10-Q 1 fdmt-20240331.htm 10-Q 10-Q
false--12-310001650648Q1http://fasb.org/us-gaap/2023#OtherNonoperatingIncomeExpensehttp://fasb.org/us-gaap/2023#OtherNonoperatingIncomeExpenseP1YP11M28DP13DP27M12DP8M9DP13M25DP15M9D0001650648us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001650648us-gaap:RetainedEarningsMember2023-01-012023-03-310001650648fdmt:ArborBiotechnologiesIncMemberfdmt:ArborAgreementMember2024-03-310001650648fdmt:CysticFibrosisFoundationMembersrt:MaximumMemberfdmt:CysticFibrosisFoundationAgreementMember2016-09-012016-09-300001650648country:NL2023-01-012023-03-310001650648fdmt:Rule10B51TradingPlanMemberfdmt:JacobChackoMember2024-03-310001650648us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-03-310001650648us-gaap:RestrictedStockUnitsRSUMember2023-12-310001650648us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001650648fdmt:WarehouseLeaseAgreementMember2024-01-010001650648fdmt:EmployeeOptionsIssuedAndOutstandingAndFutureVestingOfRestrictedStockUnitsMember2024-03-310001650648fdmt:UniQureAgreementMemberfdmt:UniQureBiopharmaBVMember2014-01-012014-01-310001650648us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001650648fdmt:CysticFibrosisFoundationMemberfdmt:CysticFibrosisFoundationAgreementMember2023-08-012023-08-310001650648country:US2024-01-012024-03-310001650648fdmt:AtmOfferingProgramMember2023-01-012023-03-310001650648fdmt:TwoThousandTwentyEquityIncentiveAwardPlanMember2020-12-310001650648fdmt:FiveEightFiveEightHortonStreetBuildingLeaseAndExpansionMember2018-10-012018-10-310001650648fdmt:CysticFibrosisFoundationMemberfdmt:CysticFibrosisFoundationAgreementMember2023-12-310001650648us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001650648us-gaap:EmployeeStockOptionMember2024-01-012024-03-310001650648us-gaap:CommonStockMemberfdmt:TwoThousandTwentyThreeFollowOnPublicOfferingMember2023-05-012023-05-310001650648us-gaap:ComputerEquipmentMember2023-12-310001650648us-gaap:CustomerConcentrationRiskMemberfdmt:CustomerAMemberus-gaap:SalesRevenueNetMember2023-01-012023-03-310001650648us-gaap:CustomerConcentrationRiskMemberfdmt:CustomerAMemberus-gaap:SalesRevenueNetMember2024-01-012024-03-310001650648us-gaap:USTreasurySecuritiesMemberfdmt:ShortTermMarketableSecuritiesMember2024-03-310001650648fdmt:CysticFibrosisFoundationMemberfdmt:CysticFibrosisFoundationAgreementMember2023-01-012023-12-310001650648fdmt:CollaborationAndLicenseRevenueMember2023-01-012023-03-310001650648us-gaap:DerivativeFinancialInstrumentsLiabilitiesMember2022-12-310001650648us-gaap:DerivativeFinancialInstrumentsLiabilitiesMember2024-03-310001650648us-gaap:RetainedEarningsMember2024-03-310001650648us-gaap:FurnitureAndFixturesMember2024-03-310001650648us-gaap:DerivativeFinancialInstrumentsLiabilitiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001650648fdmt:CysticFibrosisFoundationMemberfdmt:CollaborationAndLicenseRevenueMember2024-01-012024-03-310001650648fdmt:AtmOfferingProgramMemberus-gaap:CommonStockMember2023-01-012023-03-310001650648fdmt:FiveEightFiveEightHortonStreetBuildingLeaseAndExpansionMember2021-02-012021-02-280001650648us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-3100016506482022-12-310001650648us-gaap:RetainedEarningsMember2023-03-310001650648srt:MaximumMemberfdmt:TwoThousandTwentyEmployeeStockPurchasePlanMember2024-03-3100016506482024-01-012024-03-310001650648us-gaap:EmployeeStockOptionMember2023-01-012023-03-310001650648us-gaap:WarrantMember2023-01-012023-03-310001650648fdmt:LongTermMarketableSecuritiesMember2023-12-310001650648fdmt:Rule10B51TradingPlanMemberfdmt:DavidKirnMember2024-01-012024-03-310001650648us-gaap:AdditionalPaidInCapitalMember2024-03-310001650648fdmt:ShortTermMarketableSecuritiesMember2023-12-310001650648srt:MinimumMember2023-01-012023-12-310001650648us-gaap:CommonStockMember2024-03-310001650648fdmt:Rule10B51TradingPlanOneMemberfdmt:DavidKirnMember2024-01-012024-03-310001650648us-gaap:CommonStockMember2023-03-310001650648us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-03-310001650648us-gaap:CreditConcentrationRiskMemberus-gaap:AccountsReceivableMemberfdmt:CustomerMember2023-01-012023-12-310001650648us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001650648srt:MaximumMember2023-01-012023-03-310001650648fdmt:UCAgreementsMember2018-12-310001650648fdmt:ShortTermMarketableSecuritiesMember2024-03-310001650648fdmt:FiveEightFiveEightHortonStreetBuildingLeaseAndExpansionMember2018-10-310001650648srt:MinimumMember2024-01-012024-03-310001650648fdmt:FundingAgreementMemberfdmt:CysticFibrosisFoundationMember2021-10-310001650648fdmt:EmployeeOptionsIssuedAndOutstandingAndFutureVestingOfRestrictedStockUnitsMember2023-12-310001650648fdmt:FebrurayAndMarchTwoThousandAndTwentyFourPublicOfferingSaleMemberus-gaap:CommonStockMember2024-01-012024-03-310001650648fdmt:FiveEightFiveEightHortonStreetBuildingLeaseAndExpansionMember2024-03-310001650648us-gaap:CommercialPaperMemberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001650648fdmt:UCAgreementsMember2016-01-012016-01-310001650648fdmt:TwoThousandFifteenEquityIncentivePlanMember2024-03-310001650648fdmt:CysticFibrosisFoundationMemberfdmt:CysticFibrosisFoundationAgreementMember2024-03-310001650648fdmt:TwoThousandTwentyEmployeeStockPurchasePlanMember2024-01-012024-03-310001650648us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001650648us-gaap:CertificatesOfDepositMemberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001650648fdmt:TwoThousandFifteenEquityIncentivePlanMember2024-01-012024-03-310001650648country:NL2024-01-012024-03-310001650648srt:MaximumMember2023-01-012023-12-310001650648fdmt:AevitasTherapeuticsIncAgreementMember2024-03-310001650648us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001650648us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001650648us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMemberfdmt:CustomerMember2024-01-012024-03-3100016506482023-12-310001650648us-gaap:FurnitureAndFixturesMember2023-12-310001650648fdmt:RobertKimMemberfdmt:Rule10B51TradingPlanMember2024-01-012024-03-310001650648fdmt:AtmOfferingProgramMember2024-01-012024-03-310001650648fdmt:FiveEightFiveEightHortonStreetBuildingLeaseAndExpansionMember2023-12-310001650648us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-03-310001650648srt:MaximumMemberfdmt:UCRegentsAndTheTrusteesOfTheUniversityOfPennsylvaniaMember2021-07-012021-07-310001650648us-gaap:CommonStockMember2024-01-012024-03-310001650648fdmt:TwoThousandTwentyEquityIncentiveAwardPlanMemberus-gaap:RestrictedStockUnitsRSUMember2024-01-012024-03-310001650648fdmt:UCAgreementsMembersrt:MaximumMember2019-01-012019-01-310001650648us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001650648fdmt:AmendedUniqureAgreementAndSecondUniqureAgreementMemberfdmt:UniQureBiopharmaBVMember2023-12-310001650648srt:MaximumMember2024-01-012024-03-310001650648fdmt:RobertKimMemberfdmt:Rule10B51TradingPlanOneMember2024-01-012024-03-310001650648fdmt:ReigniteAgreementMember2024-03-012024-03-310001650648fdmt:TwoThousandTwentyEquityIncentiveAwardPlanMember2024-01-012024-03-310001650648fdmt:CollaborationAndLicenseRevenueMemberfdmt:UniQureBiopharmaBVMember2024-01-012024-03-310001650648us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-03-310001650648us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001650648fdmt:TwoThousandTwentyFourFollowOnPublicOfferingMemberus-gaap:CommonStockMemberfdmt:PreFundedWarrantsMember2024-01-012024-03-310001650648us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001650648fdmt:UCRegentsAndTheTrusteesOfTheUniversityOfPennsylvaniaMember2021-07-310001650648fdmt:TwoThousandTwentyOneFollowOnPublicOfferingMemberus-gaap:CommonStockMember2021-11-300001650648us-gaap:OfficeEquipmentMember2024-03-310001650648us-gaap:CreditConcentrationRiskMemberus-gaap:AccountsReceivableMemberfdmt:CustomerMember2024-01-012024-03-310001650648us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001650648srt:MaximumMemberfdmt:CysticFibrosisFoundationMember2024-03-310001650648fdmt:FiveNineEightZeroHortonStreetMember2024-03-310001650648us-gaap:WarrantMember2024-03-310001650648srt:MinimumMember2023-01-012023-03-310001650648fdmt:Rule10B51TradingPlanMemberfdmt:FariborzKamalMember2024-03-310001650648fdmt:FiveNineEightZeroHortonStreetMember2015-05-310001650648srt:MaximumMemberfdmt:AmendedUniQureAgreementMemberfdmt:UniQureBiopharmaBVMember2019-08-310001650648fdmt:PublicOfferingMember2024-01-012024-03-310001650648fdmt:CorporateBondMemberfdmt:ShortTermMarketableSecuritiesMember2024-03-310001650648fdmt:PublicOfferingMember2023-01-012023-03-310001650648fdmt:UniQureBiopharmaBVMember2024-03-310001650648fdmt:TwoThousandTwentyFourFollowOnPublicOfferingMemberus-gaap:CommonStockMember2024-02-012024-02-290001650648fdmt:LongTermMarketableSecuritiesMemberus-gaap:CommercialPaperMember2024-03-310001650648fdmt:PreFundedWarrantsMember2024-05-030001650648fdmt:Rule10B51TradingPlanMemberfdmt:FariborzKamalMember2024-01-012024-03-310001650648fdmt:FiveEightFiveEightHortonStreetBuildingLeaseAndExpansionMember2024-01-012024-03-310001650648fdmt:Rule10B51TradingPlanOneMemberfdmt:DavidKirnMember2024-03-310001650648srt:MaximumMemberus-gaap:OverAllotmentOptionMemberus-gaap:CommonStockMember2024-02-012024-02-290001650648fdmt:ShortTermMarketableSecuritiesMemberus-gaap:CommercialPaperMember2023-12-310001650648us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001650648fdmt:ArborAgreementMemberfdmt:ArborBiotechnologiesIncMember2024-01-012024-03-310001650648us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMemberfdmt:CustomerMember2023-01-012023-03-310001650648fdmt:FiveNineEightZeroHortonStreetMember2016-01-310001650648us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001650648us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001650648fdmt:TwoThousandTwentyThreeFollowOnPublicOfferingMemberus-gaap:CommonStockMember2023-05-310001650648fdmt:LongTermMarketableSecuritiesMember2024-03-310001650648srt:MaximumMember2024-03-310001650648fdmt:CorporateBondMemberfdmt:LongTermMarketableSecuritiesMember2024-03-310001650648fdmt:FiveNineEightZeroHortonStreetMember2018-10-012018-10-310001650648us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001650648fdmt:UCAgreementsMembersrt:MinimumMember2019-01-012019-01-310001650648us-gaap:FairValueMeasurementsRecurringMember2023-12-310001650648us-gaap:ConstructionInProgressMember2024-03-310001650648fdmt:UniQureAgreementMemberfdmt:UniQureBiopharmaBVMember2019-08-3100016506482021-01-010001650648fdmt:TwoThousandTwentyEmployeeStockPurchasePlanMember2024-03-310001650648fdmt:WarehouseLeaseAgreementMember2024-01-012024-01-010001650648us-gaap:RetainedEarningsMember2024-01-012024-03-310001650648us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001650648fdmt:UCRegentsAndTheTrusteesOfTheUniversityOfPennsylvaniaMembersrt:MinimumMember2021-07-012021-07-310001650648fdmt:CysticFibrosisFoundationMember2023-12-310001650648fdmt:LicenseAgreementWithUniversityOfPennsylvaniaMembersrt:MaximumMember2023-04-210001650648us-gaap:CustomerConcentrationRiskMembersrt:MaximumMemberus-gaap:SalesRevenueNetMemberfdmt:CustomerBMember2023-01-012023-03-310001650648us-gaap:DerivativeFinancialInstrumentsLiabilitiesMember2023-01-012023-03-310001650648us-gaap:LeaseholdImprovementsMember2024-03-310001650648fdmt:AtmOfferingProgramMemberus-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001650648us-gaap:GeneralAndAdministrativeExpenseMember2024-01-012024-03-310001650648us-gaap:DerivativeFinancialInstrumentsLiabilitiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001650648fdmt:UniQureBiopharmaBVMember2023-12-310001650648us-gaap:IPOMemberus-gaap:CommonStockMember2020-12-012020-12-310001650648srt:MaximumMemberfdmt:ReigniteAgreementMember2024-03-012024-03-310001650648us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001650648us-gaap:FairValueInputsLevel3Memberus-gaap:DerivativeFinancialInstrumentsLiabilitiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001650648fdmt:FiveNineEightZeroHortonStreetMember2018-11-012018-11-3000016506482023-01-012023-12-310001650648fdmt:UniQureAgreementMemberfdmt:UniQureBiopharmaBVMember2014-01-310001650648us-gaap:RetainedEarningsMember2023-12-310001650648us-gaap:DerivativeFinancialInstrumentsLiabilitiesMember2023-03-310001650648fdmt:CollaborationAndLicenseRevenueMember2024-01-012024-03-310001650648us-gaap:CommonStockMember2023-01-012023-03-310001650648fdmt:TwoThousandTwentyEmployeeStockPurchasePlanMember2023-12-310001650648fdmt:CorporateBondMemberfdmt:ShortTermMarketableSecuritiesMember2023-12-310001650648fdmt:TwoThousandTwentyEmployeeStockPurchasePlanMember2024-02-290001650648srt:MaximumMemberfdmt:TwoThousandTwentyEquityIncentiveAwardPlanMember2024-01-012024-03-3100016506482023-01-012023-03-310001650648us-gaap:DerivativeFinancialInstrumentsLiabilitiesMember2023-12-310001650648fdmt:FiveNineEightZeroHortonStreetMember2023-12-310001650648fdmt:TwoThousandTwentyEquityIncentiveAwardPlanMember2024-03-310001650648us-gaap:ResearchAndDevelopmentExpenseMember2024-01-012024-03-310001650648fdmt:AmendedUniqureAgreementAndSecondUniqureAgreementMemberfdmt:UniQureBiopharmaBVMember2024-01-012024-03-310001650648fdmt:TwoThousandFourteenPlanMember2024-01-012024-03-3100016506482024-03-310001650648us-gaap:OverAllotmentOptionMemberus-gaap:CommonStockMember2020-12-012020-12-310001650648us-gaap:CommonStockMember2024-05-0300016506482023-03-310001650648fdmt:CysticFibrosisFoundationMemberfdmt:CysticFibrosisFoundationAgreementMember2024-01-012024-03-310001650648fdmt:ReigniteAgreementMember2024-01-012024-03-310001650648us-gaap:AdditionalPaidInCapitalMember2023-12-310001650648srt:MaximumMemberfdmt:AstellasGeneTherapiesIncMember2023-07-050001650648us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-03-310001650648us-gaap:ConstructionInProgressMember2023-12-310001650648us-gaap:ComputerEquipmentMember2024-03-310001650648fdmt:CysticFibrosisFoundationMembersrt:MinimumMember2024-03-310001650648us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-3100016506482018-05-012018-05-310001650648fdmt:FiveEightFiveEightHortonStreetBuildingLeaseAndExpansionMember2023-01-012023-12-310001650648fdmt:UCRegentsAndTheTrusteesOfTheUniversityOfPennsylvaniaMember2023-01-012023-03-310001650648us-gaap:WarrantMember2023-12-310001650648fdmt:CollaborationAndLicenseRevenueMemberfdmt:UniQureBiopharmaBVMember2023-01-012023-03-310001650648us-gaap:AdditionalPaidInCapitalMember2022-12-310001650648us-gaap:AdditionalPaidInCapitalMemberfdmt:FebrurayAndMarchTwoThousandAndTwentyFourPublicOfferingSaleMember2024-01-012024-03-310001650648fdmt:AevitasTherapeuticsIncAgreementMember2023-04-212023-04-210001650648us-gaap:IPOMemberus-gaap:CommonStockMember2020-12-310001650648us-gaap:CommonStockMember2022-12-310001650648us-gaap:OfficeEquipmentMember2023-12-310001650648fdmt:RobertKimMemberfdmt:Rule10B51TradingPlanOneMember2024-03-310001650648srt:MaximumMemberfdmt:ReigniteAgreementMember2024-03-310001650648fdmt:TwoThousandTwentyEmployeeStockPurchasePlanMember2024-01-012024-03-310001650648fdmt:FiveNineEightZeroHortonStreetMember2015-05-012015-05-310001650648us-gaap:CommercialPaperMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001650648fdmt:TwoThousandTwentyOneFollowOnPublicOfferingMemberus-gaap:CommonStockMember2021-11-012021-11-300001650648us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001650648us-gaap:DerivativeFinancialInstrumentsLiabilitiesMember2024-01-012024-03-310001650648fdmt:FebrurayAndMarchTwoThousandAndTwentyFourPublicOfferingSaleMember2024-01-012024-03-310001650648fdmt:TwoThousandTwentyFourFollowOnPublicOfferingMemberus-gaap:CommonStockMember2024-02-290001650648country:US2023-01-012023-03-310001650648us-gaap:CommercialPaperMemberfdmt:ShortTermMarketableSecuritiesMember2024-03-310001650648us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310001650648us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001650648fdmt:UCAgreementsMember2019-01-310001650648us-gaap:MachineryAndEquipmentMember2023-12-310001650648us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001650648us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001650648us-gaap:FairValueInputsLevel3Memberus-gaap:DerivativeFinancialInstrumentsLiabilitiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001650648fdmt:TwoThousandTwentyEmployeeStockPurchasePlanMember2020-12-310001650648fdmt:TwoThousandTwentyEquityIncentiveAwardPlanMember2024-02-290001650648fdmt:FiveEightFiveEightHortonStreetBuildingLeaseAndExpansionMember2019-12-012019-12-310001650648us-gaap:USGovernmentAgenciesDebtSecuritiesMemberfdmt:ShortTermMarketableSecuritiesMember2024-03-310001650648us-gaap:MachineryAndEquipmentMember2024-03-310001650648us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001650648fdmt:ReigniteAgreementMember2024-03-310001650648us-gaap:OverAllotmentOptionMemberus-gaap:CommonStockMember2024-03-012024-03-3100016506482020-12-310001650648fdmt:UniQureAgreementMembersrt:MaximumMemberfdmt:UniQureBiopharmaBVMember2014-01-310001650648fdmt:CysticFibrosisFoundationMemberfdmt:CollaborationAndLicenseRevenueMember2023-01-012023-03-310001650648us-gaap:AdditionalPaidInCapitalMember2023-03-310001650648us-gaap:RetainedEarningsMember2022-12-3100016506482020-12-012020-12-310001650648fdmt:UniQureAgreementMember2024-04-01fdmt:UniQureBiopharmaBVMember2014-01-310001650648fdmt:TwoThousandTwentyEquityIncentiveAwardPlanMember2023-12-310001650648fdmt:RobertKimMemberfdmt:Rule10B51TradingPlanMember2024-03-310001650648fdmt:AstellasGeneTherapiesIncMember2023-07-052023-07-050001650648us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001650648us-gaap:USGovernmentAgenciesDebtSecuritiesMemberfdmt:ShortTermMarketableSecuritiesMember2023-12-310001650648us-gaap:LeaseholdImprovementsMember2023-12-310001650648us-gaap:RestrictedStockUnitsRSUMember2024-03-310001650648us-gaap:FairValueMeasurementsRecurringMember2024-03-310001650648us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001650648fdmt:AmendedUniqureAgreementAndSecondUniqureAgreementMemberfdmt:UniQureBiopharmaBVMember2023-01-012023-03-310001650648us-gaap:CommonStockMember2023-12-310001650648fdmt:Rule10B51TradingPlanMemberfdmt:DavidKirnMember2024-03-310001650648us-gaap:WarrantMember2024-01-012024-03-310001650648fdmt:UCRegentsAndTheTrusteesOfTheUniversityOfPennsylvaniaMember2024-01-012024-03-310001650648fdmt:CorporateBondMemberfdmt:LongTermMarketableSecuritiesMember2023-12-310001650648fdmt:CysticFibrosisFoundationMemberfdmt:CysticFibrosisFoundationAgreementMember2016-09-012016-09-300001650648srt:MaximumMemberfdmt:AevitasTherapeuticsIncAgreementMember2023-04-2100016506482018-05-310001650648fdmt:CysticFibrosisFoundationMember2024-03-310001650648fdmt:FundingAgreementMemberfdmt:CysticFibrosisFoundationMemberus-gaap:CommonStockMember2021-10-012021-10-310001650648fdmt:LongTermMarketableSecuritiesMemberus-gaap:CommercialPaperMember2023-12-310001650648us-gaap:CertificatesOfDepositMemberfdmt:ShortTermMarketableSecuritiesMember2024-03-310001650648fdmt:TwoThousandFourteenPlanMember2023-01-012023-03-310001650648fdmt:WarehouseLeaseAgreementMember2024-03-310001650648fdmt:Rule10B51TradingPlanMemberfdmt:JacobChackoMember2024-01-012024-03-310001650648us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001650648srt:MaximumMemberfdmt:TwoThousandTwentyEquityIncentiveAwardPlanMember2024-03-310001650648fdmt:AstellasGeneTherapiesIncMember2024-03-310001650648us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMemberfdmt:CustomerBMember2024-01-012024-03-310001650648fdmt:AmendedUniqureAgreementAndSecondUniqureAgreementMemberfdmt:UniQureBiopharmaBVMember2024-03-310001650648fdmt:FundingAgreementMemberfdmt:CysticFibrosisFoundationMemberfdmt:SeriesCRedeemableConvertiblePreferredStockMember2020-04-012020-04-300001650648fdmt:TwoThousandTwentyEmployeeStockPurchasePlanMember2023-01-012023-03-310001650648us-gaap:FairValueInputsLevel2Memberus-gaap:CertificatesOfDepositMemberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001650648fdmt:TwoThousandTwentyFourFollowOnPublicOfferingMemberus-gaap:CommonStockMemberfdmt:PreFundedWarrantsMember2024-02-290001650648fdmt:FundingAgreementMemberfdmt:CysticFibrosisFoundationMember2020-04-300001650648us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-03-31xbrli:purefdmt:Periodutr:sqftxbrli:sharesfdmt:Segmentfdmt:Installmentiso4217:USDfdmt:Productiso4217:USDxbrli:shares

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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 001-39782

4D Molecular Therapeutics, Inc.

(Exact name of registrant as specified in its Charter)

Delaware

47-3506994

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

5858 Horton Street #455

Emeryville, CA

94608

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (510) 505-2680

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, par value $0.0001 per share

 

FDMT

 

The 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 May 3, 2024, there were 51,703,412 shares of 4D Molecular Therapeutics, Inc.'s common stock outstanding. This number does not include 3,583,476 shares of common stock issuable upon the exercise of pre-funded warrants outstanding as of May 3, 2024 (which are immediately exercisable at an exercise price of $0.0001 per share of common stock, subject to beneficial ownership limitations) sold in the registrant’s public offering in February 2024. See Note 12, Common Stock Warrants, to the Registrant’s unaudited condensed financial statements.

 

 

 


 

 

Table of Contents

 

 

Page

PART I.

FINANCIAL INFORMATION

3

Item 1.

Condensed Unaudited Financial Statements

3

 

Condensed Balance Sheets as of March 31, 2024 and December 31, 2023

3

 

Condensed Statements of Operations for the Three Months Ended March 31, 2024 and 2023

4

 

Condensed Statements of Comprehensive Loss for the Three Months Ended March 31, 2024 and 2023

5

 

Condensed Statements of Stockholders’ Equity for the Three Months Ended March 31, 2024 and 2023

6

 

Condensed Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023

7

 

Notes to Unaudited Condensed Financial Statements

8

Item 2.

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

27

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

36

Item 4.

Controls and Procedures

37

 

 

 

PART II.

OTHER INFORMATION

38

Item 1.

Legal Proceedings

38

Item 1A.

Risk Factors

38

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

102

Item 3.

Default Upon Senior Securities

102

Item 4.

Mine Safety Disclosures

102

Item 5.

Other Information

102

Item 6.

Exhibits

104

Signatures

 

105

 

 

 

1


 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q contains forward-looking statements concerning our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business operations and financial performance and condition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “potential,” “positioned,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

the success, cost and timing of our development activities, preclinical studies and clinical trials, including our clinical trials for 4D-150, 4D-175, 4D-710, 4D-725, 4D-310, 4D-125 and 4D-110;
the number, size and design of our planned clinical trials, and what regulatory authorities may require to obtain marketing approval;
the timing of Investigational New Drug Application (“IND”) enabling studies and results from such studies;
the timing and success of lead optimization for our product candidates in lead optimization;
the translation of our preclinical results and data into future clinical trials in humans;
the timing of any manufacturing runs for materials to be used in patient trials;
the timing or likelihood of regulatory filings and approvals;
our ability to obtain and maintain regulatory approval of our product candidates, and any related restrictions, limitations and/or warnings in the label of any approved product candidate;
our ability to obtain funding for our operations, including funding necessary to develop and commercialize our product candidates;
the rate and degree of market acceptance of our product candidates, if approved;
the success of competing products or platform technologies that are or may become available;
our plans and ability to establish sales, marketing and distribution infrastructure to commercialize any product candidates for which we obtain approval;
future agreements with third parties in connection with the commercialization of our product candidates;
the size and growth potential of the markets for our product candidates, if approved for commercial use, and our ability to serve those markets;
existing regulations and regulatory developments in the United States and foreign countries;
the expected potential benefits of strategic collaboration agreements, including our relationships with Arbor Biotechnologies, Inc., Astellas Gene Therapies, Inc., uniQure biopharma B.V. and Cystic Fibrosis Foundation (CFF), and our ability to attract collaborators with development, regulatory and commercialization expertise;
the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology;
potential claims relating to our intellectual property and third-party intellectual property;
our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;
the pricing and reimbursement of our product candidates, if approved;

1


 

the potential effects of public health emergencies, including the COVID-19 pandemic, to our preclinical and clinical programs and our business;
our ability to attract and retain key managerial, scientific and medical personnel;
the accuracy of our estimates regarding expenses, capital requirements and needs for additional financing;
our financial performance; and
our expectations regarding the period during which we qualify as an emerging growth company under the JOBS Act.

These forward-looking statements are based on management’s current expectations, estimates, forecasts and projections about our business and the industry in which we operate and management’s beliefs and assumptions and are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. As a result, any or all of our forward-looking statements in this Quarterly Report on Form 10-Q may turn out to be inaccurate. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Potential investors are urged to consider these factors carefully in evaluating the forward-looking statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future. You should, however, review the factors and risks we describe in the reports we will file from time to time with the SEC after the date of this Quarterly Report on Form 10-Q.

2


 

4D Molecular Therapeutics, Inc.

Condensed Balance Sheets (Unaudited)

(In thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

 

March 31,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

275,594

 

 

$

249,108

 

Marketable securities

 

 

250,317

 

 

 

39,124

 

Prepaid expenses and other current assets

 

 

9,678

 

 

 

8,356

 

Total current assets

 

 

535,589

 

 

 

296,588

 

Marketable securities, long-term

 

 

62,942

 

 

 

10,954

 

Property and equipment, net

 

 

19,464

 

 

 

20,126

 

Operating lease right-of-use assets, net

 

 

11,118

 

 

 

11,539

 

Other assets

 

 

771

 

 

 

684

 

Total assets

 

$

629,884

 

 

$

339,891

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

4,217

 

 

$

3,515

 

Accrued and other current liabilities

 

 

9,013

 

 

 

12,014

 

Deferred revenue

 

 

 

 

 

273

 

Operating lease liabilities, current portion

 

 

3,173

 

 

 

3,149

 

Total current liabilities

 

 

16,403

 

 

 

18,951

 

Deferred revenue, net of current portion

 

 

1,322

 

 

 

972

 

Derivative liability

 

 

369

 

 

 

369

 

Operating lease liabilities, long-term portion

 

 

10,998

 

 

 

11,522

 

Other liabilities

 

 

231

 

 

 

248

 

Total liabilities

 

 

29,323

 

 

 

32,062

 

Commitments and contingencies (Note 9)

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

Preferred stock, $0.0001 par value, 10,000,000 shares authorized at March 31, 2024 and December 31, 2023; no shares issued and outstanding at March 31, 2024 and December 31, 2023

 

 

 

 

 

 

Common stock, $0.0001 par value, 300,000,000 shares authorized at March 31, 2024 and December 31, 2023; 51,157,388 and 43,075,218 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

 

 

5

 

 

 

4

 

Additional paid-in-capital

 

 

1,048,393

 

 

 

723,136

 

Accumulated other comprehensive gain (loss)

 

 

(109

)

 

 

16

 

Accumulated deficit

 

 

(447,728

)

 

 

(415,327

)

Total stockholders’ equity

 

 

600,561

 

 

 

307,829

 

Total liabilities and stockholders’ equity

 

$

629,884

 

 

$

339,891

 

 

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

3


 

4D Molecular Therapeutics, Inc.

Condensed Statements of Operations (Unaudited)

(In thousands, except share and per share amounts)

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Revenue:

 

 

 

 

 

 

Collaboration and license revenue

 

$

28

 

 

$

298

 

Operating expenses:

 

 

 

 

 

 

Research and development

 

 

27,870

 

 

 

22,412

 

General and administrative

 

 

10,294

 

 

 

7,992

 

Total operating expenses

 

 

38,164

 

 

 

30,404

 

Loss from operations

 

 

(38,136

)

 

 

(30,106

)

Other income (expense):

 

 

 

 

 

 

Interest income

 

 

5,745

 

 

 

1,443

 

Other expense, net

 

 

(10

)

 

 

(19

)

Total other income, net

 

 

5,735

 

 

 

1,424

 

Net loss

 

$

(32,401

)

 

$

(28,682

)

Net loss per share, basic and diluted

 

$

(0.66

)

 

$

(0.88

)

Weighted-average shares outstanding used in computing net loss per share, basic and diluted

 

 

49,271,984

 

 

 

32,723,530

 

 

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

 

4


 

4D Molecular Therapeutics, Inc.

Condensed Statements of Comprehensive Loss (Unaudited)

(In thousands)

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Net loss

 

$

(32,401

)

 

$

(28,682

)

Other comprehensive loss:

 

 

 

 

 

 

Net unrealized gain (loss) on marketable securities

 

 

(125

)

 

 

926

 

Total comprehensive loss

 

$

(32,526

)

 

$

(27,756

)

 

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

5


 

 

4D Molecular Therapeutics, Inc.

Condensed Statements of Stockholders' Equity (Unaudited)

(In thousands, except share amounts)

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated Other Comprehensive

 

 

Accumulated

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balances at December 31, 2023

 

 

43,075,218

 

 

$

4

 

 

$

723,136

 

 

$

16

 

 

$

(415,327

)

 

$

307,829

 

Issuance of common stock upon exercise of stock options and vesting of RSUs

 

 

236,856

 

 

 

 

 

 

3,113

 

 

 

 

 

 

 

 

 

3,113

 

Issuance of common stock upon public offering, net of issuance costs - February / March 2024 Public Offering Sale

 

 

7,845,314

 

 

 

1

 

 

 

316,148

 

 

 

 

 

 

 

 

 

316,149

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

5,974

 

 

 

 

 

 

 

 

 

5,974

 

Vesting of common stock warrants issued for services

 

 

 

 

 

 

 

 

22

 

 

 

 

 

 

 

 

 

22

 

Net unrealized loss on marketable securities

 

 

 

 

 

 

 

 

 

 

 

(125

)

 

 

 

 

 

(125

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(32,401

)

 

 

(32,401

)

Balances at March 31, 2024

 

 

51,157,388

 

 

$

5

 

 

$

1,048,393

 

 

$

(109

)

 

$

(447,728

)

 

$

600,561

 

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated Other Comprehensive

 

 

Accumulated

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balances at December 31, 2022

 

 

32,626,627

 

 

$

3

 

 

$

547,020

 

 

$

(1,196

)

 

$

(314,490

)

 

$

231,337

 

Issuance of common stock upon exercise of stock options

 

 

122,207

 

 

 

 

 

 

1,135

 

 

 

 

 

 

 

 

 

1,135

 

Issuance of common stock for the ATM offering program, net of issuance costs

 

 

487,934

 

 

 

 

 

 

9,647

 

 

 

 

 

 

 

 

 

9,647

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

4,221

 

 

 

 

 

 

 

 

 

4,221

 

Vesting of common stock warrants issued for services

 

 

 

 

 

 

 

 

22

 

 

 

 

 

 

 

 

 

22

 

Net unrealized gain on marketable securities

 

 

 

 

 

 

 

 

 

 

 

926

 

 

 

 

 

 

926

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(28,682

)

 

 

(28,682

)

Balances at March 31, 2023

 

 

33,236,768

 

 

$

3

 

 

$

562,045

 

 

$

(270

)

 

$

(343,172

)

 

$

218,606

 

 

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

6


 

4D Molecular Therapeutics, Inc.

Condensed Statements of Cash Flows (Unaudited)

(In thousands)

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$

(32,401

)

 

$

(28,682

)

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

 

 

 

 

 

 

Stock-based compensation expense

 

 

5,974

 

 

 

4,221

 

Vesting of common stock warrants in return for services

 

 

22

 

 

 

22

 

Change in fair value of derivative liability

 

 

 

 

 

7

 

Depreciation and amortization

 

 

1,173

 

 

 

1,029

 

Amortization of right-of-use assets

 

 

421

 

 

 

383

 

Net amortization (accretion) of premium (discount) on marketable securities

 

 

(757

)

 

 

(395

)

Changes in operating assets and liabilities

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

(1,322

)

 

 

90

 

Other assets

 

 

(88

)

 

 

(110

)

Accounts payable

 

 

703

 

 

 

(333

)

Accrued and other liabilities

 

 

(2,389

)

 

 

(3,397

)

Deferred revenue

 

 

77

 

 

 

(298

)

Operating lease liabilities

 

 

(501

)

 

 

(443

)

Net cash used in operating activities

 

 

(29,088

)

 

 

(27,906

)

Cash flows from investing activities

 

 

 

 

 

 

Purchases of marketable securities

 

 

(277,324

)

 

 

(14,729

)

Maturities of marketable securities

 

 

14,776

 

 

 

58,871

 

Acquisition of property and equipment

 

 

(710

)

 

 

(1,012

)

Net cash provided by (used in) investing activities

 

 

(263,258

)

 

 

43,130

 

Cash flows from financing activities

 

 

 

 

 

 

Payment of offering costs

 

 

 

 

 

(69

)

Issuance of common stock upon the exercise of stock options

 

 

3,113

 

 

 

1,416

 

Issuance of common stock upon public offering, net of issuance costs

 

 

315,719

 

 

 

 

Issuance of common stock for the ATM offering program, net of issuance costs

 

 

 

 

 

9,647

 

Net cash provided by financing activities

 

 

318,832

 

 

 

10,994

 

Net increase in cash and cash equivalents

 

 

26,486

 

 

 

26,218

 

Cash and cash equivalents, beginning of period

 

 

249,108

 

 

 

52,351

 

Cash and cash equivalents, end of period

 

$

275,594

 

 

$

78,569

 

Supplemental disclosures of noncash investing and financing
   information

 

 

 

 

 

 

Unpaid offering costs

 

$

430

 

 

$

 

Purchases of property and equipment in accounts payable
   and accrued and other liabilities

 

$

 

 

$

357

 

 

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

7


 

4D Molecular Therapeutics, Inc.

Notes to Unaudited Condensed Financial Statements

1. The Company

4D Molecular Therapeutics, Inc. (the “Company”) was formed as a limited liability company in September 2013 under the name 4D Molecular Therapeutics, LLC. The Company changed its name and converted into a corporation which was incorporated in the state of Delaware in March 2015. The Company is a clinical-stage biotherapeutics company harnessing the power of directed evolution for targeted genetic medicines.

Initial Public Offering

In December 2020, the Company sold and issued 9,660,000 shares of common stock at a price to the public of $23.00 per share, which included shares sold upon the underwriters’ exercise of their overallotment option to purchase 1,260,000 additional shares. The Company received an aggregate of $204.7 million in net proceeds, after deducting underwriting discounts and commissions and offering costs.

Upon the closing of the Company's initial public offering in December 2020 (the "IPO"), all outstanding shares of redeemable convertible preferred stock automatically converted into 11,575,984 shares of common stock. Subsequent to the closing of the IPO, there were no shares of redeemable convertible preferred stock outstanding.

2021 Follow On Public Offering

In November 2021, the Company completed an underwritten public offering ("2021 Offering") in which 4,750,000 shares of the Company's common stock were sold at an offering price of $25.00 per share pursuant to an effective Registration Statement on Form S-1. The net proceeds from the 2021 Offering were $111.1 million, after deducting underwriting discounts and commissions and offering expenses.

2023 Follow On Public Offering

In May 2023, the Company completed its third underwritten public offering (the “2023 Offering”) in which 8,625,000 shares of the Company’s common stock were sold at an offering price of $16.00 per share pursuant to an effective Registration Statement on Form S-3. The net proceeds from the 2023 Offering were $129.2 million, after deducting underwriting discounts and commissions and offering expenses.

2024 Follow On Public Offering

In February 2024, the Company completed an underwritten public offering (the “2024 Offering”) in which 6,586,015 shares of the Company’s common stock were sold at an offering price of $29.50 per share, as well as pre-funded warrants to purchase 3,583,476 shares of the Company’s common stock at an offering price of $29.4999 per underlying share pursuant to an effective Registration Statement on Form S-3. The net proceeds from the 2024 Offering were $281.2 million, after deducting underwriting discounts and commissions and other offering expenses. The Company also granted the underwriters the option to purchase up to 1,525,423 additional shares of common stock in connection with the offering.

In March 2024, the underwriters exercised their option to purchase 1,259,299 additional shares of common stock resulting in net proceeds of $34.9 million, after deducting commissions.

Liquidity

The Company has incurred significant losses and negative cash flows from operations and had an accumulated deficit of $447.7 million as of March 31, 2024. The Company believes that its cash and cash equivalents and marketable securities as of March 31, 2024 are sufficient for the Company to fund planned operations for at least one year from the issuance date of these unaudited condensed financial statements. The Company has historically financed its operations primarily through the sale of equity securities, and to

8


 

a lesser extent, from cash received pursuant to its collaboration and license agreements. To date, none of the Company’s product candidates have been approved for sale, and therefore, the Company has not generated any revenue from product sales. Management expects operating losses and negative cash flows from operations to continue for the foreseeable future. The Company plans to raise additional funding as required based on the status of its clinical trials and projected cash flows. There can be no assurance that, in the event the Company requires additional financing, such financing will be available on terms acceptable to the Company, if at all. Failure to generate sufficient cash flows from operations, raise additional capital and reduce discretionary spending should additional capital not become available could have a material adverse effect on the Company’s ability to achieve its business objectives.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”) and the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim reporting.

Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Accordingly, the unaudited condensed financial statements should be read in conjunction with the audited financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC.

The accompanying financial information for the three months ended March 31, 2024 and 2023 is unaudited. The unaudited condensed financial statements have been prepared on the same basis as the annual audited financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position as of March 31, 2024 and December 31, 2023 and its results of operations and cash flows for the three months ended March 31, 2024 and 2023. The results for interim periods are not necessarily indicative of the results expected for the full fiscal year or any other periods.

Use of Estimates and Judgments

The preparation of condensed financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses; and disclosure of contingent assets and liabilities as of the date of the financial statements. Such estimates include the determination of useful lives for property and equipment, the contract term, transaction price and costs of collaboration agreements, as well as estimates of the fair value of common stock (prior to the IPO), stock options and the derivative instrument and income tax uncertainties. Actual results could differ from those estimates.

Due to the war in Ukraine, conflicts in the Middle East, rising interest rates and inflation, and the lingering impacts of the coronavirus (“COVID-19”) pandemic, there has been uncertainty and disruption in the global economy and financial markets. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of March 31, 2024. While there was not a material impact to the Company’s unaudited condensed financial statements as of March 31, 2024, these estimates may change, as new events occur and additional information is obtained, as well as other factors that could result in material impacts to the unaudited condensed financial statements in future reporting periods.

Segment Information

The Company operates and manages its business as one reportable and operating segment. The Company’s chief executive officer, who is the chief operating decision maker, reviews financial information on a company-wide basis for purposes of allocating resources and assessing financial performance.

9


 

Concentration of Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, marketable securities and accounts receivable. The Company’s cash is held at two financial institutions in the United States of America. The Company’s cash equivalents are invested in money market funds. The Company also invests in U.S. Treasuries, U.S. government sponsored agencies, commercial paper, corporate bonds and certificates of deposit. The Company has not experienced any losses on its deposits of cash and cash equivalents. Such deposits may, at times, exceed federally insured limits.

The Company’s partners in collaboration and license agreements who represent 10% or more of the Company’s total revenue are as follows:

 

 

 

Three Months Ended March 31,

 

 

2024

 

2023

 Customer A

 

0%

 

99%

 Customer B

 

100%

 

*

Total

 

100%

 

99%

 

* Less than 10%

The Company did not have accounts receivable from its partners in collaboration and license agreements as of March 31, 2024 and December 31, 2023.

 

The Company’s total revenues by geographic region, based on the location of the customer, are as follows (in thousands):

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Netherlands

 

$

 

 

$

295

 

United States

 

 

28

 

 

 

3

 

Total revenue

 

$

28

 

 

$

298

 

Other Risks and Uncertainties

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, protection of proprietary technology, dependence on key personnel, suppliers for key raw materials, contract manufacturing organizations (“CMOs”) and contract research organizations (“CROs”), compliance with government regulations and the need to obtain additional financing to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical studies, clinical trials and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance and reporting.

There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained or maintained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate significant revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from other pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees, consultants and other third parties (including for clinical trials and some aspects of research and preclinical testing).

10


 

Recently Issued Accounting Pronouncements Not Yet Adopted

On December 14, 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2023-09, Improvements to Income Tax Disclosures. The final guidance adds clarifications related to the presentation of rate reconciliation for public business entities and definitions of specific categories in rate reconciliation. These amendments are effective for public business entities for annual periods beginning after December 15, 2024. For other entities, amendments are effective for annual periods beginning after December 15, 2025. The Company is not early adopting ASU 2023-09. The Company expects to make additional disclosures for income taxes upon adoption of this ASU.

 

3. Fair Value Measurements

The following tables represent the Company’s fair value hierarchy for financial assets and financial liabilities measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023 (in thousands):

 

 

 

Basis for Fair Value Measurements

 

 

Fair Value as of

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

March 31, 2024

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

245,111

 

 

$

 

 

$

 

 

$

245,111

 

Commercial paper

 

 

 

 

 

64,624

 

 

 

 

 

 

64,624

 

Corporate bonds

 

 

 

 

 

169,106

 

 

 

 

 

 

169,106

 

U.S. Treasuries

 

 

 

 

 

26,262

 

 

 

 

 

 

26,262

 

U.S. government sponsored agencies

 

 

 

 

 

1,398

 

 

 

 

 

 

1,398

 

Certificates of deposit

 

 

 

 

 

51,869

 

 

 

 

 

 

51,869

 

Total

 

$

245,111

 

 

$

313,259

 

 

$

 

 

$

558,370

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liability

 

$

 

 

$

 

 

$

369

 

 

$

369

 

Total

 

$

 

 

$

 

 

$

369

 

 

$

369

 

 

 

 

Basis for Fair Value Measurements

 

 

Fair Value as of

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

December 31, 2023

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

217,644

 

 

$

 

 

$

 

 

$

217,644

 

Commercial paper

 

 

 

 

 

18,243

 

 

 

 

 

 

18,243

 

Corporate bonds

 

 

 

 

 

28,939

 

 

 

 

 

 

28,939

 

U.S. government sponsored agencies

 

 

 

 

 

2,896

 

 

 

 

 

 

2,896

 

Total

 

$

217,644

 

 

$

50,078

 

 

$

 

 

$

267,722

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liability

 

$

 

 

$

 

 

$

369

 

 

$

369

 

Total

 

$

 

 

$

 

 

$

369

 

 

$

369

 

Level 3 Inputs

The fair value of the derivative liability is based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The fair value of the derivative liability was determined using a present value analysis with multiple scenarios. In determining the fair value of the derivative liability, the inputs impacting fair value include the change of control payment to Cystic Fibrosis Foundation (CFF), the probability of a change of control event, the product status at time of a change of control event and the discount rate. See Note 14 for further discussion on the embedded derivative.

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

11


 

The following tables set forth a summary of the changes in the fair value of the Company’s Level 3 financial instrument during the three-month periods ended March 31, 2024 and 2023 (in thousands):

 

 

 

Derivative
Liability

 

Balance as of December 31, 2023

 

$

369

 

Change in fair value included in other income (expense), net

 

 

 

Balance as of March 31, 2024

 

$

369

 

 

 

 

Derivative
Liability

 

Balance as of December 31, 2022

 

$

212

 

Change in fair value included in other income (expense), net

 

 

7

 

Balance as of March 31, 2023

 

$

219

 

 

4. Marketable Securities

Marketable securities, which are classified as available-for-sale, consisted of the following as of March 31, 2024 and December 31, 2023 (in thousands):

 

 

 

Amortized Cost Basis

 

 

Gross Unrealized Gains

 

 

Gross Unrealized Losses

 

 

Fair Value as of March 31, 2024

 

Short-term marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial paper

 

$

61,428

 

 

$

5

 

 

$

(46

)

 

$

61,387

 

Corporate bonds

 

 

109,432

 

 

 

16

 

 

 

(47

)

 

 

109,401

 

U.S. Treasuries

 

 

26,262

 

 

 

1

 

 

 

(1

)

 

 

26,262

 

U.S. government sponsored agencies

 

 

1,400

 

 

 

 

 

 

(2

)

 

 

1,398

 

Certificates of deposit

 

 

51,875

 

 

 

3

 

 

 

(9

)

 

 

51,869

 

Total short-term marketable securities

 

$

250,397

 

 

$

25

 

 

$

(105

)

 

$

250,317

 

Long-term marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial paper

 

$

3,234

 

 

$

3

 

 

$

 

 

$

3,237

 

Corporate bonds

 

 

59,737

 

 

 

14

 

 

 

(46

)

 

 

59,705

 

Total long-term marketable securities

 

$

62,971

 

 

$

17

 

 

$

(46

)

 

$

62,942

 

 

 

 

Amortized Cost Basis

 

 

Gross Unrealized Gains

 

 

Gross Unrealized Losses

 

 

Fair Value as of December 31, 2023

 

Short-term marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial paper

 

$

17,603

 

 

$

1

 

 

$

(26

)

 

$

17,578

 

Corporate bonds

 

 

18,641

 

 

 

12

 

 

 

(3

)

 

 

18,650

 

U.S. government sponsored agencies

 

 

2,900

 

 

 

 

 

 

(4

)

 

 

2,896

 

Total short-term marketable securities

 

$

39,144

 

 

$

13

 

 

$

(33

)

 

$

39,124

 

Long-term marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

$

661

 

 

$

4

 

 

$

 

 

$

665

 

Commercial paper

 

 

10,257

 

 

 

32

 

 

 

 

 

 

10,289

 

Total long-term marketable securities

 

$

10,918

 

 

$

36

 

 

$

 

 

$

10,954

 

 

All marketable securities held as of March 31, 2024 had contractual maturities of less than two years. There have been no material realized gains or losses on marketable securities for the periods presented.

12


 

Aggregate fair values of marketable securities with unrealized losses and gains were as follows as of March 31, 2024 and December 31, 2023 (in thousands):

 

 

March 31,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Aggregate fair value of marketable securities in a continuous loss position for less than twelve months

 

$

209,564

 

 

$

20,494

 

Aggregate fair value of marketable securities in a continuous loss position for more than twelve months

 

 

 

 

 

4,986

 

Aggregate fair value of marketable securities in unrealized gain position

 

 

103,695

 

 

 

24,598

 

Total marketable securities

 

$

313,259

 

 

$

50,078

 

The Company manages credit risk associated with its investment portfolio through its investment policy, which limits purchases to high-quality issuers and also limits the amount of its portfolio that can be invested in a single issuer. The Company did not record an allowance for credit losses or other impairment charges related to its marketable securities for any period presented. The Company has determined that (i) it does not have the intent to sell any of these investments, and (ii) it is not more likely than not that it will be required to sell any of these investments before recovery of the entire amortized cost basis. The Company further considered the maximum unrealized loss amounts both at the individual instrument level, $9 thousand, as well as in aggregate, $151 thousand, as of March 31, 2024, as immaterial. These unrealized losses were not attributed to credit risk and were associated with changes in market conditions. The Company periodically reviews its marketable securities for indications of credit losses. The Company anticipates that it will recover the entire amortized cost basis of such securities, and therefore, no credit loss existed as of March 31, 2024.

5. Property and Equipment, Net

Property and equipment, net, consisted of the following (in thousands):

 

 

 

March 31,
2024

 

 

December 31,
2023

 

Machinery and equipment

 

$

13,605

 

 

$

12,996

 

Leasehold improvements

 

 

17,325

 

 

 

16,902

 

Furniture and fixtures

 

 

566

 

 

 

566

 

Office equipment

 

 

239

 

 

 

239

 

Computer equipment and software

 

 

835

 

 

 

805

 

Construction in progress

 

 

 

 

 

550

 

Total property and equipment

 

 

32,570

 

 

 

32,058

 

Less: Accumulated depreciation and amortization

 

 

(13,106

)

 

 

(11,932

)

Property and equipment, net

 

$

19,464

 

 

$

20,126

 

 

All property and equipment are maintained in the United States. Depreciation expense was $1.2 million and $1.0 million for the three months ended March 31, 2024 and 2023, respectively.

6. Accrued and Other Current Liabilities

Accrued and other current liabilities consisted of the following (in thousands):