10-Q: Passage Bio Reports Q1 2025 Financial Results, Provides Clinical Program Update

Sentiment:

Quarterly Report 13 May 2025 7:15 AM

Passage Bio reports a net loss of $15.4 million for Q1 2025 and provides updates on its clinical programs, including PBFT02 for FTD-GRN and FTD-C9orf72.

Capital raiseThe Company plans to seek additional funding through public or private equity offerings, debt financings, other collaborations, strategic alliances and licensing arrangements.The Company is limited to $15.8 million in its capacity to offer and sell shares of its common stock under this sales agreement pursuant to the prospectus supplement to its shelf registration statement on Form S-3, filed on March 5, 2025.As of March 31, 2025, $15.8 million of capacity remains available to be sold under the ATM Facility.

Worse than expectedThe company reported a net loss of $15.4 million for Q1 2025.The company recognized an impairment of long-lived assets of $2.6 million related to laboratory equipment.

Summary

Passage Bio, a clinical-stage genetic medicines company, reported its financial results for the quarter ended March 31, 2025.
The company's net loss for the quarter was $15.4 million, compared to $16.7 million for the same period in 2024.
Research and development expenses decreased to $7.7 million from $11.5 million year-over-year, primarily due to reduced preclinical research and personnel expenses.
General and administrative expenses also decreased slightly to $6.1 million from $6.5 million in the prior year.
The company recognized an impairment of long-lived assets of $2.6 million related to laboratory equipment.
As of March 31, 2025, Passage Bio had cash and cash equivalents of $63.4 million, which is expected to fund operations into the first quarter of 2027.
The company is progressing PBFT02, its lead clinical product candidate, for the treatment of frontotemporal dementia (FTD) caused by progranulin deficiency (FTD-GRN) and is planning to initiate dosing in FTD-C9orf72 patients in the first half of 2025.
The company amended its Gemma Sublicenses to revise certain financial terms related to the Outlicensed Programs, and is entitled to receive (i) an aggregate total of $15 million in initial payments for licenses and clinical product supply, of which $5 million was previously received; and (ii) an additional $5 million contingent on Gemma completing certain business milestones.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While the company is making progress in its clinical programs, it continues to incur net losses and relies on additional funding.

Positives

Cash runway extended into the first quarter of 2027.
Progress in clinical development of PBFT02 for FTD-GRN and FTD-C9orf72.
Positive regulatory feedback received on the clinical pathway for treating FTD-C9orf72 and ALS with PBFT02.
Amendment of Gemma Sublicenses to revise certain financial terms related to the Outlicensed Programs.

Negatives

The company continues to incur net losses.
The company is dependent on the success of PBFT02.
The company is reliant on third parties for manufacturing and clinical trials.
The company is subject to the risk of product liability claims.

Risks

Clinical trials may be delayed or unsuccessful.
Regulatory approvals may not be obtained.
Product candidates may cause undesirable side effects.
Competition from other therapies and companies.
Reliance on third-party manufacturers.
Unfavorable pricing regulations or reimbursement policies.
Potential delisting from Nasdaq.
Inability to obtain and maintain patent protection.

Future Outlook

The company expects its existing cash and cash equivalents will enable it to fund its operating expenses and capital expenditure requirements into the first quarter of 2027. The company expects to deliver 12-month follow-up data from Dose 1 and interim safety and biomarker data from Dose 2 in the second half of 2025 and seek regulatory feedback on registrational trial design in the first half of 2026.

Industry Context

The company operates in the competitive genetic medicines industry, facing competition from companies developing gene therapies for neurodegenerative diseases. The company's success depends on its ability to develop and commercialize its product candidates, obtain regulatory approvals, and secure adequate reimbursement.

Comparison to Industry Standards

The document does not provide enough information to make a detailed comparison to industry standards.
However, the document mentions competitors such as Prevail Therapeutics Inc. (part of Eli Lilly & Co), AviadoBio Ltd, Alector, Inc. (partnered with GSK plc), Denali Therapeutics Inc. in partnership with Takeda Pharmaceutical Company Limited, Vesper Bio ApS, Arkuda Therapeutics, and Transposon Therapeutics, Inc.
These companies are developing therapies for similar indications, such as FTD-GRN and FTD-C9orf72.
The document does not provide enough information to compare Passage Bio's results to those of its competitors.

Legal Proceedings

The Company is a defendant in litigation with a former employee, who filed a lawsuit in the Court of Common Pleas of Philadelphia County asserting claims for breach of contract and violation of the Pennsylvania Wage Payment and Collection Law.
On December 23, 2024, the plaintiff filed an appeal with the Superior Court of Pennsylvania, which is currently pending.
The Company intends to continue to defend against this claim.

Stakeholder Impact

Shareholders: Dilution may occur if the company raises additional capital through equity offerings.
Employees: Workforce reduction announced in January 2025.
Patients: Potential for new therapies for neurodegenerative diseases.

Next Steps

Report 12-month follow-up data from Dose 1 and interim safety and biomarker data from Dose 2 in the second half of 2025.
Seek regulatory feedback on registrational trial design in the first half of 2026.
Initiate dosing of FTD-C9orf72 patients in the first half of 2025.

Key Dates

Date	Description
2017-07	Passage Bio, Inc. incorporated in July 2017.
2020-02-28	Employee Stock Purchase Plan became effective.
2021-03-05	Company entered into a Sales Agreement with Cowen and Company, LLC, relating to the applicable terms of at-the-market equity offerings.
2024-07-31	Company entered into a series of sublicense agreements with Gemma Biotherapeutics, Inc.
2025-01	Company announced a workforce reduction to reduce operating expenses and to extend its cash runway.
2025-01-31	First Amendment to the Transition Services Agreement, dated January 31, 2025.
2025-03-31	End of the quarterly period.
2025-05-07	Company agreed to amend each of the Gemma Sublicenses to revise certain financial terms related to the Outlicensed Programs.
2025-05-08	Date as of which the registrant had 62,148,274 shares of common stock outstanding.

Keywords

PBFT02, FTD-GRN, FTD-C9orf72, gene therapy, clinical trial, Passage Bio, financial results, neurodegenerative diseases, Gemma Biotherapeutics, AAV1

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