GENERATION BIO CO._March 31, 2025

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


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

For the quarterly period ended March 31, 2025


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

For the transition period from to

Commission File Number: 001-39319

GENERATION BIO CO.

(Exact name of registrant as specified in its charter)



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

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

(617) 655-7500

(Registrant’s telephone number, including area code)

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



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 Par Value	GBIO	Nasdaq Global Select Market

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

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

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



Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

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

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

As of April 30, 2025 there were 67,035,236 shares of Common Stock, $0.0001 par value per share, outstanding.

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

Generation Bio Co.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)


	March 31,		December 31,
	2025		2024
Assets
Current assets:
Cash and cash equivalents	$	50,891	$	76,301
Marketable securities		106,668		108,922
Collaboration receivable		1,392		1,224
Prepaid expenses and other current assets		6,168		6,456
Total current assets		165,119		192,903
Property and equipment, net		14,432		15,293
Operating lease right-of-use assets		19,375		20,310
Restricted cash		2,152		2,152
Other long-term assets		270		539
Total assets	$	201,348	$	231,197
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,262	$	1,408
Accrued expenses and other current liabilities		5,765		10,059
Deferred revenue		2,107		10,582
Operating lease liabilities		9,463		13,006
Total current liabilities		19,597		35,055
Deferred revenue, net of current portion		30,305		29,161
Operating lease liabilities, net of current portion		78,114		80,554
Other liabilities, net of current portion		—		223
Total liabilities		128,016		144,993
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 5,000,000 shares authorized and no shares issued or outstanding at March 31, 2025 and December 31, 2024		—		—
Common stock, $0.0001 par value; 150,000,000 shares authorized at March 31, 2025 and December 31, 2024; 67,008,511 and 66,971,977 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively		7		7
Additional paid-in capital		791,087		789,083
Accumulated other comprehensive income		85		159
Accumulated deficit		(717,847)		(703,045)
Total stockholders’ equity		73,332		86,204
Total liabilities and stockholders’ equity	$	201,348	$	231,197

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

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Generation Bio Co.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended March 31,
	2025		2024
Revenues:
Collaboration revenue	$	8,723	$	4,059
Operating expenses:
Research and development		15,357		14,335
General and administrative		8,834		10,428
Loss on lease termination		1,138		56,930
Total operating expenses		25,329		81,693
Loss from operations		(16,606)		(77,634)
Other income:
Other income and interest income, net		1,804		3,093
Net loss	$	(14,802)	$	(74,541)
Net loss per share, basic and diluted	$	(0.22)	$	(1.12)
Weighted average common shares outstanding, basic and diluted		67,002,511		66,433,640

Comprehensive loss:
Net loss	$	(14,802)	$	(74,541)
Other comprehensive loss:
Unrealized losses on marketable securities		(74)		(471)
Comprehensive loss	$	(14,876)	$	(75,012)

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

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Generation Bio Co.

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except share amounts)

(Unaudited)


						Accumulated
				Additional		Other				Total
	Common Stock			Paid-in		Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Capital		Income (Loss)		Deficit		Equity
Balances at December 31, 2024	66,971,977	$	7	$	789,083	$	159	$	(703,045)	$	86,204
Vesting of restricted common stock	36,534		—		(7)		—		—		(7)
Stock-based compensation expense	—		—		2,011		—		—		2,011
Unrealized losses on marketable securities	—		—		—		(74)		—		(74)
Net loss	—		—		—		—		(14,802)		(14,802)
Balances at March 31, 2025	67,008,511	$	7	$	791,087	$	85	$	(717,847)	$	73,332


						Accumulated
				Additional		Other				Total
	Common Stock			Paid-in		Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Capital		Income (Loss)		Deficit		Equity
Balances at December 31, 2023	66,205,550	$	7	$	774,224	$	274	$	(571,377)	$	203,128
Vesting of restricted common stock	273,550		—		(125)		—		—		(125)
Stock-based compensation expense	—		—		4,000		—		—		4,000
Unrealized losses on marketable securities	—		—		—		(471)		—		(471)
Net loss	—		—		—		—		(74,541)		(74,541)
Balances at March 31, 2024	66,479,100	$	7	$	778,099	$	(197)	$	(645,918)	$	131,991

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

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Generation Bio Co.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2025		2024
Cash flows from operating activities:
Net loss	$	(14,802)	$	(74,541)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss on lease termination		1,138		56,930
Stock-based compensation expense		2,011		4,000
Depreciation and amortization expense		1,136		1,312
Accretion of discount on marketable securities, net		(993)		(2,328)
Other		2		(7)
Changes in operating assets and liabilities:
Collaboration receivable		(168)		—
Prepaid expenses and other current assets		469		(878)
Operating lease right-of-use assets		935		1,050
Other noncurrent assets		269		13
Accounts payable		643		(242)
Accrued expenses and other current liabilities		(4,319)		(10,032)
Deferred revenue		(7,331)		(4,059)
Other noncurrent liabilities		(223)		—
Operating lease liabilities		(7,127)		(2,915)
Net cash used in operating activities		(28,360)		(31,697)
Cash flows from investing activities:
Purchases of property and equipment		(246)		(1,918)
Proceeds from sale of property and equipment		30		—
Purchases of marketable securities		(41,827)		(86,635)
Maturities of marketable securities		45,000		88,000
Net cash provided by (used in) investing activities		2,957		(553)
Cash flows from financing activities:
Tax withholding payments related to net share settlements of restricted stock units		(7)		(125)
Net cash used in financing activities		(7)		(125)
Net decrease in cash, cash equivalents and restricted cash		(25,410)		(32,375)
Cash, cash equivalents and restricted cash at beginning of period		78,453		72,237
Cash, cash equivalents and restricted cash at end of period	$	53,043	$	39,862
Supplemental disclosure of noncash investing and financing information:
Purchases of property and equipment included in accounts payable and accrued expenses	$	420	$	—
Unrealized losses on marketable securities	$	(74)	$	(471)

Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	50,891	$	35,526
Restricted cash (included in current assets)		—		2,184
Restricted cash (included in non-current assets)		2,152		2,152
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	53,043	$	39,862

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

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Generation Bio Co.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Nature of the Business and Basis of Presentation

Generation Bio Co., or Generation Bio, was incorporated on October 21, 2016 as Torus Therapeutics, Inc. and subsequently changed its name to Generation Bio Co. Generation Bio Co. and its consolidated subsidiary, or the company, we, our or us, are working to change what’s possible for people living with T cell-driven autoimmune diseases. Our strategy is to discover, develop, and commercialize redosable therapeutics that reprogram T cells in vivo to reduce or eliminate the production and persistence of autoreactive T cells, which erroneously recognize and attack the body’s own tissues, causing autoimmune disease. We are leveraging our cell-targeted lipid nanoparticle, or ctLNP, to selectively deliver small interfering RNA, or siRNA, to T cells, and we believe that the combination of selective delivery and an intracellular, genetically precise mechanism of target engagement unlocks a series of high-value historically undruggable disease-driving genes in autoimmunity. We are headquartered in Cambridge, Massachusetts.

We are 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, compliance with government regulations, the ability to establish clinical- and commercial-scale manufacturing processes and the ability to secure additional capital to fund operations. 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 our development efforts are successful, it is uncertain when, if ever, we 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, we have funded our operations with proceeds from the sale of instruments convertible into convertible preferred stock, sales of convertible preferred stock, and sales of common stock in underwritten public offerings, “at-the-market” offerings, and in a private placement, as well as collaboration revenue under our collaboration with ModernaTX, Inc., or Moderna. We have incurred recurring losses, including net losses of $14.8 million for the three months ended March 31, 2025 and $74.5 million for the three months ended March 31, 2024. As of March 31, 2025 we had an accumulated deficit of $717.8 million. We expect to continue to generate operating losses in the foreseeable future. As of the issuance date of these condensed consolidated financial statements, we expect that our cash, cash equivalents, and marketable securities will be sufficient to fund our operating expenses and capital expenditure requirements for at least 12 months.

We will need to obtain additional funding through public or private equity offerings, debt financings, collaborations, strategic alliances and/or licensing arrangements. We may not be able to obtain financing on acceptable terms, or at all, and we may not be able to enter into additional collaborative or strategic alliances or licensing arrangements. The terms of any financing may adversely affect the holdings or the rights of our stockholders. Arrangements with collaborators or others may require us to relinquish rights to certain of our technologies or programs. If we are unable to obtain funding, we could be forced to delay, reduce or eliminate some or all of our research and development programs, pipeline expansion or commercialization efforts, which could adversely affect our business prospects. Although management will continue to pursue these plans, there is no assurance that we will be successful in obtaining sufficient funding on terms acceptable to us to fund continuing operations when needed or at all.

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

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2. Summary of Significant Accounting Policies

Use of estimates

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

Unaudited interim financial information

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

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

Recently issued accounting pronouncements

In December 2023, the FASB issued its final standard to improve income tax disclosures. This standard, issued as ASU 2023-09, requires public business entities to annually disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. This update is effective for us as of and for the year ended December 31, 2025. We are currently evaluating the impact the guidance will have on our consolidated financial statements.

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

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3. Marketable Securities and Fair Value Measurements

The following tables present our marketable securities by security type:

As of March 31, 2025

Gross

Amortized

Unrealized

Fair

(in thousands)

Cost

Gains

Losses

Value

U.S. Treasury securities

106,583

(4)

106,668

As of December 31, 2024

Gross

Amortized

Unrealized

Fair

(in thousands)

Cost

Gains

Losses

Value

U.S. Treasury securities

108,763

159

—

108,922

Our marketable securities as of March 31, 2025 consisted of investments that mature within one year.

We assess our available-for-sale securities under the available-for-sale security impairment model in ASC 326 Financial Instruments - Credit Losses, as of each reporting date in order to determine if a portion of any decline in fair value below carrying value recognized on our available-for-sale securities is the result of a credit loss. We also evaluate our available-for-sale securities for impairment using a variety of factors including our intent to sell the underlying securities prior to maturity and whether it is more likely than not that we would be required to sell the securities before the recovery of their amortized basis. During the three months ended March 31, 2025 and 2024, we did not recognize any impairment or realized gains or losses on sales of available-for-sale securities, and we did not record an allowance for, or recognize, any expected credit losses.

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


	Fair Value Measurements at March 31, 2025 Using:
(in thousands)	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	25,616	$	—	$	—	$	25,616
U.S. Treasury securities		—		14,959		—		14,959
Marketable securities:
U.S. Treasury securities		—		106,668		—		106,668
Totals	$	25,616	$	121,627	$	—	$	147,243


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

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4. Collaboration and License Agreement

Moderna Collaboration and License Agreement

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

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

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

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

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

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

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In addition, in connection with the execution of the Collaboration Agreement, we entered into a Share Purchase Agreement, or the Share Purchase Agreement, with Moderna, pursuant to which we issued and sold 5,859,375 shares of our common stock to Moderna, at a price of $6.14 per share, for an aggregate purchase price of $36.0 million, which closed concurrently with the execution of the Collaboration Agreement, and resulted in Moderna becoming a related party. Under the Share Purchase Agreement, Moderna has the right, subject to certain terms and conditions, to purchase up to 3.06% of the outstanding shares of our common stock (on a post-closing basis) in connection with a future equity financing of at least $25.0 million by us.

Moderna Agreement Assessment

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

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

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


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

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

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

During the three months ended March 31, 2025, we recorded additional revenue related to a change in estimate due to revisions in the research plan. The change in estimate resulted in a $3.5 million decrease in the allocated transaction price, a $5.3 million increase in collaboration revenue, a $5.3 million decrease in deferred revenue and a $0.08 decrease in net loss per share, basic and diluted, for the three months ended March 31, 2025.

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


	Transaction Price Allocated		Revenue Recognized During
	as of		Three Months Ended		Deferred Revenue as of
Performance Obligations (in thousands)	March 31, 2025		March 31, 2025		March 31, 2025
ctLNP technology and research license	$	37,112	$	8,629	$	2,109
First liver program commercialization option license		4,948		—		4,871
Second liver program commercialization option license		4,948		—		4,871
First non-liver program commercialization option license		8,271		—		8,141
Second non-liver program commercialization option license		8,271		—		8,141
Third liver or non-liver program commercialization option license		4,347		—		4,279
Total	$	67,897	$	8,629	$	32,412

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


	Balance at						Balance at
(in thousands)	December 31, 2024		Additions		Deductions		March 31, 2025
Collaboration receivable	$	1,224	$	1,298	$	(1,224)	$	1,298
Contract liabilities:
Deferred revenue	$	39,743	$	1,298	$	(8,629)	$	32,412

On January 21, 2025, Moderna exercised an option to receive additional services under the Agreement on a time and materials basis. The Company accounts for these services as a separate contract under ASC 606 and recognizes revenue as services are performed. During the three months ended March 31, 2025, the Company recognized revenue of $0.1 million, which amount is included in collaboration receivable as of March 31, 2025.

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5. Accrued Expenses

Accrued expenses and other current liabilities consisted of the following:


	March 31,		December 31,
(in thousands)	2025		2024
Accrued employee compensation and benefits	$	2,345	$	5,975
Accrued external research and development expenses		848		720
Accrued professional fees		950		597
Property and equipment		140		109
Other		1,482		2,658
Total	$	5,765	$	10,059

Accrued employee compensation and benefits as of each of March 31, 2025 and December 31, 2024 includes salary continuation and severance costs of $0.4 million related to our strategic reorganization. For additional information, refer to Note 11, Reduction in Force.

6. Leases

Office and Lab Lease

We lease our office and laboratory space under a noncancelable operating lease that expires in 2029, or the Office and Lab Lease. There have been no material changes to our Office and Lab Lease during the three months ended March 31, 2025. For additional information, refer to Note 7, Leases, to the consolidated financial statements in our 2024 Annual Report.

Seyon Lease

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

In connection with the termination of the Seyon Lease, during the three months ended March 31, 2024, we recorded a material impairment loss of non-cash charges of $45.8 million in an impairment of the Seyon Lease right-of-use asset, $6.2 million in an impairment of construction in progress, and the write-off of $3.9 million in tenant improvement allowance receivable from the Landlord. In addition, during the three months ended March 31, 2024, we recognized $1.0 million in accretion and other related expenses, which resulted in a $56.9 million loss on termination of lease in our condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2024.

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During the three months ended March 31, 2025, we recognized $1.1 million in accretion and other related expenses. Accretion and other related expenses will continue to be recognized in loss on lease termination in our condensed consolidated statements of operations and comprehensive loss. After the Court’s preliminary injunction ruling in January 2025, we began making monthly payments to the Landlord. During the three months ended March 31, 2025, we paid $7.1 million to the Landlord, which included $4.9 million due from July through December 2024.

As of March 31, 2025 and December 31, 2024, we have not met the criteria to extinguish the lease liability pursuant to ASC 405 Liabilities. Accordingly, we had a total operating lease liability related to the Seyon Lease of $58.5 million and $63.1 million as of March 31, 2025 and December 31, 2024, respectively, of which $3.4 million and $7.1 million were included in current liabilities on our consolidated balance sheets as of March 31, 2025 and December 31, 2024, respectively. Additionally, in accordance with ASC 450 Contingencies, we have assessed the probability of realizing a material loss contingency for the potential losses, including obligations to pay any future variable lease costs, under the Seyon Lease. Based on this assessment, we have determined that it is not probable that we will be obligated to pay any such material amounts.

For additional information, refer to Note 9 Commitments and Contingencies.

7. Equity

As of March 31, 2025, our amended and restated certificate of incorporation authorizes us to issue 150,000,000 shares of common stock, par value $0.0001 per share, and 5,000,000 shares of preferred stock, par value $0.0001 per share, all of which preferred stock is undesignated.

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

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

8. Stock-Based Compensation

Stock incentive plans

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

In May 2020, our board of directors adopted, and in June 2020, our stockholders approved, the 2020 Stock Incentive Plan, or the 2020 Plan, and, together with the 2017 Plan, the Plans, which became effective on June 11, 2020. The 2020 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards. The number of shares of common stock reserved for issuance under the 2020 Plan is the sum of (1) 2,547,698 shares; plus (2) the number of shares (up to a maximum of 7,173,014 shares) as was equal to the sum of (x) the number of shares of common stock reserved for issuance under the 2017 Plan that remained available for grant under the 2017 Plan on June 11, 2020 and (y) the number of shares of common stock subject to outstanding awards granted under the 2017 Plan that expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by us at their original issuance price pursuant to a contractual repurchase right; plus (3) an annual increase, to be added on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2021 and continuing until, and including, the fiscal year ending December 31, 2030, equal to the lesser of (i) 4% of the number of shares of common stock outstanding on such date, and (ii) an amount determined by the board of directors. In January 2025, the number of shares of common stock authorized for issuance under the 2020 Plan was increased from 19,462,688 shares to 22,141,904 shares. Upon the effectiveness of the 2020 Plan, we ceased granting additional awards under the 2017 Plan.

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

As of March 31, 2025, 700,090 shares remained available for future issuance under the 2020 Plan. Shares subject to outstanding awards granted under the Plans that expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by us at their original issuance price pursuant to a contractual repurchase right will be available for future awards under the 2020 Plan.

Grant of stock options

During the three months ended March 31, 2025, we granted time-based options to certain employees for the purchase of an aggregate of 3,681,752 shares of common stock with a weighted average grant date fair value of $0.77 per share that vest over a weighted average period of approximately four years.

Employee stock purchase plan

In May 2020, our board of directors adopted, and in June 2020, our stockholders approved, the 2020 Employee Stock Purchase Plan, or the 2020 ESPP, which became effective June 11, 2020. The 2020 ESPP is administered by our board of directors or by a committee appointed by the board of directors. The number of shares of common stock authorized for issuance under the 2020 ESPP automatically increases on the first day of each fiscal year, beginning with the fiscal year that commenced on January 1, 2021 and continuing for each fiscal year until, and including the fiscal year commencing on, January 1, 2030, in an amount equal to the lowest of (1) 1,302,157 shares of common stock, (2) 1% of the number of shares of common stock outstanding on such date, and (3) an amount determined by the board of directors. In January 2025, the number of shares of common stock authorized for issuance under the 2020 ESPP was increased from 2,777,974 shares to 3,447,778 shares. As of March 31, 2025, 2,698,529 shares remained available for issuance under the 2020 ESPP.

Stock-based compensation

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


	Three Months Ended March 31,
(in thousands)	2025		2024
Research and development expenses	$	714	$	1,521
General and administrative expenses		1,297		2,479
Total	$	2,011	$	4,000

As of March 31, 2025, total unrecognized compensation cost related to unvested time-based stock options and restricted stock units was $10.3 million, with $9.4 million expected to be recognized over a weighted average period of 2.5 years and $0.9 million expected to be recognized over a weighted average period of 1.8 years.

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9. Commitments and Contingencies

401(k) Plan

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

Indemnification agreements

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

Legal proceedings

We, from time to time, may be party to litigation arising in the ordinary course of business. On February 20, 2024, the Landlord served us with a complaint, filed in the Court with respect to the Seyon Lease. The complaint sought declaratory judgment that we unlawfully terminated the Seyon Lease and also asserted a claim for breach of contract damages. Following receipt of the complaint, we filed a counterclaim against the Landlord asserting breach of contract and violation of Massachusetts General Law Chapter 93A. On October 29, 2024, the Court determined that although we did not have the right to terminate the Seyon Lease, the Landlord’s subsequent termination was effective, and that we had alleged sufficient facts to state a claim for breach of contract and violation of Massachusetts General Law Chapter 93A by the Landlord. On January 21, 2025, the Court granted the Landlord’s motion for preliminary injunction and ordered us to pay, until further notice, monthly amounts equal to the rent and other charges that would have been due to the Landlord under the Seyon Lease had it not been terminated. On February 14, 2025, we filed a notice of appeal of the Court’s preliminary injunction ruling and our appeal is pending before the Massachusetts Appeals Court. On March 28, 2025, we filed a petition for direct appellate review with the Massachusetts Supreme Judicial Court. We are continuing to make monthly payments under the Seyon Lease during the pendency of the appeal. We will continue to vigorously defend the action and prosecute our counterclaims against the Landlord with respect to this matter. As a result, we may continue to incur costs and expenses relating to this facility, and we may remain responsible for payments under the Seyon Lease, which may have a material adverse effect on our business, results of operations or financial condition.

10. Net Loss per Share

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


	March 31,
	2025	2024
Unvested restricted stock units	225,341	497,121
Stock options to purchase common stock	16,041,622	12,514,950
Total	16,266,963	13,012,071

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11. Reduction in Force

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

During the three months ended March 31, 2025, we recorded $0.6 million of restructuring expenses related to the January 2025 RIF in our condensed consolidated statements of operation and comprehensive loss, of which $0.4 million was classified as research and development expense and $0.2 million was classified as general and administrative expense. During the three months ended March 31, 2024, we recorded $0.3 million of restructuring expenses in our condensed consolidated statements of operation and comprehensive loss, all of which was classified as general and administrative expense, and related to our prior strategic reorganization that commenced in November 2023 and was completed during the second quarter of 2024, or the November 2023 RIF.

Below is a summary of accrued restructuring costs recorded and included in accrued expenses and other current liabilities on our condensed consolidated balance sheets:


(in thousands)	Payroll-Related Costs		Stock-Based Compensation		Total
Balance at December 31, 2024	$	446	$	—	$	446
Restructuring expenses		618		13		631
Cash payments		(690)		—		(690)
Non-cash expenses		—		(13)		(13)
Adjustments		(5)		—		(5)
Balance at March 31, 2025	$	369	$	—	$	369

12. Reportable Segments

Our Chief Executive Officer is our chief operating decision maker, or CODM and we operate as one reportable segment related to the research and development of therapeutics that can deliver siRNA, leveraging our ctLNP delivery system, to T cells. The measure of segment profit or loss is the Company’s consolidated net loss.

Resource allocation decisions are based on the best use of our resources to advance our ctLNP delivery system with the goal of selecting and advancing a drug candidate into clinical development. These decisions are informed by our cash resources, reflected in the balance of cash, cash equivalents and marketable securities on our consolidated balance sheets, forecasted financial results, the actual results included in our consolidated balance sheets, consolidated statements of operations and comprehensive loss, and significant segment expenses included in the table below.

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Significant segment revenues and expenses include the following:


	Three Months Ended March 31,
(in thousands)	2025		2024
Revenue:
Collaboration revenue	$	8,723	$	4,059

Operating expenses:
Personnel-related		8,947		6,735
Preclinical and manufacturing		3,489		3,296
Facilities-related		4,753		5,757
Stock-based compensation		2,011		4,000
Lab supplies		803		915
Consulting and professional services		3,234		2,598
Loss on lease termination		1,138		56,930
Other (1)		954		1,462
Total operating expenses		25,329		81,693
Loss from operations		(16,606)		(77,634)
Other income:
Other income and interest income, net		1,804		3,093
Net Loss	$	(14,802)	$	(74,541)

(1)

Other segment items include depreciation, amortization, license fees and other costs. Depreciation and amortization expense for the three months ended March 31, 2025 and 2024 were $1.1 million and $1.3 million, respectively, and are included in facilities-related and other segment operating expenses.

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

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

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

Overview

We are a biotechnology company working to change what’s possible for people living with T cell-driven autoimmune diseases. Our strategy is to discover, develop, and commercialize redosable therapeutics that reprogram T cells in vivo to reduce or eliminate the production and persistence of autoreactive T cells, which erroneously recognize and attack the body’s own tissues, causing autoimmune disease. We are leveraging our cell-targeted lipid nanoparticle, or ctLNP, to selectively deliver small interfering RNA, or siRNA, to T cells, and we believe that the combination of selective delivery and an intracellular, genetically precise mechanism of target engagement unlocks a series of high-value historically undruggable disease-driving genes in autoimmunity.

T cells are central to the normal function of the immune system, but when inactivated or naïve T cells are inappropriately activated against proteins or molecules naturally present in the body, known as autoantigens, they expand, differentiate, and drive tissue inflammation that results in the development of autoimmune disease. Modulating T cell activity has historically been limited by a lack of selectivity along two dimensions – selective delivery to T cells while sparing other immune cell types, and precisely inhibiting or silencing the intended genetic sequence to block disease causing pathways.

We believe that the advantage of our approach to combatting T cell-driven autoimmune disease is in the combination of highly selective delivery and precise gene silencing in T cells to drive potency while sparing broader immune cells, thus potentially expanding the therapeutic margin of safety, or index. We achieve selective delivery using our modular, redosable ctLNP delivery system, which is designed to reach cell type targets of interest selectively through active ligand-mediated uptake. We are leveraging our T cell-selective LNP to deliver siRNA, a cargo that can potently and precisely regulate protein expression in T cells without off-target effects. The intracellular mechanism of action of siRNA means that our T cell-selective LNP-siRNA has the potential to reach targets inaccessible by other modalities, creating a large and new target space for autoimmune disease.

Selective and potent siRNA delivery to T cells opens a broad landscape of protein targets to address T cell-driven autoimmune disease indications, including targets that are undruggable or poorly drugged by conventional modalities. We intend to build a portfolio of therapeutic candidates for T cell-driven autoimmune indications, selecting those with a strong link to protein target biology, high unmet need, a clear clinical/regulatory pathway, and path to demonstrate clinical superiority. We are prioritizing protein target selection for these indications based on the following:

-targets in T cells that are undruggable or poorly drugged with conventional modalities;

-well-characterized biology;

-superiority of mechanism of action (selective delivery and intracellular knockdown); and

-clear target engagement in early clinical development.

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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 any product candidates we may develop, we expect to incur significant expenses related to developing our commercial capability to support product sales, marketing and distribution.

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/or licensing arrangements, including our collaboration with Moderna. 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 when needed or on terms acceptable to us, we would be required to delay, limit, reduce or terminate our product development or future commercialization of one or more of our product candidates.

Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

Components of Our Results of Operations

Collaboration revenue

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

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

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

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

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General and administrative expenses

General and administrative expenses consist primarily of personnel-related costs, including salaries, benefits, stock-based compensation and severance expense, for employees engaged in executive, legal, finance and accounting and other administrative functions. General and administrative expenses also include professional fees for legal, patent, consulting, investor and public relations and accounting and audit services as well as direct and allocated facility-related costs.

We anticipate that our general and administrative expenses will increase in the future as our research progresses towards clinical studies and will increase our headcount to support our operational growth. We also anticipate that we will continue to incur substantial accounting, audit, legal, regulatory, compliance, director and officer insurance costs and investor and public relations expenses associated with operating as a public company.

Loss on lease termination

Loss on lease termination consists of expenses recognized for the impairment of the right-of-use asset and construction in progress, the write-off of the related tenant improvement allowance receivable, accretion and other related expenses in connection with the termination of our lease for a manufacturing facility in Waltham, Massachusetts, or the Seyon Lease.

Other income and interest income, net

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

Results of Operations

Comparison of the three months ended March 31, 2025 and 2024

The following table summarizes our results of operations for the three months ended March 31, 2025 and 2024:


	Three Months Ended March 31,				Change
(in thousands)	2025		2024		2025 vs. 2024
Revenues:
Collaboration revenue	$	8,723	$	4,059	$	4,664
Operating expenses:
Research and development		15,357		14,335		1,022
General and administrative		8,834		10,428		(1,594)
Loss on lease termination		1,138		56,930		(55,792)
Total operating expenses		25,329		81,693		(56,364)
Loss from operations		(16,606)		(77,634)		61,028
Other income:
Other income and interest income, net		1,804		3,093		(1,289)
Net loss	$	(14,802)	$	(74,541)	$	59,739

Collaboration revenue

During the three months ended March 31, 2025, we recognized $8.7 million in collaboration revenue, compared to $4.1 million for the three months ended March 31, 2024. The increase in collaboration revenue of $4.7 million during the three months ended March 31, 2025 was primarily due to $5.3 million of additional revenue related to a change in the total estimated research services due to revisions in the research plan, partially offset by decreased reimbursable activity. For additional information on our collaboration with Moderna and the accounting thereunder, refer to Note 4, Collaboration and License Agreement.

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Research and development expenses

The following table summarizes our research and development expenses for the three months ended March 31, 2025 and 2024:


	Three Months Ended March 31,				Change
(in thousands)	2025		2024		2025 vs. 2024
Personnel-related	$	5,637	$	3,722	$	1,915
Facilities-related		3,611		3,531		80
Preclinical and manufacturing		3,489		3,296		193
Stock-based compensation		714		1,521		(807)
Lab supplies		803		915		(112)
Consulting and professional services		363		387		(24)
License fees		17		89		(72)
Other		723		874		(151)
Total research and development expenses	$	15,357	$	14,335	$	1,022

Research and development expenses were $15.4 million for the three months ended March 31, 2025, compared to $14.3 million for the three months ended March 31, 2024. The increase in personnel-related costs of $1.9 million was driven primarily by an employee tax credit in the first quarter of 2024 that did not recur in the first quarter of 2025 as well as severance expenses, partially offset by a decrease in headcount. The decrease in stock-based compensation costs of $0.8 million was driven primarily by decreased headcount.

General and administrative expenses

The following table summarizes our general and administrative expenses for the three months ended March 31, 2025 and 2024:


	Three Months Ended March 31,				Change
(in thousands)	2025		2024		2025 vs. 2024
Personnel-related	$	3,310	$	3,013	$	297
Stock-based compensation		1,297		2,479		(1,182)
Facilities-related		1,142		2,226		(1,084)
Consulting and professional services		2,871		2,211		660
Other		214		499		(285)
Total general and administrative expenses	$	8,834	$	10,428	$	(1,594)

General and administrative expenses were $8.8 million for the three months ended March 31, 2025, compared to $10.4 million for the three months ended March 31, 2024. The decrease in stock-based compensation costs of $1.2 million was driven primarily by decreased headcount. The decrease in facilities-related costs of $1.1 million was driven primarily by the termination of the Seyon Lease in in the first quarter of 2024. The increase in consulting and professional services of $0.7 million was driven primarily by higher legal fees and recruiting expenses.

Loss on lease termination

During the three months ended March 31, 2025, we recognized a non-cash charge of $1.1 million in accretion and other related expenses in connection with the termination of the Seyon Lease. During the three months ended March 31, 2024, we recognized a non-cash charge of $56.9 million in connection with the termination of the Seyon Lease which included impairments of $45.8 million on the right-of-use asset and $6.2 million on construction in progress, a write-off of $3.9 million in tenant improvement allowance receivable from the landlord and $1.0 million in accretion and other related expenses.

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Other income and interest income, net

Other income and interest income, net for the three months ended March 31, 2025 was $1.8 million as compared to $3.1 million for the three months ended March 31, 2024. The decrease in other income and interest income, net during the three months ended March 31, 2025 was primarily due to decreases in interest yields and invested cash balances.

Liquidity and Capital Resources

Sources of Liquidity

Since our inception, we have incurred significant operating losses. We expect to incur significant expenses and operating losses for the foreseeable future as we support our continued research activities and development of our programs and technologies. We have not yet commercialized any product candidates and we do not expect to generate revenue from sales of any product candidates for several years, if at all. We expect that any revenue recognized for the next several years will be derived primarily from our current collaboration with Moderna and any additional collaborations that we may enter into in the future.

Historically, we have funded our operations with proceeds from the sale of instruments convertible into convertible preferred stock, sales of convertible preferred stock and sales of common stock in underwritten public offerings, “at-the-market” offerings and in a private placement, as well as collaboration revenue under our collaboration with Moderna. In August 2024, we entered into an “at-the-market” sales agreement pursuant to which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $237.0 million. As of the date of this Quarterly Report, we have not issued and sold any shares of our common stock pursuant to the August 2024 sales agreement. As of March 31, 2025, we had cash, cash equivalents, and marketable securities of $157.6 million.

Cash flows

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


	Three Months Ended March 31,
(in thousands)	2025		2024
Net cash used in operating activities	$	(28,360)	$	(31,697)
Net cash provided by (used in) investing activities		2,957		(553)
Net cash used in financing activities		(7)		(125)
Net decrease in cash, cash equivalents and restricted cash	$	(25,410)	$	(32,375)

Operating activities

During the three months ended March 31, 2025, operating activities used $28.4 million of cash, primarily resulting from our net loss of $14.8 million and the net changes in our operating assets and liabilities of $16.9 million, partially offset by net non-cash charges of $3.3 million. Net changes in our operating assets and liabilities for the three months ended March 31, 2025 consisted of a $7.3 million decrease in deferred revenue, a $7.1 million decrease of operating lease liabilities due primarily to payments for the Seyon Lease, a $3.7 million decrease of accrued expense and other current liabilities and accounts payable, due primarily to payments of accrued employee bonus, partially offset by a $0.9 million decrease in operating lease right-of-use assets and a $0.5 million decrease in prepaid expenses and other current assets.

During the three months ended March 31, 2024, operating activities used $31.7 million of cash, primarily resulting from our net loss of $74.5 million and the net changes in our operating assets and liabilities of $17.1 million and offset by the net of non-cash charges of $59.9 million. Net changes in our operating assets and liabilities for the three months ended March 31, 2024 consisted of a $4.1 million decrease of deferred revenue, a $1.1 million decrease in operating lease right of-use assets, a $0.9 million increase in prepaid expenses and other current assets, a $10.3 million decrease of accrued expense and other current liabilities and accounts payable and a $2.9 million decrease in operating lease liability.

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●

the associated costs in connection with any acquisition of in-licensed products, intellectual property and technologies; and

●

the costs of operating as a public company.

In July 2021, we entered into the Seyon Lease for a manufacturing facility in Waltham, Massachusetts. On January 31, 2024, we notified the Landlord of termination of the Seyon Lease due to the Landlord’s breach of its obligations to us under the Seyon Lease and returned possession of the premises to the Landlord, effective January 31, 2024. On February 20, 2024, the Landlord served us with a complaint, filed in Massachusetts Superior Court, or the Court, with respect to the Seyon Lease. The complaint seeks declaratory judgment that we unlawfully terminated the Seyon Lease and also asserts a claim for breach of contract damages. Following receipt of the complaint, we filed a counterclaim against the Landlord asserting breach of contract and violation of Massachusetts General Law Chapter 93A. On October 29, 2024, the Court determined that although we did not have the right to terminate the Seyon Lease, the Landlord’s subsequent termination was effective, and that we had alleged sufficient facts to state a claim for breach of contract and violation of Massachusetts General Law Chapter 93A by the Landlord. On January 21, 2025, the Court granted the Landlord’s motion for preliminary injunction and ordered us to pay, until further notice, monthly amounts equal to the rent and other charges that would have been due to the Landlord under the Seyon Lease had it not been terminated. On February 14, 2025, we filed a notice of appeal of the Court’s preliminary injunction ruling and our appeal is pending before the Massachusetts Appeals Court. On March 28, 2025, we filed a petition for direct appellate review with the Massachusetts Supreme Judicial Court. We are continuing to make monthly payments under the Seyon Lease during the pendency of the appeal. We will continue to vigorously defend the action and prosecute our counterclaims against the Landlord with respect to this matter.

We believe that our existing cash, cash equivalents, and marketable securities will enable us to fund our operating expenses and capital expenditures into the second half of 2027. 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. Although we may receive potential future payments under our collaboration with Moderna, we do not have any committed external source of funds. Accordingly, we will be required to obtain further funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources. If we raise additional funds by issuing equity securities, our stockholders may experience dilution. Any future debt financing into which we enter would result in fixed payment obligations and may involve agreements that include grants of security interests on our assets and restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures, granting liens over our assets, redeeming stock or declaring dividends, that could adversely impact our ability to conduct our business. Any debt financing or additional equity that we raise may contain terms that could adversely affect the holdings or the rights of our common stockholders.

If we are unable to raise sufficient capital as and when needed, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs or the commercialization of any product candidate we may develop, or be unable to expand our operations or otherwise capitalize on our business opportunities. If we raise additional funds through collaborations or licensing arrangements with third parties, we may have to relinquish valuable rights to future revenue streams or product candidates or grant licenses on terms that may not be favorable to us.

See the “Risk Factors” section of this Quarterly Report and in our 2024 Annual Report for additional risks associated with our substantial capital requirements.

Table of Contents

Critical Accounting Policies and Significant Judgments and Estimates

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

Item 3. Quantitative and Qualitative Disclosures about Market Risks.

Interest Rate Market Risk

We are exposed to market risk related to changes in interest rates. We had marketable securities of $106.7 million as of March 31, 2025. We did not record any impairment charges to our marketable securities during the three months ended March 31, 2025. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because a majority of our investments are generally invested in short-term securities. Interest rate changes would result in a change in the net fair value of these financial instruments due to the difference between the current market interest rate and the market interest rate at the date of purchase of the financial instrument. As of March 31, 2025, a hypothetical increase in interest rates of 100 basis points across the entire yield curve on our holdings would have resulted in a $0.4 million decrease to the fair value of our holdings. We currently do not seek to hedge this exposure to fluctuations in interest rates. We have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our President and Chief Executive Officer and our Chief Financial Officer, our principal executive officer and principal financial and accounting officer, respectively, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, 2025, our President and Chief Executive Officer and our Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no other changes in our internal control over financial reporting (as defined in Rules 13a–15(f) and 15d–15(f) under the Exchange Act) during the three months ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


Name	Title	Action taken	Date	Shares to be sold	Expiration Date
Kevin Conway	Chief Financial Officer	Adopted	January 28, 2025	111,397	May 29, 2026

Exhibit Number		Description of Exhibit

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

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

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

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

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

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

	GENERATION BIO CO.

Date: May 7, 2025	By:	/s/ Geoff McDonough
		Geoff McDonough, M.D.
		President and Chief Executive Officer
		(Principal Executive Officer)

Date: May 7, 2025	By:	/s/ Kevin Conway
		Kevin Conway
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

		Page(s)
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	5
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Operations and Comprehensive Loss	6
	Condensed Consolidated Statements of Stockholders’ Equity	7
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 5.	Other Information	32
Item 6.	Exhibits	33
	Signatures	34