Source: sec
Source ID: 0001404644-26-000059
URL: https://www.sec.gov/Archives/edgar/data/1404644/000140464426000059/ngne-20260630.htm
Symbol: (NGNE)
Published: 2026-08-11 16:57:43 EDT
Time precision: minute
Title: 10-Q 10-Q

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us-gaap:SubsequentEventMember
us-gaap:OverAllotmentOptionMember
2026-07-01
2026-07-31
0001404644
us-gaap:SubsequentEventMember
ngne:PublicStockOfferingMember
2026-07-31
0001404644
ngne:PreFundedWarrantMember
us-gaap:SubsequentEventMember
2026-07-31
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
June 30, 2026
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934
For the transition period from ________ to ________
Commission file number:
001-36327
__________________________________________________
Neurogene Inc.
__________________________________
(Exact name of registrant as specified in its charter)
Delaware
98-0542593
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
535 W 24th St.
5th Floor
New York
,
NY
10011
(Address of principal executive offices)
(Zip Code)
(
855
)
508-3568
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, par value $0.000001 per share
NGNE
The Nasdaq Global Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
☒
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 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
o
Accelerated filer
o
Non-accelerated filer
x
Smaller reporting company
x
Emerging growth company
o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
¨
No
☒
As of August 7, 2026, there were
20,011,382
shares of the registrant’s common stock outstanding.
Table of Contents
Table of Contents
Page
Part I
Financial Information
1
Item 1.
Financial Statements
1
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
23
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
37
Item 4.
Controls and Procedures
37
Part II
Other Information
39
Item 1.
Legal Proceedings
39
Item 1A.
Risk Factors
39
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
91
Item 3.
Defaults Upon Senior Securities
91
Item 4.
Mine Safety Disclosures
91
Item 5.
Other Information
91
Item 6.
Exhibits
92
Signatures
93
Table of Contents
Part I - Financial Information
Item 1. Condensed Consolidated Financial Statements
Neurogene Inc.
Condensed Consolidated Balance Sheets
(In Thousands, Except Share Information)
(Unaudited)
June 30,
2026
December 31,
2025
Assets
Current assets:
Cash and cash equivalents
$
112,485
$
103,845
Short-term investments
112,907
165,168
Prepaid expenses and other current assets
3,521
2,757
Total current assets
228,913
271,770
Property and equipment, net
11,734
12,792
Operating lease right-of-use assets
2,263
2,648
Finance lease right-of-use assets
8
22
Restricted cash
339
339
Other non-current assets
1,107
1,033
Total assets
$
244,364
$
288,604
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
$
3,294
$
1,953
Accrued expenses and other current liabilities
15,185
10,756
Operating lease liabilities, current
3,021
3,050
Finance lease liabilities, current
5
14
Contingent value rights liability, current
—
638
Total current liabilities
21,505
16,411
Operating lease liabilities, non-current
5,316
6,822
Finance lease liabilities, non-current
3
5
Contingent value rights liability, non-current
407
428
Other liabilities
—
51
Total liabilities
27,231
23,717
Commitments and contingencies - Note 9
Stockholders' equity:
Preferred stock, $
0.000001
par value;
50,000,000
shares authorized as of June 30, 2026 and December 31, 2025;
0
shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively
—
—
Common stock, $
0.000001
par value;
450,000,000
shares authorized as of June 30, 2026 and December 31, 2025;
15,830,504
and
15,489,800
shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively
—
—
Additional paid-in capital
635,204
617,536
Accumulated deficit
(
418,071
)
(
352,649
)
Total stockholders' equity
217,133
264,887
Total liabilities and stockholders' equity
$
244,364
$
288,604
The accompanying notes are an integral part of these condensed consolidated financial statements.
-1-
Table of Contents
Neurogene Inc.
Condensed Consolidated Statements of Operations
(In Thousands, Except Share and Per Share Amounts)
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2026
2025
2026
2025
Operating expenses:
Research and development expenses
$
25,468
$
19,366
50,618
37,131
General and administrative expenses
11,202
6,715
19,401
14,869
Total operating expenses
36,670
26,081
70,019
52,000
Loss from operations
(
36,670
)
(
26,081
)
(
70,019
)
(
52,000
)
Other income (expense):
Interest income
2,046
2,928
4,307
6,134
Interest expense
—
(
1
)
(
1
)
(
3
)
Other income
143
1,212
307
1,360
Other expense
(
7
)
(
74
)
(
16
)
(
154
)
Net loss
$
(
34,488
)
$
(
22,016
)
$
(
65,422
)
$
(
44,663
)
Per share information:
Net loss per share, basic and diluted
$
(
1.53
)
$
(
1.05
)
$
(
2.92
)
$
(
2.12
)
Weighted-average shares of common stock outstanding, basic and diluted
22,552,032
21,055,378
22,429,563
21,025,996
The accompanying notes are an integral part of these condensed consolidated financial statements.
-2-
Table of Contents
Neurogene Inc.
Condensed Consolidated Statement of Stockholders’ Equity
(In Thousands, Except Share Information)
(Unaudited)
Common Stock
Additional
Paid-In
Capital
Accumulated
Deficit
Total
Stockholders'
Equity
Shares
Amount
Amount
Amount
Amount
Balance- December 31, 2025
15,489,800
$
—
$
617,536
$
(
352,649
)
$
264,887
Stock-based compensation expense
—
—
3,629
—
3,629
Common stock issued upon exercise of stock options
21,324
—
201
—
201
Common shares issued upon vesting of restricted stock units
104,662
—
—
—
—
Net loss
—
—
—
(
30,934
)
(
30,934
)
Balance- March 31, 2026
15,615,786
$
—
$
621,366
$
(
383,583
)
$
237,783
Stock-based compensation expense
—
—
7,862
—
7,862
Common stock issued upon exercise of stock options
1,374
—
22
—
22
Common stock issued under the 2023 Employee Stock Purchase Plan
3,815
—
67
—
67
Issuance of common stock in at-the-market offering, net of offering costs
209,529
—
5,904
—
5,904
Deferred costs related to offering
—
—
(
17
)
—
(
17
)
Net loss
—
—
—
(
34,488
)
(
34,488
)
Balance- June 30, 2026
15,830,504
$
—
$
635,204
$
(
418,071
)
$
217,133
-3-
Table of Contents
Common Stock
Additional
Paid-In
Capital
Accumulated
Deficit
Total
Stockholders'
Equity
Shares
Amount
Amount
Amount
Amount
Balance- December 31, 2024
14,854,725
$
—
$
572,673
$
(
262,298
)
$
310,375
Stock-based compensation expense
—
—
4,048
—
4,048
Common stock issued upon exercise of stock options
1,683
—
19
—
19
Common stock issued upon vesting of restricted stock units
73,158
—
—
—
—
Net loss
—
—
—
(
22,647
)
(
22,647
)
Balance- March 31, 2025
14,929,566
$
—
$
576,740
$
(
284,945
)
$
291,795
Stock-based compensation expense
—
—
3,408
—
3,408
Exchange of common stock for pre-funded warrants
(
667,500
)
—
—
—
—
Common stock issued upon exercise of stock options
7,198
—
68
—
68
Net loss
—
—
—
(
22,016
)
(
22,016
)
Balance- June 30, 2025
14,269,264
$
—
$
580,216
$
(
306,961
)
$
273,255
The accompanying notes are an integral part of these condensed consolidated financial statements.
-4-
Table of Contents
Neurogene Inc.
Condensed Consolidated Statements of Cash Flows
(In Thousands)
(Unaudited)
Six Months Ended
June 30,
2026
2025
Operating activities
Net loss
$
(
65,422
)
$
(
44,663
)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense
11,491
7,456
Depreciation and impairment of property and equipment
1,660
1,503
Non-cash operating lease expense
385
399
Amortization of finance lease right-of-use assets
14
26
Amortization and accretion of premiums/discounts on held-to-maturity investments
(
718
)
(
3,220
)
Change in contingent value rights liability
(
659
)
78
Changes in assets and liabilities:
Prepaid expenses and other current assets
(
774
)
(
949
)
Other assets
(
74
)
(
121
)
Accounts payable
1,298
719
Accrued expenses and other liabilities
4,454
(
31
)
Operating lease liabilities
(
1,535
)
(
1,433
)
Net cash used in operating activities
(
49,880
)
(
40,236
)
Investing activities
Purchases of property and equipment
(
635
)
(
928
)
Purchases of held-to-maturity investments
(
196,161
)
(
149,367
)
Proceeds from maturities of held-to-maturity investments
249,140
112,700
Net cash provided by (used in) investing activities
52,344
(
37,595
)
Financing activities
Proceeds from the issuance of common stock upon exercise of options
223
87
Principal payments on finance leases
(
11
)
(
29
)
Proceeds from sale of common stock in at-the-market offering, net of offering costs
5,914
—
Proceeds from the issuance of common stock under the 2023 Employee Stock Purchase Plan
67
—
Deferred costs related to offering
(
17
)
—
Net cash provided by financing activities
6,176
58
Net increase (decrease) in cash, cash equivalents and restricted cash
8,640
(
77,773
)
Cash, cash equivalents and restricted cash at beginning of period
104,184
136,925
Cash, cash equivalents and restricted cash at end of period
$
112,824
$
59,152
Supplemental disclosure of non-cash investing and financing activities:
Property and equipment included in accounts payable and accrued expenses
$
43
$
128
Deferred offering costs reclassified to additional paid-in capital
$
10
$
—
Supplemental cash flow information:
Cash paid for interest
$
1
$
3
The accompanying notes are an integral part of these condensed consolidated financial statements.
-5-
Table of Contents
NEUROGENE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1.
Organization and Description of Business
Neurogene Inc. (formerly known as Neoleukin Therapeutics, Inc. (“Neoleukin”)) (the “Company” or “Neurogene”) is a clinical-stage biotechnology company that is a result of the reverse merger. The operating entity of Neurogene Inc. is the wholly owned subsidiary incorporated in the state of Nevada and also named Neurogene Inc. (“Neurogene OpCo”). Neurogene OpCo was incorporated as a limited liability company in Delaware on January 26, 2018 and converted into a Delaware corporation on July 3, 2018, and then merged with a wholly owned subsidiary of the parent company and re-domiciled to Nevada on December 18, 2023 after completing a reverse merger with Neoleukin Therapeutics, Inc. (the “Closing”), in accordance with the terms of the Agreement and Plan of Merger, dated as of July 17, 2023 (the “Merger Agreement”). Both Neurogene and Neurogene OpCo have a principal place of business in New York, NY. Neurogene was formed to harness the power of gene therapy, combined with its EXACT
TM
transgene regulation technology, to turn today’s complex, devastating neurological diseases into treatable conditions. The Company’s first clinical-stage program to utilize the EXACT technology is NGN-401, which has completed dosing in a Phase 1/2 clinical trial for the treatment of Rett syndrome. The Company has also completed dosing in its registrational trial of NGN-401 to treat Rett syndrome. The trial, known as the
Embolden
TM
study, is a single‑arm, baseline‑controlled, open‑label study evaluating NGN‑401 in females with Rett syndrome and has been designed to support a potential Biologics License Application ("BLA") submission. Since beginning operations, the Company has devoted substantially all its resources to conducting research and development activities and undertaking preclinical studies, establishing the Company’s manufacturing facility, conducting clinical trials and the manufacturing of product used in the Company’s clinical trials and preclinical studies, business planning, developing and maintaining its intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these activities.
2.
Risks and Uncertainties
The Company is subject to risks common to companies in the biotechnology industry, including, but not limited to, successful development of technology, obtaining additional funding, protection of proprietary technology, compliance with government regulations, risks of failure of preclinical studies, clinical studies and clinical trials, risks related to personnel changes and other disruptions at federal agencies, including the U.S. Food and Drug Administration ("FDA"), and uncertainty related to those disruptions, the need to obtain marketing approval for its drug candidates and its consumer products, fluctuations in operating results, economic pressure impacting therapeutic pricing and reimbursement, dependence on key personnel, risks associated with changes in technologies, development by competitors of technological innovations and the ability to transition from pilot scale manufacturing to large scale production.
Liquidity and Financial Condition
Since its inception, the Company has funded its operations primarily with outside capital (e.g., proceeds from the sale of preferred stock, common stock, and pre-funded warrants) and has incurred significant recurring losses, including net losses of $
65.4
million and $
44.7
million for the six months ended June 30, 2026 and 2025, respectively. In addition, the Company used cash in operations of $
49.9
million and $
40.2
million for the six months ended June 30, 2026 and 2025, respectively, and had an accumulated deficit of $
418.1
million as of June 30, 2026. Management expects to incur substantial and increasing losses in future periods as the Company advances its products through its clinical and regulatory process and will rely on outside capital to fund its operations for the foreseeable future. The Company has not generated positive cash flows from operations, and there are no assurances that the Company will be successful in obtaining an adequate level of financing for the development and commercialization of its product candidates.
As of June 30, 2026, the Company had cash, cash equivalents and short-term investments of approximately $
225.4
million. To further enhance the Company’s financial flexibility and support strategic growth initiatives, subsequent to June 30, 2026, the Company completed a public offering of common stock and pre-funded warrants, generating aggregate gross proceeds of approximately $
143.8
million and net proceeds of approximately $
134.8
million after deducting underwriters’ discount and commissions and estimated offering expenses (see Note 14,
Subsequent Events
). The cash and cash equivalents balance presented in the unaudited condensed consolidated balance sheet as of June 30, 2026, does not reflect these proceeds. The Company expects its available cash and cash equivalents on hand as of the issuance date
of these financial statements
will be sufficient to fund its obligations as they become due for at least one year beyond the issuance date of these financial statements.
-6-
Table of Contents
In the event the Company is unable to secure additional outside capital, management will be required to seek other alternatives which may include, among others, a delay or termination of clinical trials or the development of its product candidates, temporary or permanent curtailment of the Company’s operations, a sale of assets, or other alternatives with strategic or financial partners.
The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. Accordingly, the condensed consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.
3.
Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, these financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 24, 2026.
In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position of the Company as of June 30, 2026, and results of operations and cash flows for all periods presented. The interim results presented are not necessarily indicative of results that can be expected for the full year ending December 31, 2026.
Use of Estimates
The preparation of the financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. In preparing these financial statements, management used significant estimates in the following areas, among others: recoverability of the Company’s net deferred tax assets and related valuation allowance, useful lives and recoverability of property and equipment,
determining the incremental borrowing rate for calculating lease liabilities and related right-of-use assets and finance lease assets, clinical trial accruals, accrual estimates for all contingent value rights (“CVRs”), and
the value attributed to employee stock options and other stock-based awards. On an ongoing basis, the Company reviews its estimates to ensure that they appropriately reflect changes in the business or as new information becomes available. Actual results may differ from these estimates.
Segment Information
The Company determines and presents operating segments based on the information internally provided to the Chief Operating Decision Makers (“CODMs”) in accordance with Accounting Standards Codification (“ASC”) 280,
Segment Reporting
. The Company’s CODMs are (i) the Chief Executive Officer and (ii) the President and Chief Financial Officer. The Company is a clinical-stage biotechnology company that operates as a single operating segment and has
one
reportable segment. Refer to Note 13,
Segment Information,
for further information related to the Company’s segment.
Cash, Cash Equivalents and Investments
The Company considers all highly-liquid investments purchased with original maturities of 90 days or less at time of purchase to be cash equivalents. Cash and cash equivalents include cash held in banks and are stated at fair value.
-7-
Table of Contents
The following table provides a reconciliation of cash, cash equivalents, and restricted cash in the balance sheets that sum to the total of the same such amounts shown in the statements of cash flows (in thousands):
June 30,
2026
December 31,
2025
Cash and cash equivalents
$
112,485
$
103,845
Restricted cash
339
339
Total cash, cash equivalents and restricted cash
$
112,824
$
104,184
Cash equivalents consist of money market funds in which the carrying value equals the fair value (see Note 5,
Fair Value of Financial Instruments
). Restricted cash includes $
0.3
million in cash deposits the Company maintains with its bank as collateral for the irrevocable letters of credit related to its lease obligations.
The Company’s investments in U.S. treasury notes are classified as held-to-maturity because the Company has the intent and ability to hold the securities to maturity. Accordingly, these securities are carried at amortized cost. Unrealized gains and losses are not recognized in other comprehensive income or loss.
Concentrations of Credit Risk
Financial instruments that subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company’s cash and cash equivalent accounts, at times, may exceed federally insured limits. As of June 30, 2026, the Company had $
112.3
million in excess of the federally insured limits. The Company places its cash in financial institutions that management believes to be of high credit quality.
Contingent Value Right
s
In conjunction with the reverse merger, the Company entered into a CVR Agreement on December 18, 2023 with the Rights Agent named therein (the “CVR Agreement”) prior to Closing. Included in the CVR Agreement are
three
different types of CVRs: (i) the Lease CVR, (ii) the Intellectual Property CVR, and (iii) the Sales Tax CVR (each as defined in the CVR Agreement). The Company evaluated each of the CVRs to determine if they qualified as derivatives under ASC 815,
Derivatives and Hedging
,
and concluded that since certain scope exceptions were met, the CVRs did not qualify as derivatives. Instead, the Company records a contingent consideration liability associated with the CVRs when payments are probable and estimable under ASC 450,
Contingencies
. In assessing whether payments are probable and estimable, the Company considers the existence of or ability to enter into agreements with third parties or government agencies and the timing of potential payments. Refer to Note 9,
Commitments and Contingencies
, for further discussion on the CVRs.
Income Taxes
The Company accounts for income taxes in accordance with ASC 740,
Income Taxe
s, which prescribes the use of the liability method whereby deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is provided to reduce the net deferred tax assets to a level which, more likely than not, will be realized.
No
provision for federal or state income taxes was recorded during the three and six months ended June 30, 2026 and 2025, as the Company incurred operating losses and maintains a full valuation allowance against its net deferred tax assets.
The Company assesses its income tax positions and records tax benefits based upon management’s evaluation of the facts, circumstances, and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, the Company records the amount of tax benefit with a greater than 50 percent likelihood of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. For those income tax positions for which it is not more likely than not that a tax benefit will be sustained, no tax benefit is recognized in the financial statements. Potential interest and penalties associated with such uncertain tax positions is recorded as a component of income tax expense. As of June 30, 2026, there were no material changes to either the nature or the amounts of the uncertain tax positions.
-8-
Table of Contents
Significant Accounting Policies
The Company’s significant accounting policies are disclosed in the audited financial statements filed with the Company’s Annual Report on Form 10-K for the year ended
December 31, 2025
. Since the date of those financial statements, there have been no changes to the Company’s significant accounting policies.
Net Loss Per Share Attributable to Common Stockholders
Basic net loss per share of common stock is computed by dividing net income attributable to the Company by the weighted-average number of shares of common stock outstanding during the period. In periods of losses, diluted net loss per share is computed on the same basis as basic net loss per share as the inclusion of any other potential shares outstanding would be anti-dilutive. Outstanding pre-funded warrants as of June 30, 2026 and 2025 were
6,792,559
. Pre-funded warrants are considered outstanding as of their issuance date and are included in basic and diluted net loss per share because they are fully vested and exercisable for nominal cash consideration.
The following potentially dilutive securities have been excluded from the diluted per share calculations as they would be anti-dilutive:
Six Months Ended June 30,
2026
2025
Outstanding stock options
2,977,194
2,125,498
Restricted stock units
287,922
271,923
Performance stock units
252,124
252,124
Shares issuable under 2023 Employee Stock Purchase Plan
4,879
10,225
Total
3,522,119
2,659,770
Comprehensive Loss
Comprehensive loss consists of net loss and other comprehensive income (loss). The Company had no items of other comprehensive income (loss) during the three and six months ended June 30, 2026 and 2025. Accordingly, comprehensive loss was equal to net loss for all periods presented.
Recently Issued Accounting Standards
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed below, the Company does not believe that the adoption of recently issued standards has or may have a material impact on its condensed financial statements or disclosures.
Recently Issued Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03,
Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures
(“ASU 2024-03”) which requires public entities to provide disaggregated disclosure of income statement expenses. Public entities are required to disaggregate, in a tabular presentation, each relevant expense caption on the face of the condensed consolidated statements of operations such as the following expenses: purchases of inventory, employee compensation, intangible asset amortization, and depreciation. In January 2025, the FASB issued ASU 2025-01,
Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures
, to clarify the effective date. The updated effective date for the Company to adopt ASU 2024-03 is for annual reporting periods beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the potential impact that ASU 2024-03 will have on its financial statement disclosures.
-9-
Table of Contents
In September 2025, the FASB issued ASU 2025-06,
Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)
(“ASU 2025-06”) which removes all references to project stages throughout ASC 350-40,
Intangibles — Goodwill and Other, Internal-Use Software
. Cost capitalization will now begin solely when (1) management has authorized and committed to funding the software project, and (2) it is ‘probable’ the project will be completed and the software used to perform its intended function (referred to as the probable-to-complete recognition threshold). The effective date for the Company to adopt ASU 2025-06 is for annual reporting periods beginning after December 15, 2027 and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the potential impact that ASU 2025-06 will have on its financial statement disclosures.
4.
Investments
The following table summarizes the Company’s investment securities as of June 30, 2026 and December 31, 2025 (in thousands):
June 30, 2026
Amortized cost, as adjusted
Gross
unrealized
holding gains
Gross
unrealized
holding losses
Estimated fair
value
Cash equivalents:
Money market funds
$
96,954
$
—
$
—
$
96,954
Short-term investments:
U.S. treasury notes
112,907
—
(
12
)
112,895
Total
$
209,861
$
—
$
(
12
)
$
209,849
All of the Company’s investments mature within the next 12 months.
December 31, 2025
Amortized cost, as adjusted
Gross
unrealized
holding gains
Gross
unrealized
holding losses
Estimated fair
value
Cash equivalents:
Money market funds
$
93,593
$
—
$
—
$
93,593
Short-term investments:
U.S. treasury notes
165,168
135
(
1
)
165,302
Total
$
258,761
$
135
$
(
1
)
$
258,895
5.
Fair Value of Financial Instruments
As of June 30, 2026 and December 31, 2025, financial assets measured at fair value on a recurring basis are categorized in the table below based upon the lowest level of significant input to the valuations (in thousands):
June 30, 2026
Level 1
Level 2
Level 3
Assets:
Money market funds
$
96,954
$
—
$
—
U.S. treasury notes
112,895
—
—
Total
$
209,849
$
—
$
—
December 31, 2025
Level 1
Level 2
Level 3
Assets:
Money market funds
$
93,593
$
—
$
—
U.S. treasury notes
165,302
—
—
Total
$
258,895
$
—
$
—
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Money market funds are cash equivalents and are included in cash and cash equivalents in the condensed consolidated balance sheet as of June 30, 2026 and December 31, 2025.
6.
Prepaid expenses and other current assets
Prepaid expenses and other assets consist of the following (in thousands):
June 30,
2026
December 31,
2025
Other receivables
$
433
$
460
Prepaid expenses
2,563
1,938
Deferred financing costs
393
191
Other current assets
132
168
Total prepaid and other current assets
$
3,521
$
2,757
7.
Property and Equipment, Net
Property and equipment, net consist of the following (in thousands):
June 30,
2026
December 31,
2025
Lab equipment
$
3,366
$
3,262
Manufacturing equipment
7,827
7,582
Office equipment
30
30
Leasehold improvements
15,640
15,418
Software
285
285
Land improvements
80
—
Construction in progress
276
324
Total property and equipment, cost
27,504
26,901
Less: accumulated depreciation and impairment
(
15,770
)
(
14,109
)
Property and equipment, net
$
11,734
$
12,792
The Company recorded depreciation and amortization expense of $
0.8
million and $
0.8
million for the three months ended June 30, 2026 and 2025, respectively, and recorded $
1.6
million and $
1.5
million for the six months ended June 30, 2026 and 2025, respectively.
Management has reviewed its property and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset might not be recoverable. During the six months ended June 30, 2026, impairment losses were
immaterial
. During the six months ended June 30, 2025,
no
impairment losses were recorded. Impairment losses are charged to research and development expenses in the condensed consolidated statement of operations. Fair value for the idle assets was determined by a quoted purchase price for the assets
.
8.
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following (in thousands):
June 30,
2026
December 31,
2025
Compensation, bonuses and related benefits
$
4,101
$
5,072
Research and development
10,006
5,120
Other
1,078
564
Total accrued expenses and other current liabilities
$
15,185
$
10,756
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9.
Commitments and Contingencies
Lease Obligations
New York Headquarters Lease
In September 2019, the Company commenced a sub-lease of approximately
6,000
square feet of office space for the corporate headquarters in New York, New York with a term expiring in June 2023.
In July 2021, the sublessor was released from the original lease by the landlord, and the Company attorned to the landlord the executory terms and provisions of the sub-lease. In February 2022, the Company entered into an extension of the New York office lease (retroactive to December 2021) through June 2026. In November 2025, the Company entered into a second amendment of the lease, extending the New York office lease through January 2028, with decreased monthly lease payments of approximately $
0.03
million. As a result, the Company recorded an additional operating right-of-use asset of approximately $
0.4
million and an additional operating lease liability of approximately $
0.4
million.
Houston Lease
In August 2019, the Company entered into an agreement to lease approximately
26,905
square feet in Houston, Texas to build a manufacturing facility and office with a term expiring in August 2029. The Company has the option to renew the lease term for
two
additional
five-year
terms. The renewal periods were not included in the lease term for purposes of determining the lease liability or right-of-use asset. Monthly rent payments were approximately $
0.03
million. In connection with the lease, the Company paid a security deposit of approximately $
0.04
million.
In September 2020, the Company amended the lease agreement to further increase the rentable space to
42,342
square feet. The commencement date of the expansion space lease was January 1, 2021 and the monthly rent payments increased to a range of approximately $
0.05
million to $
0.06
million.
Blaine Lease in Seattle
As a result of the reverse merger, the Company assumed an operating lease for approximately
33,300
square feet of office space in Seattle, Washington for offices, a laboratory for research and development, and related uses. The lease expires on February 1, 2029, with the option to extend the lease for
two
five-year
terms. The renewal periods were not included in the lease term for purposes of determining the lease liability or right-of-use asset.
Eastlake Lease in Seattle
As a result of the reverse merger, the Company assumed an operating lease for approximately
6,272
square feet of office space in Seattle, Washington for additional office and laboratory space for research and development and related uses (the “Eastlake Lease”). The lease expires on September 30, 2026. The Company also assumed the existing agreement to sublease the Eastlake Lease to an unrelated third party (“Eastlake Sublease”). Pursuant to the terms of the Eastlake Sublease, Neurogene is entitled to receive approximately $
1.6
million in lease payments. The Company recorded sublease income of $
0.1
million for the three months ended June 30, 2026 and 2025. The Company recorded sublease income of $
0.3
million for the six months ended June 30, 2026 and 2025. Sublease income is included in other income in the statement of operations. The term of the sublease is through September 30, 2026
.
Supplemental lease expense for the three and six months ended June 30, 2026 and 2025 was as follows (in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2026
2025
2026
2025
Operating lease cost
$
405
$
472
$
823
$
956
Finance lease cost
Amortization of finance leases
7
12
14
26
Interest on finance lease liabilities
—
1
1
3
Variable lease cost
327
385
710
737
Short-term lease cost
7
11
23
29
Total lease cost
$
746
$
881
$
1,571
$
1,751
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Lease CVR
Under the CVR Agreement, each CVR holder is eligible to receive certain net savings, if any, realized by June 30, 2029 in connection with certain legacy lease obligations (the “Lease CVR”). As of June 30, 2026, approximately $
0.4
million was recorded as a component of the contingent value rights liability on the Company’s condensed consolidated balance sheet consisting of lease commitments that were probable and estimable at the Closing. The commitments relate to Neoleukin’s sublease agreement, effective October 31, 2023, for
one
of its properties with an unrelated third party for the remainder of the lease term.
Intellectual Property CVR
Under the CVR Agreement, each CVR holder is eligible to receive
100
% of the net proceeds, if any, derived from any consideration paid as a result of the disposition of Neoleukin’s pre-merger legacy assets pursuant to any agreements entered into before the Closing, and
80
% of net proceeds, if any, derived from any consideration paid as a result of the disposition of Neoleukin’s pre-merger legacy assets pursuant to any agreements entered into within
one year
after the Closing (the “Intellectual Property CVR”). Contingent consideration liabilities related to the CVR Agreement will only be recorded if the liabilities are probable and estimable as of the balance sheet date. Refer to the
December 2023 CVR Licensing Agreement and April 2024 CVR Licensing Agreement subsections
below for further detail on the current agreements related to the Company’s Intellectual Property CVR.
December 2023 CVR Licensing Agreement
Prior to the Closing, Neoleukin entered into a licensing agreement on December 13, 2023 with an unrelated third party to develop and commercialize certain legacy Neoleukin assets (the “December 2023 CVR Licensing Agreement”). In June 2024, an upfront payment of $
0.2
million was received by the Company and was recorded as licensing revenue within the condensed consolidated statements of operations. Since the December 2023 CVR Licensing Agreement was entered into before the Closing, the CVR holders are eligible to receive
100
% of the net proceeds derived from the December 2023 CVR Licensing Agreement. The December 2023 CVR Licensing Agreement contains development, regulatory and commercialization milestones totaling up to approximately $
13.4
million, as well as royalty payments. However, as of June 30, 2026, no other development and sales milestones were achieved nor deemed probable of achievement under the December 2023 CVR Licensing Agreement.
April 2024 CVR Licensing Agreement
In April 2024, the Company entered into a licensing and intellectual property assignment agreement with another unrelated third party to develop and commercialize certain legacy Neoleukin assets (the “April 2024 CVR Licensing Agreement”). In April 2024, the Company received a one-time upfront payment of approximately $
0.8
million and reimbursement of $
0.01
million for patent expenses under the April 2024 CVR Licensing Agreement. Accordingly, the Company recorded $
0.8
million as licensing revenue within the condensed consolidated statements of operations. Since the April 2024 CVR Licensing Agreement was entered into within
one year
after the Closing, the CVR holders are eligible to receive
80
% of the net proceeds derived from the April 2024 CVR Licensing Agreement. The April 2024 CVR Licensing Agreement contains development, regulatory and commercialization milestones totaling up to approximately $
11.0
million, as well as royalty payments. However, as of June 30, 2026, no other development and sales milestones were achieved nor deemed probable of achievement under the April 2024 CVR Licensing Agreement.
The December 2023 CVR Licensing Agreement and April 2024 CVR Licensing Agreement collectively account for the total Intellectual Property CVR. The total amount of $
0.9
million due under the Intellectual Property CVR was offset by $
0.4
million due to permitted deductions under the Merger Agreement and the remaining $
0.5
million was paid to the CVR holders.
CVR Payments
In August 2025, the Company made the second CVR payment to CVR holders of $
0.8
million. $
0.4
million was applied to the Sales Tax CVR and $
0.4
million was applied to the Lease CVR, reducing the respective liabilities. In February 2026, the Company made the third CVR payment to CVR holders of $
0.6
million. $
0.3
million was applied to the Intellectual Property CVR and $
0.3
million was applied to the Lease CVR.
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The following table summarizes the components of the contingent value rights liability in the condensed consolidated balance sheet as of June 30, 2026 and December 31, 2025 (in thousands):
June 30, 2026
December 31, 2025
Current
Non-Current
Current
Non-Current
Lease CVR
$
—
$
407
$
312
$
428
Intellectual Property CVR
—
—
326
—
Total CVR liability
$
—
$
407
$
638
$
428
As per the CVR Agreement, the total amount owed to CVR holders, after deductions permitted under the Merger Agreement, must be at least $
0.5
million to trigger a CVR payment prior to the end of the CVR term.
All other payments under the CVR Agreement were not considered probable and estimable as of
June 30, 2026
and therefore, no additional contingent consideration liability has been recorded.
The Company will evaluate the probable and estimable range of outcomes under the CVR Agreement at each reporting period until the end of the CVR term and adjust the amounts accrued for, as necessary.
Employment Agreements
The Company has employment and consulting agreements with key personnel providing for compensation and severance in certain circumstances, as defined in the respective employment agreements.
Other Research and Development Arrangements
As of June 30, 2026, the Company had standing agreements with consultants, contractors or service providers that generally can be terminated by the Company with
30
to
60
days written notice, unless otherwise indicated.
Litigation and Legal Proceedings
The Company is subject to litigation and other claims that arise in the ordinary course of business. While the ultimate result of outstanding legal matters cannot presently be determined, the Company does not expect that the ultimate disposition will have a material effect on its financial condition, results of operations or cash flows. However, legal matters are inherently unpredictable and subject to significant uncertainties, some of which are beyond the Company’s control. As such, there can be no assurance that the final outcome of any particular legal matter will not have a material adverse effect on the Company’s financial condition, results of operations or cash flows.
10.
Licenses
Master Collaboration Agreement with The University of Edinburgh
In December 2020, the Company entered into a Master Collaboration Agreement (the “MCA”) with the University Court of the University of Edinburgh (the “University of Edinburgh”). Under the MCA, the Company and the University of Edinburgh agreed to collaborate on certain research and development projects (“Projects”), and the Company agreed to provide funding for such Projects for a
40-month
initial term, which was extended in November 2023 for an additional
33
months and may be
further
extended by mutual agreement. Under the MCA, the Company is obligated to pay semi-annual installment payments relating to funding of costs for personnel and lab consumables for the duration of the MCA. Either party may terminate the MCA for convenience upon
90
days’ notice. If the Company were to terminate the MCA, the Company would be responsible for all non-cancellable costs and commitments related to any particular Project and any and all funding costs for any person working on such Project.
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License Agreement with The University of Edinburgh
In March 2022, the Company exercised an option under the MCA with respect to certain Projects and entered into a License Agreement with the University of
Edinburgh
(the “March 2022 Edinburgh License Agreement”), pursuant to which the Company licensed certain patents and know-how related to the EXACT technology and optimized MECP2 cassettes on an exclusive basis. Under the March 2022 Edinburgh License Agreement, the Company obtained an exclusive, worldwide license to the licensed patents to develop, manufacture, supply, sell, and commercialize any products that utilize the licensed patents (the “Licensed Products”) in exchange for low single-digit percentage royalties on future commercial net sales of the Licensed Products. Royalties are payable on a Licensed Product-by-Licensed Product and country-by-country basis until the later of the expiration of the last licensed patent covering such Licensed Product in the country where the Licensed Product is sold, or, if no licensed patent exists or has expired in such country, then
10
years from first commercial sale of such Licensed Product in such country (the “Royalty Term”). The term of the March 2022 Edinburgh License Agreement continues until the end of the Royalty Term and the expiration of all of the payment obligations under that license. The Company may terminate the March 2022 Edinburgh License Agreement for convenience upon
90
days’ notice. In connection with the license, the Company is also obligated to pay the University of Edinburgh up to $
5.3
million in regulatory-related milestones, of which $
0.3
million has been paid in connection with the Phase 1/2 study. The remaining regulatory milestone payments consist of $
2.0
million payable upon achievement of the first regulatory approval (FDA or European Medicines Agency (“EMA”)) and $
3.0
million payable upon achievement of the second regulatory approval (FDA or EMA). In addition, the Company may be obligated to make up to $
25.0
million of sales-related milestone payments based on annual net sales of Licensed Products in excess of defined thresholds.
For the six months ended June 30, 2026 and 2025, the expense recorded by the Company related to the MCA was $
0.8
million and $
0.8
million, respectively.
License Agreement with Virovek
In September 2020, the Company entered into a Non-Exclusive License Agreement with Virovek, Inc., pursuant to which the Company has a license to use certain patents and
know-how
on a non-exclusive basis related to the Company’s baculovirus process in exchange for low single-digit percentage royalties on future commercial net sales of each product using the baculovirus process, development milestone payments of up to
$
0.2
million
in the aggregate, and a nonrefundable annual license fee. This agreement continues until the later of (i) the expiration of the last to expire patent right that covers the manufacture, use, offer for sale, sale, importation, export or supply of any licensed product, (ii)
ten years
after the first commercial sale of any licensed product, or (iii) the expiration of all regulatory or market exclusivities. The Company may terminate this agreement for convenience upon
60
days notice. During the six months ended June 30, 2026 and 2025,
no
milestone expense was recorded.
License Agreement with Sigma-Aldrich Co
In January 2023, the Company entered into a Non-Exclusive License Agreement with Sigma-Aldrich Co. LLC, pursuant to which the Company has a license to certain patents and know-how on a non-exclusive basis related to certain cell lines used in the Company’s baculovirus process in exchange for a small annual fee on a product-by-product basis, payable once the first product candidate enters the clinic. In addition, on a product-by-product basis, the Company is obligated to pay up to
$
2.5
million
in the aggregate for regulatory-related milestones. This agreement remains in force for as long as the Company continues to possess and use the licensed technology. The Company may terminate this agreement for convenience upon
60
days
’ notice.
During the six months ended June 30, 2026 and 2025,
no
milestone expense was recorded.
License Agreement with Stanford
In August 2024, the Company entered into a Non-Exclusive License Agreement with the Board of Trustees of Leland Stanford Junior
University
(the “Stanford License Agreement”) to license, on a non-exclusive basis, certain biological materials used in the manufacturing process of the Company’s product candidates, including NGN-401. Over the
10-year
term of the Stanford License Agreement, the Company is obligated to pay an annual license maintenance fee.
The Company may terminate this agreement for convenience upon
30
days’ notice
. During the six months ended June 30, 2026 and 2025,
no
milestone expense was recorded.
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11.
Stockholders’ Equity
Common Stock and Pre-funded Warrants
In April 2025, the Company entered into an exchange agreement with existing stockholders to exchange an aggregate of
667,500
shares of the Company’s common stock for pre-funded warrants to purchase an aggregate of
667,563
shares of the Company’s common stock at an exercise price of $
0.001
per share. The exchange was executed to facilitate the investor’s beneficial ownership thresholds. The exchange was accounted for as an equity-for-equity transaction. The Company derecognized the common shares and recognized an equivalent value in pre-funded warrants, with no gain or loss recognized.
At-The-Market Offering of Shares
In August 2025, the Company entered into an at-the-market (“ATM”) sales agreement (the “Sales Agreement”) with Leerink Partners, LLC (“Leerink”), as sales agent, pursuant to which the Company may offer and sell, from time to time, shares of the Company’s common stock with an aggregate price up to $
150.0
million through Leerink. During the three months ended June 30, 2026, the Company sold
209,529
shares of the Company’s common stock pursuant to the Sales Agreement, and received $
5.9
million in net proceeds after deducting commissions and other offering expenses. As of June 30, 2026, the remaining amount authorized for sale under the Sales Agreement was $
112.9
million.
In connection with the Sales Agreement, the Company incurred approximately $
0.9
million of offering costs, of which $
0.2
million was deferred. The deferred offering costs are recognized ratably as a reduction to additional paid-in-capital as shares are sold under the Sales Agreement. As of June 30, 2026, approximately $
0.2
million of deferred offering costs remained on the balance sheet.
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Table of Contents
Pre-funded Warrants
The Company has pre-funded warrants outstanding to purchase an aggregate of
6,792,559
shares of the Company’s common stock as of June 30, 2026. The pre-funded warrants are exercisable at any time for exercise prices ranging from $
0.000001
to $
0.001
, except that the pre-funded warrants cannot be exercised by a holder if, after giving effect thereto, such holder would beneficially own more than
9.99
% of the Company’s outstanding common stock, subject to certain exceptions. However, any holder may increase or decrease such percentage to any other percentage (not in excess of
19.99
%) upon at least
61
days’ prior notice from the holder to the Company. The holders of the pre-funded warrants will not have the right to vote the shares underlying the pre-funded warrants on any matter except to the extent required by Delaware law.
Information on the outstanding warrants is as follows:
Type
Exercise Price
Amount
Type of Financing
Common stock pre-funded warrant
$
0.000001
425,987
Legacy pre-funded warrants outstanding
Common stock pre-funded warrant
$
0.000001
1,708,332
December 2023 preferred stock conversion
Common stock pre-funded warrant
$
0.000001
1,825,635
December 2023 Pre-Closing Financing
Common stock pre-funded warrant
$
0.001
2,165,042
November 2024 private placement
Common stock pre-funded warrant
$
0.001
667,563
April 2025 common stock conversion
Total
6,792,559
Subsequent to June 30, 2026, the Company issued pre-funded warrants pursuant to an underwritten public offering of its common stock and pre-funded warrants. For additional information regarding the issuance of pre-funded warrants, see Note 14,
Subsequent Events
.
The Company had reserved shares of the Company’s common stock for future issuance as follows:
June 30,
2026
December 31,
2025
Unvested restricted stock units
287,922
256,361
Unvested performance stock units
252,124
252,124
Options outstanding
2,977,194
2,088,550
Shares available for future grant under the 2023 Equity Incentive Plan
1,355,092
1,277,826
Shares available for future grant under the 2025 Inducement Plan
157,445
394,055
Shares available for future issuance under the 2023 Employee Stock Purchase Plan
532,096
313,088
Pre-funded warrants outstanding
6,792,559
6,792,559
Total common stock reserved
12,354,432
11,374,563
12.
Stock-Based Compensation
In March 2025, the Company’s board of directors approved the Neurogene Inc. 2025 Inducement Plan, which reserves for issuance up to
500,000
shares of the Company’s common stock underlying inducement awards.
The Company measures stock-based awards at their grant-date fair value and records compensation expense on a straight-line basis over the vesting period of the awards.
The Company recorded stock-based compensation expense in the following expense categories in its accompanying condensed consolidated statements of operations (in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2026
2025
2026
2025
Research and development expenses
$
2,689
$
1,575
$
4,480
$
3,146
General and administrative expenses
5,173
1,833
7,011
4,310
Total expense
$
7,862
$
3,408
$
11,491
$
7,456
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Table of Contents
The following table summarizes the option activity:
Options
Number
of
shares
Weighted
average
exercise price
per share
Weighted
average
remaining
contractual
term (in years)
Outstanding at December 31, 2025
2,088,550
$
23.49
7.91
Granted
988,533
$
19.52
Exercised
(
22,698
)
$
9.84
Expired/Forfeited
(
77,191
)
$
24.64
Outstanding at June 30, 2026
2,977,194
$
22.25
8.12
Exercisable at June 30, 2026
1,177,772
$
24.08
6.72
As of June 30, 2026, the aggregate intrinsic value of outstanding options and exercisable options was approximately $
31.1
million and $
11.3
million, respectively. The aggregate intrinsic value of options exercised was $
0.3
million for the six months ended June 30, 2026.
The weighted-average grant date fair value of options granted was $
15.45
and $
13.18
per share for the six months ended June 30, 2026 and 2025, respectively. The Company recorded stock-based compensation related to stock options of approximately $
3.1
million and $
2.2
million for the three months ended June 30, 2026 and 2025, respectively. The Company recorded stock-based compensation related to stock options of approximately $
5.5
million and $
4.0
million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, the total unrecognized compensation expense related to unvested stock option awards was approximately $
27.8
million, which the Company expects to recognize over a weighted-average period of
2.79
years.
The fair value of each option was estimated on the grant date using the weighted-average assumptions in the table below:
Three Months Ended
June 30,
Six Months Ended
June 30,
2026
2025
2026
2025
Expected volatility
96.14
%-
97.08
%
94.60
%-
96.19
%
96.14
%-
97.43
%
93.99
%-
96.49
%
Risk-free interest rate
4.03
%-
4.21
%
3.86
%-
4.05
%
3.64
%-
4.21
%
3.86
% -
4.42
%
Expected life (in years)
6.03
-
6.07
5.27
-
6.08
5.27
-
6.98
5.27
-
6.96
Expected dividend yield
—
—
—
—
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Restricted Stock Units
A summary of the Company’s restricted stock unit (“RSU”) activity and related information for the six months ended June 30, 2026 is as follows:
RSUs
Number of Shares
Weighted Average Grant Date Fair Value
Unvested at December 31, 2025
256,361
$
26.16
Restricted stock units granted
150,430
$
17.64
Restricted stock units vested
(
104,662
)
$
28.16
Restricted stock units forfeited
(
14,207
)
$
23.15
Unvested at June 30, 2026
287,922
$
21.13
The Company recorded stock-based compensation expense related to RSUs of approximately $
0.9
million and $
0.8
million for the three months ended June 30, 2026 and 2025, respectively. The Company recorded stock-based compensation expense related to RSUs of approximately $
1.7
million and $
1.4
million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, there was approximately $
4.9
million of unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over a remaining weighted average vesting period of approximately
1.83
years.
Performance Stock Units
A summary of the Company’s performance stock unit (“PSU”) activity and related information for the six months ended June 30, 2026 is as follows:
PSUs
Number of Shares
Weighted Average Grant Date Fair Value
Unvested at December 31, 2025
252,124
$
36.06
Performance stock units granted
—
$
—
Performance stock units vested
—
$
—
Performance stock units forfeited
—
$
—
Unvested at June 30, 2026
252,124
$
36.06
The PSUs were granted with vesting in
two
equal tranches based on certain performance conditions. Each PSU entitles the holder to receive
one
share of the Company's common stock when the PSU vests. Stock-based compensation expense for PSUs will be recognized when it is probable that the performance conditions will be achieved. During 2025, the performance conditions underlying the first tranche of
126,062
PSUs were achieved for the first milestone and are currently considered probable to vest. As of June 30, 2026, the performance conditions underlying the second tranche of
126,062
PSUs were deemed probable of achievement and considered probable to vest. The Company recorded stock-based compensation expense related to PSUs of approximately $
3.9
million and $
0.4
million for the three months ended June 30, 2026 and 2025, respectively. The Company recorded stock-based compensation expense related to PSUs of approximately $
4.2
million and $
2.0
million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, there was approximately $
2.1
million of unrecognized compensation cost related to PSUs, which is expected to be recognized over a remaining weighted average vesting period of approximately
0.70
years.
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2023 Employee Stock Purchase Plan
For the six months ended June 30, 2026, the Company issued
3,815
shares of common stock at a purchase price of $
17.65
per share under the 2023 Employee Stock Purchase Plan. Cash received from the purchases under the plan for the six months ended June 30, 2026 was approximately $
0.1
million.
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13.
Segment Information
Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the CODMs in deciding how to allocate resources and in assessing performance. The Company’s CODMs are (i) the Chief Executive Officer and (ii) the President and Chief Financial Officer. The Company is a clinical-stage biotechnology company that operates as a single operating segment and has
one
reportable segment. In addition to reviewing the expenses in the consolidated statement of operations, the CODMs are provided with research and development costs for Rett syndrome, Batten disease and Early Discovery, as well as categorized general and administrative expenses. The research and development programs are considered significant by the Company. The CODMs assess the financial performance of the segment and decide how to allocate resources based on net loss on a consolidated basis. The measure of segment assets is reported on the condensed consolidated balance sheets as total consolidated assets
.
The CODMs also assess performance of the segment according to preclinical and clinical data, the stage of development of the research and development programs, along with program specific expenses and market conditions in the pharmaceutical and biotechnology sectors.
As of June 30, 2026 and 2025, the Company did not have any significant long-lived assets located outside of the United States. Information on the segment and reconciliation to net loss is as follows (in thousands):
Three Months Ended June 30,
Six Months Ended
June 30,
2026
2025
2026
2025
Program specific expenses:
Rett syndrome
$
9,890
$
7,052
$
20,927
$
11,576
Batten disease
60
401
238
1,246
Early Discovery
675
720
1,288
2,007
Unallocated internal expenses:
Personnel-related
5,990
5,125
12,446
10,529
Stock-based compensation
2,688
1,575
4,479
3,146
Manufacturing
4,876
3,635
9,073
6,742
Other
(a)
1,289
858
2,167
1,885
Total research and development expenses
$
25,468
$
19,366
$
50,618
$
37,131
General and administrative specific expenses:
Personnel-related
$
2,785
$
2,212
$
5,411
$
4,696
Stock-based compensation
5,172
1,833
7,010
4,310
Professional and consultant fees
1,233
970
2,635
2,247
Office-related
496
620
1,106
1,252
Other
(b)
1,516
1,080
3,239
2,364
Total general and administrative expenses
$
11,202
$
6,715
$
19,401
$
14,869
Other income
(c)
2,182
4,065
4,597
7,337
Net loss
$
(
34,488
)
$
(
22,016
)
$
(
65,422
)
$
(
44,663
)
(a)
The Other expense segment items category within research and development expense is mainly comprised of: Consultant fees for programs not specified above, IT software and network support and rent expenses.
(b)
The Other expense segment items category within general and administrative expense is mainly comprised of: Insurance, IT software and network support, market research, and tax expenses.
(c)
Other income included in net loss is mainly comprised of: Interest income, interest expense, other income and other expense.
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14.
Subsequent Events
Public Offering of Common Stock and Pre-Funded Warrants
In July 2026, the Company issued and sold an aggregate of
4,124,999
shares of its common stock (inclusive of
624,999
shares of common stock pursuant to the exercise in full of the underwriters’ option to purchase additional shares) at a public offering price of $
30.00
per share and, in lieu of common stock to certain investors, pre-funded warrants to purchase up to
666,666
shares of the Company’s common stock at a public offering price of $
29.999999
per pre-funded warrant. The Company received aggregate gross proceeds of approximately $
143.8
million, or approximately $
134.8
million, after deducting the underwriters’ discount and commissions and estimated offering expenses.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the unaudited interim condensed consolidated financial
statements
and notes thereto included elsewhere in this report and our audited consolidated financial statements and notes thereto included as part of our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 24, 2026 (“Annual Report on Form 10-K”). Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, include forward-looking statements that involve risks, uncertainties, and assumptions. As a result of many factors, including those factors set forth in the section entitled “Risk Factors,” our actual results or outcomes, or the timing of our results or outcomes, could differ materially from the results or outcomes described in or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section of this report entitled “Risk Factors.” You should carefully read the “Cautionary Note About Forward-Looking Statements” and “Risk Factors” sections of the Annual Report on Form 10-K as well as the risk factors included in Part II, Item 1A of this Quarterly Report on Form 10-Q to gain an understanding of the important factors that could cause actual results to differ materially from the results described below.
Forward-looking statements are inherently uncertain and you should not place undue reliance on these statements, which speak only as of the date that they were made. These cautionary statements should be considered in connection with any written or oral forward-looking statements that we may issue in the future. Except as required by law, we do not undertake any obligation to revise or update publicly any forward-looking statements after completion of the filing of this Quarterly Report on Form 10‑Q to reflect later events or circumstances or to reflect the occurrence of unanticipated events, or otherwise.
In this section, references to “we,” “our,” “us,” and “the Company” refer to post-merger Neurogene Inc. and
our wholly owned subsidiary incorporated in the state of Nevada, also named Neurogene Inc. (“
Neurogene OpCo”), unless otherwise indicated.
Overview
Despite recent scientific advances in genetics, most neurological diseases, particularly those with devastating consequences to patients, are left untreated. Conventional gene therapy is an attractive potential treatment approach for only a limited number of monogenic diseases due to the challenges caused by the complex biology of neurological diseases and by inherent variable transgene uptake and expression. We are a clinical-stage biotechnology company committed to overcoming these limitations and turning today’s complex devastating neurological diseases into treatable conditions. We are building a robust and differentiated product portfolio of genetic medicines for rare neurological diseases with high unmet need not otherwise addressable by conventional gene therapy. One approach we are taking harnesses our proprietary transgene regulation technology, EXACT
TM
(Expression Attenuation via Construct Tuning), that utilizes microRNA-based genetic circuits designed to deliver therapeutic levels of transgene to key areas of the brain that underlie neurological disease pathology.
Our lead clinical-stage program, NGN-401, is in development for the treatment of Rett syndrome, a severe and progressive neurodevelopmental disease with substantial neurological and physical impairments and significant unmet need. NGN-401 is purposefully designed to utilize the EXACT platform
and adeno-associated virus (“AAV”) delivery via
intracerebroventricular (“ICV”) administration, and to deliver the full-length
MECP2
gene which preserves the complete set of endogenous regulatory elements to restore functional MeCP2 protein
. W
e believe ICV delivery is the most suitable route of administration to achieve optimal biodistribution in key regions of the brain and other parts of the nervous system that underlie Rett syndrome pathophysiology. We have completed dosing of 25 participants in our ongoing registrational trial of NGN-401, Embolden
TM
, a single-arm, open-label, baseline-controlled trial evaluating the 1E15 vg dose of NGN-401 gene therapy in females with Rett syndrome. The Embolden trial is designed to evaluate NGN-401 in females ages three and above with potential to support a broad label in a single study and enable an efficient path to market. Top-line results are expected in the second half of 2027.
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We completed dosing in the Phase 1/2 open-label, multi-center clinical trial evaluating NGN-401 for the treatment of female patients with classic Rett syndrome in the second quarter of 2025. The trial is assessing the safety, tolerability, and efficacy of NGN-401 at a dose of 1E15 vg in eight participants in an ages 4-10 years cohort and two participants in an ages 11 years and older cohort.
In June 2026, we announced positive long-term clinical data from the Phase 1/2 trial with a data cutoff date of June 16, 2026. Across the 10 participants receiving the 1E15 vg dose, 100% improved in Clinical Global Impression–Improvement Scale (“CGI-I”) score and gained one or more developmental milestone, consistent with the composite endpoint used to evaluate efficacy in the Embolden registrational trial. Forty-seven total developmental milestones were gained, averaging 4.7 milestones per participant. Participants gained milestones in a progressive, developmentally ordered, stepwise sequence, suggesting a restart of developmental progression. Clinical improvements emerged rapidly, with a median time to first improvement of two months post-treatment. Milestone gains deepened over time, increasing by 95% from 6 to 12 months and by 147% from 6 to ≥12 months. Seven of 10 participants gained ≥2 developmental milestones and demonstrated improvements across ≥2 core Rett syndrome domains, including both pediatric and adolescent/adult participants. Improvement continued through 30 months post-dose, with no plateau observed and no milestones lost.
Participants also experienced clinically meaningful improvements across additional validated Rett syndrome scales, including the Rett Syndrome Gross Motor Scale (RSGMS) and Rett Syndrome Hand Function Scale (RSHFS) (p<0.001).
In the Phase 1/2 trial, all treatment-related adverse events have been mild (Grade 1) or moderate (Grade 2) in severity, and the majority are known potential risks of AAV and have resolved or are resolving, as of the data cutoff date of June 16, 2026.
NGN-401 at the 1E15 vg dose continues to be generally well-tolerated in the Phase 1/2 trial and Embolden, with no cases of hemophagocytic lymphohistiocytosis (“HLH”) in any participant at this dose, as of August 10, 2026.
The Phase 1/2 trial previously included a cohort evaluating a 3E15 vg dose of NGN-401. In November 2024, the third participant receiving the 3E15 vg dose died following complications from a rare hyperinflammatory syndrome associated with systemic exposure to high doses of AAV, and we discontinued use of that dose. Hyperinflammatory syndromes can include HLH and multisystem inflammatory syndrome.
Based on research we conducted in 2025 related to hyperinflammatory syndromes and AAV gene therapy, HLH has only been reported following doses of AAV that are generally in the 1E14 vg/kg range or higher. The 1E15 vg dose used in the Phase 1/2 trial and in the Embolden registrational trial translates into the E13 vg/kg range, and we are not aware of any case of HLH ever being reported at this dose. HLH is an acute inflammatory reaction that, if it were to occur, would be expected to happen within days after dosing. Out of an abundance of caution, we incorporated enhanced monitoring into our Phase 1/2 and Embolden protocols for HLH markers, including ferritin, and a treatment algorithm that, when administered early, has been used successfully to treat cases of HLH both in other AAV gene therapies and other known causes of HLH.
In June 2025, we first announced written agreement from the FDA on key elements of the NGN-401 Embolden registrational trial design, and we confirmed these elements and the trial design in September 2025. The primary endpoint is a responder-based composite endpoint that will assess an improvement in CGI-I with Rett syndrome anchors and the gain of a developmental milestone, compared to the participant’s own baseline. Responders are defined as participants who attain a CGI-I score less than or equal to three (“minimally improved”) and gain any one developmental milestone from a list of 28, as captured through standardized video recordings and independently verified by blinded central raters at the 12-month endpoint. The primary analysis to support the planned BLA is expected to occur after the first 24 participants have completed 12 months of follow-up. A response rate of 33% is the minimum threshold for success to reject the null hypothesis in the Embolden trial. We expect to report top-line data in the second half of 2027, and therefore we do not plan to share data updates from the trial before that time.
Clinical grade NGN-401 manufactured at our f
ully operational current good manufacturing practices (“cGMP”) facility in Houston, Texas
was used for dosing in the Phase 1/2 clinical trial and the Embolden trial.
We believe that our in-house manufacturing capabilities better enable control of product quality and development timelines, strategic pipeline and financial flexibility, and clinical-to-commercial continuity.
We previously reached alignment with the FDA on our potency assay strategy and chemistry, manufacturing and controls (“CMC”) planning for the program. We initiated our Process Performance Qualification (“PPQ”) campaign in July 2026 and confirmed our commercial manufacturing scale is the same as our current clinical manufacturing scale, removing the need for comparability studies. We expect to complete the PPQ runs by the end of 2026.
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In February 2026, we announced that NGN-401 received Breakthrough Therapy designation based on the FDA’s review of interim efficacy and safety data from the Phase 1/2 trial as of the data cutoff date of October 30, 2025, including patient-level data and supporting video documentation. Breakthrough Therapy designation is intended to expedite the development and review of medicines for the treatment of serious conditions which have shown preliminary clinical evidence indicating the potential for substantial improvement over available therapies on a clinically significant endpoint. The benefits of Breakthrough Therapy designation include eligibility for Priority Review, rolling submission of sections of the BLA and the FDA’s organizational commitment to help determine an efficient route to approval.
In March 2025, we announced that NGN-401 received Priority Medicines (“PRIME”) designation by the European Medicines Agency (“EMA”). Medicines are eligible for PRIME if they demonstrate the potential to address an unmet medical need by showing a meaningful improvement of clinical outcomes.
In August 2024, we announced that NGN-401 received Regenerative Medicine Advanced Therapy (“RMAT”) designation from the FDA. RMAT designation is granted for regenerative medicines intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition, and with preliminary clinical evidence that indicates that the drug has the potential to address unmet medical needs. Benefits of the RMAT designation program include early and frequent communications with FDA senior managers, intensive guidance on efficient drug development and eligibility for an Accelerated Approval pathway and Priority Review.
In June 2024, we announced that NGN-401 was one of four sponsors selected by the Center for Biologics Evaluation and Research at the FDA to participate in the FDA’s Support for clinical Trials Advancing Rare disease Therapeutics (“START”) pilot program based on potential for clinical benefits and clinical development program readiness. As part of the START program, we have opportunities for enhanced communications with the FDA, with the aim to further accelerate the pace of NGN-401’s development. These opportunities are designed to provide frequent advice and regular ad-hoc conversations to address product-specific development issues, including, but not limited to, clinical study design, choice of control group and fine-tuning the choice of patient population.
NGN-401 has also received Orphan Drug designation, Fast Track designation and Rare Pediatric Disease designation from the FDA. NGN-401 also received Orphan designation and Advanced Therapy Medicinal Product designation from the European Medicines Agency (EMA).
We believe that our EXACT platform has broad applicability in complex neurological diseases not otherwise easily addressable by conventional gene therapy. In addition to NGN‑401, we are advancing early‑stage discovery programs leveraging our EXACT platform for other potential indications. These programs are in the discovery stage, and we have not yet selected a clinical development candidate.
We also pursued a gene therapy program for the treatment of CLN5 Batten disease. We completed enrollment in a Phase 1/2 clinical trial of NGN-101, and in November 2024, we announced that we do not expect to advance the program at this time. Given the rarity of the disease, continued investment in the program was predicated on alignment with the FDA on a streamlined registrational pathway. To support this objective, we submitted an RMAT application, which was denied. We are currently evaluating options for the program.
Consistent with our precision drug delivery approach, we believe in utilizing the most optimal route of administration for our genetic medicines that best targets the underlying pathophysiology and biology of the disease to increase the probability of technical and regulatory success. The pathobiology of Rett syndrome involves structures across the brain and other areas of the nervous system. Therefore, it was critical to us to evaluate the optimal route of administration to achieve broad adeno-associated virus serotype 9 (“AAV9”) distribution to key regions relevant for disease. In October 2025, we presented new preclinical data from non-human primates (“NHPs”) demonstrating that ICV delivery of NGN-401 achieves superior AAV biodistribution across brain regions relevant to Rett syndrome, compared to intrathecal lumbar (“IT-L”) delivery.
The head-to-head NHP study compared ICV and IT-L administration of NGN-401 at a dose that approximates the human dose being evaluated in the NGN-401 Phase 1/2 and Embolden clinical trials (1E15 vg) alongside a dose approximately four times higher than the clinically relevant dose administered via IT-L. ICV administration of NGN-401 showed greater expression of the full-length therapeutic
MECP2
transgene mRNA in key brain regions underlying Rett syndrome pathophysiology when compared to the same IT-L administered dose. Similar levels of transgene RNA expression were observed in the lumbar spinal cord between the two delivery methods. Higher transgene RNA expression in key areas of the brain was also observed when ICV was compared to the approximately four times higher dose IT-L cohort. Comparable peripheral exposure of vector genome biodistribution was observed in peripheral organs, including the liver, between equivalent ICV and IT-L doses, consistent with data from intra-CSF administered products.
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These findings are consistent with preclinical data generated by us previously using a different transgene and lower dose as well as other independent laboratories, reinforcing a growing body of evidence that supports ICV delivery for achieving greater expression in the brain.
Background
We were founded in 2018, and have devoted substantially all of our resources to conducting research and development activities and undertaking preclinical studies, establishing our manufacturing facility, conducting clinical trials and the manufacturing of product used in our clinical trials and preclinical studies, business planning, developing and maintaining our intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these activities.
Since our inception, we have funded our operations primarily with outside capital (e.g., proceeds from the sale of preferred stock, common stock and pre-funded warrants) and have raised aggregate net proceeds of approximately
$692.8 million, including net proceeds of approximately $134.8 million from the July 2, 2026 public offering. See “Liquidity and Capital Resources” for additional information
. However, we have incurred significant recurring losses, including a net loss of
$65.4 million
and
$44.7 million
for the
six
months ended
June 30, 2026
and
2025
, respectively. In addition, as of
June 30, 2026
, we had an accumulated deficit of
$418.1 million
and cash, cash equivalents and short-term investments totaling
$225.4 million
. Following the completion of our July 2, 2026 public offering, we believe our existing cash, cash equivalents and investments will be sufficient to fund our operations into the first quarter of 2029. We may seek additional capital in the future to advance our pipeline, support our operations or pursue strategic opportunities. There can be no assurance that we will be successful in raising additional capital or that such capital, if available, will be on terms that are acceptable to us. If we are unable to raise sufficient additional capital, we may be compelled to consider actions such as reducing the scope of our operations and planned capital expenditures or selling certain assets, including intellectual property assets.
Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on a variety of factors, including the timing, scope and results of our research and development activities. Management expects that our expenses and capital requirements will increase substantially in connection with our ongoing activities as we:
•
advance the NGN-401 program through clinical development and, if successful, seek regulatory approvals;
•
invest in research programs to strengthen our capabilities, including resourcing and evaluating additional technologies that may augment our pipeline of product candidates;
•
advance discovery programs from preclinical development into and through clinical development;
•
seek regulatory approvals for any other product candidates that successfully complete clinical trials;
•
establish sales, marketing and distribution infrastructure to commercialize any approved product candidates;
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•
establish a commercialization infrastructure and scale up internal and external manufacturing and distribution capabilities to commercialize any product candidates for which we may obtain regulatory approval;
•
expand clinical, scientific, management and administrative teams;
•
maintain, expand, protect and enforce our intellectual property portfolio, including patents, trade secrets and know-how;
•
implement operational, financial and management systems; and
•
incur legal, accounting and other expenses related to operating as a public company.
We do not have any products approved for commercial sale and have not generated any commercial revenue from product sales. Our ability to generate product revenue sufficient to achieve and maintain profitability will depend upon the successful development and eventual commercialization of one or more of our product candidates, which we expect, if it ever occurs, will take many years. We expect to spend a significant amount in development and marketing costs prior to such time. We will therefore require substantial additional capital to develop our product candidates and support our continuing operations. We may never succeed in achieving regulatory and marketing approval for our product candidates. We may obtain unexpected results from our preclinical and clinical trials. For example, in November 2024 we decided not to move forward with the NGN-101 gene therapy program for CLN5 Batten disease, given the rarity of the disease and the lack of a streamlined registrational pathway with the FDA following denial of our RMAT application for that program
.
We may in the future elect to discontinue, delay, or modify additional preclinical and clinical trials of our other product candidates. A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. Accordingly, until such time that we can generate a sufficient amount of revenue from product sales or other sources, if ever, management expects to finance our operations through private or public equity or debt financings, loans or other capital sources, which could include income from collaborations, partnerships or other marketing, distribution, licensing or other strategic arrangements with third parties, or from grants. However, we may be unable to raise additional capital from these sources on favorable terms, or at all, which could have a material adverse effect on our business. Our management cannot provide assurance that we will ever generate positive cash flow from operating activities. See “
Liquidity and Capital Resources”
.
In December 2020, we entered into the Master Collaboration Agreement (“MCA”) with the University Court of the University of Edinburgh (the “University of Edinburgh”), which was amended in November 2023 to extend the term of the MCA to December 2026. This collaboration supports our pipeline development activities, and provides us with the option to in-license product candidates arising from research conducted in Dr. Stuart Cobb’s laboratory. Dr. Cobb serves as our Chief Scientific Officer and is also a Professor at the University of Edinburgh. Under the standard policies of the University of Edinburgh, as a professor inventor, he may be entitled to receive in the future a percentage of certain license-related payments made by us to the University. For more information about the MCA, see “
Management’s Discussion & Analysis of Financial Condition and Results of Operations—License and Collaboration Agreements
”.
Impact of Global Economic Events
Uncertainty in the global economy presents significant risks to our business. We are subject to continued risks and uncertainties related to the current macroeconomic environment, including persistent inflation, changing interest rates, changes in foreign currency exchange rates, changes in trade policies, including tariffs or other trade restrictions or the threat of such actions, changes in domestic and global monetary and fiscal policy, the enactment of the BIOSECURE Act in December 2025, which mandates a transition away from “biotechnology companies of concern,” rapid changes in the regulatory and legislative landscape in the United States, geopolitical factors, including the ongoing conflicts between Russia and Ukraine and in the Middle East and significant volatility in commodity prices, including the price of oil, and the responses thereto, the impacts of climate change, and supply chain disruptions. While management is closely monitoring the impact of the current macroeconomic conditions on aspects of our business, including the impacts on our participants in our Phase 1/2 and Embolden clinical trials, employees, suppliers, vendors and business partners, the ultimate extent of the direct and indirect impacts on our business remains highly uncertain and will depend on future developments and factors that continue to evolve. Most of these developments and factors are outside of our control and could exist for an extended period of time. Management will continue to evaluate the nature and extent of the potential impacts to our business, results of operations, liquidity and capital resources. For additional information, see the section entitled “Risk Factors.”
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Components of Results of Operations
Operating Expenses
Research and Development Expenses
Research and development expenses consist primarily of costs incurred in connection with the discovery and development of our product candidates. We expense research and development costs as incurred, including:
•
expenses incurred to conduct the necessary discovery-stage laboratory work, preclinical studies and clinical trials required to obtain regulatory approval;
•
acquired licenses and intellectual property that are accounted for as asset acquisitions and have no alternative future use;
•
personnel expenses, including salaries, benefits and stock-based compensation expense for our employees engaged in research and development functions;
•
costs of funding research performed by third parties, including pursuant to agreements with clinical research organizations (“CROs”) that conduct our clinical trials, as well as investigative sites, consultants and CROs that conduct our preclinical and nonclinical studies;
•
expenses incurred under agreements with our third-party contract development and manufacturing organizations (“CDMOs”), as well as internal manufacturing scale-up expenses, including the cost of acquiring and manufacturing preclinical study and clinical trial materials;
•
fees paid to consultants who assist with research and development activities;
•
expenses related to regulatory activities, including filing fees paid to regulatory agencies; and
•
allocated expenses for facility costs, including rent, utilities, depreciation and maintenance.
Before a product receives regulatory approval, we record upfront and milestone payments to third parties under licensing arrangements as expense, provided that there is no alternative future use of the rights in other research and development projects.
Non-refundable prepayments for research and development costs that are paid in advance of performance are capitalized as a prepaid expense and amortized over the service period as the services are provided. Costs for certain development activities, such as outside research programs funded by us, are recognized based on an evaluation of the progress to completion of specific tasks with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development expense as applicable.
We track outsourced development costs and other external research and development costs to specific product candidates on a program-by-program basis, including fees paid to CROs, CDMOs and research laboratories in connection with our preclinical development, process development, and clinical development activities. We also incur personnel and other operating expenses for research and development programs, which are presented in aggregate.
Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect our research and development expenses to remain significant over the next several years as we continue patient monitoring activities for our ongoing registrational trial, conduct clinical trials for future product candidates, complete process performance qualification (PPQ) activities, and prepare regulatory filings for our product candidates.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel expenses, including salaries, benefits and stock-based compensation expense, for employees and consultants in executive, finance and accounting, legal, operations support, information technology and human resource functions. General and administrative expenses also include corporate facility costs not otherwise included in research and development expense, including rent, utilities, depreciation and maintenance, as well as legal fees related to intellectual property and corporate matters and fees for accounting and consulting services.
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We expect that our general and administrative expense will increase in the future to support our continued research and development activities and potential commercialization efforts. These increases will likely include increased costs related to the hiring of additional personnel and fees to outside consultants, legal support and accountants, among other expenses. If any of our current or future product candidates obtains U.S. regulatory approval, we expect that we would incur significantly increased expenses associated with building a sales and marketing team, as well as an expanded regulatory and compliance function.
Interest Income
Interest income consists primarily of interest earned on our cash, cash equivalents and short-term investments. We expect our interest income to fluctuate depending on interest rates and the amount of cash that is invested.
Income Taxes
We assess our income tax positions and record tax benefits based upon management’s evaluation of the facts, circumstances, and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, we record the amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. For those income tax positions for which it is not more likely than not that a tax benefit will be sustained, no tax benefit is recognized in the financial statements.
Since inception, we have not recorded any income tax benefits for net operating losses (“NOLs”) or for our research and development tax credits, as we believe, based upon the weight of available evidence, that it is more likely than not that all of our NOLs and tax credits will not be realized. Accordingly, we have established a valuation allowance against such deferred tax assets for all periods since inception.
As of
December 31, 2025
, we had federal and state NOL carryforwards in the amount of
$372.2 million
and
$43.5 million
, respectively, which may be available to offset future taxable income. The state NOL carryforwards will begin to expire in 2029, unless previously utilized. Most federal NOL carryforwards were generated subsequent to January 1, 2018, and therefore are able to be carried forward indefinitely. As of
December 31, 2025
, we also had federal research tax credit and federal orphan drug tax credit carryforwards of
$8.5 million
and
$10.0 million
, respectively, which may be used to offset future tax liabilities. These tax and orphan drug credit carryforwards begin to expire in 2039 and 2043, respectively, unless previously utilized.
Results of Operations
Comparison of the
Three and Six
Months Ended June 30, 2026 and 2025
The following table summarizes our results of operations for the periods indicated (in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
Change
2026
2025
Change
Operating expenses:
Research and development expenses
$
25,468
$
19,366
$
6,102
$
50,618
$
37,131
$
13,487
General and administrative expenses
11,202
6,715
4,487
19,401
14,869
4,532
Total operating expenses
36,670
26,081
10,589
70,019
52,000
18,019
Loss from operations
(36,670)
(26,081)
(10,589)
(70,019)
(52,000)
(18,019)
Other income (expense):
Interest income
2,046
2,928
(882)
4,307
6,134
(1,827)
Interest expense
—
(1)
1
(1)
(3)
2
Other income
143
1,212
(1,069)
307
1,360
(1,053)
Other expense
(7)
(74)
67
(16)
(154)
138
Net loss
$
(34,488)
$
(22,016)
$
(12,472)
$
(65,422)
$
(44,663)
$
(20,759)
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Research and Development Expenses
The following table summarizes our research and development expenses for the periods indicated (in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
Change
2026
2025
Change
Program specific expenses:
Rett syndrome
$
9,890
$
7,052
$
2,838
$
20,927
$
11,576
$
9,351
Batten disease
60
401
(341)
238
1,246
(1,008)
Early Discovery
675
720
(45)
1,288
2,007
(719)
Unallocated internal expenses:
Personnel-related
5,990
5,125
865
12,446
10,529
1,917
Stock-based compensation
2,688
1,575
1,113
4,479
3,146
1,333
Manufacturing
4,876
3,635
1,241
9,073
6,742
2,331
Other
1,289
858
431
2,167
1,885
282
Total research and development expenses
$
25,468
$
19,366
$
6,102
$
50,618
$
37,131
$
13,487
Research and development expenses were
$25.5 million
for the
three months ended June 30, 2026
, as compared to
$19.4 million
for the
three months ended June 30, 2025
.
Expenses related to the Rett syndrome program increased primarily due to a $2.9 million increase in clinical trial costs related to the ongoing registrational clinical trial for NGN-401 and a $0.7 million increase in CMC costs primarily related to CDMO support and PPQ runs for NGN-401, partially offset by a $0.6 million decrease in preclinical costs. The decrease in expenses related to the Batten disease program was primarily driven by a $0.3 million decrease in clinical trial costs for the Phase 1/2 clinical trial of NGN-101, due to the de-prioritization of the program.
The increase in unallocated internal expenses was primarily driven by higher salaries, benefits, and stock-based compensation costs due to an increase in research and development headcount, as well as an increase in laboratory consumables expense related to CMC.
Research and development expenses were
$50.6 million for the six months ended June 30, 2026, as compared to $37.1 million for the six months ended June 30, 2025.
Expenses related to the Rett syndrome program increased primarily due to an $8.0 million increase in clinical trial costs related to the ongoing registrational clinical trial for NGN-401 and a $3.1 million increase in CMC costs primarily related to CDMO support and PPQ manufacturing runs for NGN-401, partially offset by a $1.6 million decrease in preclinical costs. The decrease in expenses related to the Batten disease program was primarily driven by a $1.0 million decrease in clinical trial costs for the Phase 1/2 clinical trial of NGN-101, due to the de-prioritization of the program. The decrease in expenses related to the Early Discovery programs was driven by a $0.7 million decrease in preclinical development costs.
The increase in unallocated internal expenses was primarily driven by higher salaries, benefits, and stock-based compensation costs due to an increase in research and development headcount, as well as an increase in laboratory consumables expense related to CMC.
We expect that our research and development expenses will continue to increase for the foreseeable future as we advance our programs and product candidates into and through clinical development and, as we continue to develop additional product candidates, build our manufacturing capabilities and develop our EXACT technology.
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General and Administrative Expenses
The following table summarizes our general and administrative expenses for the periods indicated (in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
Change
2026
2025
Change
General and administrative specific expenses:
Personnel-related
$
2,785
$
2,212
$
573
$
5,411
$
4,696
$
715
Stock-based compensation
5,172
1,833
3,339
7,010
4,310
2,700
Professional and consultant fees
1,233
970
263
2,635
2,247
388
Office-related
496
620
(124)
1,106
1,252
(146)
Other
1,516
1,080
436
3,239
2,364
875
Total general and administrative expenses
$
11,202
$
6,715
$
4,487
$
19,401
$
14,869
$
4,532
General and administrative expenses were $11.2 million for the
three months ended June 30, 2026
, as compared to
$6.7 million
for the
three months ended June 30, 2025. The increase was primarily attributable to: (i) a
$3.3 million
increase in stock-based compensation expense, driven by an increase in headcount as well as by an increase of approximately $2.7 million related to PSU expense as the second underlying performance condition was deemed probable of achievement and currently considered probable to vest, (ii) a
$0.6 million
increase in personnel-related expenses, reflecting higher headcount to support business operations, (iii) a
$0.4 million
increase in other expenses, primarily related to higher corporate costs and pre-commercial activities, and (iv) a
$0.3 million
increase in professional and consultant fees. The increase was partially offset by a
$0.1 million
decrease in office-related expense.
General and administrative expenses were $19.4 million fo
r the six months ended June 30, 2026, as compared to
$14.9 million
for the six months ended June 30, 2025. The increase was primarily attributable to: (i) a
$2.7 million
increase in stock-based compensation expense, driven by an increase in headcount as well as by an increase of approximately $1.8 million related to PSU expense as the second underlying performance condition was deemed probable of achievement and currently considered probable to vest, (ii) a
$0.9 million
increase in other expenses, primarily related to higher corporate costs and pre-commercial activities, (iii) a
$0.7 million
increase in personnel-related expenses, reflecting higher headcount to support business operations and (iv) a
$0.4 million
increase in professional and consultant fees. These increases were partially offset by a
$0.1 million
decrease in office-related expense.
We expect general and administrative expenses to increase in future periods as we continue to scale our operations.
Interest Income
Interest income decreased by $0.9 million for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The decrease was primarily due to a decrease in short-term investments and lower yields on cash, cash equivalents, and short-term investment balances.
Interest income decreased by $1.8 million for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The decrease was primarily due to a decrease in short-term investments and lower yields on cash, cash equivalents, and short-term investment balances.
Other Income
Other income decreased $1.1 million for the three and six months ended June 30, 2026 as compared to the three and six months ended June 30, 2025, respectively. The decrease was primarily due to refunds received in 2025 attributable to (i) approximately $0.4 million in Washington state sales tax refunds receivable and (ii) approximately $0.7 million of New York state tax refunds received for the prior period amended returns.
Other Expenses
The change in other expenses was not material for the three and six months ended June 30, 2026 as compared to the three and six months ended June 30, 2025 respectively.
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Liquidity and Capital Resources
Sources of Liquidity
Since inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we advance the clinical development of our product candidates. We expect that our research and development and general and administrative costs will continue to increase significantly, including in connection with conducting clinical trials and manufacturing for our product candidates to support commercialization and providing general and administrative support for our operations, including the costs associated with operating as a public company. As a result, we will need additional capital to fund our operations, which we may obtain from additional equity or debt financings, collaborations, licensing arrangements or other sources. We believe that our existing capital resources will be sufficient to fund our operations through at least 12 months following the filing date of this Form 10-Q. See the section entitled “Risk Factors” in this Quarterly Report on Form 10-Q for additional risks associated with our substantial capital requirements.
As of June 30, 2026, we had cash, cash equivalents and short-term investments totaling
$225.4 million
. Since inception, we have funded our operations primarily with outside capital (e.g., proceeds from the sale of preferred stock, common stock and pre-funded warrants) and have raised aggregate net proceeds of approximately
$692.8 million, including net proceeds of approximately $134.8 million from the July 2, 2026, public offering described below.
In August 2025, we entered into an at-the-market sales agreement (the “Sales Agreement” with Leerink Partners, LLC (“Leerink”) as sales agent, pursuant to which we may offer and sell, from time to time, shares of our common stock with an aggregate price up to $150.0 million through Leerink (the “ATM facility”). As of
June 30, 2026
,
$112.9 million
remained available for sale under the Sales Agreement.
In July 2026, we issued and sold an aggregate of 4,124,999 shares of our common stock (inclusive of 624,999 shares of common stock pursuant to the exercise in full of the underwriters' option to purchase additional shares) at a public offering price of $30.00 per share and, in lieu of common stock to certain investors, pre-funded warrants to purchase up to 666,666 shares of our common stock at a public offering price of $29.999999 per pre-funded warrant (the "July 2026 Offering"). We received aggregate proceeds of approximately $143.8 million, or approximately
$134.8 million
after deducting the underwriters’ discount and commissions and estimated offering expenses.
After giving effect to the July 2026 Offering, we had approximately
$360.2 million
of cash, cash equivalents and short-term investments.
Based on our current operating plan, we believe that our existing cash, cash equivalents and short-term investments should be sufficient to fund our operations into the first quarter of 2029. For more information see “Risk Factors."
We intend to use the net proceeds from the July 2026 Offering, together with our existing cash, cash equivalents and short-term investments, to fund the ongoing clinical development of NGN-401, pre-commercial activities for NGN-401 and for working capital and other general corporate purposes.
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Future Capital Requirements
In order to complete the development of our product candidates and to build the sales, marketing and distribution infrastructure that management believes will be necessary to commercialize product candidates, if approved, we will require substantial additional capital. Accordingly, until such time as we can generate a sufficient amount of revenue from product sales or other sources, if ever, management expects to seek to raise any necessary additional capital through private or public equity or debt financings, loans or other capital sources, which could include income from collaborations, partnerships or other marketing, distribution, licensing or other strategic arrangements with third parties, or from grants. To the extent that we raise additional capital through equity financings or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, including restricting our operations and limiting our ability to incur liens, issue additional debt, pay dividends, repurchase our own common stock, make certain investments or engage in merger, consolidation, licensing, or asset sale transactions. If we raise capital through collaborations, partnerships, and other similar arrangements with third parties, we may be required to grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. We may be unable to raise additional capital from these sources on favorable terms, or at all. Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from macroeconomic conditions, geopolitical instability, government regulation and otherwise. The failure to obtain sufficient capital on acceptable terms when needed could have a material adverse effect on our business, results of operations or financial condition, including by requiring us to delay, reduce or curtail our research, product development or future commercialization efforts. We may also be required to license rights to product candidates at an earlier stage of development or on less favorable terms than we would otherwise choose. Management cannot provide assurance that we will ever generate positive cash flow from operating activities.
In order to continue our operations, we must achieve profitable operations and/or obtain additional equity or debt financing. Until we achieve profitability, management plans to fund our operations and capital expenditures with cash on hand and the sale and issuance of securities. We may not be successful in raising additional capital and such capital, if available, may not be on terms that are acceptable to us.
We have incurred, and expect to continue to incur, additional costs associated with operating as a public company. In addition, we anticipate that we will need substantial additional funding in connection with our continuing operations. Management bases its projections of operating capital requirements on our current operating plan, which includes several assumptions that may prove to be incorrect, and we may use all of our available capital resources sooner than management expects.
Because of the numerous risks and uncertainties associated with research, development and commercialization of product candidates, we are unable to estimate the exact amount and timing of our capital requirements. Our future funding requirements will depend on many factors, including:
•
the scope, timing, progress, results, and costs of researching and developing genetic medicines, and conducting larger and later-stage clinical trials;
•
the scope, timing, progress, results, and costs of researching and developing other product candidates that we may pursue;
•
the costs, timing, and outcome of regulatory review of our product candidates;
•
the costs of future activities, including product sales, medical affairs, marketing, manufacturing, and distribution, for any of our product candidates for which we receive marketing approval;
•
the costs of manufacturing commercial-grade products and sufficient inventory to support commercial launch;
•
the revenue, if any, received from commercial sale of our products, should any of our product candidates receive marketing approval;
•
the cost and timing of attracting, hiring, and retaining skilled personnel to support our operations and continued growth;
•
the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;
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•
Our ability to establish, maintain, and derive value from collaborations, partnerships or other marketing, distribution, licensing, or other strategic arrangements with third parties on favorable terms, if at all;
•
the extent to which we acquire or in-license other product candidates and technologies, if any; and
•
the costs associated with operating as a public company.
A change in the outcome of any of these or other factors with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate. Furthermore, our operating plans may change in the future, and we may need additional capital to meet the capital requirements associated with such operating plans.
Cash Flows
The following table summarizes our cash flows for the periods indicated (in thousands):
Six Months Ended
June 30,
2026
2025
Net cash used in operating activities
$
(49,880)
$
(40,236)
Net cash provided by (used in) investing activities
52,344
(37,595)
Net cash provided by financing activities
6,176
58
Net increase (decrease) in cash, cash equivalents and restricted cash
$
8,640
$
(77,773)
Cash Flows from Operating Activities
For the six months ended June 30, 2026, we used $49.9 million of cash in operating activities. Cash used in operating activities reflected our net loss of $65.4 million, a $3.4 million decrease in our net operating assets and non-cash charges of $12.2 million, which consisted primarily of $11.5 million of stock-based compensation, $1.7 million in depreciation and impairment expense and $0.4 million in non-cash operating lease expense partially offset by $0.7 million in accretion on the held-to-maturity investments and $0.7 million change in the contingent value rights liability. The primary use of cash was to fund our operations related to the development of our product candidates.
For the six months ended June 30, 2025, we used $40.2 million of cash in operating activities. Cash used in operating activities reflected our net loss of $44.7 million, a $1.8 million net increase in our operating assets and liabilities, and non-cash charges of $6.2 million, which consisted primarily of $7.5 million in stock-based compensation, $1.5 million in depreciation and $0.4 million in non-cash operating lease expense, partially offset by $3.2 million in accretion on the held-to-maturity investments. The primary use of cash was to fund our operations related to the development of our product candidates.
Cash Flows from Investing Activities
For the
six months ended June 30, 2026, net cash flows provided by investing activities consisted of proceeds from maturities of short-term investments of $249.1 million, partially offset by purchases of short-term investments of $196.2 million and purchases of property and equipment of $0.6 million.
For the
six months ended June 30, 2025
, net cash flows used in investing activities
consisted of purchases of short-term investments of $149.4 million and purchases of property and equipment of $0.9 million, partially offset by proceeds from maturities of short-term investments of $112.7 million.
Cash Flows from Financing Activities
For the six months ended June 30, 2026, net cash flows provided by financing activities primarily consisted of $5.9 million in net proceeds from open market sales of common stock pursuant to the at-the-market (ATM) sales agreement with Leerink Partners, LLC, $0.2 million from the exercise of stock options and $0.1 million from the proceeds from issuance of common stock under the 2023 Employee Stock Purchase Plan. As of June 30, 2026, the remaining amount authorized for sale under the ATM sales agreement was $112.9 million.
For the six months ended June 30, 2025, net cash flows provided by financing activities were insignificant.
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Contractual Obligations and Commitments
Lease Obligations
New York Headquarters Lease
We sub-lease approximately 6,000 square feet of office space for our corporate headquarters in New York, New York. In November 2025, we extended the lease by an additional 19 months at a lower cost per square foot which now expires in January 2028.
Houston Lease
We lease 42,342 square feet for a manufacturing facility in Houston, Texas. The lease expires in August 2029. We have the option to renew the lease term for two additional five-year terms. The renewal periods were not included in the lease term for purposes of determining the lease liability or right-of-use asset.
Blaine Lease in Seattle
We lease approximately 33,300 square feet of office space in Seattle, Washington, that was previously used by Neoleukin for offices, a laboratory for research and development, and related uses. The lease expires on February 1, 2029, with the option to extend the lease for two additional five-year terms. The renewal periods were not included in the lease term for purposes of determining the lease liability.
Eastlake Lease in Seattle
We lease approximately 6,272 square feet of office space in Seattle, Washington, that was previously used by Neoleukin for additional office and laboratory space for research and development and related uses (the “Eastlake Lease”). The lease expires on September 30, 2026. We also assumed the existing agreement to sublease the Eastlake Lease to an unrelated third party (“Eastlake Sublease”). Pursuant to the terms of the Eastlake Sublease, we are entitled to receive a total of approximately $1.6 million in lease payments. The term of the sublease is through September 30, 2026.
Lease CVR
Each contingent value right (“CVR”) distributed pursuant to the CVR Licensing Agreement, dated December 18, 2023, by and between us and the rights agent (the “CVR Agreement”) contains the contractual right to receive
certain net savings, if any, realized by June 30, 2029 in connection with certain legacy lease obligations related to our business prior to the reverse merger with Neoleukin (the “Lease CVR”).
As of
June 30, 2026
, approximately
$0.4 million was recorded as a component of the contingent value rights liability arising from the Lease CVR
on our condensed consolidated balance sheet. The commitment relates to Neoleukin’s sublease agreement, effective October 31, 2023, for one of its properties with an unrelated third party for the remainder of the lease term. For more information on the Lease CVR, see Note 9,
Commitments and Contingencies—Lease CVR
, in the notes to the financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Intellectual Property CVR
The December 2023 CVR Licensing Agreement and April 2024 CVR Licensing Agreement collectively account for the total Intellectual Property CVR. As of June 30, 2026, no other development and sales milestones were achieved nor deemed probable of achievement under the December 2023 CVR Licensing Agreement.
For more information on the Intellectual Property CVR, see Note 9,
Commitments and Contingencies—Intellectual Property CVR
, in the notes to the financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
The following table summarizes the components of the contingent value rights liability as of June 30, 2026 and December 31, 2025 (in thousands):
June 30, 2026
December 31, 2025
Current
Non-Current
Current
Non-Current
Lease CVR
$
—
$
407
$
312
$
428
Intellectual Property CVR
—
—
326
—
Total CVR liability
$
—
$
407
$
638
$
428
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Research and Development and Manufacturing Agreements
We enter into agreements with certain vendors for the provision of goods and services, which includes manufacturing services with contract development and manufacturing organizations and development and clinical trial services with CROs. These agreements may include certain provisions for purchase obligations and termination obligations that could require payments for the cancellation of committed purchase obligations or for early termination of the agreements. The amount of the cancellation or termination payments vary and are based on the timing of the cancellation or termination and the specific terms of the agreement. These obligations and commitments are not presented separately.
License and Collaboration Agreements
Master Collaboration Agreement with The University of Edinburgh
In December 2020, we entered into a Master Collaboration Agreement (the “MCA”) with the University Court of the University of Edinburgh (the “University of Edinburgh”). Under the MCA, we and the University of Edinburgh agreed to collaborate on certain research and development projects (“Projects”), and we agreed to provide funding for such Projects for a 40-month initial term, which was extended in November 2023 for an additional 33 months and may be
further
extended by mutual agreement. Under the MCA, we are obligated to pay semi-annual installment payments relating to funding of costs for personnel and lab consumables for the duration of the MCA. Either party may terminate the MCA for convenience upon 90 days’ notice. If we were to terminate the MCA, we would be responsible for all non-cancellable costs and commitments related to any particular Project and any and all funding costs for any person working on such Project.
License Agreement with The University of Edinburgh
In March 2022, we exercised our option under the MCA with respect to certain Projects and entered into a License Agreement with the University of
Edinburgh
(the “March 2022 Edinburgh License Agreement”), pursuant to which we licensed certain patents and know-how related to the EXACT technology and optimized
MECP2
cassettes on an exclusive basis. Under the March 2022 Edinburgh License Agreement, we obtained an exclusive, worldwide license to the licensed patents to develop, manufacture, supply, sell, and commercialize any products that utilize the licensed patents (the “Licensed Products”) in exchange for low single-digit percentage royalties on future commercial net sales of the Licensed Products. Royalties are payable on a Licensed Product-by-Licensed Product and country-by-country basis until the later of the expiration of the last licensed patent covering such Licensed Product in the country where the Licensed Product is sold, or, if no licensed patent exists or has expired in such country, then 10 years from first commercial sale of such Licensed Product in such country (the “Royalty Term”). The term of the March 2022 Edinburgh License Agreement continues until the end of the Royalty Term and the expiration of all of the payment obligations under that license. We may terminate the March 2022 Edinburgh License Agreement for convenience upon 90 days’ notice. In connection with the license, we are also obligated to pay the University of Edinburgh up to $5.3 million in regulatory-related milestones, of which $0.3 million has been paid in connection with the Phase 1/2 study. The remaining regulatory milestone payments consist of $2.0 million payable upon achievement of the first regulatory approval (FDA or EMA) and $3.0 million payable upon achievement of the second regulatory approval (FDA or EMA). In addition, we may be obligated to make up to $25.0 million of sales-related milestone payments based on annual net sales of Licensed Products in excess of defined thresholds.
License Agreement with Virovek
In September 2020, we entered into a Non-Exclusive License Agreement with Virovek, Inc., pursuant to which we have a license to use certain patents and know-how on a non-exclusive basis related to our baculovirus process in exchange for low single-digit percentage royalties on future commercial net sales of each product using the baculovirus process, development milestone payments of up to $0.2 million in the aggregate, and a nonrefundable annual license fee. This agreement continues until the later of (i) the expiration of the last to expire patent right that covers the manufacture, use, offer for sale, sale, importation, export or supply of any licensed product, (ii) ten years after the first commercial sale of any licensed product, or (iii) the expiration of all regulatory or market exclusivities. We may terminate this agreement for convenience upon 60 days’ notice.
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License Agreement with Sigma-Aldrich Co
In January 2023, we entered into a Non-Exclusive License Agreement with Sigma-Aldrich Co. LLC, pursuant to which we have a license to certain patents and know-how on a non-exclusive basis related to certain cell lines used in our baculovirus process in exchange for a small annual fee on a product-by-product basis, payable once the first product candidate entered the clinic. In addition, on a product-by-product basis, we are obligated to pay up to $2.5 million in the aggregate for development-related milestones. This agreement remains in force for as long as we continue to possess and use the licensed technology. We may terminate this agreement for convenience upon 60 days’ notice.
License Agreement with Stanford
In August 2024, we entered into a Non-Exclusive License Agreement with the Board of Trustees of Leland Stanford Junior University (the “Stanford License Agreement”) to license, on a non-exclusive basis, certain biological materials used in the manufacturing process of our product candidates, including NGN-401. Over the 10-year term of the Stanford License Agreement, we are obligated to pay an annual license maintenance fee.
We may terminate this agreement for convenience upon 30 days’ notice.
Off-Balance Sheet Arrangements
We currently do not have, and did not have during the periods presented, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
Critical Accounting Policies and Significant Judgments and Estimates
Our financial statements are prepared in accordance with U.S. GAAP. The preparation of the financial statements and related disclosures requires management 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 financial statements. We base our estimates on historical experience, known trends and events and various other factors that management believes 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. Management evaluates estimates and assumptions on a periodic basis. Our actual results may differ from these estimates. A summary of our significant accounting policies is presented in Part II, Item 8 of our Annual Report on Form 10-K for the year ended
December 31, 2025
. There have been no material changes to our significant accounting policies during the
six months ended June 30, 2026
.
Recent Accounting Pronouncements
See Note 3,
Summary of Significant Accounting Policies—Recently Issued Accounting Standards
in the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company,” as defined by Rule 12b-2 of the Exchange Act, and pursuant to Item 305 of Regulation S-K, we are not required to provide quantitative and qualitative disclosures about market risk.
Item 4. Controls and Procedures
Evaluation of disclosure controls and procedures
.
Under the supervision and with the participation of our principal executive and our principal financial officer, our management conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this report.
In designing and evaluating our disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
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Based on management’s evaluation, our principal executive and our principal financial officer concluded that our disclosure controls and procedures are designed to, and are effective to, provide assurance at a reasonable level that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive and financial officer, as appropriate, to allow timely decisions regarding required disclosures.
Changes in internal control over financial reporting
. There have not been any changes in our internal control over financial reporting during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Part II - Other Information
Item 1. Legal Proceedings
We may from time to time be named as a party to legal claims, actions and complaints, including matters involving employment, intellectual property or others. We are not presently a party to any legal proceedings that, in the opinion of our management, would reasonably be expected to have a material adverse effect on our business, financial condition, operating results or cash flows if determined adversely to us. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.
Item 1A. Risk Factors
Investing in shares of our common stock involves a high degree of risk. You should carefully consider the following risks and uncertainties, together with all of the other information contained in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K before making an investment decision. The occurrence of any of the following risks could materially and adversely affect our business, financial condition, reputation, or results of operations. In such case, the trading price of shares of our common stock could decline, and you may lose all or part of your investment. It is not possible to predict or identify all such risks; our operations could also be affected by factors, events or uncertainties that are not presently known to us or that we currently do not consider to present significant risks to our operations. Therefore, you should not consider the following risks to be a complete statement of all the potential risks or uncertainties that we face. Moreover, some of the factors, events and contingencies discussed below may have occurred in the past, but the disclosures below are not representations as to whether or not the factors, events or contingencies have occurred in the past, and instead reflect our beliefs and opinions as to the factors, events or contingencies that could materially and adversely affect us in the future.
Summary of Risk Factors
•
We have a limited operating history, have not completed any clinical trials, and have no products approved for commercial sale, and our results may vary from quarter to quarter.
•
We will require substantial additional capital to finance our operations in the future. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce or eliminate clinical trials, product development programs or future commercialization efforts.
•
We have incurred significant losses since inception, expect to incur significant losses for the foreseeable future and may not be able to achieve or sustain profitability in the future. We have no products for sale, have not generated any product revenue and may never generate product revenue or become profitable.
•
We are substantially dependent on the success of our
most advanced product candidate, NGN-401,
and our clinical trial of NGN-401 may not be successful.
•
NGN-401 is in clinical development and our preclinical programs are in early stages of development and may fail in development or suffer delays that materially and adversely affect their commercial viability.
If we are unable to complete development of, or commercialize, our product candidates, or experience significant delays in doing so, our business will be materially harmed.
•
Delays in developing our manufacturing capabilities or failure to achieve operating efficiencies from such capabilities may require us to devote additional resources and management time to manufacturing operations and may delay our product development timelines.
•
We have a number of academic collaborations, and currently rely on our collaboration with the
University Court of the University
of Edinburgh for certain aspects of our preclinical research and development programs, including working in collaboration to discover and preclinically develop potential product candidates for our near-term future pipeline. Failure or delay of the University of Edinburgh or any other collaborator to fulfill all or part of its obligations under our agreements, a breakdown in collaboration between the parties or a complete or partial loss of the relationship would materially harm our business.
•
In order to successfully implement our plans and strategies, we will need to grow the size of our organization and we may experience difficulties in managing this growth.
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The regulatory approval processes of the U.S. Food and Drug Administration (“FDA”) and other comparable foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable. If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals for our product candidates, or if we determine that we are not willing or able to complete the regulatory approval process given the resources required to do so, we will not be able to commercialize, or will be delayed in commercializing, such product candidates, and our ability to generate revenue will be materially impaired.
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Because gene therapy is novel and the regulatory landscape that governs any product candidates we may develop is rigorous, complex, uncertain and subject to change, we cannot predict the time and cost of obtaining regulatory approval, if received at all, for any product candidates we may develop.
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Our estimates of market opportunity and forecasts of market growth may prove to be inaccurate, and even if the markets in which we compete achieve the forecasted growth, our business may not grow at similar rates, or at all.
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The market price of our common stock may continue to be volatile.
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Future sales of a substantial number of shares of our stock could cause our stock price to decline.
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Our executive officers, directors and principal stockholders have the ability to control or significantly influence all matters submitted to our stockholders for approval.
Risks Related to Our Limited Operating History, Financial Position and Capital Requirements
We have a limited operating history, have not completed any clinical trials, and have no products approved for commercial sale, and our results may vary from quarter to quarter.
We are a clinical-stage biotechnology company with limited operating history. Since our inception in 2018, we have incurred significant operating losses and have used substantially all of our resources to conduct research and development activities, preclinical studies, Phase 1/2 clinical trials of our most advanced product candidates as well as our Embolden trial for NGN-401, establish in-house manufacturing capabilities, including analytical and process development operations to support ongoing manufacturing operations, manufacture product candidates, conduct business planning, develop and maintain our intellectual property portfolio, hire personnel, raise capital, and provide general and administrative support for these activities. We have limited experience as a company in initiating, conducting or completing clinical trials. In part because of this lack of experience, we cannot be certain that our current and planned clinical trials will begin on time, meet our anticipated timelines for enrollment and data analysis, or be completed on time, if at all. In addition, while we have completed dosing in the Embolden trial and the Phase 1/2 trial for NGN-401 in patients with Rett syndrome, and a Phase 1/2 clinical trial of NGN-101 in patients with CLN5 Batten disease, we have not yet demonstrated our ability to successfully complete clinical trials (including Phase 3 or other pivotal clinical trials), obtain regulatory or marketing approvals, manufacture a commercial-scale product or arrange for a third party to do so on our behalf, or conduct sales, marketing and distribution activities necessary for successful product commercialization. Additionally, we expect our financial condition and operating results to continue to fluctuate significantly from period to period due to a variety of factors, many of which are beyond our control. Consequently, any predictions made about our future success or viability may not be as accurate as they could be if we had a longer operating history.
In addition, as our business grows, we may encounter unforeseen expenses, restrictions, difficulties, complications, delays and other known and unknown factors. We will need to transition at some point from a company with a limited focus on early research and development and small clinical trials to a company that can also support commercial activities, including the manufacture of commercial scale product. We may not be successful in such a transition.
We will require substantial additional capital to finance our operations in the future. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce or eliminate clinical trials, product development programs or future commercialization efforts.
Developing biotechnology products is a long, time-consuming, expensive and uncertain process that takes years to complete. Since our inception, we have funded our operations primarily through equity financings and have incurred significant recurring losses, including a cumulative net loss from inception through
June 30, 2026
of
$418.1 million
. We expect to continue incurring significant expenses in connection with our ongoing activities, including continued patient monitoring activities for our ongoing Embolden trial of NGN-401 in patients with Rett syndrome, with the expectation that we will also initiate additional clinical trials in the future, and continue to research, develop and conduct preclinical studies of our other potential product candidates. We also anticipate that we may have near term expenses related to NGN-101 as we continue to evaluate options for the program following the denial by the FDA of a Regenerative Medicine Advanced Therapy (“RMAT”) designation, which precludes our ability to use a streamlined registrational pathway necessary for further investment in the program
.
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In addition, if we obtain regulatory approval for any product candidate for commercial sale,
including NGN-401
, we anticipate incurring significant commercialization expenses related to product manufacturing, marketing, sales and distribution activities to launch any such product. Our expenses could increase beyond expectations if we are required by the FDA or other regulatory agencies to perform preclinical studies or clinical trials in addition to those that we currently anticipate. Because the design and outcome of our current, planned and anticipated clinical trials are highly uncertain, we cannot reasonably estimate the actual amount of funding that will be necessary to successfully complete the development and commercialization of any product candidate we develop. Our future capital requirements depend on many factors, including factors that are not within our control.
We have incurred and expect to continue to incur additional costs associated with operating as a public company, and we do not anticipate achieving any significant revenue in the near term given the development stage of our product candidates. Accordingly, we will require substantial additional funding to continue our operations.
Based on our current operating plan, we believe that our existing cash, cash equivalents and short-term investments should be sufficient to fund our operations into the first quarter of 2029.
This estimate is based on assumptions that may prove to be materially wrong, and we could deplete our available capital resources sooner than we currently expect. Our future capital requirements will depend on many factors, including:
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the timing and progress of preclinical and clinical development activities, including any impact to our NGN-401 clinical trial activities relating to our participation in the FDA’s Support for clinical Trials Advancing Rare disease Therapeutics (“START”) program and the RMAT and Breakthrough Therapy designations for NGN-401;
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the number and scope of preclinical and clinical programs we pursue to develop our gene therapy candidate pipeline and EXACT
TM
platform;
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our ability to secure appropriate animal models for the conduct of investigational new drug (“IND”)-enabling studies in a timely and financially feasible manner, especially large animal models, such as non-human primates (“NHPs”) needed for toxicology studies;
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our ability to establish an acceptable safety profile with IND-enabling toxicology studies to enable clinical trials;
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successful patient enrollment in, and the initiation and completion of, larger and later-stage clinical trials;
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the number of subjects that participate in clinical trials and per subject trial costs;
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the number and extent of trials required for regulatory approval;
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the countries in which the trials are conducted;
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the length of time required to enroll eligible subjects in clinical trials;
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the drop-out and discontinuation rate of subjects;
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potential additional safety monitoring requested by regulatory agencies;
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the duration of subject participation in the trials and follow-up;
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the extent to which we encounter any serious adverse events in our clinical trials;
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the timing of receipt of regulatory approvals from applicable regulatory authorities, including those required to initiate clinical trials;
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the timing, receipt and terms of any marketing approvals and post-marketing approval commitments from applicable regulatory authorities;
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the extent to which we establish collaborations, strategic partnerships, or other strategic arrangements with third parties, if any, and the performance of any such third party;
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the scale up of our clinical and regulatory capabilities, including establishing our current good manufacturing practices (“cGMP”) manuf