10-Q 1 dyn-20240331.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 10-Q

 

(Mark One)

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

For the quarterly period ended March 31, 2024

OR

 

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: 001-39509

 

 

Dyne Therapeutics, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

36-4883909

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

1560 Trapelo Road

Waltham, Massachusetts

02451

(Address of principal executive offices)

(Zip Code)

(781) 786-8230

(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 per share

 

DYN

 

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, 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 April 30, 2024, the registrant had 87,382,638 shares of common stock, $0.0001 par value per share, outstanding.

 

 


 

Table of Contents

 

Page

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

2

PART I.

FINANCIAL INFORMATION

4

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

7

Notes to Unaudited Condensed Consolidated Financial Statements

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

15

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

24

Item 4.

Controls and Procedures

24

PART II.

OTHER INFORMATION

25

Item 1.

Legal Proceedings

25

Item 1A.

Risk Factors

25

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

82

Item 3.

Defaults Upon Senior Securities

82

Item 4.

Mine Safety Disclosures

82

Item 5.

Other Information

82

Item 6.

Exhibits

86

Signatures

87

 

 

We own or have rights to trademarks, service marks and trade names that we use in connection with the operation of our business, including our corporate name, logos and website names. The service marks and trademarks that we own include the marks Dyne Therapeutics® and FORCE™. Other trademarks, service marks and trade names appearing in this Quarterly Report on Form 10-Q are the property of their respective owners. Solely for convenience, some of the trademarks, service marks and trade names referred to in this Quarterly Report on Form 10-Q are listed without the ® and ™ symbols, but we will assert, to the fullest extent under applicable law, our rights to our trademarks, service marks and trade names.

1


 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q, or this Quarterly Report, 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, that involve substantial risk 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,” “continue” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “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 initiation, timing, progress and results of our research and development programs, preclinical studies and clinical trials;
the anticipated timing of the submission and clearance of investigational new drug applications, or INDs, and comparable foreign applications for any product candidates we may develop;
our estimates regarding expenses, future revenue, capital requirements, need for additional financing and the period over which we believe our cash, cash equivalents and marketable securities will be sufficient to fund our operating expenses and capital expenditure requirements;
our plans to develop and, if approved, subsequently commercialize any product candidates we may develop;
the timing of and our ability to submit applications for, obtain and maintain regulatory approvals for any product candidates we may develop;
the potential advantages of our FORCE platform;
our commercialization, marketing and manufacturing capabilities and strategy;
our intellectual property position and our expectations regarding our ability to obtain and maintain intellectual property protection;
our ability to identify additional products, product candidates or technologies with significant commercial potential that are consistent with our commercial objectives;
the impact of government laws and regulations;
our competitive position and expectations regarding developments and projections relating to our competitors and any competing therapies that are or become available;
our ability to establish and maintain collaborations or obtain additional funding; and
our expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act, or the JOBS Act.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you 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 this Quarterly Report, particularly in Item 1A. “Risk Factors” in this Quarterly Report, 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, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. 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.

 

You should read this Quarterly Report and the documents that we have filed or incorporated by reference as exhibits to this Quarterly Report 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.

2


 

RISK FACTOR SUMMARY

 

Our business is subject to a number of risks that, if realized, could materially affect our business, prospects, operating results and financial condition. These risks are discussed more fully in the “Risk Factors” section of this Quarterly Report. These risks include, but are not limited to, the following:

our limited operating history may make it difficult to evaluate the success of our business to date and to assess our future viability;
we are early in our development efforts. Our product candidates are in varying stages of preclinical and clinical development, and we have not completed a clinical trial of any product candidate. As a result, it will be several years before we commercialize a product candidate, if ever. If we are unable to advance product candidates through preclinical studies and clinical trials, obtain marketing approval and ultimately commercialize them, or experience significant delays in doing so, our business will be materially harmed;
we may encounter substantial delays in commencement, enrollment or completion of our clinical trials or our product candidates may fail to demonstrate safety and efficacy to warrant further development or satisfy the applicable regulatory authorities, which could prevent us from commercializing any product candidates we determine to develop on a timely basis, if at all;
our approach to the discovery and development of product candidates based on our FORCE platform is unproven, and we may not be successful in our efforts to develop our product candidates;
the outcome of preclinical studies and initial data from earlier-stage clinical trials may not be predictive of final results of clinical trials or future clinical trials;
if our product candidates cause undesirable side effects or have other unexpected adverse properties, such side effects or properties could delay or prevent regulatory approval, limit the commercial potential or result in significant negative consequences following any potential marketing approval;
we rely, and expect to continue to rely, on third parties to conduct some or all aspects of our product manufacturing, research, preclinical and clinical testing, and these third parties may not perform satisfactorily;
we face substantial competition, which may result in others discovering, developing or commercializing products before us or more successfully than we do;
our rights to develop and commercialize any product candidates are subject and may in the future be subject, in part, to the terms and conditions of licenses granted to us by third parties. If we fail to comply with our obligations under current or future intellectual property license agreements or otherwise experience disruptions to our business relationships with our current or any future licensors, we could lose intellectual property rights that are important to our business; and
if we or our licensors are unable to obtain, maintain and defend patent and other intellectual property protection for any product candidates or technology, or if the scope of the patent or other intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to successfully develop and commercialize our product candidates or our technology may be adversely affected due to such competition.

 

3


 

PART I—FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited)

Dyne Therapeutics, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except share and per share data)

 

 

 

March 31,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

272,035

 

 

$

121,626

 

Marketable securities

 

 

181,512

 

 

 

1,474

 

Prepaid expenses and other current assets

 

 

34,594

 

 

 

6,275

 

Total current assets

 

 

488,141

 

 

 

129,375

 

Property and equipment, net

 

 

4,578

 

 

 

4,780

 

Right-of-use assets

 

 

27,640

 

 

 

28,612

 

Restricted cash

 

 

1,920

 

 

 

2,315

 

Total assets

 

$

522,279

 

 

$

165,082

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

 

7,214

 

 

 

22,936

 

Accrued expenses and other current liabilities

 

 

10,393

 

 

 

23,439

 

Lease liabilities

 

 

4,756

 

 

 

4,720

 

Total current liabilities

 

 

22,363

 

 

 

51,095

 

Lease liabilities, net of current portion

 

 

21,861

 

 

 

22,695

 

Total liabilities

 

 

44,224

 

 

 

73,790

 

Stockholders’ equity

 

 

 

 

 

 

Preferred stock, $0.0001 par value; 10,000,000 shares authorized at March 31, 2024 and December 31, 2023

 

 

 

 

 

 

Common stock, $0.0001 par value; 200,000,000 shares authorized at March 31, 2024 and December 31, 2023; 87,089,649 and 61,468,743 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

 

 

9

 

 

 

6

 

Additional paid-in capital

 

 

1,176,337

 

 

 

723,796

 

Accumulated other comprehensive loss

 

 

(132

)

 

 

 

Accumulated deficit

 

 

(698,159

)

 

 

(632,510

)

Total stockholders’ equity

 

 

478,055

 

 

 

91,292

 

Total liabilities and stockholders’ equity

 

$

522,279

 

 

$

165,082

 

 

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

4


 

Dyne Therapeutics, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

(in thousands, except share and per share data)

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Operating expenses:

 

 

 

 

 

 

Research and development

 

$

44,539

 

 

$

37,536

 

General and administrative

 

 

24,618

 

 

 

7,928

 

Total operating expenses

 

 

69,157

 

 

 

45,464

 

Loss from operations

 

 

(69,157

)

 

 

(45,464

)

Other income (expense):

 

 

 

 

 

 

Interest income

 

 

3,002

 

 

 

1,493

 

Other income (expense), net

 

 

506

 

 

 

(216

)

Total other income (expense), net

 

 

3,508

 

 

 

1,277

 

Net loss

 

$

(65,649

)

 

$

(44,187

)

Net loss per share—basic and diluted

 

$

(0.81

)

 

$

(0.78

)

Weighted average common shares outstanding, basic and diluted

 

 

81,043,741

 

 

 

56,325,864

 

Comprehensive loss:

 

 

 

 

 

 

Net loss

 

$

(65,649

)

 

$

(44,187

)

Other comprehensive loss:

 

 

 

 

 

 

Unrealized (losses) gains on marketable securities, net

 

 

(132

)

 

 

368

 

Comprehensive loss

 

$

(65,781

)

 

$

(43,819

)

 

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

5


 

Dyne Therapeutics, Inc.

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

(in thousands, except share data and issuance costs)

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated
Other

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Comprehensive Loss

 

 

Deficit

 

 

Equity

 

Balance at January 1, 2024

 

 

61,468,743

 

 

$

6

 

 

$

723,796

 

 

$

 

 

$

(632,510

)

 

$

91,292

 

Issuance of common stock in public offering, net of issuance costs of $21.3 million

 

 

19,722,500

 

 

 

2

 

 

 

323,849

 

 

 

 

 

 

 

 

 

323,851

 

Issuance of common stock in at-the-market offering, net of issuance costs of $3.3 million

 

 

3,800,465

 

 

 

1

 

 

 

97,870

 

 

 

 

 

 

 

 

 

97,871

 

Exercise of stock options

 

 

1,858,791

 

 

 

 

 

 

10,916

 

 

 

 

 

 

 

 

 

10,916

 

Stock-based compensation

 

 

 

 

 

 

 

 

19,906

 

 

 

 

 

 

 

 

 

19,906

 

Vesting of restricted stock units

 

 

239,150

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized losses on marketable securities

 

 

 

 

 

 

 

 

 

 

 

(132

)

 

 

 

 

 

(132

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(65,649

)

 

 

(65,649

)

Balance at March 31, 2024

 

 

87,089,649

 

 

$

9

 

 

$

1,176,337

 

 

$

(132

)

 

$

(698,159

)

 

$

478,055

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated
Other

 

 

Accumulated

 

 

Stockholders’

 

(in thousands, except per share data)

 

Shares

 

 

Amount

 

 

Capital

 

 

Comprehensive Loss

 

 

Deficit

 

 

Equity

 

Balance at January 1, 2023

 

 

55,636,505

 

 

$

6

 

 

$

649,502

 

 

$

(571

)

 

$

(396,573

)

 

$

252,364

 

Issuance of common stock in public offering, net of issuance costs of $1.0 million

 

 

2,335,150

 

 

 

 

 

 

28,186

 

 

 

 

 

 

 

 

 

28,186

 

Exercise of stock options

 

 

232,292

 

 

 

 

 

 

587

 

 

 

 

 

 

 

 

 

587

 

Stock-based compensation

 

 

 

 

 

 

 

 

4,617

 

 

 

 

 

 

 

 

 

4,617

 

Vesting of restricted stock units

 

 

101,533

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains on marketable securities

 

 

 

 

 

 

 

 

 

 

 

368

 

 

 

 

 

 

368

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(44,187

)

 

 

(44,187

)

Balance at March 31, 2023

 

 

58,305,480

 

 

$

6

 

 

$

682,892

 

 

$

(203

)

 

$

(440,760

)

 

$

241,935

 

 

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

6


 

Dyne Therapeutics, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(65,649

)

 

$

(44,187

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Stock-based compensation expense

 

 

19,906

 

 

 

4,617

 

Depreciation and amortization expense

 

 

386

 

 

 

412

 

Non-cash lease expense

 

 

173

 

 

 

211

 

Accretion of premium on marketable securities

 

 

(523

)

 

 

(181

)

Loss on sale of marketable securities

 

 

 

 

 

23

 

Loss (gain) on disposal of property and equipment

 

 

(2

)

 

 

118

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

(4,070

)

 

 

(1,390

)

Accounts payable and other liabilities

 

 

(28,758

)

 

 

(6,531

)

Net cash used in operating activities

 

 

(78,537

)

 

 

(46,908

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(191

)

 

 

(230

)

Purchases of marketable securities

 

 

(181,386

)

 

 

(16,687

)

Maturities of marketable securities

 

 

1,740

 

 

 

42,150

 

Sales of marketable securities

 

 

 

 

 

1,829

 

Net cash (used in) provided by investing activities

 

 

(179,837

)

 

 

27,062

 

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from issuance of common stock in public offering, net of issuance costs

 

 

323,851

 

 

 

 

Proceeds from issuance of common stock in at-the-market offering, net of issuance costs

 

 

73,621

 

 

 

28,228

 

Proceeds from exercise of stock options

 

 

10,916

 

 

 

587

 

Net cash provided by financing activities

 

 

408,388

 

 

 

28,815

 

Net increase in cash, cash equivalents and restricted cash

 

 

150,014

 

 

 

8,969

 

Cash, cash equivalents and restricted cash, beginning of period

 

 

123,941

 

 

 

174,466

 

Cash, cash equivalents and restricted cash, end of period

 

$

273,955

 

 

$

183,435

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

Proceeds from issuance of common stock in at-the-market offering in other receivables

 

$

24,250

 

 

$

 

Public offering costs in accounts payable and accrued expenses

 

$

 

 

$

42

 

Purchase of property and equipment in accounts payable

 

$

27

 

 

$

39

 

 

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

7


 

Dyne Therapeutics, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

1. Nature of Business and Basis of Presentation

Dyne Therapeutics, Inc. (the “Company”) is a clinical-stage muscle disease company focused on advancing innovative life-transforming therapeutics for people living with genetically driven diseases. The Company was incorporated in Delaware on December 1, 2017 and has a principal place of business in Waltham, Massachusetts.

 

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, risks of failure of preclinical studies and clinical trials, the need to obtain marketing approval for its product candidates, fluctuations in operating results, compliance with government regulations, the ability to establish clinical- and commercial-scale manufacturing processes and the ability to secure additional capital to fund operations. Product candidates and programs currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization of a product. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

 

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, the Company has funded its operations with proceeds from the sales of equity securities. The Company expects to continue to generate operating losses for the foreseeable future. The Company expects that its cash, cash equivalents and marketable securities will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months from the issuance of these condensed consolidated financial statements.

 

To continue its development efforts, the Company will need to obtain substantial additional funding through public or private equity offerings, debt financings, collaborations, strategic alliances and/or licensing arrangements in order to fund its research and development and ongoing operating expenses. The Company may not be able to obtain financing on acceptable terms, when needed or at all, and the Company may not be able to enter into collaborations, strategic alliances or licensing arrangements. The terms of any financing may adversely affect the holdings or the rights of the Company’s stockholders. Any collaborations, strategic alliances or licensing arrangements may require the Company to relinquish rights to certain of its technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to the Company. If the Company is unable to obtain funding, the Company could be forced to delay, limit, reduce or eliminate some or all of its research and development programs, pipeline expansion or future commercialization efforts or grant rights to develop and market product candidates, which could adversely affect its business prospects. Although management will continue to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company to fund continuing operations when needed or at all.

2. Summary of Significant Accounting Policies

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) in the United States of America. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

The financial statements of the Company included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The unaudited interim financial statements have been prepared on the same basis as audited annual financial statements, except certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. In the opinion of management, the interim financial information reflects all adjustments, all of which are of a normal and recurring nature, necessary for a fair representation of the results for the reported periods. Accordingly, these financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s annual report on Form 10-K filed with the SEC on March 5, 2024. The results for the three months ended March 31, 2024 are not necessarily indicative of results to be expected for the year ending December 31, 2024, any other interim periods, or any future year or period.

 

Fair value measurements

8


 

Certain assets and liabilities are carried at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

Level 1—Unadjusted quoted prices in active markets that are accessible to the reporting entity at the measurement date for identical assets and liabilities.
Level 2—Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 inputs include the following:
quoted prices for similar assets and liabilities in active markets;
quoted prices for identical or similar assets or liabilities in markets that are not active;
observable inputs other than quoted prices that are used in the valuation of the asset or liabilities (e.g., interest rate and yield curve quotes at commonly quoted intervals); and
inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3—Unobservable inputs for the assets or liability (i.e., supported by little or no market activity). Level 3 inputs include management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).

 

Net loss per share

Basic net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding for the period. Diluted net loss is computed by adjusting net loss to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net loss per share is computed by dividing the diluted net loss by the weighted average number of shares of common stock outstanding for the period, including potential dilutive common shares assuming the dilutive effect of common stock equivalents.

 

The following potentially dilutive common stock equivalents, presented based on amounts outstanding at each period end, were excluded from the computation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect:

 

 

 

March 31,

 

 

 

2024

 

 

2023

 

Options to purchase common stock

 

 

8,607,966

 

 

 

9,280,575

 

Unvested restricted stock units

 

 

3,173,071

 

 

 

1,598,341

 

Total

 

 

11,781,037

 

 

 

10,878,916

 

 

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280). The amendments in this update expand segment disclosure requirements, including new segment disclosure requirements for entities with a single reportable segment among other disclosure requirements. This update is effective for the Company in the consolidated financial statements for the year ending December 31, 2024, and interim periods beginning after January 1, 2025. The adoption of this standard only impacts disclosures and is not expected to have a material impact on the Company’s consolidated financial statements.

3. Cash, Cash Equivalents and Restricted Cash

Cash includes cash in readily available checking accounts and cash equivalents include money market funds that invest in U.S. treasury securities and all highly liquid investments maturing within 90 days from the date of purchase.

Amounts included in restricted cash represent amounts pledged as collateral for letters of credit required for security deposits on the Company’s leased facilities.

 

9


 

Cash, cash equivalents and restricted cash consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

(in thousands)

 

2024

 

 

2023

 

Cash and cash equivalents

 

$

272,035

 

 

$

121,626

 

Restricted cash

 

 

1,920

 

 

 

2,315

 

Total

 

$

273,955

 

 

$

123,941

 

 

4. Fair Value Measurements

The following tables set forth marketable securities for the periods presented:

 

 

 

As of March 31, 2024

 

(in thousands)

 

Amortized
Cost

 

 

Unrealized
Gains

 

 

Unrealized
Losses

 

 

Total

 

Commercial paper

 

 

25,572

 

 

 

3

 

 

 

(20

)

 

 

25,555

 

Corporate debt securities

 

 

106,675

 

 

 

20

 

 

 

(132

)

 

 

106,563

 

Certificates of deposit

 

 

12,874

 

 

 

 

 

 

(6

)

 

 

12,868

 

U.S. treasury notes

 

 

36,523

 

 

 

3

 

 

 

 

 

 

36,526

 

Total

 

$

181,644

 

 

$

26

 

 

$

(158

)

 

$

181,512

 

 

 

 

As of December 31, 2023

 

(in thousands)

 

Amortized
Cost

 

 

Unrealized
Gains

 

 

Unrealized
Losses

 

 

Total

 

Corporate debt securities

 

 

1,474

 

 

 

 

 

 

 

 

 

1,474

 

Total

 

$

1,474

 

 

$

 

 

$

 

 

$

1,474

 

 

The following tables set forth by level, within the fair value hierarchy (see Note 2), the assets carried at fair value on a recurring basis for the periods presented:

 

 

 

Fair value measurements as of March 31, 2024

 

(in thousands)

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

9,308

 

 

$

 

 

$

 

 

$

9,308

 

Corporate debt securities

 

 

 

 

 

7,142

 

 

 

 

 

 

7,142

 

U.S. treasury notes

 

 

4,734

 

 

 

 

 

 

 

 

 

4,734

 

Marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

Commercial paper

 

 

25,555

 

 

 

 

 

 

 

 

 

25,555

 

Corporate debt securities

 

 

 

 

 

106,563

 

 

 

 

 

 

106,563

 

Certificates of deposit

 

 

 

 

 

12,868

 

 

 

 

 

 

12,868

 

U.S. treasury notes

 

 

36,526

 

 

 

 

 

 

 

 

 

36,526

 

Total

 

$

76,123

 

 

$

126,573

 

 

$

 

 

$

202,696

 

 

 

 

Fair Value Measurements as of December 31, 2023

 

(in thousands)

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

66,179

 

 

$

 

 

$

 

 

$

66,179

 

U.S. treasury notes

 

 

18,689

 

 

 

 

 

 

 

 

 

18,689

 

Marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt securities

 

 

 

 

 

1,474

 

 

 

 

 

 

1,474

 

Total

 

$

84,868

 

 

$

1,474

 

 

$

 

 

$

86,342

 

 

The fair value of U.S. government treasury notes, money market funds and commercial paper were determined by the Company based on quoted market prices, which represent a Level 1 measurement within the fair value hierarchy. Certificates of deposit and corporate debt securities were valued by the Company using quoted prices in active markets for similar securities, which represent a Level 2 measurement within the fair value hierarchy.

 

There were no transfers between Level 1, Level 2, or Level 3 during the periods presented.
 

10


 

The following table summarizes the scheduled maturity for the Company's marketable securities for the periods presented:

 

(in thousands)

 

March 31, 2024

 

Maturing in one year or less

 

$

132,213

 

Maturing after one year through two years

 

 

49,299

 

Maturing after two years

 

 

 

Total

 

$

181,512

 

 

Financial instruments not recorded at fair value

The carrying values of cash, cash equivalents, accounts payable and accrued expenses that are reported on the balance sheets approximate their fair value due to the short-term nature of these assets and liabilities.

5. Property and Equipment

Property and equipment consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

(in thousands)

 

2024

 

 

2023

 

Laboratory equipment

 

$

7,624

 

 

$

7,546

 

Office and computer equipment

 

 

2,091

 

 

 

2,091

 

Construction in process

 

 

535

 

 

 

431

 

Property and equipment—at cost

 

 

10,250

 

 

 

10,068

 

Less accumulated depreciation and amortization

 

 

(5,672

)

 

 

(5,288

)

Property and equipment—net

 

$

4,578

 

 

$

4,780

 

 

Depreciation and amortization expense for the three months ended March 31, 2024 and 2023 was $0.4 million and $0.4 million, respectively.

6. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

(in thousands)

 

2024

 

 

2023

 

Payroll and benefits

 

$

4,718

 

 

$

10,498

 

Consulting services

 

 

736

 

 

 

423

 

Legal services

 

 

1,091

 

 

 

397

 

Research and development

 

 

3,848

 

 

 

12,121

 

Total

 

$

10,393

 

 

$

23,439

 

 

7. Stockholders' Equity

 

Common Stock

In November 2021, the Company entered into an Open Market Sale Agreement (the "Sales Agreement") with Jefferies LLC ("Jeffries") as the Company's sales agent, and filed a universal shelf registration statement on Form S-3 (the "2021 Shelf Registration Statement") that included a prospectus relating to the Sales Agreement and pursuant to which, from time to time, the Company could offer and sell shares of its common stock having an aggregate offering price of up to $150.0 million in an "at-the-market" offering. On January 4, 2024, the Company notified Jefferies that it was suspending and terminating the prospectus filed under the 2021 Shelf Registration Statement relating to the Sales Agreement for the Company's "at-the-market" offering program.

On March 5, 2024, the Company filed a shelf registration statement on Form S-3 with the SEC, (the “2024 Shelf Registration Statement”) and included a prospectus relating to the Sales Agreement (the “2024 ATM Prospectus”). Under the 2024 Shelf Registration Statement, the Company may offer and sell debt securities, common stock, preferred stock, units and/or warrants from time to time at an indeterminate aggregate offering price in one or more offerings. Under the

11


 

2024 ATM Prospectus, in accordance with the Sales Agreement, the Company may offer and sell shares of its common stock having an aggregate offering price of up to $200.0 million in an “at-the-market” offering.

 

During the three months ended March 31, 2024, the Company issued and sold an aggregate of 3,800,465 shares of common stock pursuant to the Sales Agreement for aggregate net proceeds of $97.9 million, after deducting fees and offering expenses payable by the Company. The Company sold such shares at a weighted average price of $26.86 per share. In addition, on March 27, 2024, the Company sold 925,925 shares of common stock pursuant to the Sales Agreement. However, the sale of such shares was not settled until April 2024, the shares were not issued until April 2024 and the Company did not receive the proceeds until April 2024. The Company sold such shares at a weighted average price of $27.00 and received net proceeds of $24.3 million after deducting fees and offering expenses payable by the Company. The $24.3 million in net proceeds related to these sales is recorded in prepaid expenses and other current assets as of March 31, 2024.

In January 2024, the Company completed a follow-on public offering, pursuant to which the Company issued and sold 19,722,500 shares of the Company’s common stock. The Company received net proceeds of $323.9 million, after deducting underwriting discounts and commissions and offering expenses payable by the Company.

Forbion Capital Fund IV Cooperatief U.A. and related affiliated entities (collectively, “Forbion”) were a beneficial owner of 9.0% of the Company's outstanding common stock as of March 31, 2024. Two members of the Company's board of directors are partners at Forbion. In the January 2024 offering, the Company issued and sold 1,714,285 shares of common stock that Forbion and related affiliated entities purchased at the public offering price of $17.50 per share for aggregate gross proceeds of $30.0 million. The shares were purchased on the same terms as the other shares that were offered and sold in the offering.

 

2020 Stock Incentive Plan

 

In August 2020 the Company’s board of directors adopted and the Company’s stockholders approved the 2020 Stock Incentive Plan, (the "2020 Plan"), which became effective on September 16, 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 to employees, directors, consultants and advisors of the Company. The 2020 Plan is administered by the Company’s board of directors or by a committee appointed by the board of directors. Upon the effectiveness of the 2020 Plan, the Company ceased granting awards under the 2018 Stock Incentive Plan.

 

As of March 31, 2024, 5,259,821 shares remained available for future issuance under the 2020 Plan.

 

2024 Inducement Stock Incentive Plan

In March 2024, the Company's board of directors adopted the 2024 Inducement Stock Incentive Plan (the "2024 Inducement Plan"). The 2024 Inducement Plan provides for the grant of nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards with respect to an aggregate of 900,000 shares of Common Stock (subject to adjustment as provided in the 2024 Inducement Plan). Awards under the 2024 Inducement Plan may only be granted to new employees who were not previously an employee or director of the Company or are commencing employment with the Company following a bona fide period of non-employment, in either case, as an inducement material to the individual’s entering into employment with the Company and in accordance with the requirements of Nasdaq Stock Market Rule 5635(c)(4).

 

As of March 31, 2024, 220,147 shares remained available for future issuance under the 2024 Inducement Plan.

 

Stock option valuation

 

The fair value of stock option grants is estimated using the Black-Scholes option-pricing model. The fair value is determined based upon the quoted price of the Company’s common stock. The Company lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. For options with service-based vesting conditions, the expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected

12


 

dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

 

The assumptions that the Company used to determine the grant-date fair value of options granted were as follows:

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Expected volatility

 

66%

 

 

67%

 

Risk-free interest rate

 

3.98% — 4.31%

 

 

3.42% — 4.22%

 

Expected term (in years)

 

6

 

 

6

 

Expected dividend yield

 

 

 

 

 

 

 

Stock option activity

A summary of the Company’s stock option activity and related information for the three months ended March 31, 2024 is as follows:

 

(in thousands, except share and per share data)

 

Options

 

 

Weighted
Average
Exercise
Price

 

 

Weighted
Average
Remaining Life
(in years)

 

 

Aggregate
Intrinsic
Value

 

Outstanding as of January 1, 2024

 

 

9,914,719

 

 

$

10.48

 

 

 

7.7

 

 

$

38,732

 

Granted

 

 

849,962

 

 

 

25.35

 

 

 

 

 

 

 

Exercised

 

 

(1,858,791

)

 

 

5.87

 

 

 

 

 

 

 

Canceled

 

 

(297,924

)

 

 

11.06

 

 

 

 

 

 

 

Outstanding as of March 31, 2024

 

 

8,607,966

 

 

$

12.92

 

 

 

7.1

 

 

$

133,486

 

Options exercisable as of March 31, 2024

 

 

4,159,765

 

 

$

11.52

 

 

 

6.2

 

 

$

70,155

 

Options vested or expected to vest as of March 31, 2024

 

 

8,607,966

 

 

$

12.92

 

 

 

7.1

 

 

$

133,486

 

 

The intrinsic value of options exercised for the three months ended March 31, 2024 and 2023 totaled $32.5 million and $2.2 million, respectively. The weighted-average grant date fair value of the options granted during the three months ended March 31, 2024 and 2023 was $16.06 and $8.22 per share, respectively. As of March 31, 2024 there was $35.1 million of unrecognized compensation expense, which the Company expects to recognize over a weighted-average period of 2.5 years.

 

In March 2024, the Company entered into separation and consulting agreements with its former chief executive officer resulting in the acceleration of vesting and modification of previously issued stock option awards. The acceleration of vesting and modification resulted in the recognition of $3.2 million of stock-based compensation expense for the three months ended March 31, 2024. The expense was recorded within general and administrative expenses on the condensed consolidated statement of operations and comprehensive loss. Based upon the terms of the separation and consulting agreements, 223,533 stock option awards were forfeited in March 2024.
 

 

Restricted stock units

A restricted stock unit (“RSU”) represents the right to receive one share of common stock upon vesting of the RSU. The Company grants RSUs with service conditions that vest in four equal annual installments provided that the employee remains employed with the Company, RSUs with service conditions that vest in sixteen equal quarterly installments provided that the employee remains employed with the Company and RSUs with performance-based vesting conditions. As of March 31, 2024, there are no RSUs with performance-based vesting conditions outstanding. The fair value of each RSU is based on the closing price of the Company’s common stock on the date of grant. A summary of the Company’s RSU activity and related information for the three months ended March 31, 2024 is as follows:

 

 

 

Number of Shares Underlying RSUs

 

 

Weighted
Average
Grant Date Fair Value

 

Issued and unvested as of January 1, 2024

 

 

3,422,212

 

 

$

11.50

 

Granted

 

 

39,732

 

 

 

21.77

 

Vested

 

 

(239,150

)

 

 

11.70

 

Forfeited

 

 

(49,723

)

 

 

10.84

 

Issued and unvested as of March 31, 2024

 

 

3,173,071

 

 

$

11.63

 

 

13


 

 

As of March 31, 2024, there was $28.3 million of unrecognized compensation costs ​​​​​​​related to unvested RSUs, which are expected to be recognized over a weighted-average period of 3.4 years.

 

In March 2024, the Company entered into separation and consulting agreements with its former chief executive officer resulting in the acceleration of vesting and modification of previously issued restricted stock unit awards. The acceleration of vesting and modification resulted in the recognition of $10.5 million of stock-based compensation expense for the three months ended March 31, 2024. The expense was recorded within general and administrative expenses on the condensed consolidated statement of operations and comprehensive loss.

 

The Company recorded stock-based compensation expense in the following expense categories of its condensed consolidated statements of operations and comprehensive loss:

 

Three Months Ended March 31,

 

(in thousands)

2024

 

 

2023

 

Research and development

$

3,817

 

 

$

2,627

 

General and administrative

 

16,089

 

 

 

1,990

 

Total

$

19,906

 

 

$

4,617

 

 

14


 

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 should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q, or this Quarterly Report, and our audited condensed consolidated financial statements and related notes for the year ended December 31, 2023, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on March 5, 2024. 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, 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 clinical-stage muscle disease company focused on advancing innovative life-transforming therapeutics for people living with genetically driven diseases. We are utilizing our proprietary FORCE platform to overcome the current limitations of muscle tissue delivery and advance modern oligonucleotide therapeutics for muscle diseases. Our proprietary FORCE platform therapeutics consist of an oligonucleotide payload that we rationally design to target the genetic basis of the disease we are seeking to treat, a clinically validated linker and an antigen-binding fragment, or Fab, that we attach to the payload using the linker. With our FORCE platform, we have the flexibility to deploy different types of oligonucleotide payloads with specific mechanisms of action that modify target functions. We leverage this modularity to focus on muscle diseases with high unmet need, with etiologic targets and with clear translational potential from preclinical disease models to well-defined clinical development and regulatory pathways.

Using our FORCE platform, we are assembling a broad portfolio of muscle disease therapeutics, including our programs in myotonic dystrophy type 1, or DM1, Duchenne muscular dystrophy, or DMD, and facioscapulohumeral dystrophy, or FSHD. In addition, we plan to expand our portfolio through development efforts focused on rare skeletal muscle diseases, as well as cardiac and metabolic muscle diseases, including some with larger patient populations, and diseases involving the central nervous system, or CNS. We have identified product candidates for each of our DM1, DMD and FSHD programs that are in varying stages of preclinical and clinical development.

 

Our product candidate DYNE-101 is being evaluated in ACHIEVE, an ongoing Phase 1/2 global clinical trial in patients with DM1, consisting of a 24-week multiple ascending dose, or MAD, randomized, placebo-controlled period, a 24-week open-label extension, or OLE, and a 96-week long-term extension. ACHIEVE, which is designed to be registrational, is enrolling adult patients with DM1 who are 18 to 49 years of age. The primary endpoints are safety and tolerability; with secondary endpoints of pharmacokinetics and pharmacodynamics, including change from baseline in splicing, as well as measures of muscle strength and function. In the MAD portion of the ACHIEVE trial, patients are randomized to receive DYNE-101 or placebo intravenously every four weeks or every eight weeks for 24 weeks, depending on cohort. Patient cohorts will be dosed from 1.8 mg/kg to 10.2 mg/kg (approximate antisense oligonucleotide, or ASO, dose). Following the placebo-controlled period, patients transition to DYNE-101 treatment in the OLE portion of the trial and in the long-term extension.

 

In January 2024, we announced positive initial clinical data from the ACHIEVE trial which we believe validates the promise of the FORCE platform. The initial efficacy assessment of the DYNE-101 ACHIEVE trial reported in January 2024 was based on data from 32 adult DM1 patients enrolled in the randomized, placebo-controlled MAD portion of the trial, including 6-month data from the 1.8 mg/kg (approximate ASO dose) cohort (n=16) and 3-month data from the 3.4 mg/kg Q4W cohort (n=16). In each of these cohorts, participants were randomized to receive either DYNE-101 (n=6) or placebo (n=4) once every four weeks or participants in the recovery arm (n=6) received two doses of DYNE-101 followed by placebo for the remainder of the MAD portion of the trial.

 

Safety and tolerability data in this initial assessment of the ACHIEVE trial were based on 45 patients enrolled through the 5.4 mg/kg Q8W cohort. As of the data cutoff date of December 6, 2023, DYNE-101 demonstrated a favorable safety profile. Additionally, the majority of treatment-emergent adverse events were mild or moderate, and no related serious treatment-emergent adverse events were identified. In addition, no participants demonstrated treatment-emergent anemia, and no clinically meaningful changes were observed in kidney or liver parameters. Also, no participants demonstrated kidney injury. Liver enzyme elevations were observed in approximately 18% of participants, with no impact on liver function. Interpretation is complicated by underlying liver disease and elevated baseline values up to approximately 2.5 times greater than the upper limit of normal.

 

15


 

Enrollment is complete through the 6.8 mg/kg Q8W cohort of the ACHIEVE trial (56 patients enrolled). These initial clinical data position us to optimize dose and dose regimen for DYNE-101 with the goal of initiating registrational cohorts in the trial by the end of 2024. We anticipate reporting data from multiple, higher dose cohorts of the ACHIEVE trial in the second half of 2024.

 

Our product candidate DYNE-251 is being evaluated in DELIVER, an ongoing Phase 1/2 global clinical trial in patients with DMD who have mutations amenable to exon 51 skipping, consisting of a 24-week MAD randomized, placebo-controlled period, a 24-week OLE and a 96-week long-term extension. DELIVER, which is designed to be registrational, is enrolling ambulant and non-ambulant males with DMD who are ages 4 to 16 and have mutations amenable to exon 51 skipping. The primary endpoints are safety, tolerability and change from baseline in dystrophin levels as measured by Western blot. Secondary endpoints include measures of muscle function, exon skipping and pharmacokinetics.

In the MAD portion of the DELIVER trial, patients are randomized to receive DYNE-251 or placebo every four or eight weeks intravenously for 24 weeks, depending on cohort. Patients cohorts will be dosed from 0.7 mg/kg to 40 mg/kg (approximate phosphorodiamidate morpholino oligomer, or PMO, dose). Following the placebo-controlled period, patients transition to DYNE-251 treatment in the open-label portion of the trial and in the long-term extension.

 

In January 2024, we announced positive initial clinical data from the DELIVER trial which we believe validates the promise of the FORCE platform. The initial efficacy assessment of the DYNE-251 DELIVER trial reported in January 2024 was based on 6-month data from six male patients with DMD amenable to exon 51 skipping enrolled in the 5 mg/kg (approximate PMO dose) cohort of the randomized, placebo-controlled MAD portion of the trial. Patients were randomized to receive either DYNE-251 (n=4) or placebo (n=2) once every four weeks. Once every 4-week administration of DYNE-251 in the DELIVER trial reached levels of dystrophin expression, exon skipping and percent dystrophin positive fibers that exceeded levels reported in a third-party clinical trial for the current weekly standard of care for DMD exon 51, eteplirsen, at 6 months with a 24-fold lower total PMO dose.

Safety and tolerability data in the DELIVER trial were based on 37 patients enrolled through the 20 mg/kg cohort of the MAD portion. As of the data cutoff date of December 6, 2023, DYNE-251 demonstrated a favorable safety profile. Additionally, the majority of treatment-emergent adverse events were mild or moderate, and no related serious adverse events were identified. In addition, no participants demonstrated treatment-emergent anemia, and no clinically meaningful changes were observed in kidney parameters or electrolytes, including magnesium.

Enrollment is complete through the 40 mg/kg Q8W cohort of the DELIVER trial (48 patients enrolled). These initial clinical data position us to optimize dose and dose regimen for DYNE-251 with the goal of initiating registrational cohorts by the end of 2024. We anticipate reporting data from multiple, higher dose cohorts of the DELIVER trial in the second half of 2024.

 

In September 2022, we announced that we were prioritizing our focus and resources on our clinical programs, DYNE-101 for DM1 and DYNE-251 for DMD. As a result, we announced the deferral of the IND application submission for DYNE-301 for FSHD that we had originally targeted for the second half of 2022. We continue to evaluate the optimal approach to target DUX4 and translate our preclinical work to a tractable clinical development pathway, and we plan to provide an update on the FSHD program in 2024.

 

We were incorporated and commenced operations in 2017. Since our incorporation, we have devoted substantially all of our financial resources and efforts to organizing and staffing our company, business planning, raising capital, conducting research and development activities and filing and prosecuting patent applications. We do not have any products for sale and have not generated any revenue from product sales or otherwise. To date, we have principally raised capital through sales of equity securities.

 

Since our inception, we have incurred significant operating losses. Our ability to generate any product revenue or product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of

16


 

one or more product candidates. For the three months ended March 31, 2024 and 2023, we reported net losses of $65.6 million and $44.2 million, respectively. As of March 31, 2024, we had an accumulated deficit of $698.2 million.

 

We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. We expect that our expenses and capital expenditure requirements will increase substantially in connection with our ongoing activities, particularly if and as we:

advance our product candidates for DM1, DMD and FSHD and conduct research programs in additional indications;
expand the capabilities of our proprietary FORCE platform;
seek marketing approvals for any product candidates that successfully complete clinical trials;
obtain, expand, maintain, defend and enforce our intellectual property portfolio;
hire additional clinical, regulatory and scientific personnel;
establish manufacturing sources for any product candidate we may develop, including the Fab antibody, Val-cit linker and therapeutic payload that will comprise the product candidate, and secure supply chain capacity to provide sufficient quantities for preclinical and clinical development and commercial supply;
ultimately establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval; and
add operational, legal, compliance, financial and management information systems and personnel to support our research, product development and future commercialization efforts, as well as to support our operations as a public company.

 

We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for any product candidates we may develop. If we obtain regulatory approval for or otherwise commercialize any product candidates we may develop, we expect to incur significant expenses related to developing our commercialization capabilities to support product sales, marketing and distribution. Further, we expect to continue to incur additional costs associated with operating as a public company.

 

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed, on favorable terms, or at all. If we fail to raise capital or enter into such agreements or arrangements as and when needed, we may have to significantly delay, reduce or eliminate the development or future commercialization of one or more product candidates we may develop.

 

Because of the numerous risks and uncertainties associated with product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve profitability. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to raise capital, maintain our research and development efforts, expand our business or continue our operations at planned levels, and as a result we may be forced to substantially reduce or terminate our operations.

 

We believe that our existing cash, cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditure requirements through 2025. 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. We could use our available capital resources sooner than we currently expect, in which case we would be required to obtain additional financing, which may not be available to us on acceptable terms, or at all. Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy. See “—Liquidity and capital resources” below.

17


 

 

Components of our results of operations

Revenue

We have not generated any revenue since our inception and do not expect to generate any revenue from the sale of products in the near future, if at all. If our development efforts are successful and we commercialize products, or if we enter into collaboration or license agreements with third parties, we may generate revenue in the future from product sales, as well as upfront, milestone and royalty payments from such collaboration or license agreements, or a combination thereof.

 

Research and development expenses

Research and development expenses consist primarily of costs incurred for our research activities and development of our product candidates. These expenses include:

development and operation of our proprietary FORCE platform;
employee-related expenses, including salaries, related benefits and stock-based compensation expense, for employees engaged in research and development functions;
expenses incurred in connection with our research programs and development of our product candidates, including those incurred under agreements with third parties, such as consultants and contract research organizations, or CROs to conduct preclinical studies and clinical trials;
the cost of laboratory supplies and acquiring, developing and manufacturing materials for use in our research, preclinical studies and clinical trials, including those incurred under agreements with third parties, such as consultants and contract manufacturing organizations, or CMOs;
facilities, depreciation and other expenses, which include direct or allocated expenses for rent and maintenance of facilities and insurance; and
costs related to compliance with regulatory requirements.

 

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 direct external research and development expenses consist of costs that include fees, reimbursed materials and other costs paid to consultants, contractors, CMOs and CROs in connection with our development, manufacturing and clinical activities. We have not allocated our direct external research and development costs to specific programs or product candidates that are not in clinical development.

 

Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. Accordingly, we expect that our research and development expenses will increase substantially as we advance DYNE-101 and DYNE-251 through clinical trials and in connection with our preclinical and clinical development activities if and as we advance any other product candidates through preclinical studies and clinical trials. At this time, we cannot accurately estimate or know the nature, timing and costs of the efforts that will be necessary to complete the preclinical and clinical development of any product candidates we may develop. The successful development of any product candidate is highly uncertain. This is due to the numerous risks and uncertainties associated with product development, including the following:

the timing and progress of preclinical and clinical development activities;
the number and scope of programs we decide to pursue and their regulatory paths to market;
the need to raise funding to complete preclinical and clinical development of any product candidates we may develop;
our ability to establish new licensing or collaboration arrangements and the progress of the development efforts of third parties with whom we may enter into such arrangements;
our ability to maintain our current research and development programs and to establish new programs;
the successful initiation, enrollment and completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority;

18


 

the receipt and related terms of regulatory approvals from applicable regulatory authorities for any product candidates we may develop;
the availability of specialty raw materials for use in production of any product candidate we may develop;
establishing agreements with third-party manufacturers for supply of product candidate components for our clinical trials;
our ability to obtain and maintain patents, trade secret protection and regulatory exclusivity, both in the United States and internationally;
our ability to protect our other rights in our intellectual property portfolio;
commercializing product candidates, if and when approved, whether alone or in collaboration with others; and
obtaining and maintaining third-party insurance coverage and adequate reimbursement for any approved products.

 

A change in the outcome of any of these variables with respect to the development of any product candidate we may develop could significantly change the costs and timing associated with the development of that product candidate. We may never succeed in obtaining regulatory approval for any product candidate we may develop.

 

General and administrative expenses

General and administrative expenses consist primarily of employee-related expenses, including salaries, related benefits and stock-based compensation, for employees in executive, finance, corporate and business development and administrative functions. General and administrative expenses also include legal fees relating to patent and corporate matters; professional fees for accounting, auditing, tax and administrative consulting services; insurance costs; administrative travel expenses; and facility-related expenses, which include allocated expenses for rent, depreciation and maintenance of facilities and other operating costs.

 

We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our growth strategy. In addition, if we obtain regulatory approval for a product candidate and do not enter into a third-party commercialization collaboration, we expect to incur significant expenses related to building a sales and marketing team to support product sales, marketing and distribution activities.

 

Interest income

Interest income consists of interest earned on our cash, cash equivalents and marketable securities.

 

Other income (expense), net

Other income (expense), net consists of realized gains and losses on sales of marketable securities and foreign currency gains and losses.

 

Income taxes

Since our inception, we have not recorded any U.S. federal or state income tax benefits for the net losses we have incurred in any year or for our earned research and development tax credits, due to the uncertainty of realizing a benefit from those items.

19


 

 

Results of operations

Comparison of the three months ended March 31, 2024 and 2023

The following table summarizes our results of operations for the three months ended March 31, 2024 and 2023:

 

 

 

Three Months Ended March 31,

 

 

 

 

(in thousands)

 

2024

 

 

2023

 

 

Change

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

$

44,539

 

 

$

37,536