SEC Form 10-Q filed by Generation Bio Co.

11/5/25 4:16:21 PM ET

$GBIO

Biotechnology: Pharmaceutical Preparations

Health Care

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GENERATION BIO CO._September 30, 2025

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


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

For the quarterly period ended September 30, 2025


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

For the transition period from to

Commission File Number: 001-39319

GENERATION BIO CO.

(Exact name of registrant as specified in its charter)



Delaware		81-4301284
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

301 Binney Street Cambridge, Massachusetts		02142
(Address of principal executive offices)		(Zip Code)

(617) 655-7500

(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	GBIO	Nasdaq Global Select 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 ☒ No ☐

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 ☒ No ☐

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	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

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. ☐

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

As of October 31, 2025 there were 6,737,899 shares of Common Stock, $0.0001 par value per share, outstanding.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or this Quarterly Report, of Generation Bio Co. contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that involve substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this Quarterly Report, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would,” or the negative of these words or other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

The forward-looking statements in this Quarterly Report include, among other things, statements about:

●

the outcome of our exploration of strategic alternatives and our ability to consummate any such transaction;

●

our strategic restructuring announced in August 2025 and our ability to achieve the anticipated savings from the reduction in force and related actions;

●

our estimates regarding expenses, future revenue, capital requirements, and the period over which we believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our operating expenses and capital expenditure requirements;

●

the potential achievement of milestones and receipt of payments under our collaboration with ModernaTX, Inc., or Moderna;

●

the potential advantages of our technologies;

●

our expectations regarding our ability to obtain and maintain intellectual property protection;

●

our intellectual property position;

●

the impact of government laws and regulations; and

●

our ability to maintain existing collaborations.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and stockholders should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Quarterly Report, particularly in the “Risk Factors” section in this Quarterly Report and our most recent Annual Report on Form 10-K, or our 2024 Annual Report, filed with the Securities and Exchange Commission, or SEC, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Moreover, we operate in a competitive and rapidly changing environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, joint ventures, or investments we may make or enter into.

Stockholders should read this Quarterly Report and the documents that we file with the SEC with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained in this Quarterly Report are made as of the date of this Quarterly Report, and we do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Except where the context otherwise requires or where otherwise indicated, the terms “we,” “us,” “our,” “our company,” “the company,” and “our business” in this Quarterly Report refer to Generation Bio Co. and its consolidated subsidiary.

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Generation Bio Co.

INDEX

		Page(s)
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	4
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations and Comprehensive Loss	5
	Condensed Consolidated Statements of Stockholders’ Equity	6
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	30
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 5.	Other Information	33
Item 6.	Exhibits	34
	Signatures	35

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

Generation Bio Co.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)


	September 30,		December 31,
	2025		2024
Assets
Current assets:
Cash and cash equivalents	$	21,940	$	76,301
Marketable securities		67,682		108,922
Collaboration receivable		391		1,224
Assets held for sale		1,070		163
Prepaid expenses and other current assets		2,379		6,293
Total current assets		93,462		192,903
Property and equipment, net		8,853		15,293
Operating lease right-of-use assets		17,429		20,310
Restricted cash		2,152		2,152
Other long-term assets		—		539
Total assets	$	121,896	$	231,197
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,064	$	1,408
Accrued expenses and other current liabilities		12,475		10,059
Deferred revenue		149		10,582
Operating lease liabilities		6,352		13,006
Total current liabilities		21,040		35,055
Deferred revenue, net of current portion		30,552		29,161
Operating lease liabilities, net of current portion		19,744		80,554
Other liabilities, net of current portion		—		223
Total liabilities		71,336		144,993
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 5,000,000 shares authorized and no shares issued or outstanding at September 30, 2025 and December 31, 2024		—		—
Common stock, $0.0001 par value; 150,000,000 shares authorized at September 30, 2025 and December 31, 2024; 6,735,676 and 6,697,197 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively		1		1
Additional paid-in capital		794,841		789,089
Accumulated other comprehensive income		8		159
Accumulated deficit		(744,290)		(703,045)
Total stockholders’ equity		50,560		86,204
Total liabilities and stockholders’ equity	$	121,896	$	231,197

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Generation Bio Co.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Revenues:
Collaboration revenue	$	1,594	$	7,554	$	11,082	$	15,704
Operating expenses:
Research and development		21,630		15,088		52,486		45,811
General and administrative		12,162		9,181		28,664		29,124
(Gain) loss on lease termination		(25,490)		1,169		(23,838)		59,596
Total operating expenses		8,302		25,438		57,312		134,531
Loss from operations		(6,708)		(17,884)		(46,230)		(118,827)
Other income:
Other income and interest income, net		1,188		2,571		4,985		8,541
Net loss	$	(5,520)	$	(15,313)	$	(41,245)	$	(110,286)
Net loss per share, basic and diluted	$	(0.82)	$	(2.29)	$	(6.14)	$	(16.57)
Weighted average common shares outstanding, basic and diluted		6,735,454		6,673,846		6,713,226		6,656,832

Comprehensive loss:
Net loss	$	(5,520)	$	(15,313)	$	(41,245)	$	(110,286)
Other comprehensive income (loss):
Unrealized gains (losses) on marketable securities		4		599		(151)		45
Comprehensive loss	$	(5,516)	$	(14,714)	$	(41,396)	$	(110,241)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Generation Bio Co.

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except share amounts)

(Unaudited)


						Accumulated
				Additional		Other				Total
	Common Stock			Paid-in		Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Capital		Income (Loss)		Deficit		Equity
Balances at June 30, 2025	6,733,413	$	1	$	792,866	$	4	$	(738,770)	$	54,101
Vesting of restricted common stock	2,263		—		(2)		—		—		(2)
Stock-based compensation expense	—		—		1,977		—		—		1,977
Unrealized gains on marketable securities	—		—		—		4		—		4
Net loss	—		—		—		—		(5,520)		(5,520)
Balances at September 30, 2025	6,735,676	$	1	$	794,841	$	8	$	(744,290)	$	50,560


						Accumulated
				Additional		Other				Total
	Common Stock			Paid-in		Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Capital		Income (Loss)		Deficit		Equity
Balances at June 30, 2024	6,670,272	$	1	$	782,036	$	(280)	$	(666,350)	$	115,407
Issuance of common stock upon exercise of stock options	968		—		13		—		—		13
Vesting of restricted common stock	4,109		—		(16)		—		—		(16)
Stock-based compensation expense	—		—		3,752		—		—		3,752
Unrealized gains on marketable securities	—		—		—		599		—		599
Net loss	—		—		—		—		(15,313)		(15,313)
Balances at September 30, 2024	6,675,349	$	1	$	785,785	$	319	$	(681,663)	$	104,442

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Generation Bio Co.

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except share amounts)

(Unaudited)


						Accumulated
				Additional		Other				Total
	Common Stock			Paid-in		Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Capital		Income (Loss)		Deficit		Equity
Balances at December 31, 2024	6,697,197	$	1	$	789,089	$	159	$	(703,045)	$	86,204
Vesting of restricted common stock	8,747		—		(10)		—		—		(10)
Issuance of common stock under ESPP	29,732		—		81		—		—		81
Stock-based compensation expense	—		—		5,681		—		—		5,681
Unrealized losses on marketable securities	—		—		—		(151)		—		(151)
Net loss	—		—		—		—		(41,245)		(41,245)
Balances at September 30, 2025	6,735,676	$	1	$	794,841	$	8	$	(744,290)	$	50,560


						Accumulated
				Additional		Other				Total
	Common Stock			Paid-in		Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Capital		Income (Loss)		Deficit		Equity
Balances at December 31, 2023	6,620,555	$	1	$	774,230	$	274	$	(571,377)	$	203,128
Issuance of common stock upon exercise of stock options	2,251		—		31		—		—		31
Vesting of restricted common stock	36,941		—		(172)		—		—		(172)
Issuance of common stock under ESPP	15,602		—		247		—		—		247
Stock-based compensation expense	—		—		11,449		—		—		11,449
Unrealized gains on marketable securities	—		—		—		45		—		45
Net loss	—		—		—		—		(110,286)		(110,286)
Balances at September 30, 2024	6,675,349	$	1	$	785,785	$	319	$	(681,663)	$	104,442

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Generation Bio Co.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Nine Months Ended September 30,
	2025		2024
Cash flows from operating activities:
Net loss	$	(41,245)	$	(110,286)
Adjustments to reconcile net loss to net cash used in operating activities:
(Gain) loss on lease termination		(23,838)		59,085
Stock-based compensation expense		5,681		11,449
Depreciation and amortization expense		3,674		3,755
Accretion of discount on marketable securities, net		(2,577)		(6,312)
Losses on property and equipment, net		1,911		84
Changes in operating assets and liabilities:
Collaboration receivable		833		(2,212)
Prepaid expenses and other current assets		3,914		694
Operating lease right-of-use assets		2,881		2,799
Other noncurrent assets		539		(2,840)
Accounts payable		725		(79)
Accrued expenses and other current liabilities		3,201		(9,526)
Deferred revenue		(9,042)		(12,154)
Other noncurrent liabilities		(223)		—
Operating lease liabilities		(44,302)		(7,236)
Net cash used in operating activities		(97,868)		(72,779)
Cash flows from investing activities:
Purchases of property and equipment		(705)		(2,023)
Proceeds from sale of property and equipment		475		149
Purchases of marketable securities		(66,334)		(115,881)
Maturities of marketable securities		110,000		142,000
Net cash provided by investing activities		43,436		24,245
Cash flows from financing activities:
Proceeds from exercise of stock options and ESPP, net		81		278
Tax withholding payments related to net share settlements of restricted stock units		(10)		(172)
Net cash provided by financing activities		71		106
Net decrease in cash, cash equivalents and restricted cash		(54,361)		(48,428)
Cash, cash equivalents and restricted cash at beginning of period		78,453		72,237
Cash, cash equivalents and restricted cash at end of period	$	24,092	$	23,809
Supplemental disclosure of noncash investing and financing information:
Purchases of property and equipment included in accounts payable and accrued expenses	$	—	$	47
Property and equipment exchanged for prepaid expenses	$	50	$	—
Unrealized gains (losses) on marketable securities	$	(151)	$	45

Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	21,940	$	21,657
Restricted cash		2,152		2,152
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	24,092	$	23,809

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Generation Bio Co.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Nature of the Business and Basis of Presentation

Generation Bio Co., or Generation Bio, was incorporated on October 21, 2016 as Torus Therapeutics, Inc. and subsequently changed its name to Generation Bio Co. Generation Bio Co. and its consolidated subsidiary, or the company, we, our or us, were historically working to change what’s possible for people living with T cell-driven autoimmune diseases. We are headquartered in Cambridge, Massachusetts.

In August 2025, we announced the implementation of a strategic restructuring to occur in phases, beginning in mid-August 2025, which resulted in an approximately 90% reduction in workforce by the end of October 2025, or the Reduction, and commenced the exploration of strategic alternatives focused on maximizing shareholder value. There can be no assurance that the exploration of strategic alternatives will result in our pursuing a transaction or that any acquisition or other transaction involving us will be completed, nor as to the terms on which any acquisition or other transaction will occur, if at all. If the strategic process is unsuccessful, our board of directors may decide to pursue a dissolution and liquidation.

The accompanying condensed consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business. Since inception, we have funded our operations with proceeds from the sale of instruments convertible into convertible preferred stock, sales of convertible preferred stock, and sales of common stock in underwritten public offerings, “at-the-market” offerings, and in a private placement, as well as collaboration revenue under our collaboration with ModernaTX, Inc., or Moderna. We have incurred recurring losses, including net losses of $41.2 million for the nine months ended September 30, 2025 and $110.3 million for the nine months ended September 30, 2024. As of September 30, 2025 we had an accumulated deficit of $744.3 million. We expect to continue to generate operating losses in the foreseeable future. As of the issuance date of these condensed consolidated financial statements, we expect that our cash, cash equivalents, and marketable securities will be sufficient to fund our operating expenses and capital expenditure requirements for at least 12 months.

The accompanying condensed consolidated financial statements reflect the operations of Generation Bio and our wholly owned subsidiary, Generation Bio Securities Corporation. Intercompany balances and transactions have been eliminated in consolidation. The accompanying condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, or GAAP. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification, or ASC, and Accounting Standards Update, or ASU, of the Financial Accounting Standards Board, or FASB.

Reverse Stock Split

On July 18, 2025, we filed a certificate of amendment to our amended and restated certificate of incorporation to effect a 1-for-10 reverse stock split of our issued and outstanding common stock, without any change to par value, which became effective on July 21, 2025.

All share and per share amounts of our common stock and equity awards have been retroactively adjusted in this Quarterly Report to give effect to the reverse stock split for all periods presented.

2. Summary of Significant Accounting Policies

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates

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and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, the measurement of proportional performance of the combined license and research services performance obligation of our collaboration agreement and to a lesser extent, our accrual of research and development expenses. We base our estimates on historical experience, known trends and other market-specific or other relevant factors that we believe to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates, as there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results may differ from those estimates or assumptions.

Unaudited interim financial information

The condensed consolidated balance sheet as of December 31, 2024 was derived from audited financial statements but does not include all disclosures required by GAAP. The accompanying unaudited financial statements as of September 30, 2025 and for the three and nine months ended September 30, 2025 and 2024 have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC, for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with our audited financial statements included in our Annual Report on Form 10-K that was most recently filed with the SEC, or our 2024 Annual Report. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation of our financial position as of September 30, 2025, the results of operations for the three and nine months ended September 30, 2025 and 2024, and cash flows for the nine months ended September 30, 2025 and 2024 have been made. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2025 or any other period.

Our significant accounting policies are described in Note 2 of the Notes to Consolidated Financial Statements included in our 2024 Annual Report.

Recently issued accounting pronouncements

In December 2023, the FASB issued its final standard to improve income tax disclosures. This standard, issued as ASU 2023-09, requires public business entities to annually disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. This update is effective for us as of and for the year ended December 31, 2025. We anticipate that the adoption of ASU 2023-09 will expand our income tax footnote disclosures, including a more detailed effective tax rate reconciliation.

In November 2024, the FASB issued its final standard on expense disaggregation disclosures. This standard, issued as ASU 2024-03, requires public business entities to disclose, on an annual and interim basis, disaggregated information about certain income statement line items in a tabular format in the notes to the financial statements. This update is effective for annual periods beginning after December 15, 2026. We are currently evaluating the impact the guidance will have on our consolidated financial statements.

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3. Marketable Securities and Fair Value Measurements

The following tables present our marketable securities by security type:

As of September 30, 2025

Gross

Amortized

Unrealized

Fair

(in thousands)

Cost

Gains

Losses

Value

U.S. Treasury securities

67,674

—

67,682

As of December 31, 2024

Gross

Amortized

Unrealized

Fair

(in thousands)

Cost

Gains

Losses

Value

U.S. Treasury securities

108,763

159

—

108,922

Our marketable securities as of September 30, 2025 consisted of investments that mature within one year.

We assess our available-for-sale securities under the available-for-sale security impairment model in ASC 326 Financial Instruments - Credit Losses, as of each reporting date in order to determine if a portion of any decline in fair value below carrying value recognized on our available-for-sale securities is the result of a credit loss. We also evaluate our available-for-sale securities for impairment using a variety of factors including our intent to sell the underlying securities prior to maturity and whether it is more likely than not that we would be required to sell the securities before the recovery of their amortized basis. During the three and nine months ended September 30, 2025 and 2024, we did not recognize any impairment or realized gains or losses on sales of available-for-sale securities, and we did not record an allowance for, or recognize, any expected credit losses.

The following tables present our assets that are measured at fair value on a recurring basis and indicate the level within the fair value hierarchy of the valuation techniques that we utilized to determine such fair value:


	Fair Value Measurements at September 30, 2025 Using:
(in thousands)	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	7,148	$	—	$	—	$	7,148
Marketable securities:
U.S. Treasury securities		—		67,682		—		67,682
Totals	$	7,148	$	67,682	$	—	$	74,830


	Fair Value Measurements at December 31, 2024 Using:
(in thousands)	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	46,802	$	—	$	—	$	46,802
Marketable securities:
U.S. Treasury securities		—		108,922		—		108,922
Totals	$	46,802	$	108,922	$	—	$	155,724

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4. Collaboration and License Agreement

Moderna Collaboration and License Agreement

In March 2023, we entered into a Collaboration and License Agreement, or the Collaboration Agreement, with Moderna to collaborate on developing treatments for certain diseases by targeting delivery of nucleic acids to liver cells and certain cells outside of the liver.

Under the Collaboration Agreement, the parties agreed to collaborate on preclinical research programs relating to lipid nanoparticle, or LNP, delivery systems and nucleic acid payloads, with each party obtaining certain rights to intellectual property used in and arising out of such research programs. Each party is solely responsible for its own clinical development and commercialization of products under the Collaboration Agreement. Moderna reimburses us for the internal and external costs incurred by us in conducting the research programs, to the extent consistent with such research plans and budgets.

Moderna has exclusive options, upon payment of option exercise fees, to obtain worldwide, exclusive, sublicensable licenses under specified company intellectual property to develop, manufacture and commercialize (a) products comprising LNP delivery systems and nucleic acid payloads that are directed to (i) up to two liver targets, (ii) up to two non-liver targets and (iii) a third liver or non-liver target and (b) Exclusive Targets, which are Independent Program Products (as defined below) that include messenger RNA, or mRNA, that are directed to gene and protein targets in any of certain agreed-upon immune cell types, referred to as the Cell Target Types. Subject to the exclusivity obligations described below, each party has granted to the other a worldwide, non-exclusive, sublicensable license under certain LNP-related intellectual property arising out of the non-liver ctLNP program, or the Joint Collaboration ctLNP Intellectual Property, to develop, manufacture and commercialize products comprising LNP delivery systems and nucleic acid payloads directed to gene and protein targets in any of the Cell Target Types, or Independent Program Products.

Each party is obligated to use commercially reasonable efforts to complete the activities assigned to it under the research plans, and Moderna is further obligated to use commercially reasonable efforts to develop, seek regulatory approval for and commercialize at least one product directed to each target for which Moderna exercises its exclusive license option in at least one indication in the United States and in specified European countries.

We have agreed not to, directly or indirectly, alone or with, for or through any third party, develop, manufacture, commercialize or exploit (a) products containing mRNA that are directed to any of the Cell Target Types, during an agreed-upon exclusivity period, which may be extended by payment of extension fees, (b) products directed to any liver target or non-liver target during the option periods for those targets, (c) products directed to any liver target or non-liver target for which Moderna has exercised its exclusive license option or (d) products containing mRNA that are directed to any Exclusive Target for which Moderna has exercised its exclusive license option.

Under the terms of the Collaboration Agreement, in April 2023, Moderna made an upfront payment to us of $40.0 million, and paid us $7.5 million in prepaid research funding. In addition, we are eligible to receive up to $1.8 billion in milestone payments upon the achievement of specified development, regulatory, commercial, and sales milestone events, research term extension fees and exclusivity extension fees. Subject to reductions in specified circumstances, we will also be entitled to receive tiered royalties: (i) ranging from high-single-digits to low-double-digits on sales of licensed products that are directed to any liver target or non-liver target with respect to which Moderna has exercised its exclusive license option, and (ii) in the single digits on sales of Independent Program Products, including the exclusively licensed Independent Program Products directed to the Exclusive Targets. In consideration for the non-exclusive license granted by Moderna to us under the Joint Collaboration ctLNP Intellectual Property, we have agreed to pay Moderna tiered royalties in the single digits on sales of Independent Program Products that include mRNA, subject to reductions in specified circumstances. Royalties will be paid by each party, on a licensed product-by-licensed product and country-by-country basis, until the latest to occur of: (i) expiration of the last-to-expire of specified licensed patent rights; (ii) expiration of regulatory exclusivity; or (iii) ten years after the first commercial sale of the applicable licensed product.

In addition, in connection with the execution of the Collaboration Agreement, we entered into a Share Purchase Agreement, or the Share Purchase Agreement, with Moderna, pursuant to which we issued and sold 585,937 shares of our

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common stock to Moderna, at a price of $61.40 per share, for an aggregate purchase price of $36.0 million, which closed concurrently with the execution of the Collaboration Agreement, and resulted in Moderna becoming a related party. Under the Share Purchase Agreement, Moderna has the right, subject to certain terms and conditions, to purchase up to 3.06% of the outstanding shares of our common stock (on a post-closing basis) in connection with a future equity financing of at least $25.0 million by us.

Moderna Agreement Assessment

We assessed the promised goods and services under the Collaboration Agreement, in accordance with ASC 606 Revenue from Contracts with Customers, or ASC 606. At inception, the Collaboration Agreement included one combined performance obligation, which includes the license to the ctLNP technology to target indications outside of the liver and the related research services to develop such technology, as the two items are not distinct in context of the contract. The Collaboration Agreement also provides Moderna with options to receive additional research services and options to receive exclusive licenses. The options to receive exclusive licenses allow Moderna to develop and commercialize product candidates that utilize our ctLNP and closed-ended DNA, or ceDNA, technology for targets within the liver, as well as utilizing the ctLNP technology to be developed as part of the Collaboration Agreement and our ceDNA, technology for targets outside the liver. These options are considered to be priced at a discount to its standalone selling price and therefore are considered to be material rights.

The initial transaction price included a $40.0 million upfront fee, premium paid over the fair value of the common stock of $13.3 million in connection with shares issued and sold to Moderna under the Share Purchase Agreement, and estimated revenue associated with the payment for research services, including $7.5 million in prepaid research services. We utilized the expected amount method to determine the amount of reimbursement for these activities. We utilized the most likely amount method to determine the amount of consideration to include in the transaction price related to any variable consideration related to exclusivity fees, and milestones, and the royalty payments are constrained based on the royalty constraint. No amounts are included in the transaction price related to these elements.

We initially allocated the transaction price to each unit of account as follows:


Performance Obligations (in thousands)	Standalone Selling Price		Transaction Price Allocated
ctLNP technology and research license	$	52,500	$	42,576
First liver program commercialization option license		7,000		5,677
Second liver program commercialization option license		7,000		5,677
First non-liver program commercialization option license		11,700		9,488
Second non-liver program commercialization option license		11,700		9,488
Third liver or non-liver program commercialization option license		6,150		4,987
Total	$	96,050	$	77,893

The transaction price was allocated to each unit of account based on the relative estimated standalone selling prices, over which management has applied significant judgment, of each element. We developed the estimated standalone selling price for combined performance obligation and each of the options to receive licenses primarily based on the probability-weighted present value of expected future cash flows associated with each license related to each specific program and an estimate of the costs to provide services including a reasonable return. In developing such estimate, we also considered applicable market conditions and relevant entity-specific factors, including those factors contemplated in negotiating the agreement, the probability of success and the time needed to commercialize a product candidate pursuant to the associated license.

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On a quarterly basis, we measure proportional performance of the combined performance obligation over time using an input method based on cost incurred relative to the total estimated costs by determining the proportion of effort incurred as a percentage of total effort we expect to expend. This ratio is then applied to the transaction price allocated to the combined performance obligation and each of the options to receive licenses. Any changes to these estimates are recognized in the period in which they change as a cumulative catch up. All allocated consideration for the material rights is deferred until such time that Moderna exercises its options or the right to exercise the options expires.

In the first quarter of 2025, we recorded additional revenue related to a change in estimate due to revisions in the research plan. The change in estimate resulted in a $3.5 million decrease in the allocated transaction price, and a $5.3 million increase in collaboration revenue, with a corresponding decrease in deferred revenue, and a $0.78 decrease in net loss per share, basic and diluted, for the first quarter of 2025.

The following table provides a summary of the transaction price allocated to each unit of account, in addition to revenue activity during the period:


	Transaction Price Allocated		Revenue Recognized During		Revenue Recognized During		Deferred Revenue
	as of		Three Months Ended		Nine Months Ended		as of
Performance Obligations (in thousands)	September 30, 2025		September 30, 2025		September 30, 2025		September 30, 2025
ctLNP technology and research license	$	36,870	$	1,558	$	10,885	$	149
First liver program commercialization option license		4,916		—		—		4,911
Second liver program commercialization option license		4,916		—		—		4,911
First non-liver program commercialization option license		8,217		—		—		8,208
Second non-liver program commercialization option license		8,217		—		—		8,208
Third liver or non-liver program commercialization option license		4,319		—		—		4,314
Total	$	67,455	$	1,558	$	10,885	$	30,701

The following table presents the balance of our collaboration receivable and contract liabilities related to the Collaboration Agreement:


	Balance at						Balance at
(in thousands)	December 31, 2024		Additions		Deductions		September 30, 2025
Collaboration receivable	$	1,224	$	1,843	$	(2,712)	$	355
Contract liabilities:
Deferred revenue	$	39,743	$	1,843	$	(10,885)	$	30,701

On January 21, 2025, Moderna exercised an option to receive additional services under the Agreement on a time and materials basis. The Company accounts for these services as a separate contract under ASC 606 and recognizes revenue as services are performed. During the three and nine months ended September 30, 2025, the Company recognized revenue of less than $0.1 million and $0.2 million, respectively, of which less than $0.1 million is included in collaboration receivable as of September 30, 2025.

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5. Balance Sheet Accounts

Assets held for sale

Assets held for sale as of September 30, 2025, consist of laboratory equipment carried at the lower of the carrying amount or fair value less costs to sell. In August 2025, the Company committed to a plan to sell assets with a net book value of $2.9 million and recorded an impairment loss of $1.9 million in research and development expense during the three and nine months ended September 30, 2025, relating to the assets held for sale. The impairment loss was based on the agreed-to sales price of the assets with a third party, which we consider to be a level 2 fair value measurement.

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consisted of the following:


	September 30,		December 31,
(in thousands)	2025		2024
Accrued employee compensation and benefits	$	10,335	$	5,975
Accrued external research and development expenses		760		720
Accrued professional fees		980		597
Property and equipment		—		109
Other		400		2,658
Total	$	12,475	$	10,059

Accrued employee compensation and benefits as of September 30, 2025 includes $7.1 million related to the strategic restructuring we announced in August 2025. Accrued employee compensation and benefits as of December 31, 2024 includes salary continuation and severance costs of $0.4 million related to our previous strategic reorganization. For additional information, refer to Note 11, Reductions in Force.

6. Leases

Office and Lab Lease

We lease our office and laboratory space under a noncancelable operating lease that expires in 2029, or the Office and Lab Lease. There have been no material changes to our Office and Lab Lease during the three or nine months ended September 30, 2025. For additional information, refer to Note 7, Leases, to the consolidated financial statements in our 2024 Annual Report.

Seyon Lease

In July 2021, we entered into a lease agreement for a manufacturing facility in Waltham, Massachusetts, or the Seyon Lease. The Seyon Lease commenced in December 2021, when we were granted access to the facility and monthly rent payments began in September 2022, and the total rent payment was expected to be approximately $104.3 million for the 12-year lease term. We had an option to extend the Seyon Lease term for two additional terms of five years each at the greater of the then-current base rent or the then-current fair market value. Exercise of this option was not determined to be reasonably certain and thus was not considered in determining the operating lease liability. In connection with the Seyon Lease, we provided a security deposit of $3.6 million in the form of a letter of credit. We paid an initial monthly base rent of approximately $0.4 million that increased annually, up to a monthly base rent of $0.6 million. We were obligated to pay operating costs, taxes and utilities applicable to the facility. We were responsible for costs of constructing interior improvements within the facility that exceed a construction allowance of $26.0 million provided by Waltham CenterPoint I Investment Group, LLC, or the Landlord. On January 31, 2024, we notified the Landlord of termination of the Seyon Lease due to the Landlord’s breach of its obligations to us under the Seyon Lease and returned possession of the premises to the Landlord, effective January 31, 2024. On February 20, 2024, the Landlord served us with a complaint, filed in Massachusetts Superior Court, or the Court, with respect to the Seyon Lease. The complaint sought declaratory judgment

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that we unlawfully terminated the Seyon Lease and also asserted a claim for breach of contract damages. As of December 31, 2024, the Landlord had collected $3.6 million from our security deposit in lieu of monthly payments and had fully utilized such deposit. On August 15, 2025, we entered into a settlement agreement with the Landlord. Pursuant to the agreement, we paid the Landlord a lump sum of $31.0 million. Upon receipt of this payment, we and the Landlord granted each other mutual general releases and the litigation was dismissed with prejudice.

In connection with the termination of the Seyon Lease, in the first quarter of 2024, we recorded a material impairment loss of non-cash charges of $45.8 million in an impairment of the Seyon Lease right-of-use asset, $6.2 million in an impairment of construction in progress, and the write-off of $3.9 million in tenant improvement allowance receivable from the Landlord. In addition, during the three and nine months ended September 30, 2024, we recognized $1.2 million and $3.7 million, respectively, in accretion and other related expenses. Accordingly, during the three and nine months ended September 30, 2024, we recognized a loss on termination of lease of $1.2 million and $59.6 million, respectively, in our condensed consolidated statements of operations and comprehensive loss.

During the three and nine months ended September 30, 2025, we recognized $0.7 million and $2.3 million, respectively, in accretion and other related expenses. Additionally, during the three and nine months ended September 30, 2025, we met the criteria to extinguish the remaining lease liability of $57.2 million in accordance with ASC 405 Liabilities upon the Landlord’s receipt of our $31.0 million payment pursuant to the settlement agreement, which resulted in the recognition of a $26.2 million gain on termination of the Seyon Lease. Accordingly, during the three and nine months ended September 30, 2025, we recognized a net gain on termination of lease of $25.5 million and $23.8 million, respectively, in our condensed consolidated statements of operations and comprehensive loss. During the three and nine months ended September 30, 2025, we also made cash payments of $1.5 million and $10.9 million, respectively, to the Landlord related to the Court’s preliminary injunction, including $4.9 million due from July through December 2024. For additional information, refer to Note 9 Commitments and Contingencies.

7. Equity

As of September 30, 2025, our amended and restated certificate of incorporation authorizes us to issue 150,000,000 shares of common stock, par value $0.0001 per share, and 5,000,000 shares of preferred stock, par value $0.0001 per share, all of which preferred stock is undesignated.

In August 2024, we entered into an “at-the-market” sales agreement pursuant to which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $237.0 million. As of the issuance date of these condensed consolidated financial statements, we have not issued and sold any shares of our common stock pursuant to the August 2024 sales agreement.

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of our stockholders. Holders of common stock are not entitled to receive dividends, unless declared by the board of directors.

8. Stock-Based Compensation

Stock incentive plans

Our 2017 Stock Incentive Plan, or the 2017 Plan, provided for us to grant incentive or nonstatutory stock options, restricted stock, restricted stock units and other equity awards to employees, non-employees, and directors.

In May 2020, our board of directors adopted, and in June 2020, our stockholders approved, the 2020 Stock Incentive Plan, or the 2020 Plan, and, together with the 2017 Plan, the Plans, which became effective on June 11, 2020. The 2020 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards. The number of shares of common stock reserved for issuance under the 2020 Plan is the sum of (1) 254,769 shares; plus (2) the number of shares (up to a maximum of 717,301 shares) as was equal to the sum of (x) the number of shares of common stock reserved for issuance under the 2017 Plan that remained available for grant under the 2017 Plan on June 11, 2020 and (y) the number of shares of common stock subject to outstanding awards granted under the 2017 Plan that expire, terminate or are otherwise surrendered, cancelled, forfeited

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or repurchased by us at their original issuance price pursuant to a contractual repurchase right; plus (3) an annual increase, to be added on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2021 and continuing until, and including, the fiscal year ending December 31, 2030, equal to the lesser of (i) 4% of the number of shares of common stock outstanding on such date, and (ii) an amount determined by the board of directors. In January 2025, the number of shares of common stock authorized for issuance under the 2020 Plan was increased from 1,946,268 shares to 2,214,190 shares. Upon the effectiveness of the 2020 Plan, we ceased granting additional awards under the 2017 Plan.

The Plans are administered by the board of directors or, at the discretion of the board of directors, by a committee of the board of directors. The exercise prices, vesting and other restrictions on any award under the Plans are determined at the discretion of the board of directors, or its committee if so delegated. Stock options granted under the Plans with service-based vesting conditions generally vest over four years and expire after ten years. The exercise price for stock options granted is not less than the fair value of common stock as of the date of grant.

As of September 30, 2025, 174,457 shares remained available for future issuance under the 2020 Plan. Shares subject to outstanding awards granted under the Plans that expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by us at their original issuance price pursuant to a contractual repurchase right will be available for future awards under the 2020 Plan.

2025 Inducement Plan

In April 2025, the talent committee of our board of directors adopted the 2025 Inducement Stock Incentive Plan, or the Inducement Plan. Pursuant to the terms of the Inducement Plan, the Company may grant nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards to persons who (a) were not previously our employee or director or (b) are commencing employment with us following a bona fide period of nonemployment. A total of 125,000 shares of the Company’s common stock were made available for issuance under the Inducement Plan. As of September 30, 2025, 112,140 shares remained available for future issuance under the Inducement Plan.

Grant of stock options

During the nine months ended September 30, 2025, we granted time-based options to certain employees for the purchase of an aggregate of 432,700 shares of common stock with a weighted average grant date fair value of $7.02 per share that vest over a weighted average period of approximately 2.0 years.

Employee stock purchase plan

In May 2020, our board of directors adopted, and in June 2020, our stockholders approved, the 2020 Employee Stock Purchase Plan, or the 2020 ESPP, which became effective June 11, 2020. The 2020 ESPP is administered by our board of directors or by a committee appointed by the board of directors. The number of shares of common stock authorized for issuance under the 2020 ESPP automatically increases on the first day of each fiscal year, beginning with the fiscal year that commenced on January 1, 2021 and continuing for each fiscal year until, and including the fiscal year commencing on, January 1, 2030, in an amount equal to the lowest of (1) 130,215 shares of common stock, (2) 1% of the number of shares of common stock outstanding on such date, and (3) an amount determined by the board of directors. In January 2025, the number of shares of common stock authorized for issuance under the 2020 ESPP was increased to 344,777 shares. As of September 30, 2025, 240,121 shares remained available for issuance under the 2020 ESPP.

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Stock-based compensation

Stock-based compensation expense was classified in the condensed consolidated statements of operations and comprehensive loss as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2025		2024		2025		2024
Research and development expenses	$	880	$	1,520	$	2,258	$	4,452
General and administrative expenses		1,097		2,232		3,423		6,997
Total	$	1,977	$	3,752	$	5,681	$	11,449

9. Commitments and Contingencies

401(k) Plan

We have a defined-contribution plan under Section 401(k) of the Internal Revenue Code of 1986, as amended, or the 401(k) Plan. The 401(k) Plan covers all employees who meet defined minimum age and service requirements and allows participants to contribute a portion of their annual compensation on a pre-tax and/or after-tax basis. In September 2020, we adopted a match program, beginning on January 1, 2021, for employee contributions to the 401(k) Plan up to a maximum of four percent of the employee’s salary, subject to the maximums established under the U.S. Internal Revenue Code of 1986, as amended.

Indemnification agreements

In the ordinary course of business, we may provide indemnification of varying scope and terms to vendors, lessors, contract research organizations, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, we have entered into indemnification agreements with members of our board of directors and our officers that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments we could be required to make under these indemnification agreements is, in many cases, unlimited. We have not incurred any material costs as a result of such indemnifications and are not currently aware of any indemnification claims.

Legal proceedings

We, from time to time, may be party to litigation arising in the ordinary course of business. On February 20, 2024, the Landlord served us with a complaint, filed in the Court with respect to the Seyon Lease. The complaint sought declaratory judgment that we unlawfully terminated the Seyon Lease and also asserted a claim for breach of contract damages. Following receipt of the complaint, we filed a counterclaim against the Landlord asserting breach of contract and violation of Massachusetts General Law Chapter 93A. On October 29, 2024, the Court determined that although we did not have the right to terminate the Seyon Lease, the Landlord’s subsequent termination was effective, and that we had alleged sufficient facts to state a claim for breach of contract and violation of Massachusetts General Law Chapter 93A by the Landlord. On January 21, 2025, the Court granted the Landlord’s motion for preliminary injunction and ordered us to pay, until further notice, monthly amounts equal to the rent and other charges that would have been due to the Landlord under the Seyon Lease had it not been terminated. On February 14, 2025, we filed a notice of appeal of the Court’s preliminary injunction ruling and on March 28, 2025, we filed a petition for direct appellate review with the Massachusetts Supreme Judicial Court. On August 15, 2025, we entered into a settlement agreement with the Landlord. Pursuant to the agreement, we paid the Landlord a lump sum of $31.0 million, after which we and the Landlord granted each other mutual general releases and the litigation was dismissed with prejudice.

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10. Net Loss per Share

We have generated a net loss in all periods presented in the statements of operations and comprehensive loss, therefore the basic and diluted net loss per share attributable to common stockholders are the same as the inclusion of the potentially dilutive securities would be anti-dilutive. We excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the three and nine months ended September 30, 2025 and 2024:


	September 30,
	2025	2024
Unvested restricted stock units	13,817	37,407
Stock options to purchase common stock	1,515,013	1,321,501
Total	1,528,830	1,358,908

11. Reductions in Force

In January 2025, our management and board of directors approved a reduction in force, or the January 2025 RIF, to support our new focus on applying our ctLNP delivery technology to develop siRNA therapeutics to silence disease-driving targets in T cells. In connection with the January 2025 RIF, affected employees were eligible to receive one-time severance benefits, including cash severance, temporary healthcare coverage, to the extent they were eligible for and elected such coverage, and transition support services, subject to each such employee entering into an effective separation agreement, which included a general release of claims against us. We also offered a retention bonus to certain affected employees if such employees remain in continuous employment with us through their respective separation dates and execute a general release of claims against us. Retention amounts are expensed as services are performed.

During the three and nine months ended September 30, 2025, we recorded $nil and $0.6 million of restructuring expenses, respectively, related to the January 2025 RIF in our condensed consolidated statements of operation and comprehensive loss. Of the amount recorded during the nine months ended September 30, 2025, $0.4 million was classified as research and development expense and $0.2 million was classified as general and administrative expense. During the three and nine months ended September 30, 2024, we recorded less than $0.1 million and $0.4 million of restructuring expenses, respectively, in our condensed consolidated statements of operation and comprehensive loss, all of which was classified as general and administrative expense, and related to our prior strategic reorganization that commenced in November 2023 and was completed during the second quarter of 2024.

In August 2025, we commenced the exploration of strategic alternatives focused on maximizing shareholder value. We implemented the Reduction, which occurred in phases, beginning in mid-August 2025 and concluding at the end of October 2025, resulting in an approximately 90% reduction in workforce by October 31, 2025. We expect to incur total costs of approximately $12.0 million to $15.0 million related to our strategic restructuring, primarily consisting of severance and retention payments and employee benefit costs. The estimated costs that we expect to incur and the estimated savings we expect to achieve are subject to a number of assumptions, and actual results may differ materially from these estimates. We may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, our strategic restructuring. In connection with the August 2025 restructuring, affected employees are eligible to receive one-time severance benefits, including cash severance, temporary healthcare coverage, to the extent they are eligible for and elect such coverage, and transition support services, subject to each such employee entering into an effective separation agreement, which includes a general release of claims against us. We also offered a retention bonus to certain affected employees if such employees remain in continuous employment with us through their respective separation dates and execute a general release of claims against us. Retention amounts are expensed as services are performed.

During the three and nine months ended September 30, 2025, we recorded $8.8 million of restructuring expenses related to our strategic restructuring in our condensed consolidated statements of operation and comprehensive loss of which, $4.3 million was classified as research and development expense and $4.5 million was classified as general and administrative expense.

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Below is a summary of accrued restructuring costs recorded and included in accrued expenses and other current liabilities on our condensed consolidated balance sheets, for the three and nine months ended September 30, 2025:


	Three Months Ended September 30, 2025
(in thousands)	Payroll-Related Costs		Stock-Based Compensation		Total
Balance at June 30, 2025	$	16	$	—	$	16
Restructuring expenses		8,399		410		8,809
Cash payments		(1,327)		—		(1,327)
Non-cash expenses		—		(410)		(410)
Adjustments		(1)		—		(1)
Balance at September 30, 2025	$	7,087	$	—	$	7,087


	Nine Months Ended September 30, 2025
(in thousands)	Payroll-Related Costs		Stock-Based Compensation		Total
Balance at December 31, 2024	$	446	$	—	$	446
Restructuring expenses		9,029		423		9,452
Cash payments		(2,365)		—		(2,365)
Non-cash expenses		—		(423)		(423)
Adjustments		(23)		—		(23)
Balance at September 30, 2025	$	7,087	$	—	$	7,087

12. Reportable Segments

Our Chief Executive Officer is our chief operating decision maker, or CODM and we operate as one reportable segment. The measure of segment profit or loss is the Company’s consolidated net loss.

Resource allocation decisions are based on the best use of our resources. These decisions are informed by our cash resources, reflected in the balance of cash, cash equivalents and marketable securities on our consolidated balance sheets, forecasted financial results, the actual results included in our consolidated balance sheets, consolidated statements of operations and comprehensive loss, and significant segment expenses included in the table below.

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Significant segment revenues and expenses include the following:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2025		2024		2025		2024
Revenue:
Collaboration revenue	$	1,594	$	7,554	$	11,082	$	15,704

Operating expenses:
Personnel-related		14,587		8,062		30,342		22,943
Preclinical and manufacturing		4,737		2,904		12,910		10,527
Facilities-related (2)		6,991		4,626		16,392		15,264
Stock-based compensation		1,977		3,752		5,681		11,449
Lab supplies		736		1,120		2,802		2,777
Consulting and professional services		3,505		2,675		9,872		8,171
(Gain) loss on lease termination		(25,490)		1,169		(23,838)		59,596
Other (1)		1,259		1,130		3,151		3,804
Total operating expenses		8,302		25,438		57,312		134,531
Loss from operations		(6,708)		(17,884)		(46,230)		(118,827)
Other income:
Other income and interest income, net		1,188		2,571		4,985		8,541
Net Loss	$	(5,520)	$	(15,313)	$	(41,245)	$	(110,286)

(1)

Other segment items include depreciation, amortization, license fees and other costs. Depreciation and amortization expense for the three and nine months ended September 30, 2025 were $1.4 million and $3.7 million, respectively. Depreciation and amortization expense for the three and nine months ended September 30, 2024 were $1.2 million and $3.8 million, respectively, and such amounts are included in facilities-related and other segment operating expenses.

(2)

Facilities-related expenses include an impairment loss of $1.9 million on laboratory equipment classified as held for sale. For additional information, refer to Note 5, Balance Sheet Accounts.

All collaboration revenue recognized to date which has been entirely in connection to our License and Collaboration Agreement with Moderna and long-lived assets are attributable solely to our operations in the United States.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations is meant to provide material information relevant to an assessment of the financial condition and results of operations of our company, including an evaluation of the amounts and uncertainties of cash flows from operations and from outside resources, so as to allow investors to better view our company from management’s perspective. It should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report and our consolidated financial statements and related notes appearing in our 2024 Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Quarterly Report, in our 2024 Annual Report and in the other documents filed with the SEC, our actual results could differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis.

Overview

We are a biotechnology company that was historically working to change what’s possible for people living with T cell-driven autoimmune diseases.

In August 2025, we commenced the exploration of strategic alternatives focused on maximizing shareholder value. Alternatives that may be explored include, but are not limited to, an acquisition, merger, business combination, sale of assets, or other strategic transactions. TD Cowen is acting as our financial advisor in connection with the exploration of strategic alternatives. There can be no assurance that the exploration of strategic alternatives will result in our pursuing a transaction or that any acquisition or other transaction involving us will be completed, nor as to the terms on which any acquisition or other transaction will occur, if at all. If the strategic process is unsuccessful, our board of directors may decide to pursue a dissolution and liquidation.

The company implemented a strategic restructuring in phases that began in mid-August 2025, resulting in an approximately 90% reduction in workforce by the end of October 2025, or the Reduction. We expect to incur costs of approximately $12.0 million to $15.0 million related to the strategic restructuring, primarily consisting of severance and retention payments and employee benefit costs. The estimated costs that we expect to incur and the estimated savings we expect to achieve are subject to a number of assumptions, and actual results may differ materially from these estimates. We may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the strategic restructuring. The costs related to the Reduction are expected to be substantially incurred in the third and fourth quarters of 2025.

Other Recent Events

Litigation settlement

In July 2021, we entered into a lease agreement for a manufacturing facility in Waltham, Massachusetts, or the Seyon Lease. On January 31, 2024, we notified Waltham CenterPoint I Investment Group, LLC, or the Landlord, of our termination of the Seyon Lease due to the Landlord’s breach of its obligations to us under the Seyon Lease and returned possession of the premises to the Landlord, effective January 31, 2024. On February 20, 2024, the Landlord served us with a complaint, filed in the Massachusetts Superior Court, or the Court, with respect to the Seyon Lease. The complaint sought declaratory judgment that we unlawfully terminated the Seyon Lease and also asserted a claim for breach of contract damages. Following receipt of the complaint, we filed a counterclaim against the Landlord asserting breach of contract and violation of Massachusetts General Law Chapter 93A. On August 15, 2025, we entered into a settlement agreement with the Landlord. Pursuant to the agreement, we paid the Landlord a lump sum of $31.0 million. Upon receipt of this payment, we and the Landlord granted each other mutual general releases and the litigation was dismissed with prejudice.

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Components of Our Results of Operations

Collaboration revenue

Our revenue consists of collaboration revenue, including amounts recognized as payments for licenses, research funding and milestone payments earned under our collaboration and license agreements.

In March 2023, we entered into the Collaboration Agreement with Moderna, to collaborate on developing treatments for certain diseases by targeting delivery of nucleic acids to liver cells and certain cells outside of the liver. Under the Collaboration Agreement, the parties have agreed to collaborate on preclinical research programs relating to lipid nanoparticle, or LNP, delivery systems and nucleic acid payloads, with each party obtaining certain rights to intellectual property used in and arising out of such research programs.

The research programs are conducted pursuant to research plans and associated research budgets established by governance committees formed by the parties. Moderna reimburses us for the internal and external costs we incur in conducting the research programs, to the extent consistent with such research plans and budgets. Each party will be solely responsible for its own clinical development and commercialization of products under the Collaboration Agreement.

In addition, Moderna has exclusive options, upon payment of option exercise fees, to obtain worldwide, exclusive, sublicensable licenses under certain of our specified intellectual property to develop, manufacture and commercialize (a) products comprising LNP delivery systems and nucleic acid payloads that are directed to (i) up to two liver targets, (ii) up to two agreed-upon non-liver targets and (iii) a third liver or non-liver target and (b) Independent Program Products, which are products comprising LNP delivery systems that include mRNA that are directed to gene and protein targets in any of the agreed-upon immune cell types, or Cell Targets Types.

Under the terms of the Collaboration Agreement, in April 2023, Moderna made an upfront payment to us of $40.0 million, and paid us $7.5 million in prepaid research funding. In addition, we are eligible to receive up to $1.8 billion in milestone payments upon the achievement of specified development, regulatory, commercial, and sales milestone events, research term extension fees and exclusivity extension fees. Subject to reduction in specified circumstances, we will also be entitled to receive tiered royalties: (i) ranging from high-single-digits to low-double-digits on sales of licensed products that are directed to the liver targets and non-liver targets with respect to which Moderna has exercised its exclusive license options, and (ii) in the single digits on sales of Independent Program Products, including the exclusively licensed Independent Program Products. In consideration for the non-exclusive license granted by Moderna to us under the LNP-related intellectual property arising out of the research program focused on the discovery and development of ctLNPs directed to agreed-upon immune cell types, we have agreed to pay Moderna tiered royalties ranging from low-single-digits to mid-single-digits on sales of Independent Program Products that include mRNA, subject to reductions in specified circumstances.

In connection with the Collaboration Agreement, we entered into a Share Purchase Agreement with Moderna, pursuant to which we issued and sold 585,937 shares of our common stock to Moderna, at a price of $61.40 per share, for an aggregate purchase price of $36.0 million. In addition, under the Share Purchase Agreement, Moderna has the right, subject to certain terms and conditions, to purchase up to 3.06% of the outstanding shares of our common stock (on a post-closing basis) in connection with a future equity financing of at least $25.0 million by us. For additional information on our collaboration with Moderna and the accounting thereunder, refer to Note 4, Collaboration and License Agreement.

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Operating expenses

Research and development expenses

Research and development expenses consist of costs incurred for our research activities, including our discovery efforts, and the development of our programs. Since our announcement in August 2025 to restructure our operations, we have also incurred costs related to winding down our manufacturing and research and development efforts.

Research and development expenses primarily include:

●	personnel-related costs, including salaries, benefits, stock-based compensation and severance and retention expense, for employees engaged in research and development functions;

●	expenses incurred in connection with our research programs, including under agreements with third parties, such as consultants, contractors and contract research organizations, or CROs, and regulatory agency fees;

●

the cost of developing and scaling our manufacturing process and capabilities and manufacturing drug substance and drug product for use in our research and preclinical studies, including under agreements with third parties, such as consultants, contractors and contract development organizations, or CDOs;

●	laboratory supplies and research materials;

●	facilities, depreciation and amortization, impairment charges and other expenses, which include direct and allocated expenses for rent and maintenance of facilities and insurance; and

●	payments made under third-party licensing agreements.

We expense research and development costs as incurred. Advance payments that we make for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed.

Our external research and development expenses consist of costs that include fees and other costs paid to consultants, contractors, CDOs and CROs in connection with our research, preclinical and manufacturing activities. We do not allocate our research and development costs to specific programs because costs are deployed across multiple programs and our technologies and, as such, are not separately classified. We are not actively developing any product candidates and, in August 2025, we began to wind down activities for our research activities and development programs and technologies. We are currently in the ongoing process of exploring strategic options for our assets.

General and administrative expenses

General and administrative expenses consist primarily of personnel-related costs, including salaries, benefits, stock-based compensation and severance and retention expense, for employees engaged in executive, legal, finance and accounting and other administrative functions. General and administrative expenses also include professional fees for legal, patent, consulting, investor and public relations and accounting and audit services as well as direct and allocated facility-related costs. We expect our general and administrative expenses to decrease in the future due to our workforce reductions and reduced level of business activities. We expect to incur significant costs, however, related to our evaluation of strategic alternatives, including legal, accounting and advisory expenses and other related charges.

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(Gain) loss on lease termination

(Gain) loss on lease termination consists of income recognized upon the settlement with the Landlord and extinguishment of our lease liability and expenses recognized for the impairment of the right-of-use asset and construction in progress, the write-off of the related tenant improvement allowance receivable, accretion and other related expenses in connection with the termination of the Seyon Lease.

Other income and interest income, net

Other income and interest income, net consists of interest income earned on our invested cash balances and miscellaneous income and expenses unrelated to our core operations.

Results of Operations

Comparison of the three and nine months ended September 30, 2025 and 2024

The following table summarizes our results of operations for the three and nine months ended September 30, 2025 and 2024:


	Three Months Ended September 30,				Change		Nine Months Ended September 30,				Change
(in thousands)	2025		2024		2025 vs. 2024		2025		2024		2025 vs. 2024
Revenues:
Collaboration revenue	$	1,594	$	7,554	$	(5,960)	$	11,082	$	15,704	$	(4,622)
Operating expenses:
Research and development		21,630		15,088		6,542		52,486		45,811		6,675
General and administrative		12,162		9,181		2,981		28,664		29,124		(460)
(Gain) loss on lease termination		(25,490)		1,169		(26,659)		(23,838)		59,596		(83,434)
Total operating expenses		8,302		25,438		(17,136)		57,312		134,531		(77,219)
Loss from operations		(6,708)		(17,884)		11,176		(46,230)		(118,827)		72,597
Other income:
Other income and interest income, net		1,188		2,571		(1,383)		4,985		8,541		(3,556)
Net loss	$	(5,520)	$	(15,313)	$	9,793	$	(41,245)	$	(110,286)	$	69,041

Collaboration revenue

During the three months ended September 30, 2025, we recognized $1.6 million in collaboration revenue, compared to $7.6 million for the three months ended September 30, 2024. During the nine months ended September 30, 2025, we recognized $11.1 million in collaboration revenue, compared to $15.7 million for the nine months ended September 30, 2024. The decrease in collaboration revenue during the three months ended September 30, 2025, was primarily due to decreased reimbursable activity under our Collaboration Agreement with Moderna. Additionally, the three months ended September 30, 2024 included additional revenue related to a change in estimate due to revisions in the research plan resulting in a reduction in the estimated timeline. The decrease in collaboration revenue for the nine months ended September 30, 2025, was primarily due to decreased reimbursable activity under our Collaboration Agreement with Moderna. For additional information on our collaboration with Moderna and the accounting thereunder, refer to Note 4, Collaboration and License Agreement.

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Research and development expenses

The following table summarizes our research and development expenses for the three and nine months ended September 30, 2025 and 2024:


	Three Months Ended September 30,				Change		Nine Months Ended September 30,				Change
(in thousands)	2025		2024		2025 vs. 2024		2025		2024		2025 vs. 2024
Personnel-related	$	8,019	$	5,096	$	2,923	$	17,935	$	13,867	$	4,068
Facilities-related		5,649		3,230		2,419		12,719		10,240		2,479
Preclinical and manufacturing		4,737		2,904		1,833		12,910		10,527		2,383
Stock-based compensation		880		1,520		(640)		2,258		4,452		(2,194)
Lab supplies		736		1,120		(384)		2,802		2,777		25
Consulting and professional services		575		415		160		1,349		1,220		129
License fees		70		17		53		92		203		(111)
Other		964		786		178		2,421		2,525		(104)
Total research and development expenses	$	21,630	$	15,088	$	6,542	$	52,486	$	45,811	$	6,675

Research and development expenses were $21.6 million for the three months ended September 30, 2025, compared to $15.1 million for the three months ended September 30, 2024. The increase in personnel-related costs of $2.9 million was driven primarily by an increase in severance and retention costs, partially offset by a decrease in headcount. The increase in facilities-related costs of $2.4 million was driven primarily by impairment of assets held for sale in 2025 of $1.9 million. The increase in preclinical and manufacturing costs of $1.8 million was driven primarily by wind-down costs of our research projects and to a lesser extent, increased manufacturing costs prior to our decision to wind down our manufacturing and research projects. The decrease in stock-based compensation costs of $0.6 million was driven primarily by decreased headcount and a lower fair value of stock-based awards due to a lower stock price.

Research and development expenses were $52.5 million for the nine months ended September 30, 2025, compared to $45.8 million for the nine months ended September 30, 2024. The increase in personnel-related costs of $4.1 million was driven primarily by an increase in severance and retention costs and an employee tax credit in the first quarter of 2024 that did not recur, partially offset by a decrease in headcount. The increase in facilities-related costs of $2.5 million was driven primarily by impairment of assets held for sale in 2025 of $1.9 million. The increase in preclinical and manufacturing costs of $2.4 million was driven primarily by wind-down costs of our research projects and to a lesser extent, increased manufacturing costs prior to our decision to wind down our manufacturing and research projects. The decrease in stock-based compensation costs of $2.2 million was driven primarily by decreased headcount and a lower fair value of stock-based awards due to a lower stock price.

General and administrative expenses

The following table summarizes our general and administrative expenses for the three and nine months ended September 30, 2025 and 2024:


	Three Months Ended September 30,				Change		Nine Months Ended September 30,				Change
(in thousands)	2025		2024		2025 vs. 2024		2025		2024		2025 vs. 2024
Personnel-related	$	6,568	$	2,966	$	3,602	$	12,407	$	9,076	$	3,331
Stock-based compensation		1,097		2,232		(1,135)		3,423		6,997		(3,574)
Facilities-related		1,342		1,396		(54)		3,673		5,024		(1,351)
Consulting and professional services		2,930		2,260		670		8,523		6,951		1,572
Other		225		327		(102)		638		1,076		(438)
Total general and administrative expenses	$	12,162	$	9,181	$	2,981	$	28,664	$	29,124	$	(460)

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General and administrative expenses were $12.2 million for the three months ended September 30, 2025, compared to $9.2 million for the three months ended September 30, 2024. The increase in personnel-related costs of $3.6 million was driven primarily by an increase in severance and retention costs. The increase in consulting and professional services costs of $0.7 million was driven primarily by higher legal fees. The decrease in stock-based compensation costs of $1.1 million was driven primarily by decreased headcount and a lower fair value of stock-based awards due to a lower stock price.

General and administrative expenses were $28.7 million for the nine months ended September 30, 2025, compared to $29.1 million for the nine months ended September 30, 2024. The decrease in stock-based compensation costs of $3.6 million was driven primarily by decreased headcount and a lower fair value of stock-based awards due to a lower stock price. The decrease in facilities-related costs of $1.4 million was driven primarily by the termination of the Seyon Lease in the first quarter of 2024 and due to a change in the proportion of our facility being assigned for general and administrative purposes. These decreases were partially offset by an increase in personnel-related costs of $3.3 million, driven primarily by an increase in severance and retention costs, partially offset by a decrease in headcount. Additionally, the increase in consulting and professional services of $1.6 million was driven primarily by higher legal fees.

(Gain) loss on lease termination

(Gain) loss on lease termination for the three and nine months ended September 30, 2025, consisted of the gain recognized upon the extinguishment of our lease liability of $26.2 million as a result of the settlement agreement with the Landlord, partially offset by accretion and other related expenses recorded during the periods. (Gain) loss on lease termination for the three months ended September 30, 2024 consisted of accretion and other related expenses in connection with the termination of the Seyon Lease. (Gain) loss on lease termination for the nine months ended September 30, 2024 consisted of expenses recognized for the impairment of the right-of-use asset and construction in progress, the write-off of the related tenant improvement allowance receivable, accretion and other related expenses in connection with the termination of the Seyon Lease.

Other income and interest income, net

Other income and interest income, net for the three and nine months ended September 30, 2025 was $1.2 million and $5.0 million, respectively, as compared to $2.6 million and $8.5 million for the three and nine months ended September 30, 2024. The decrease in other income and interest income, net during the three and nine months ended September 30, 2025 was primarily due to decreases in interest yields and invested cash balances.

Liquidity and Capital Resources

Sources of Liquidity

Since our inception, we have incurred significant operating losses. We expect to continue to generate operating losses in the foreseeable future. Historically, we have funded our operations with proceeds from the sale of instruments convertible into convertible preferred stock, sales of convertible preferred stock and sales of common stock in underwritten public offerings, “at-the-market” offerings and in a private placement, as well as collaboration revenue under our collaboration with Moderna. In August 2024, we entered into an “at-the-market” sales agreement pursuant to which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $237.0 million. As of the date of this Quarterly Report, we have not issued and sold any shares of our common stock pursuant to the August 2024 sales agreement. As of September 30, 2025, we had cash, cash equivalents, and marketable securities of $89.6 million.

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Cash flows

The following table summarizes our sources and uses of cash for each of the periods presented:


	Nine Months Ended September 30,
(in thousands)	2025		2024
Net cash used in operating activities	$	(97,868)	$	(72,779)
Net cash provided by investing activities		43,436		24,245
Net cash provided by financing activities		71		106
Net decrease in cash, cash equivalents and restricted cash	$	(54,361)	$	(48,428)

Operating activities

During the nine months ended September 30, 2025, operating activities used $97.9 million of cash, primarily resulting from our net loss of $41.2 million and the net changes in our operating assets and liabilities of $41.5 million. Additionally, we had net non-cash income of $15.1 million, which included a gain on lease termination of $23.8 million related to the Seyon Lease. Net changes in our operating assets and liabilities for the nine months ended September 30, 2025 consisted of a $44.3 million decrease in operating lease liabilities primarily due to the $31.0 million payment to settle the Seyon Lease and other payments for the Seyon Lease and our office and lab space lease, and a $9.0 million decrease in deferred revenue. These amounts were partially offset by a $3.9 million decrease in prepaid expenses and other current assets, primarily due to the receipt of the employee retention credit refund, and a $3.9 million increase in accounts payable and accrued expense and other current liabilities, primarily due to accrued restructuring expenses.

During the nine months ended September 30, 2024, operating activities used $72.8 million of cash, primarily resulting from our net loss of $110.3 million and the net changes in our operating assets and liabilities of $30.6 million, partially offset by net non-cash charges of $68.1 million, which included a loss on lease termination of $59.1 million related to the Seyon Lease. Net changes in our operating assets and liabilities for the nine months ended September 30, 2024 primarily consisted of a $12.2 million decrease in deferred revenue, a $9.6 million decrease in accounts payable and accrued expense and other current liabilities, and a $7.2 million decrease in operating lease liability.

Changes in deferred revenue relate to the recognition of revenue for consideration allocated to research activities performed under our Collaboration Agreement with Moderna. Changes in prepaid expenses and other current assets and accounts payable and accrued expenses and other current liabilities are generally due to the timing of employee compensation and vendor invoicing and payments.

Investing activities

During the nine months ended September 30, 2025, net cash provided by investing activities was $43.4 million, primarily due to $110.0 million in maturities of marketable securities and $0.5 million of proceeds from the sale of property and equipment, partially offset by purchases of marketable securities of $66.3 million and property and equipment of $0.7 million during the period. During the nine months ended September 30, 2024, net cash provided by investing activities was $24.2 million, primarily due to $142.0 million in maturities of marketable securities, partially offset by purchases of marketable securities of $115.9 million and property and equipment of $2.0 million during the period.

Financing activities

During the nine months ended September 30, 2025, net cash provided by financing activities was $0.1 million, consisting primarily of $0.1 million in proceeds from employee stock option exercises and sales of common stock in connection to our 2020 Employee Stock Purchase Plan. During the nine months ended September 30, 2024, net cash provided by financing activities was $0.1 million, consisting of $0.3 million in proceeds from employee stock option exercises and sales of common stock in connection to our 2020 Employee Stock Purchase Plan, partially offset by $0.2 million in payments for repurchases of common stock for employee tax withholdings.

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Funding requirements

We believe that our existing cash, cash equivalents, and marketable securities will enable us to fund our operating expenses and capital expenditures for the foreseeable future. We have based our estimates as to how long we expect we will be able to fund our operations on assumptions that may prove to be wrong and we could use our available capital resources sooner than we currently expect. Although we may receive potential future payments under our collaboration with Moderna, we do not have any committed external source of funds.

Critical Accounting Policies and Significant Judgments and Estimates

Our condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP. The preparation of our condensed consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses and the disclosure of contingent assets and liabilities in our condensed consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions. There have been no material changes to our critical accounting policies and estimates from those disclosed in our 2024 Annual Report.

Item 3. Quantitative and Qualitative Disclosures about Market Risks.

Interest Rate Market Risk

We are exposed to market risk related to changes in interest rates. We had marketable securities of $67.7 million as of September 30, 2025. We did not record any impairment charges to our marketable securities during the three or nine months ended September 30, 2025. 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 a majority of our investments are generally invested in short-term securities. Interest rate changes would result in a change in the net fair value of these financial instruments due to the difference between the current market interest rate and the market interest rate at the date of purchase of the financial instrument. As of September 30, 2025, a hypothetical increase in interest rates of 100 basis points across the entire yield curve on our holdings would have resulted in a $0.1 million decrease in the fair value of our holdings. We currently do not seek to hedge this exposure to fluctuations in interest rates. We have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates.

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Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our Interim President and Chief Executive Officer and our Chief Financial Officer, our principal executive officer and principal financial and accounting officer, respectively, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of September 30, 2025, our Interim President and Chief Executive Officer and our Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a–15(f) and 15d–15(f) under the Exchange Act) during the three months ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

For a discussion of material legal proceedings, see Note 9. Commitments and Contingencies—Legal Proceedings in Part I, Item 1, Financial Statements of this Quarterly Report.

Item 1A. Risk Factors.

In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors discussed in Part I, Item 1A Risk Factors in our 2024 Annual Report, which could materially affect our business, financial condition, or future results. Other than as reflected in the following updated risk factors, there has been no material change from the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2024.

Risks Related to Our Evaluation of Strategic Alternatives

We may not be successful in identifying and implementing any strategic transaction and any strategic transactions that we may consummate in the future could have negative consequences.

In August 2025, we commenced the exploration of strategic alternatives focused on maximizing shareholder value. We are exploring potential strategic alternatives which may include, but are not limited to, an offer for or other acquisition of the company, merger, business combination, or other transaction. We expect to devote substantial time and resources to exploring strategic alternatives that our board of directors believes will maximize shareholder value. Despite devoting significant efforts to identify and evaluate potential strategic alternatives, there can be no assurance that this strategic review process will result in us pursuing any transaction or that any transaction, if pursued, will be completed on attractive terms or at all. We have not set a timetable for completion of this strategic review process, and our board of directors has not approved a definitive course of action. Additionally, there can be no assurances that any particular course of action,

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business arrangement or transaction, or series of transactions, will be pursued, successfully consummated or lead to increased shareholder value or that we will make any cash distributions to our shareholders.

The process of evaluating these strategic options may be very costly, time-consuming and complex and we expect to incur significant costs related to this evaluation, such as legal and accounting fees and expenses and other related charges. We may also incur additional unanticipated expenses in connection with this process. A considerable portion of these costs will be incurred regardless of whether any such course of action is implemented or transaction is completed. Any such expenses will decrease the remaining cash available for use in our business. In addition, potential counterparties in a strategic transaction involving our company may place minimal or no value on our assets and our public listing.

Further, any strategic business combination or other transactions that we may consummate in the future could have a variety of negative consequences and we may implement a course of action or consummate a transaction that yields unexpected results that adversely affects our business and decreases the remaining cash available for use in our business.

Any potential transaction would be dependent on a number of factors that may be beyond our control, including, among other things, market conditions, industry trends, the interest of third parties in a potential transaction with us, obtaining shareholder approval and the availability of financing to third parties in a potential transaction with us on reasonable terms. Any failure of such potential transaction to achieve the anticipated results could significantly impair our ability to enter into any future strategic transactions and may significantly diminish or delay any future distributions to our shareholders.

If we are not successful in identifying a strategic alternative or if our plans are not executed in a timely fashion, this may cause reputational harm with our shareholders and the value of our shares may be adversely impacted. In addition, speculation regarding any developments related to the review of strategic alternatives and perceived uncertainties related to the future of our business could cause our share price to fluctuate significantly.

Even if we successfully consummate any transaction from our strategic evaluation, we may fail to realize all of the anticipated benefits of the transaction, those benefits may take longer to realize than expected, or we may encounter integration difficulties.

Our ability to realize the anticipated benefits of any potential business combination or any other result from our pursuit of strategic alternatives, are highly uncertain. Any anticipated benefits will depend on a number of factors, including our ability to integrate with any future business partner and our ability to generate future shareholder value. The process may be disruptive to our business and the expected benefits may not be achieved within the anticipated time frame, or at all. The failure to meet the challenges involved and to realize the anticipated benefits of any potential transaction could adversely affect our business and financial condition.

If we are successful in completing a strategic transaction, we may be exposed to other operational and financial risks.

Although there can be no assurance that a strategic transaction will result from the process we have undertaken to identify and evaluate strategic alternatives, the negotiation and consummation of any such transaction will require significant time on the part of our management.

The negotiation and consummation of any such transaction may also require more time or greater cash resources than we anticipate and expose us to other operational and financial risks, including:

●	increased near-term and long-term expenditures;

●	exposure to unknown liabilities;

●	higher than expected acquisition or integration costs;

●	incurrence of substantial debt or dilutive issuances of equity securities to fund future operations;

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●	write-downs of assets or goodwill or incurrence of non-recurring, impairment or other charges;

●	increased amortization expenses;

●	difficulty and cost in combining the operations and personnel of any acquired business with our operations and personnel;

●	impairment of relationships with key suppliers or customers of any acquired business due to changes in management and ownership;

●	inability to retain key employees of our company or any acquired business; and

●	possibility of future litigation.

Any of the foregoing risks could have a material adverse effect on our business, financial condition and prospects.

If a strategic transaction is not consummated, our board of directors may decide to pursue a dissolution and liquidation. In such an event, the amount of cash available for distribution to our shareholders will depend heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities.

There can be no assurance that a strategic transaction will be completed. If a strategic transaction is not completed, our board of directors may decide to pursue a dissolution and liquidation. In such an event, the amount of cash available for distribution to our shareholders will depend heavily on the timing of such decision and, with the passage of time the amount of cash available for distribution will be reduced as we continue to fund our operations. In addition, we may be subject to litigation or other claims related to a dissolution and liquidation. If a dissolution and liquidation were pursued, our board of directors, in consultation with our advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve. Accordingly, holders of our shares could lose all or a significant portion of their investment in the event of a liquidation, dissolution or winding up.

Our ability to consummate a strategic transaction depends on our ability to retain our employees required to consummate such transaction.

Our ability to consummate a strategic transaction depends upon our ability to retain our employees required to consummate such a transaction, the loss of whose services may adversely impact the ability to consummate such transaction. In connection with the evaluation of strategic alternatives and in order to extend our resources, we implemented the Reduction. The strategic review process is supported by our experience at the board of directors, executive management, and supporting staff levels. Our cash conservation activities may yield unintended consequences, such as attrition beyond the Reduction and reduced employee morale, which may cause remaining employees to seek alternative employment. Our ability to successfully complete a strategic transaction depends in large part on our ability to retain certain of our remaining personnel successfully, and if we are unable to do so, we are at risk of a disruption to our exploration and consummation of a strategic alternative.

Our corporate restructuring and the associated headcount reduction may not result in anticipated savings, could result in total costs and expenses that are greater than expected.

In August 2025, our board of directors determined to implement a strategic restructuring that included the Reduction, and ultimately discontinued our research and development operations. We conducted the Reduction in phases during the third and fourth quarters of 2025. We may incur additional costs in connection with the Reduction that are not currently contemplated due to events that may occur as a result of, or that are associated with, the Reduction. The costs related to the Reduction are expected to be substantially incurred in the third and fourth quarters of 2025. The estimated costs that we expect to incur and the estimated timing to complete the Reduction and for the incurrence of the costs are subject to a number of assumptions, and actual results may differ materially from these estimates.

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We may not realize, in full or in part, the anticipated benefits, savings and improvements in our cost structure from our restructuring efforts due to unforeseen difficulties, delays or unexpected costs. If we are unable to realize the expected operational efficiencies and cost savings from the restructuring, our operating results and financial condition would be adversely affected. Furthermore, our restructuring plan may be disruptive to our operations. For example, our headcount reductions could yield unanticipated consequences, such as increased difficulties in retention of our remaining employees.

We may become involved in litigation, including securities class action litigation, that could divert management’s attention and harm our business, and insurance coverage may not be sufficient to cover all costs and damages.

In the past, litigation, including securities class action litigation, has often followed certain significant business transactions, such as the sale of a company or announcement of any other strategic transaction, or the announcement of negative events, such as negative results from clinical trials. These events may also result in investigations by the SEC. We may be exposed to such litigation or investigation even if no wrongdoing occurred. Litigation and investigations are usually expensive and divert management’s attention and resources, which could adversely affect our cash resources and our ability to consummate a potential strategic transaction.

Item 5. Other Information.

Director and Officer Trading Arrangements

None of our directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (each as defined in Item 408(a) of Regulation S-K) during the quarterly period covered by this Quarterly Report.

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Item 6. Exhibits.

Exhibit Number		Description of Exhibit

10.1+*		Separation Agreement, by and between the registrant and Antoinette Paone, dated August 12, 2025.

10.2+*		Separation Agreement, by and between the registrant and Phillip Samayoa, dated August 12, 2025.

10.3+*		Separation Agreement, by and between the registrant and Kevin Conway, dated August 12, 2025.

10.4+*		Consulting Agreement, by and between the registrant and Antoinette Paone, dated November 1, 2025.

10.5+*		Consulting Agreement, by and between the registrant and Phillip Samayoa, dated November 1, 2025.

10.6+*		Separation Agreement, by and between the registrant and Geoff McDonough, dated October 22, 2025.

10.7+*		Consulting Agreement, by and between the registrant and Geoff McDonough, dated November 1, 2025.

10.8+*		Retention Letter, by and between the registrant and Yalonda Howze, dated August 26, 2025.

10.9+*		Promotion Letter, by and between the registrant and Yalonda Howze, dated October 22, 2025.

10.10+*		Separation Agreement, by and between the registrant and Yalonda Howze, dated October 22, 2025.

31.1*		Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1**		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2**		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

*	Filed herewith.

**	Furnished herewith.

+	Indicates management contract or compensatory plan.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	GENERATION BIO CO.

Date: November 5, 2025	By:	/s/ Yalonda Howze
		Yalonda Howze
		Interim President and Chief Executive Officer
		(Principal Executive Officer)

Date: November 5, 2025	By:	/s/ Kevin Conway
		Kevin Conway
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

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Date	Price Target	Rating	Analyst
8/13/2025	$7.00	Outperform → Neutral	Wedbush
10/19/2023		Outperform → Market Perform	TD Cowen
11/8/2022	$9.00	Buy	Canaccord Genuity
12/15/2021	$40.00 → $10.00	Market Outperform	JMP Securities
12/15/2021	$50.00 → $27.00	Buy	Needham
12/14/2021		Outperform → Mkt Perform	William Blair

SEC Form 10-Q filed by Generation Bio Co.

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