rna-20250930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________________________________________________

FORM 10-Q

_____________________________________________________


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2025


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-39321

_____________________________________________________

Avidity Biosciences, Inc.

(Exact name of registrant as specified in its charter)

_____________________________________________________


Delaware						46-1336960
(State or other jurisdiction of incorporation or organization)						(IRS Employer Identification No.)

3020 Callan Road San Diego, California						92121
(Address of principal executive offices)						(Zip Code)

(858) 401-7900

(Registrant’s telephone number, including area code)

_____________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value	RNA	The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of October 31, 2025, the registrant had 150,675,742 shares of common stock outstanding.

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Avidity Biosciences, Inc.

FORM 10-Q

TABLE OF CONTENTS


PART I – FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss	4
	Condensed Consolidated Statements of Stockholders' Equity	5
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	33

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	38

SIGNATURES		40

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PART I - FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (unaudited)

Avidity Biosciences, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except par value)


	September 30, 2025		December 31, 2024
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	350,158	$	219,868
Marketable securities	1,525,678		1,281,629
Prepaid and other current assets	90,181		40,793
Total current assets	1,966,017		1,542,290
Property and equipment, net	21,504		12,670
Restricted cash	2,798		2,795
Right-of-use assets	52,848		5,619
Other assets	91,042		521
Total assets	$	2,134,209	$	1,563,895
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	9,626	$	8,461
Accrued expenses and other liabilities	137,163		64,726
Lease liabilities, current portion	3,967		3,844
Deferred revenue, current portion	19,123		20,987
Total current liabilities	169,879		98,018
Lease liabilities, net of current portion	45,999		2,957
Deferred revenue, net of current portion	32,066		37,961
Total liabilities	247,944		138,936
Commitments and contingencies (Note 7)
Stockholders’ equity:
Common stock, $0.0001 par value; authorized shares – 400,000; issued and outstanding shares – 146,771 and 119,893 at September 30, 2025 and December 31, 2024, respectively	15		12
Additional paid-in capital	3,225,078		2,315,111
Accumulated other comprehensive income	1,768		2,902
Accumulated deficit	(1,340,596)		(893,066)
Total stockholders’ equity	1,886,265		1,424,959
Total liabilities and stockholders’ equity	$	2,134,209	$	1,563,895

See accompanying notes.

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Avidity Biosciences, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except per share data)

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Collaboration revenue	$	12,475	$	2,336	$	17,895	$	7,924
Operating expenses:
Research and development	154,948		77,197		392,563		207,968
General and administrative	46,333		23,273		116,797		57,902
Total operating expenses	201,281		100,470		509,360		265,870
Loss from operations	(188,806)		(98,134)		(491,465)		(257,946)
Other income (expense):
Interest income	14,744		17,968		45,401		38,350
Other expense	(380)		(232)		(1,466)		(449)
Total other income	14,364		17,736		43,935		37,901
Net loss	$	(174,442)	$	(80,398)	$	(447,530)	$	(220,045)
Net loss per share, basic and diluted	$	(1.27)	$	(0.65)	$	(3.38)	$	(2.08)
Weighted-average shares outstanding, basic and diluted	137,895		123,375		132,281		105,902
Other comprehensive income (loss):
Net unrealized (losses) gains on marketable securities	(4)		7,555		(1,258)		6,977
Foreign currency translation adjustment	(5)		—		124		—
Comprehensive loss	$	(174,451)	$	(72,843)	$	(448,664)	$	(213,068)

See accompanying notes.

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Avidity Biosciences, Inc.

Condensed Consolidated Statements of Stockholders' Equity

(in thousands)

(unaudited)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2024	119,893	$	12	$	2,315,111	$	2,902	$	(893,066)	$	1,424,959
Issuance of common stock upon exercise of stock options	114	—		1,937		—		—		1,937



Issuance of common stock in connection with vesting of restricted stock units and performance stock units	505	—		—		—		—		—
Stock-based compensation	—	—		17,736		—		—		17,736
Net loss	—	—		—		—		(115,773)		(115,773)
Other comprehensive loss	—	—		—		(136)		—		(136)
Balance at March 31, 2025	120,512	$	12	$	2,334,784	$	2,766	$	(1,008,839)	$	1,328,723
Issuance of common stock upon exercise of stock options	130	—		2,109		—		—		2,109

Issuance of common stock under Employee Stock Purchase Plan	92	—		2,477		—		—		2,477
Issuance of common stock in connection with vesting of restricted stock units	44	—		—		—		—		—
Stock-based compensation	—	—		17,659		—		—		17,659
Net loss	—	—		—		—		(157,315)		(157,315)
Other comprehensive loss	—	—		—		(989)		—		(989)
Balance at June 30, 2025	120,778	$	12	$	2,357,029	$	1,777	$	(1,166,154)	$	1,192,664
Issuance of common stock upon exercise of stock options	832	—		12,133		—		—		12,133
Issuance of common stock upon exercise of pre-funded warrants	2,208	—		—		—		—		—
Issuance of common stock in public offerings, net of issuance costs of $43,337	22,897	3		836,892		—		—		836,895
Issuance of common stock in connection with vesting of restricted stock units	56	—		—		—		—		—
Stock-based compensation	—	—		19,024		—		—		19,024
Net loss	—	—		—		—		(174,442)		(174,442)
Other comprehensive loss	—	—		—		(9)		—		(9)
Balance at September 30, 2025	146,771	$	15	$	3,225,078	$	1,768	$	(1,340,596)	$	1,886,265

See accompanying notes.

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Avidity Biosciences, Inc.

Condensed Consolidated Statements of Stockholders' Equity

(in thousands)

(unaudited)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2023	79,275	$	8	$	1,071,395	$	125	$	(570,764)	$	500,764
Issuance of common stock upon exercise of stock options	541	—		3,896		—		—		3,896
Issuance of common stock in public offering, net of issuance costs of $143	418	—		5,594		—		—		5,594
Issuance of common stock in a private placement, net of issuance costs of $12,821	15,225	2		238,386		—		—		238,388
Issuance of pre-funded warrants in a private placement, net of issuance costs of $7,605	—	—		141,395		—		—		141,395
Issuance of common stock in connection with vesting of restricted stock units	135	—		—		—		—		—
Stock-based compensation	—	—		10,306		—		—		10,306
Net loss	—	—		—		—		(68,855)		(68,855)
Other comprehensive loss	—	—		—		(589)		—		(589)
Balance at March 31, 2024	95,594	$	10	$	1,470,972	$	(464)	$	(639,619)	$	830,899
Issuance of common stock upon exercise of stock options	1,201	—		14,308		—		—		14,308
Issuance of common stock in public offering, net of issuance costs of $28,263	12,133	1		432,771		—		—		432,772
Issuance of common stock under Employee Stock Purchase Plan	138	—		1,027		—		—		1,027
Issuance of common stock in connection with vesting of restricted stock units	200	—		—		—		—		—
Stock-based compensation	—	—		12,812		—		—		12,812
Net loss	—	—		—		—		(70,793)		(70,793)
Other comprehensive income	—	—		—		11		—		11
Balance at June 30, 2024	109,266	$	11	$	1,931,890	$	(453)	$	(710,412)	$	1,221,036
Issuance of common stock upon exercise of stock options	1,007	—		17,363		—		—		17,363
Issuance of common stock in public offering, net of issuance costs of $21,406	8,418	1		323,731		—		—		323,732
Issuance of common stock in connection with vesting of restricted stock units	209	—		—		—		—		—
Stock-based compensation	—	—		14,092		—		—		14,092
Net loss	—	—		—		—		(80,398)		(80,398)
Other comprehensive income	—	—		—		7,555		—		7,555
Balance at September 30, 2024	118,900	$	12	$	2,287,076	$	7,102	$	(790,810)	$	1,503,380

See accompanying notes.

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Avidity Biosciences, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


	Nine Months Ended September 30,
	2025		2024
Cash flows from operating activities
Net loss	$	(447,530)	$	(220,045)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	2,655		2,038
Stock-based compensation expense	54,419		37,210
Amortization of premiums and discounts on marketable securities, net	(11,037)		(14,281)
Gain on disposal of property and equipment	83		—

Non-cash operating lease costs	2,672		2,473
Changes in operating assets and liabilities:
Prepaid and other assets	(140,283)		(16,928)
Accounts payable	1,112		(1,147)
Accrued expenses and other liabilities	67,031		19,775
Operating right-of-use assets and lease liabilities, net	(2,031)		(2,752)
Deferred revenue	(7,759)		(7,342)
Net cash used in operating activities	(480,668)		(200,999)
Cash flows from investing activities
Proceeds from maturities of marketable securities	862,604		349,655
Purchases of marketable securities	(1,096,874)		(1,136,534)
Purchases of property and equipment	(7,808)		(3,150)
Tenant improvements capitalized to right-of-use assets	(3,175)		—
Net cash used in investing activities	(245,253)		(790,029)
Cash flows from financing activities
Proceeds from issuance of common stock in public offerings, net of issuance costs	837,420		762,661
Proceeds from issuance of common stock under employee incentive equity plans	18,656		36,189
Proceeds from the issuance of common stock in a private placement, net of issuance costs	—		238,388
Proceeds from issuance of pre-funded warrants in a private placement, net of issuance costs	—		141,395
Net cash provided by financing activities	856,076		1,178,633
Effect of exchange rate on cash, cash equivalents and restricted cash	138		—
Net increase in cash, cash equivalents and restricted cash	130,293		187,605
Cash, cash equivalents and restricted cash at beginning of period	222,663		185,377
Cash, cash equivalents and restricted cash at end of period	$	352,956	$	372,982

Supplemental schedule of noncash investing and financing activities:
Right-of-use assets obtained in exchange for operating lease liabilities	$	45,195	$	—
Costs incurred, but not paid, in connection with public offering included in accounts payable and accrued expenses and other liabilities	$	525	$	565
Tenant improvements capitalized to right-of-use assets within accounts payable and accrued expenses	$	1,145	$	—
Receivables from stock option exercises included in prepaid and other current assets	$	—	$	406
Costs incurred, but not paid, in connection with purchases of property and equipment included in accounts payable and accrued expenses and other liabilities	$	3,763	$	655

See accompanying notes.

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Avidity Biosciences, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

1. Description of Business and Basis of Presentation

Description of Business

Avidity Biosciences, Inc. (the Company or Avidity) is a biopharmaceutical company committed to delivering a new class of RNA therapeutics called Antibody Oligonucleotide Conjugates (AOCs). The Company’s proprietary AOC platform is designed to combine the specificity of monoclonal antibodies with the precision of RNA therapeutics to target the root cause of diseases previously untreatable with such therapeutics.

Agreement and Plan of Merger & Separation and Distribution Agreement

On October 25, 2025,the Company entered into an Agreement and Plan of Merger (the Merger Agreement) with Novartis AG, a company limited by shares (Aktiengesellschaft) incorporated under the laws of Switzerland (Novartis or Parent), and Ajax Acquisition Sub, Inc., a Delaware corporation and an indirect wholly owned subsidiary of Parent (Merger Sub), pursuant to which, on the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company (the Merger), with the Company surviving the Merger as an indirect wholly owned subsidiary of Parent. In connection with the Merger, the Company, Bryce Therapeutics, Inc., a newly formed Delaware corporation and wholly owned subsidiary of the Company (SpinCo), and Parent (with respect to certain sections specified therein) also entered into a Separation and Distribution Agreement, dated October 25, 2025 (the Separation and Distribution Agreement), to effect a pre-closing reorganization of certain assets related the Company’s early stage precision cardiology programs and certain collaboration agreements. Refer to footnote 10, Subsequent Events, for more information.

Liquidity

Since inception, the Company has relied on various means of raising capital, including public offerings, at-the-market (ATM) sales agreements, the sale and issuance of convertible preferred stock, funding under collaboration agreements, and private placements of common stock. The Company has devoted substantially all of its resources to organizing and staffing the Company, business planning, raising capital, developing its proprietary AOC platform, identifying potential product candidates, establishing its intellectual property portfolio, conducting research and preclinical studies, advancing its clinical programs, and providing other general and administrative support for these operations. In addition, the Company has a limited operating history, has incurred operating losses since inception and expects that it will continue to incur net losses into the foreseeable future as it continues the development of its product candidates and development programs. As of September 30, 2025, the Company had an accumulated deficit of $1.3 billion, cash and cash equivalents of $350.2 million, and marketable securities of $1.5 billion.

The Company believes that existing cash, cash equivalents and marketable securities will be sufficient to fund the Company’s operations for at least 12 months from the date of the filing of this Form 10-Q. The Company plans to finance its future cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. If the Company is not able to secure adequate additional funding, it may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, and/or delay or reduce the scope of its planned development programs. Any of these actions could materially harm the Company’s business, results of operations and future prospects.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and the rules and regulations of the Securities and Exchange Commission (SEC) related to a quarterly report on Form 10-Q. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations. The unaudited condensed consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of the results for the periods presented. All such adjustments are of a normal and recurring nature. The operating results presented in these unaudited condensed consolidated financial statements are not necessarily indicative of the results that may be expected for any future periods. These unaudited condensed

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consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 31, 2024 included in the Company’s annual report on Form 10-K filed with the SEC on February 27, 2025.

In December 2023, the Company formed Avidity Biosciences Ireland Limited, a wholly-owned subsidiary (the Subsidiary). The accompanying unaudited condensed consolidated financial statements reflect the operations of Avidity Biosciences, Inc. and the Subsidiary. Intercompany balances and transactions have been eliminated in consolidation.

Certain amounts reported in the Company's prior fiscal periods consolidated financial statements have been reclassified to conform to the current period presentation, including the reclassification of accounts payable from “Accounts payable and accrued liabilities” into “Accounts payable” and the reclassification of accrued compensation from “Accrued compensation” into “Accrued expenses and other liabilities" on the condensed consolidated balance sheets. There are no changes to the Company’s financial position or results of operations as a result of this reclassification.

2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of condensed consolidated financial statements in accordance with GAAP requires the Company to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the condensed consolidated financial statements and accompanying notes. Although estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions.

Summary of Significant Accounting Policies

The Company’s significant accounting policies are discussed in “Note 2 – Summary of Significant Accounting Policies” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on February 27, 2025. There have been no significant changes to these policies during the nine months ended September 30, 2025.

Foreign Currency Translation

The foreign subsidiary uses its local currency as the functional currency. The financial statements of the foreign subsidiary are translated into U.S. dollars using the exchange rate in effect at the balance sheet date for assets and liabilities, stockholders’ equity is translated at the historical rates, and revenues and expenses are translated at the average exchange rates for the period. Translation adjustments are recorded as a component of accumulated other comprehensive income within stockholders’ equity.

Net Loss Per Share

Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period, adjusted for the weighted-average number of common shares outstanding that are subject to repurchase or forfeiture. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and dilutive common stock equivalents outstanding for the period determined using the treasury-stock and if-converted methods. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding as inclusion of the common stock equivalent securities would be anti-dilutive. The pre-funded common stock warrants are included in the calculation of basic and diluted net loss per share as the exercise price of $0.001 per share is not substantive and the shares are issuable for little or no consideration.

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Common stock equivalent securities not included in the calculation of diluted net loss per share, because to do so would be anti-dilutive, are as follows (in common stock equivalent shares; in thousands):


	September 30,
	2025	2024
Common stock options issued and outstanding	13,705	12,190
Restricted stock units	3,131	1,608
Performance stock units	810	375
ESPP shares pending issuance	59	25
Total	17,705	14,198

Recently Issued Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances income tax disclosures, primarily through standardization and disaggregation of the income tax rate reconciliation and disaggregation of income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. ASU 2023-09 can be applied either prospectively or retrospectively and early adoption is permitted. The Company is currently evaluating the impact that this guidance will have on the presentation of its condensed consolidated financial statements and accompanying notes.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), which requires that public business entities disclose additional information about specific expense captions in the notes to financial statements at interim and annual reporting periods. The amendment in the update does not change or remove current expense disclosures, rather, it requires enhanced disaggregated disclosures of specific expense captions and affects where that information is presented within the notes to the financial statements. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. ASU 2024-03 can be applied either prospectively or retrospectively and early adoption is permitted. The Company is currently evaluating the impact that this guidance will have on the presentation of its condensed consolidated financial statements and accompanying notes.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), which eliminates the project stage model and introduces a probable-to-complete recognition threshold for the capitalization of software development costs. The amendment in the update requires an assessment of uncertainty associated with software development activities, additional disclosures for capitalized internal-use software costs and consideration of website development costs. ASU 2025-06 is effective for annual periods beginning after December 15, 2027. ASU 2025-06 can be applied prospectively, through a modified transition approach, or retrospectively and early adoption is permitted. The Company is currently evaluating the impact that this guidance will have on the presentation of its condensed consolidated financial statements and accompanying notes.

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3. Fair Value Measurements

The following tables summarize the Company’s cash equivalents and marketable securities measured at fair value (in thousands):


			Fair Value Measurements Using
As of September 30, 2025	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
U.S. Treasury securities	$	51,836	$	51,836	$	—	$	—
Marketable securities:
U.S. Treasury securities	1,525,678		1,525,678		—		—



Total	$	1,577,514	$	1,577,514	$	—	$	—


			Fair Value Measurements Using
As of December 31, 2024	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
U.S. Treasury securities	$	7,439	$	7,439	$	—	$	—
Marketable securities:
U.S. Treasury securities	1,281,139		1,281,139		—		—

Negotiable certificates of deposit	490		—		490		—

Total	$	1,289,068	$	1,288,578	$	490	$	—

4. Marketable Securities

The Company’s marketable securities, which consist of highly liquid marketable debt securities, are classified as available-for-sale and are stated at fair value. The following tables summarize the Company’s marketable securities (in thousands):


As of September 30, 2025	Maturity (in years)	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
U.S. Treasury securities	1 or less	$	927,070	$	1,765	$	(72)	$	928,763



U.S. Treasury securities	1 - 2	596,965		331		(381

SEC Form 10-Q filed by Avidity Biosciences Inc.