of gene therapy, non-viral therapeutic, and other biological products is technically complex and necessitates substantial expertise and capital investment. Production difficulties caused by unforeseen events may delay the availability of material for our clinical studies.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeHe has also participated in Gartner cybersecurity programs and conferences and received training in the identification and prevention of cyber threats such as spam, phishing, spear-phishing, malware, and social engineering. ​ In an effort to deter and detect cyber threats, we annually provide all of our personnel, including full-time and part-time employees and temporary staff, with a data protection, cybersecurity and incident response and prevention training and compliance program, which covers timely and relevant topics, including social engineering, phishing, password protection, confidential data protection, asset use and mobile security, and the importance of reporting all incidents immediately.
Biggest changeAdditionally, the VP of IT has participated in Gartner cybersecurity programs and conferences and received training on combating cyber threats, including phishing, malware, and social engineering. 115 Table of Contents Employee Training and Technology-Based Safeguards We provide annual data protection and cybersecurity training for all personnel, including full-time, part-time, and temporary staff.
ITEM 1C. CYBERSECURITY We have certain processes for assessing, identifying and managing cybersecurity risks, which are built into our overall risk management program/information technology function. These processes are designed to help protect our information assets and operations from internal and external cyber threats, protect employee, vendor, and collaborator information from unauthorized access or attack, and secure our networks and systems.
These processes are designed to: ● Protect our information assets and operations from internal and external cyber threats , ● Safeguard employee, vendor, and collaborator information from unauthorized access or attack , and ● Secure our networks and systems.
Our Vice President of Information Technology has more than 15 years of experience managing cybersecurity, including service as the Chief Information Security Officer for a multi-national company in the specialty materials industry.
Our VP of IT brings over 15 years of experience in cybersecurity, including serving as Chief Information Security Officer for a multinational company in the specialty materials industry. Our VP of IT has experience with compliance programs for cybersecurity-related regulations and standards.
We consider the internal risk oversight programs of third-party information technology service providers before engaging them in order to help protect us from any related vulnerabilities. ​ Our Board of Directors does not believe that there are currently any known risks from cybersecurity threats that are reasonably likely to materially affect us or our business strategy, results of operations or financial condition.
Board and Audit Committee Oversight We do not believe that there are currently any known risks from cybersecurity threats that are reasonably likely to materially impact the company or its business strategy, operations, or financial condition. The Audit Committee provides direct oversight of cybersecurity risk and updates the Board of Directors on such matters.
The Audit Committee receives updates from management twice a year regarding cybersecurity matters and is notified between such updates regarding significant new cybersecurity threats or incidents. ​ Our Vice President of Information Technology leads operational oversight of company-wide cybersecurity strategy, policy, standards, and processes, and works across the relevant departments to assess and help prepare us to address cybersecurity risks.
Management delivers quarterly cybersecurity updates to the Audit Committee, with additional updates provided as significant new threats or incidents arise. Operational Leadership and Incident Response Our Vice President of Information Technology, or VP of IT, leads company-wide cybersecurity strategy, policy, standards, and processes.
They include physical, procedural and technical safeguards, response plans, regular tests on our systems, incident simulations, and routine review of our policies and procedures to identify risks and improve our cybersecurity risk management practices. We engage certain external parties, including consultants with expertise in information security, cybersecurity incident response, and governance, to enhance our cybersecurity oversight.
Our cybersecurity framework includes physical, procedural, and technical safeguards, as well as: ● Continuous security monitoring to detect any anomalies and event s, ● Response plans for cyber incidents , ● Regular system testing and incident simulations , and ● Routine reviews of policies and procedures to identify risks and enhance practices.
In the event of a cybersecurity incident, our Vice President of Information Technology works with our information technology department and appropriate representatives of other affected departments to assess and respond to the incident, and to determine whether internal and external reporting of the incident is merited under the circumstances.
This role includes working across departments to assess and address cybersecurity risks and participating in management's updates to the Audit Committee. In the event of a cybersecurity incident, the VP of IT collaborates with the information technology department and relevant teams to assess and respond to the incident, determining the need for internal and external reporting.
We also utilize a stringent endpoint security practice, geo-fencing and geo-blocking on firewalls, and automatic prioritization of emails to enable our information technology department to efficiently prioritize response to the most dangerous threats. ​ 111 Table of Contents
To complement employee training, we utilize technology-based tools and practices to mitigate cybersecurity risks, including: ● Proactive cybersecurity monitoring for threat detection and swift response , ● Tools to address vulnerabilities and protect information assets , ● Endpoint security measures, geo-fencing, and geo-blocking on firewall s , and ● Automatic email prioritization to help our information technology department efficiently address the most critical threats.
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Our Audit Committee provides direct oversight over cybersecurity risk, and provides updates to the Board of Directors regarding such oversight.
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ITEM 1C. CYBERSECURITY Cybersecurity Risk Management and Oversight We have processes for assessing, identifying, and managing cybersecurity risks, integrated into our overall risk management program and information technology function.
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Additionally, our Vice President of Information Technology participates in management’s semi-annual updates to the Audit Committee.
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To strengthen our cybersecurity risk management practices and oversight, we engage external consultants with expertise in information security, incident response, and governance. Additionally, we evaluate the internal risk oversight programs of third-party service providers before engaging them in order to help protect us from any related vulnerabilities.
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He has experience with compliance programs for cybersecurity-related regulations and standards such as the European Union’s General Data Protection Regulation, The Payment Card Industry Data Security Standard (PCI-DSS), and the U.S. Food and Drug Administration’s regulations on electronic records and electronic signatures.
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This program covers topics such as: ● Social engineering and phishing awareness , ● Password protection and mobile security , and ● Incident response and reporting.
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We also use technology-based tools to mitigate cybersecurity risks and to bolster our employee-based cybersecurity programs. We have implemented a proactive cybersecurity monitoring program that is designed to achieve threat detection and swift response, which includes the use of best-in-class tools to mitigate vulnerabilities and protect our information assets and operations.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIE S Our corporate headquarters are located in Lexington, Massachusetts. Other operations, including laboratory space, are located in Cambridge, Massachusetts. We lease our office and laboratory space, which consist of approximately 26,148 square feet located in Cambridge, Massachusetts and 93,449 square feet located in Lexington, Massachusetts.
Biggest changeITEM 2. PROPERTIE S Our corporate headquarters are located in Lexington, Massachusetts. We lease our office and laboratory space, which consist of approximately 26,148 square feet located in Cambridge, Massachusetts and 93,449 square feet located in Lexington, Massachusetts. Our lease in Cambridge expires in 2026 and our lease in Lexington expires in 2031.
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We have subleased our office and laboratory space in Cambridge to a third party.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWhile the outcome of any such matters cannot be predicted with certainty, as of December 31, 2023, we were not party to any material pending proceedings. No material governmental proceedings are pending or, to our knowledge, contemplated against us.
Biggest changeWhile the outcome of any such matters cannot be predicted with certainty, as of December 31, 2024, we were not party to any material pending proceedings. No material governmental proceedings are pending or, to our knowledge, contemplated against us.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThis number of holders of record also does not include stockholders whose shares may be held in trust by other entities. ​ Dividends ​ We have not paid any cash dividends on our common stock since inception and do not anticipate paying cash dividends in the foreseeable future. ​ Recent Sales of Unregistered Securities ​ Set forth below is information regarding shares of our common stock issued and stock options granted by us for the twelve months ended December 31, 2023 that were not registered under the Securities Act of 1933, as amended, or the Securities Act and that have not otherwise been described in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K. ​ On October 1, 2023, we granted to six employees restricted stock unit awards settleable for an aggregate of 211,500 shares of our common stock.
Biggest changeThis number of holders of record also does not include stockholders whose shares may be held in trust by other entities. 116 Table of Contents ​ Dividends ​ We have not paid any cash dividends on our common stock since inception and do not anticipate paying cash dividends in the foreseeable future. ​ ITEM 6. RESERVED ​ ​
Prior to this time, there was no public market for our common stock. ​ Stockholders ​ As of February 21, 2024, there were approximately 12 holders of record of our common stock.
Prior to this time, there was no public market for our common stock. ​ Stockholders ​ As of March 3, 2025, there were approximately 10 holders of record of our common stock.
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These restricted stock units were made outside of our 2015 Stock Option and Incentive Plan as an inducement material to such individual’s acceptance of an offer of employment with us in accordance with Nasdaq Listing Rule 5635(c)(4).
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We intend to file a registration statement on a Form S-8 to register the shares of common stock underlying these inducement awards prior to the time at which the awards become exercisable or settleable, as applicable. 112 Table of Contents ITEM 6. RESERVED ​ ​

Item 7. Management's Discussion & Analysis

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

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Biggest changeThe following table summarizes our research and development expenses for the years ended December 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ 2023 2022 Change ​ ​ ​ (in thousands) ​ Employee and consultant ​ $ 42,445 $ 29,209 ​ $ 13,236 ​ External research and development ​ 34,185 ​ 15,679 ​ 18,506 ​ Facilities and other ​ 6,790 ​ 7,863 ​ (1,073) ​ Professional fees ​ 8,752 ​ 8,013 ​ 739 ​ Total research and development expenses ​ $ 92,172 ​ $ 60,764 ​ $ 31,408 ​ ​ 118 Table of Contents The increase in research and development expense for the year ended December 31, 2023 was primarily attributable to the following: ​ ● approximately $13.2 million for increased employee and consultant-related costs associated with higher headcount in research and development functions as compared to the same period in the prior year due to the progress in our development programs; and ​ ● approximately $18.5 million for external research and development costs related to increased program-related spending, particularly on manufacturing and IND-enabling studies for our anti-tau antibody program and SOD1 program, along with increased Neurocrine program support during the 2023 period, and the fee due to Touchlight pursuant to our license agreement; ​ ● approximately $0.7 million for increased professional fees to support our pipeline programs; partially offset by ​ ● approximately $1.1 million for decreased facility and other costs primarily related to the termination of the lease for office and laboratory space at 75 Sidney Street during the second quarter of 2022. ​ General and Administrative Expense ​ General and administrative expense increased by $4.8 million from $31.0 million for the year ended December 31, 2022 to $35.8 million for the year ended December 31, 2023.
Biggest changeAll amounts for the year ended December 31, 2023, have been reclassified to conform to the current year’s presentation. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ 2024 2023 Change ​ ​ ​ (in thousands) ​ Internal research and development ​ $ 38,422 $ 27,860 ​ $ 10,562 ​ External research and development ​ 58,081 ​ 46,008 ​ 12,073 ​ Facilities and other ​ 30,865 ​ 18,304 ​ 12,561 ​ Total research and development expenses ​ $ 127,368 ​ $ 92,172 ​ $ 35,196 ​ ​ The increase in research and development expense for the year ended December 31, 2024 was primarily attributable to the following: ​ ● approximately $12.6 million for facility and other costs primarily related to our lease for additional laboratory and office space at 75 Hayden Avenue in Lexington, Massachusetts, which we took occupancy of on February 1, 2024, along with an impairment charge on our leased office and laboratory space in Cambridge, Massachusetts; ​ ● approximately $12.1 million for external research and development costs related to increased program-related spending; and ​ ● approximately $10.6 million for increased internal research and development costs associated with higher headcount in research and development functions as compared to the same period in the prior year . ​ General and Administrative Expense ​ General and administrative expense balance remained consistent for the year ended December 31, 2024, compared to December 31, 2023. ​ Other Income, Net Other income, net of approximately $19.0 million was recognized during the year ended December 31, 2024, as compared to $11.7 million during the year ended December 31, 2023.
Many of our programs are derived from our TRACER™ (Tropism Redirection of AAV by Cell Type-Specific Expression of RNA) adeno-associated virus, or AAV, capsid discovery platform, which we have used to generate novel capsids, or TRACER Capsids, and identify associated receptors to potentially enable high brain penetration with genetic medicines following intravenous dosing.
Many of our programs are derived from our TRACER™ (Tropism Redirection of AAV by Cell-type-specific Expression of RNA) adeno-associated virus, or AAV, capsid discovery platform, which we have used to generate novel capsids, or TRACER Capsids, and identify associated receptors to potentially enable high brain penetration with genetic medicines following intravenous, or IV, dosing.
However, at this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development of our product candidates. Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses.
At this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development of our product candidates. Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses.
Our expenses will increase if: ​ ● we are required by the FDA or the European Medicines Agency or other regulatory agencies to redesign or modify trials or studies or to perform trials or studies in addition to those currently expected; ● there are any delays in the receipt of regulatory clearance to begin our planned clinical programs; or ● there are any delays in enrollment of patients in or completing our clinical trials or the development of our product candidates . ​ General and Administrative Expenses ​ General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in executive, finance, accounting, information technology, business development, legal and human resource functions.
Our expenses will increase if: ● we are required by the FDA or the European Medicines Agency or other regulatory agencies to redesign or modify trials or studies or to perform trials or studies in addition to those currently expected; ● there are any delays in the receipt of regulatory clearance to begin our planned clinical programs; or ● there are any delays in enrollment of participants in or completing our clinical trials or the development of our product candidates . ​ General and Administrative Expenses ​ General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in executive, finance, accounting, information technology, business development, legal and human resource functions.
For additional information about our revenue recognition policy, see the section titled “—Summary of significant accounting policies and basis of presentation.” ​ For the foreseeable future, we expect substantially all of our revenue will be generated from the 2019 Neurocrine Collaboration Agreement, the 2023 Neurocrine Collaboration Agreement, the 2023 Novartis Collaboration Agreement, the 2022 Novartis Option and License Agreement, and our option and license agreement with Alexion entered into on October 1, 2021, or the Alexion Agreement, and any other strategic collaborations and out-licensing arrangements we may enter into in the future.
For additional information about our revenue recognition policy, see the section titled “Summary of significant accounting policies and basis of presentation.” ​ For the foreseeable future, we expect substantially all of our revenue will be generated from the 2019 Neurocrine Collaboration Agreement, the 2023 Neurocrine Collaboration Agreement, the 2023 Novartis Collaboration Agreement, the 2022 Novartis Option and License Agreement, and our option and license agreement with Alexion entered into on October 1, 2021, or the Alexion Agreement, and any other strategic collaborations and out-licensing arrangements we may enter into in the future.
We do not have any committed external source of funds other than the amounts we are entitled to receive from our collaboration partners and licensors for reimbursement of certain research and development expenses, potential option exercises, the achievement of specified regulatory and commercial milestones, and royalty payments under our collaboration, and option and license agreements, as applicable.
We do not have any committed external source of funds other than the amounts we are entitled to receive from our collaboration partners and licensees for reimbursement of certain research and development expenses, potential option exercises, the achievement of specified regulatory and commercial milestones, and royalty payments under our collaboration, and option and license agreements, as applicable.
Research and development costs are expensed as incurred. Costs for certain activities, such as manufacturing, preclinical studies, and clinical trials, are generally recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and collaborators. Research and development activities are central to our business model.
Costs for certain activities, such as manufacturing, preclinical studies, and clinical trials, are generally recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and collaborators. Research and development activities are central to our business model.
Adequate additional financing may not be available to us on acceptable terms, or at all. ​ Until such time, if ever, as we can generate product revenues sufficient to achieve consistent profitability, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances, and option and license arrangements.
Adequate additional financing may not be available to us on acceptable terms, or at all. ​ Until such time, if ever, as we can generate product revenues sufficient to achieve consistent profitability, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic 126 Table of Contents alliances, and option and license arrangements.
We also anticipate the cost of goods and services and the levels of compensation paid to employee will increase due to inflationary conditions existing in the general economy. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations.
We also anticipate the cost of goods and services and the levels of compensation paid to employees will increase due to inflationary conditions existing in the general economy. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations.
If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product 122 Table of Contents development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. ​ Contractual Obligations ​ We enter into agreements in the normal course of business with clinical research organizations, contract manufacturing organizations, and institutions to license intellectual property.
If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves. ​ Contractual Obligations ​ We enter into agreements in the normal course of business with clinical research organizations, contract manufacturing organizations, and institutions to license intellectual property.
We are in the early stages of development of our product candidates. During the year ended December 31, 2023, our research and development expenses have increased as compared to the amounts recorded in the same period in the prior year.
We are in the early stages of development of our product candidates. During the year ended December 31, 2024, our research and development expenses have increased as compared to the amounts recorded in the same period in the prior year.
Some of our programs are wholly-owned, and some are advancing with licensees and collaborators including Alexion, AstraZeneca Rare Disease, or Alexion; Novartis Pharma AG, or Novartis; Neurocrine Biosciences, Inc., or Neurocrine; and Sangamo Therapeutics, Inc., or Sangamo.
Some of our programs are wholly-owned, and some are advancing with licensees and collaborators including Alexion, AstraZeneca Rare Disease, or Alexion; Novartis Pharma AG, or Novartis; and Neurocrine Biosciences, Inc., or Neurocrine.
Funding Requirements ​ Our expenses increased during the year ended December 31, 2023 as compared with the prior year as our development programs progressed and we increased headcount.
Funding Requirements ​ Our expenses increased during the year ended December 31, 2024 as compared with the prior year as our development programs progressed and we increased headcount.
Our future capital requirements will depend on many factors, including : ​ ● the scope, progress, results, and costs of product discovery, preclinical studies and clinical trials for our product candidates ; ● the scope, progress, results, costs, prioritization, and number of our research and development programs; ● the progress and status of our strategic collaborations and option and license agreements and any similar arrangements we may enter into in the future, including any research and development costs for which we are responsible, future additional obligations that may be committed to within or outside these agreements, and our receipt of any future milestone payments and royalties from our collaboration partners or licensors; ● the extent to which we are obligated to reimburse preclinical development and clinical trial costs, or the achievement of milestones or occurrence of other developments that trigger milestone and royalty 121 Table of Contents payments, under any collaboration or license agreements to which we might become a party, such as the Touchlight License Agreement; ● the costs, timing and outcome of regulatory review of our product candidates; ● our ability to establish and maintain collaboration, distribution, or other marketing arrangements for our product candidates on favorable terms, if at all; ● the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; ● the extent to which we acquire or in-license other product candidates and technologies, including any intellectual property associated with such candidates or technologies, acquire or invest in other businesses, or out-license our product candidates, capsids or other technologies; ● the costs of advancing our manufacturing capabilities and securing manufacturing arrangements for pre-commercial and commercial production; ● the level of product sales by us or our collaborators from any product candidates for which we obtain marketing approval in the future; ● the costs of operating as a public company and maintaining adequate product, clinical trial, and directors’ and officers’ liability insurance coverage; and ● the costs of establishing or contracting for sales, manufacturing, marketing, distribution, and other commercialization capabilities if we obtain regulatory approvals to market our product candidates.
Our future capital requirements will depend on many factors, including: ​ ● the scope, progress, results, and costs of product discovery, preclinical studies and clinical trials for our product candidates , including our clinical trials to evaluate VY7523 ; ● the scope, progress, results, costs, prioritization, and number of our research and development programs; ● the progress and status of our strategic collaborations and option and license agreements and any similar arrangements we may enter into in the future, including any research and development costs for which we are responsible, future additional obligations that we may be committed to in connection with these agreements, and our receipt of any expense reimbursements, future milestone payments and royalties from our collaboration partners or licensors; ● the extent to which we are obligated to reimburse preclinical development and clinical trial costs, or the achievement of milestones or occurrence of other developments that trigger milestone and royalty payments, under any collaboration or license agreements to which we might become a party , such as the license agreement we entered into with Touchlight IP Limited in November 2022 ; ● the costs, timing and outcome of regulatory review of our product candidates; ● our ability to establish and maintain collaboration, distribution, or other marketing arrangements for our product candidates on favorable terms, if at all; ● the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; ● the extent to which we acquire or in-license other product candidates and technologies, including any intellectual property associated with such candidates or technologies, acquire or invest in other businesses, or out-license our product candidates, capsids or other technologies; ● the costs of advancing our manufacturing capabilities and securing manufacturing arrangements for pre-commercial and commercial production; ● the level of product sales by us or our collaborators from any product candidates for which we obtain marketing approval in the future; ● the costs of operating as a public company and maintaining adequate product, clinical trial, and directors’ and officers’ liability insurance coverage; and ● the costs of establishing or contracting for sales, manufacturing, marketing, distribution, and other commercialization capabilities if we obtain regulatory approvals to market our product candidates.
If our development efforts are successful, we may also generate revenue from product sales. ​ Expenses ​ Research and Development Expenses ​ Research and development expenses consist primarily of costs incurred for our research activities, including our program discovery efforts, and the development of our proprietary antibody program and gene therapy and vectorized antibody platforms and programs which include: ​ ● employee- related expenses including salaries, benefits, and stock-based compensation expense; ​ ● costs of funding research performed by third parties that conduct research and development, preclinical activities, manufacturing and production design on our behalf; ● the cost of purchasing laboratory supplies and non-capital equipment used in designing, developing and manufacturing preclinical study materials; ● consultant fees; ● facility costs including rent, depreciation and maintenance expenses; ● the cost of securing and protecting intellectual property rights associated with our research and development activities; and ● fees for maintaining licenses under our third-party licensing agreement.
If our development efforts are successful, we may also generate revenue from product sales. ​ Expenses ​ Research and Development Expenses ​ Research and development expenses consist primarily of costs incurred for our research activities, including our program discovery efforts, and the development of our proprietary antibody, gene therapy, vectorized antibody, and non-viral therapeutic platforms and programs which include: ​ ● employee-related expenses including salaries, benefits, and stock-based compensation expense; ​ ● costs of funding research performed by third parties that conduct research and development, preclinical and clinical activities, manufacturing and production design on our behalf; ​ ● the cost of purchasing laboratory supplies and non-capital equipment used in designing, developing and manufacturing preclinical and clinical study materials; ● consultant fees; ● facility costs including rent, depreciation and maintenance expenses; ● the cost of securing and protecting intellectual property rights associated with our research and development activities; and ● fees for maintaining licenses under our third-party licensing agreements. 119 Table of Contents Research and development costs are expensed as incurred.
We anticipate that our expenses will increase substantially in connection with our ongoing activities, as we: ● conduct preclinical development activities and initiate investigational new drug, or IND, application-enabling studies and clinical trials in connection with our anti-tau antibody program and our SOD1 ALS gene therapy program; ● continue investing in our proprietary antibody program, gene therapy and vectorized antibody platforms and programs, and other research and development initiatives ; ● increase our investment in and support for TRACER, our proprietary discovery platform to facilitate the selection of AAV capsids and expand our investment to discover TRACER Capsids with broad tropism in central nervous system, or CNS, and other tissues with cell-specific transduction properties for particular therapeutic applications; ● increase our investment in the discovery and development of modalities for receptor-mediated non-viral delivery of therapeutic payloads to the CNS; ● conduct joint research and development under our strategic collaborations for the research, development, and commercialization of certain of our pipeline programs, including our FA Program pursuant to our collaboration and license agreement with Neurocrine entered into in January 2019, or the 2019 Neurocrine Collaboration Agreement, and our GBA1 Program pursuant to our collaboration and license agreement with Neurocrine entered into on January 8, 2023, or the 2023 Neurocrine Collaboration Agreement; and our Huntington’s disease program, or the Novartis HD Program, pursuant to our license and collaboration agreement with Novartis entered into on December 28, 2023, or the 2023 Novartis Collaboration Agreement ; ● initiate additional preclinical studies and clinical trials for, and continue research and development of, our other programs; ● continue our process research and development activities, as well as establish our research-grade manufacturing capabilities; ● identify additional diseases for treatment with our AAV gene therapies and develop additional programs or product candidates; ● seek marketing and regulatory approvals for any of our product candidates that successfully complete clinical development; ● maintain, expand, protect and enforce our intellectual property portfolio; ● identify, acquire or in-license other product candidates and technologies; ● expand our operational, financial and management systems and personnel, including personnel to support our clinical development, manufacturing and commercialization efforts; ● continue our clinical trial insurance coverage as we expand our clinical trials and increase our product liability insurance once we engage in commercialization efforts; and 114 Table of Contents ● continue to operate as a public company.
We anticipate that our expenses will increase substantially in the long term in connection with our ongoing activities, as we: ● conduct clinical trials in connection with our anti-tau antibody program; ● continue investing in our proprietary antibody program, non-viral therapeutics platform, gene therapy and vectorized antibody platforms and programs, and other research and development initiatives; ● continue investing in and supporting TRACER, our proprietary discovery platform to facilitate the selection of AAV capsids and our investment to discover TRACER Capsids with broad tropism in CNS and other tissues with cell-specific transduction properties for particular therapeutic applications; ● increase our investment in the discovery and development of modalities for receptor-mediated non-viral delivery of therapeutic payloads to the CNS; ● conduct joint research and development under our strategic collaborations for the research, development, and commercialization of certain of our pipeline programs, including our FA Program pursuant to our collaboration and license agreement with Neurocrine entered into in January 2019, or the 2019 Neurocrine Collaboration Agreement, our GBA1 Program , pursuant to our collaboration and license agreement with Neurocrine entered into in January 2023, or the 2023 Neurocrine Collaboration Agreement , and our Huntington’s disease program, or the Novartis HD Program, pursuant to our license and collaboration agreement with Novartis entered into in December 2023, or the 2023 Novartis Collaboration Agreement ; ● initiate additional preclinical studies and clinical trials for, and continue research and development of, our other programs; ● continue our process research and development activities, as well as establish our research-grade manufacturing capabilities; ● identify additional diseases for treatment with our AAV gene therapies and develop additional programs or product candidates; ● seek marketing and regulatory approvals for any of our product candidates that successfully complete clinical development; ● maintain, expand, protect and enforce our intellectual property portfolio; ● identify, acquire or in-license other product candidates and technologies; 118 Table of Contents ● expand our operational, financial and management systems and personnel, including personnel to support our clinical development, manufacturing and commercialization efforts; ● increase our clinical trial insurance coverage as we expand our clinical trials and increase our product liability insurance once we engage in commercialization efforts; and ● continue to operate as a public company.
If we are unable to raise capital or enter into business development transactions when needed or on acceptable terms, we could be forced to delay, reduce or eliminate our research and development programs or any future commercialization efforts. ​ As of December 31, 2023, we had cash, cash equivalents, and marketable securities of $230.9 million.
If we are unable to raise capital or enter into business development transactions when needed or on acceptable terms, we could be forced to delay, reduce or eliminate our research and development programs or any future commercialization efforts. ​ As of December 31, 2024, we had cash, cash equivalents, and marketable securities of $ 332.4 million.
We are a biotechnology company whose mission is to leverage the power of human genetics to modify the course of and ultimately cure neurological diseases. Our pipeline includes programs for Alzheimer’s disease, or AD; amyotrophic lateral sclerosis, or ALS; Parkinson’s disease, and multiple other diseases of the central nervous system.
We are a biotechnology company whose mission is to leverage the power of human genetics to modify the course of and ultimately cure neurological diseases. Our pipeline includes programs for Alzheimer’s disease, or AD; Friedreich’s ataxia, or FA; Parkinson’s disease; and multiple other diseases of the central nervous system, or CNS.
We expect our expenses to continue to increase as we continue the research and development of, conduct clinical trials of, and seek marketing approval for our product candidates including as we initiate our planned Phase 1 clinical trial to evaluate VY-TAU01 in 2024, and as we continue to enter into or conduct activities in connection with our collaboration agreements.
We expect our expenses to continue to increase as we continue the research and development of, conduct clinical trials of, and seek marketing approval for our product candidates including our Phase 1 MAD clinical trial to evaluate VY7523 in 2025, and as we continue to enter into or conduct activities in connection with our collaboration agreements.
The cash used in operating activities for the year ended December 31, 2022 was primarily driven by operating expenses, net of stock-based compensation and depreciation, offset by an increase in deferred revenue partially driven by the upfront payment of $54.0 million from Novartis in connection with our entry into the 2022 Novartis Agreement during the year ended December 31, 2022.
The cash used in operating activities for the year ended December 31, 2022 was primarily driven by operating expenses, net of stock-based compensation and depreciation, offset by an increase in deferred revenue partially driven by the upfront payment of $54.0 million from Novartis in connection with our entry into the 2022 Novartis Option and License Agreement during the year ended December 31, 2022. 124 Table of Contents Cash Flows from Investing Activities Net cash used in investing activities was $94.9 million during the year ended December 31, 2024.
Net cash provided by financing activities was $0.6 million during the year ended December 31, 2021 primarily due to the proceeds from the exercise of stock options, and purchases by our employees of our common stock under our employee stock purchase plan.
Net cash provided by financing activities was $33.6 million during the year ended December 31, 2023 primarily due to the $31.1 million in proceeds from the sale of common stock in connection with the 2023 Neurocrine Collaboration Agreement along with proceeds from the exercise of stock options, and purchases by our employees of our common stock under our employee stock purchase plan.
For the year ended December 31, 2023, we recognized $80.8 million of collaboration revenue from the 2023 Neurocrine Collaboration Agreement, $80.0 million of collaboration revenue from the 2023 Novartis Collaboration Agreement, $79.0 million of collaboration revenue from our option and license agreement with Novartis entered into on March 4, 2022, or the 2022 Novartis Agreement, $9.8 million of collaboration revenue from the 2019 Neurocrine Collaboration Agreement, and $0.4 million of other collaboration revenue.
For the year ended December 31, 2024, we recognized $49.7 million of collaboration revenue from the 2023 Neurocrine Collaboration Agreement, $15.0 million of collaboration revenue from an amendment, or the Novartis Amendment, to our option and license agreement with Novartis entered into in March 2022, or the 2022 Novartis Option and License Agreement, $10.4 million of collaboration revenue from the 2019 Neurocrine Collaboration Agreement, and $4.9 million of collaboration revenue from the 2023 Novartis Collaboration Agreement.
Liquidity and Capital Resources ​ Sources of Liquidity ​ We have funded our operations primarily through private placements of redeemable convertible preferred stock, public offerings and private placements of our common stock, strategic collaborations and option and license arrangements, including our 2019 Neurocrine Agreement, 2023 Neurocrine Collaboration Agreement, 2022 Novartis Agreement, 2023 Novartis Collaboration Agreement, Alexion Agreement, and with our prior collaboration agreements. ​ As of December 31, 2023, we had cash, cash equivalents, and marketable securities of $230.9 million.
Other income, net during the year ended December 31, 2024, was primarily related to interest income due to increased interest rates on increased balances of marketable securities, as our marketable securities increased during the year ended December 31, 2024, as compared to the year ended December 31, 2023. 123 Table of Contents Liquidity and Capital Resources ​ Sources of Liquidity ​ We have funded our operations primarily through private placements of redeemable convertible preferred stock, public offerings and private placements of our common stock, strategic collaborations and option and license arrangements, including our 2019 Neurocrine Agreement, 2023 Neurocrine Collaboration Agreement, 2022 Novartis Agreement, 2023 Novartis Collaboration Agreement, Alexion Agreement, and with our prior collaboration agreements. ​ As of December 31, 2024, we had cash, cash equivalents, and marketable securities of $332.4 million.
As our development programs progress and as we identify product candidates and initiate preclinical studies and clinical trials, including as we initiate our planned Phase 1 clinical trial to evaluate VY-TAU01 in 2024, we expect research and development costs 115 Table of Contents to continue to increase.
As our research and development programs progress and as we identify product candidates and initiate preclinical studies and clinical trials, including our clinical trials to evaluate VY7523, we expect research and development costs to continue to increase.
Based upon our current operating plan, we expect that our existing cash, cash equivalents, and marketable securities at December 31, 2023, together with the $80.0 million upfront payment received in January 2024 in connection with the 2023 Novartis Collaboration Agreement, the $20.0 million in proceeds from Novartis’ stock purchase, the $93.5 million in net proceeds received from a public offering in January 2024 (refer to Note 15 of our consolidated financial statements included elsewhere in this Annual Report on Form 10-K), along with amounts expected to be received as reimbursement for development costs under our collaboration and license agreements with Neurocrine and Novartis, certain near term milestones, and interest income, to be sufficient to meet our planned operating expenses and capital expenditure requirements into 2027. 119 Table of Contents Cash Flows ​ The following table provides information regarding our cash flows for the years ended December 31, 2023, 2022, and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ December 31, ​ ​ ​ 2023 2022 2021 ​ ​ (in thousands) ​ Net cash provided by (used in): ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating activities ​ $ 77,919 ​ $ (12,509) ​ $ (53,525) ​ Investing activities ​ (141,643) ​ (7,339) ​ 65,906 ​ Financing activities ​ 33,645 ​ 1,110 ​ 612 ​ Net (decrease) increase in cash, cash equivalents, and restricted cash ​ $ (30,079) ​ $ (18,738) ​ $ 12,993 ​ Cash Flows from Operating Activities Net cash provided by operating activities was $77.9 million during the year ended December 31, 2023 as compared to $12.5 million of net cash used in operating activities for the year ended December 31, 2022.
Based upon our current operating plan, we expect that our existing cash, cash equivalents, and marketable securities at December 31, 2024, along with amounts expected to be received as reimbursement for development costs under our collaboration and license agreements with Neurocrine and Novartis and interest income, to be sufficient to meet our planned operating expenses and capital expenditure requirements into mid-2027. ​ Cash Flows ​ The following table provides information regarding our cash flows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ December 31, ​ ​ ​ 2024 2023 2022 ​ ​ (in thousands) ​ Net cash (used in) provided by: ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating activities ​ $ (15,310) ​ $ 77,919 ​ $ (12,509) ​ Investing activities ​ (94,859) ​ (141,643) ​ (7,339) ​ Financing activities ​ 114,015 ​ 33,645 ​ 1,110 ​ Net increase (decrease) in cash, cash equivalents, and restricted cash ​ $ 3,846 ​ $ (30,079) ​ $ (18,738) ​ Cash Flows from Operating Activities Net cash used in operating activities was $15.3 million during the year ended December 31, 2024.
We reported a net loss of $46.4 million for the year ended December 31, 2022. We reported a net loss of $71.2 million for the year ended December 31, 2021. As of December 31, 2023, we had an accumulated deficit of $261.2 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 $326.2 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future.
The effects of material revisions in estimates, if any, will be reflected in the financial statements prospectively from the date of change in estimates. ​ While our significant accounting policies are described in more detail in the notes to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, we believe that certain aspects of our accounting policy on revenue recognition require the most significant judgments and estimates in the preparation of our financial statements.
The effects of material revisions in estimates, if any, will be reflected in the financial statements prospectively from the date of change in estimates. ​ While our significant accounting policies are described in more detail in the notes to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, we believe that certain aspects of our accounting policy on revenue recognition require the most significant judgments and estimates in the preparation of our financial statements. 120 Table of Contents Revenue Recognition – ASC 606 ​ We recognize revenue in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 606 Revenue from Contracts with Customers, or ASC 606. ​ We enter into license, option, and collaboration agreements which are within the scope of ASC 606, under which we license or provide options to license certain of our product candidates and, in certain cases, perform research and development.
In addition, during the year ended December 31, 2023, we recognized $80.0 million of revenue associated with the 2023 Novartis Collaboration Agreement, $80.8 million of revenue associated with the 2023 Neurocrine Collaboration Agreement, $9.8 million of revenue associated with the 2019 Neurocrine Collaboration Agreement, and $0.4 million of other collaboration revenue.
During the year ended December 31, 2024, we recognized collaboration revenue in connection with the following agreements: ● $49.7 million under the 2023 Neurocrine Collaboration Agreement; ● $15.0 million of collaboration revenue from the Novartis Amendment; ● $10.4 million under the 2019 Neurocrine Collaboration Agreement; and ● $4.9 million under the 2023 Novartis Collaboration Agreement.
Based upon our current operating plan, we expect that our existing cash, cash equivalents, and marketable securities at December 31, 2023, together with the $80.0 million upfront payment received in January 2024 in connection with the 2023 Novartis Collaboration Agreement, the $20.0 million in proceeds from Novartis’ stock purchase, the $93.5 million in net proceeds received from a public offering executed in January 2024, along with amounts expected to be received as reimbursement for development costs under our collaboration and license agreements with Neurocrine and Novartis, certain near term milestones, and interest income, to be sufficient to meet our planned operating expenses and capital expenditure requirements into 2027.
Based upon our current operating plan, we expect that our existing cash, cash equivalents, and marketable securities at December 31, 2024, along with amounts expected to be received as reimbursement for development costs under our collaboration and license agreements with Neurocrine and Novartis and interest income, to be sufficient to meet our 125 Table of Contents planned operating expenses and capital expenditure requirements into mid-2027.
We may cease to qualify as a smaller reporting company as early as June 30, 2024, which would require us to comply with disclosure requirements that are applicable to other public companies that are not smaller reporting companies following the filing of our Annual Report on Form 10-K for the year ending December 31, 2024, and any portions of our definitive proxy statement relating to our 2025 Annual Meeting of Stockholders incorporated by reference therein. ​
For more information, refer to Note 7 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. ​ Off-Balance Sheet Arrangements ​ We did not have, during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under applicable rules of the Securities and Exchange Commission, or the SEC. ​ Smaller Reporting Company Status ​ As of June 30, 2024, we ceased to qualify as a smaller reporting company, which requires us to comply with disclosure requirements that are applicable to other public companies that are not smaller reporting companies following the filing of our Annual Report on Form 10-K for the year ending December 31, 2024, and any portions of our definitive proxy statement relating to our 2025 Annual Meeting of Stockholders incorporated by reference therein. ​
Net cash provided by investing activities was $65.9 million during the year ended December 31, 2021.
Net cash used in investing activities was $141.6 million during the year ended December 31, 2023.
Changes in our estimates of the expected remaining costs to complete the research and development services for our performance obligations, such as the significant change that occurred in the fourth quarter of 2021 as a result of decisions made by the JSC for the 2019 Neurocrine Collaboration Agreement, can result in significant changes to the amount of revenue we recognize each period. 117 Table of Contents Results of Operations Comparison of the years ended December 31, 2023 and 2022: The following table summarizes our results of operations for the years ended December 31, 2023 and 2022, respectively, together with the changes in those items in dollars: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ 2023 2022 Change ​ ​ ​ (in thousands) ​ Collaboration revenue ​ $ 250,008 $ 40,907 $ 209,101 ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ 92,172 ​ 60,764 ​ 31,408 ​ General and administrative ​ 35,822 ​ 30,980 ​ 4,842 ​ Total operating expenses ​ 127,994 ​ 91,744 ​ 36,250 ​ Other income, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ 11,721 ​ 1,792 ​ 9,929 ​ Other income ​ 3 ​ 2,653 ​ (2,650) ​ Total other income, net ​ 11,724 ​ 4,445 ​ 7,279 ​ Income (loss) before income taxes ​ ​ 133,738 ​ ​ (46,392) ​ ​ 180,130 ​ Income tax provision ​ ​ 1,408 ​ ​ 16 ​ ​ 1,392 ​ Net income (loss) ​ $ 132,330 ​ $ (46,408) ​ $ 178,738 ​ Collaboration Revenue Collaboration revenue was $250.0 million and $40.9 million for the years ended December 31, 2023 and 2022, respectively.
Changes in our estimates of the expected remaining costs to complete the research and development services for our performance obligations can result in significant changes to the amount of revenue we recognize each period. 121 Table of Contents Results of Operations Comparison of the years ended December 31, 2024 and 2023: The following table summarizes our results of operations for the years ended December 31, 2024 and 2023, respectively, together with the changes in those items in dollars: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ 2024 2023 Change ​ ​ ​ (in thousands) ​ Collaboration revenue ​ $ 80,001 $ 250,008 $ (170,007) ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ 127,368 ​ 92,172 ​ 35,196 ​ General and administrative ​ 35,920 ​ 35,822 ​ 98 ​ Total operating expenses ​ 163,288 ​ 127,994 ​ 35,294 ​ Other income, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ 18,328 ​ 11,721 ​ 6,607 ​ Other income ​ 622 ​ 3 ​ 619 ​ Total other income, net ​ 18,950 ​ 11,724 ​ 7,226 ​ (Loss) income before income taxes ​ ​ (64,337) ​ ​ 133,738 ​ ​ (198,075) ​ Income tax provision ​ ​ 665 ​ ​ 1,408 ​ ​ (743) ​ Net (loss) income ​ $ (65,002) ​ $ 132,330 ​ $ (197,332) ​ Collaboration Revenue Collaboration revenue was $80.0 million and $250.0 million for the years ended December 31, 2024 and 2023, respectively.
We believe this trial could result in the potential to generate proof-of-concept data for slowing the spread of pathological tau via tau positron emission tomography imaging in 2026. We identified a lead development candidate for the SOD1 silencing gene therapy program in the fourth quarter of 2023, and we expect to submit the IND application for this program in mid-2025.
We believe this trial has the potential to generate proof-of-concept data for slowing the spread of pathological tau via tau positron emission tomography imaging in the second half of 2026. VY1706 was selected as the development candidate for the tau silencing gene therapy in November 2024.
Our proprietary pipeline also includes an early research initiative to develop a gene therapy for the treatment of AD. This program seeks to combine a vectorized anti-amyloid antibody with a TRACER Capsid. We are also working with our collaboration partners on multiple programs. In January 2019 and January 2023, we entered into collaboration and license agreements with Neurocrine.
We anticipate submission of an investigational new drug, or IND, for the VY1706 program in 2026. Our proprietary pipeline also includes early research initiatives to develop a vectorized anti-amyloid antibody for AD and a vectorized superoxide dismutase 1, or SOD1, knockdown gene therapy for SOD1 amyotrophic lateral sclerosis. We are also working with our collaboration partners on multiple programs.
The increase in collaboration revenue was the result of $79.0 million in revenue recognized during the year ended December 31, 2023, in connection with Novartis’ decision to exercise two of its license options under the 2022 Novartis Option and License Agreement, or Novartis License Options, along with the expiration of a third Novartis License Option.
During the year ended December 31, 2023, we recognized collaboration revenue in connection with the following agreements: ● $79.0 million upon Novartis’ decision to exercise two of its license options under the 2022 Novartis Option and License Agreement, or Novartis License Options, along with the expiration of a third Novartis License Option, all of which were determined to be material rights in the 2022 Novartis Option and License Agreement ; ● $80.8 million under the 2023 Neurocrine Collaboration Agreement; ● $80.0 million under the 2023 Novartis Collaboration Agreement; ● $9.8 million under the 2019 Neurocrine Collaboration Agreement; and ● $0.4 million under other agreements. 122 Table of Contents Research and Development Expense Research and development expense increased by $35.2 million from $92.2 million for the year ended December 31, 2023, to $127.4 million for the year ended December 31, 2024.
Other significant costs include corporate facility costs not otherwise included in research and development expenses, legal fees related to patent and corporate matters and fees for accounting and consulting services. ​ During the year ended December 31, 2023, our general and administrative expenses have increased as compared to the amount recorded in the same period in prior year.
Other significant costs include corporate facility costs not otherwise included in research and development expenses, legal fees related to patent and corporate matters and fees for accounting and consulting services. ​ During the year ended December 31, 2024, our general and administrative expenses have remained consistent with the amount recorded in the same period in prior year. ​ Other Income, Net ​ Other income, net consists primarily of interest income on our marketable securities. ​ Critical Accounting Policies and Estimates ​ Our management’s discussion and analysis of our consolidated financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles.
We are advancing our own proprietary pipeline of drug candidates for neurological diseases, with a focus on AD. Our wholly-owned prioritized pipeline programs include an anti-tau antibody for AD; a superoxide dismutase 1, or SOD1, gene therapy for ALS; and a tau silencing gene therapy for AD.
We are advancing our own proprietary pipeline of drug candidates for neurological diseases, with a focus on AD, and particularly on tau, which we view as a critically important AD target.
We anticipate that our collaborative partners and licensees will submit at least one additional IND application for a partnered program and initiate clinical development for the associated program by the end of 2025. Despite reporting $132.3 million in net income for the year ended December 31, 2023, we have a history of incurring significant losses.
Despite reporting $132.3 million in net income for the year ended December 31, 2023, we have a history of incurring significant losses. We reported a net loss of $65.0 million for the year ended December 31, 2024, and we reported a net loss of $46.4 million for the year ended December 31, 2022.
Under our agreements with Neurocrine, we are actively advancing two later preclinical stage programs: a glucocerebrosidase 1, or GBA1, gene therapy program for Parkinson’s disease and other GBA1-mediated diseases, and a frataxin gene therapy program for Friedreich’s ataxia, or the FA Program.
We expect that Neurocrine will submit IND filings in 2025 for the two most advanced of these programs, a glucosylceramidase beta 1, or GBA1, gene therapy program for Parkinson’s disease and other GBA1-mediated diseases, or the GBA1 Program, and a frataxin, or FXN, gene therapy program for FA, or the FA Program.
This is offset by an increase in accounts receivable of $80.2 million during the year ended December 31, 2023 primarily attributable to the upfront payment due in connection with the 2023 Novartis Collaboration Agreement, as compared to no accounts receivable activity during the year ended December 31, 2022.
The cash provided by operating activities for the year ended December 31, 2023, was primarily driven by our net income for the year ended December 31, 2023, of $132.3 million, stock-based compensation expense of $11.2 million, and an increase in deferred revenue of $9.4 million, offset by an increase in accounts receivable of $80.2 million due to the recording of the upfront payment under the 2023 Novartis Agreement.
The cash provided by investing activities for the year ended December 31, 2021 was primarily due to $70.0 million from maturities of marketable securities and $12.6 million from proceeds of sales of marketable securities partially offset by $15.1 million for purchases of marketable securities and $1.6 million for purchases of property and equipment. 120 Table of Contents Cash Flows from Financing Activities Net cash provided by financing activities was $33.6 million during the year ended December 31, 2023 primarily due to the $31.1 million in proceeds from the issuance of common stock in connection with the 2023 Neurocrine Collaboration Agreement along with proceeds from the exercise of stock options, and purchases by our employees of our common stock under our employee stock purchase plan.
The cash used in investing activities for the year ended December 31, 2024 was primarily due to $465.7 million for purchases of marketable securities and $3.5 million for purchases of property and equipment, offset by $374.3 million from proceeds from maturities and sales of marketable securities.
Net cash used in operating activities was $53.5 million during the year ended December 31, 2021. The cash used in operating activities for the year ended December 31, 2021 was primarily driven by operating expenses, net of stock-based compensation and depreciation.
The cash used in operating activities for the year ended December 31, 2024, was primarily driven by our net loss for the year ended December 31, 2024, of $65.0 million and a decrease in deferred revenue of $44.8 million due to revenue recognized under the 2019 Neurocrine Agreement and the 2023 Neurocrine Collaboration Agreement, offset by a decrease in accounts receivable of $78.6 million due to the collection of the upfront payment under the 2023 Novartis Agreement, and stock-based compensation expense of $14.8 million. ​ Net cash provided by operating activities was $77.9 million during the year ended December 31, 2023.
Removed
We focus on leveraging our expertise in capsid discovery and neuropharmacology to address the delivery hurdles that have constrained the genetic medicine and neurology disciplines, with the goal of either halting or slowing disease progression or reducing symptom severity, and therefore providing clinically meaningful impact to patients.
Added
Our wholly-owned prioritized pipeline includes two tau targeting programs: VY7523 (which we formerly referred to as VY-TAU01), an anti-tau antibody for AD and VY1706, a tau silencing gene therapy for AD. The murine version of VY7523 reduced tau spread by more than 60% in preclinical studies.
Removed
We identified a lead development candidate for our anti-tau antibody program in the first quarter of 2023 and expect to submit an investigational new drug, or IND, application to the U.S. Food and Drug Administration, or the FDA, for this program in the first half of 2024.
Added
VY7523 demonstrated an acceptable safety, tolerability, and immunogenicity profile as well as expected pharmacokinetic results in a Phase 1, single ascending dose, or SAD, clinical trial in healthy volunteers. In February 2025, we initiated a Phase 1 multiple ascending dose, or MAD, clinical trial of VY7523 in early AD patients.
Removed
We promoted our tau silencing gene therapy program to a prioritized program in the first quarter of 2024, based on preclinical data demonstrating robust reductions in tau messenger RNA, or mRNA, in a murine model, and we anticipate submission of an IND in 2026.
Added
In a non-human primate, or NHP, study, a single 1.3E13 vector genomes per kilogram dose of VY1706 delivered intravenously resulted in reductions in tau mRNA levels of 50% to 73% across the cerebral cortex, including in areas of the brain where tau accumulates during progression of AD.
Removed
Pursuant to such agreements, we are also working with Neurocrine on five early-stage programs for the research, development, manufacture and commercialization of gene therapies designed to address central nervous system diseases or conditions associated with rare genetic targets.
Added
We are advancing seven gene therapy programs with Neurocrine. Development candidates were selected for three of these programs in 2024, resulting in milestone payments to us.
Removed
We have also entered into agreements with licensees including Novartis, Alexion, and Sangamo, to license or to provide options to receive exclusive licenses to certain TRACER Capsids.
Added
These two programs are particularly significant to us for two reasons: the subsequent clinical trials of these programs have the potential to establish human proof-of-concept for the TRACER Capsids, and we have the option to opt-in on co-development and co-commercialization in the United States. for both products.
Removed
As described further below, in December 2023, we entered into a license and collaboration agreement with Novartis to provide Novartis certain rights regarding the development of potential gene therapy product candidates for the treatment of spinal muscular atrophy and to collaborate with Novartis to develop gene therapy product candidates for the treatment of Huntington’s disease.
Added
In addition to the Neurocrine collaborations, we have partnered with Novartis on TRACER Capsid-based gene therapies for spinal muscular atrophy 117 Table of Contents and Huntington’s disease. We have also licensed capsids to Novartis for three undisclosed CNS targets and to Alexion for one undisclosed rare neurological disease target.
Removed
The joint steering committee with Neurocrine has selected a development candidate for the FA Program, during the first quarter of 2024, and expects to advance into first-in-human 113 Table of Contents clinical trials in 2025.
Added
In total, these partnerships have delivered more than $500.0 million in non-dilutive funding to us to date, including upfront fees, development milestone payments, option exercise fees, license fees, and research and development expense reimbursement.
Removed
As our development programs progress and we identify product candidates and initiate preclinical studies and clinical trials, including as we initiate our planned Phase 1 clinical trial to evaluate VY-TAU01 in 2024, we continue to expect general and administrative expenses to increase to support these additional research and development activities. ​ Other Income, Net ​ Other income, net consists primarily of interest income on our marketable securities. ​ Critical Accounting Policies and Estimates ​ Our management’s discussion and analysis of our consolidated financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles.
Added
Looking forward, we have the potential to earn up to $8.2 billion in milestone payments across the partnered portfolio, including $2.9 billion in potential development milestone payments, as well as royalties. ​ All of the gene therapies in our wholly-owned and collaborative pipeline leverage TRACER.
Removed
Revenue Recognition – ASC 606 ​ We recognize revenue in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 606 Revenue from Contracts with Customers, or ASC 606. ​ 116 Table of Contents We enter into license, option, and collaboration agreements which are within the scope of ASC 606, under which we license or provide options to license certain of our product candidates and, in certain cases, perform research and development.
Added
TRACER is a broadly applicable, RNA-based screening platform that enables rapid discovery of AAV capsids with robust penetration of the blood-brain barrier, or BBB, and enhanced CNS tropism in multiple species, including NHPs. We are also developing a second non-viral therapeutics platform focused on non-viral receptor-mediated transport across the BBB.
Removed
During the year ended December 31, 2022, collaboration revenue was primarily related to Pfizer’s decision, as Alexion’s predecessor-in-interest under the Alexion Agreement, to exercise the first material right for a license option under the Alexion Agreement, or the Pfizer License Option, along with the expiration of the second material right associated with the Pfizer License Option, which resulted in revenue recognized of $40.0 million.
Added
The following table summarizes our research and development expenses for the years ended December 31, 2024 and 2023.
Removed
Research and Development Expense Research and development expense increased by $31.4 million from $60.8 million for the year ended December 31, 2022 to $92.2 million for the year ended December 31, 2023.
Added
Cash Flows from Financing Activities Net cash provided by financing activities was $114.0 million during the year ended December 31, 2024 primarily due to the $93.5 million in net proceeds from a public offering of common stock and warrants and $19.3 million in connection with the sale of common stock to Novartis in January 2024.
Removed
The increase in general and administrative expense was primarily attributable to increased compensation costs and stock-based compensation associated with higher headcount in general and administrative functions as compared to the same period in the prior year, as well as the recognition of $1.9 million of business development costs related to the 2023 Novartis Collaboration Agreement as general and administrative expenses during the year ended December 31, 2023. ​ Other Income, Net Other income, net of approximately $11.7 million was recognized during the year ended December 31, 2023, as compared to $4.4 million during the year ended December 31, 2022.
Removed
Other income, net during the year ended December 31, 2023 was primarily related to interest income due to increased interest rates on increased balances of marketable securities, while other income, net during the year ended December 31, 2022 was primarily related to an employee retention tax credit under the Coronavirus Aid, Relief, and Economic Security Act and interest income on marketable securities balances.
Removed
The increase was primarily due to our net income for the year ended December 31, 2023 of $132.3 million as compared to our net loss for the year ended December 31, 2022 of $46.4 million.
Removed
We also received an upfront payment of $30.0 million from Pfizer as the predecessor-in-interest to Alexion, in connection with our entry into the Alexion Agreement. Cash Flows from Investing Activities Net cash used in investing activities was $141.6 million during the year ended December 31, 2023.
Removed
For more information, refer to Note 7 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. ​ Off-Balance Sheet Arrangements ​ We did not have, during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under applicable rules of the Securities and Exchange Commission, or the SEC. ​ Smaller Reporting Company Status ​ As of June 30, 2023, we have requalified as a “smaller reporting company,” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended.
Removed
We would cease to qualify as a smaller reporting company if we have (a) a non-affiliate public float in excess of $250 million and annual revenues in excess of $100 million during our last fiscal year, or (b) a non-affiliate public float in excess of $700 million, in each case determined on an annual basis as of the last business day of our second quarter.
Removed
As a smaller reporting company, we are permitted and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not smaller reporting companies.
Removed
These exemptions include: ​ ● being permitted to provide only two years of audited consolidated financial statements in this Annual Report on Form 10-K, with correspondingly reduced Management's Discussion and Analysis of Financial Condition and Results of Operations disclosure; ​ ● reduced disclosure obligations regarding executive compensation; and ​ ● not being required to furnish a stock performance graph in our annual report. ​ We expect to continue to take advantage of some or all of the available exemptions until we cease to be a smaller reporting company.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed2 unchanged
Biggest changeWe do not believe that inflation had, or that an immediate 100 basis point change in inflation would have had, a material effect on our business, financial condition, or results of operations during the year ended December 31, 2023. ​ ITEM 8.
Biggest changeWe do not believe that inflation had a material effect on our business, financial condition, or results of operations during the year ended December 31, 2024. ​ ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DAT A The financial statements required to be filed pursuant to this Item 8 are appended to this report.
Our primary exposure to 123 Table of Contents market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because our investments, including cash equivalents, are in the form of money market funds and marketable securities and are invested in U.S. Treasury notes.
Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because our investments, including cash equivalents, are in the form of money market funds and marketable securities 127 Table of Contents and are invested in U.S. Treasury notes.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DAT A The financial statements required to be filed pursuant to this Item 8 are appended to this report. An index of those financial statements is found in Item 15. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANT S ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
An index of those financial statements is found in Item 15. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANT S ON ACCOUNTING AND FINANCIAL DISCLOSURE None.

Other VYGR 10-K year-over-year comparisons