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Avidity Biosciences
RNA
#1860
Rank
$11.26 B
Marketcap
๐Ÿ‡บ๐Ÿ‡ธ United States
Country
$72.91
Share price
-0.01%
Change (1 day)
115.77%
Change (1 year)
๐Ÿ’Š Pharmaceuticals๐Ÿงฌ Biotech
Categories
  1. Avidity Biosciences
  2. Quarterly Reports (10-Q)
  3. Financial Year FY2024 Q2

Avidity Biosciences - 10-Q quarterly report FY2024 Q2


Text size:
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________________________________________
FORM 10-Q
_____________________________________________________
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024
or
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 001-39321
_____________________________________________________
Avidity Biosciences, Inc.
(Exact name of registrant as specified in its charter)
_____________________________________________________
Delaware46-1336960
(State or other jurisdiction of
incorporation or organization)		(IRS Employer
Identification No.)
10578 Science Center Drive, Suite 125
San Diego, California
92121
(Address of principal executive offices)(Zip Code)
(858) 401-7900
(Registrant’s telephone number, including area code)
_____________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.0001 par valueRNAThe 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 x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
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 filerxAccelerated filero
Non-accelerated fileroSmaller reporting companyo
Emerging growth companyo
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 o No x
As of July 22, 2024, the registrant had 109,801,397 shares of common stock outstanding.

Avidity Biosciences, Inc.
FORM 10-Q
TABLE OF CONTENTS
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29
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29
29
29
29
32
33
2
PART I - FINANCIAL INFORMATION
Item 1. Condensed Financial Statements (unaudited)
Avidity Biosciences, Inc.
Condensed Balance Sheets
(in thousands, except par value)
June 30,
2024		December 31,
2023
(unaudited)
Assets
Current assets:
Cash and cash equivalents$575,751 $185,082 
Marketable securities723,295 410,269 
Prepaid and other assets29,755 15,956 
Total current assets1,328,801 611,307 
Property and equipment, net8,498 8,381 
Restricted cash2,795 295 
Right-of-use assets6,967 8,271 
Other assets364 301 
Total assets$1,347,425 $628,555 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities$40,924 $34,341 
Accrued compensation12,826 14,335 
Lease liabilities, current portion3,765 3,639 
Deferred revenue, current portion26,697 28,365 
Total current liabilities84,212 80,680 
Lease liabilities, net of current portion4,617 6,213 
Deferred revenue, net of current portion37,560 40,898 
Total liabilities126,389 127,791 
Commitments and contingencies (Note 7)
Stockholders’ equity:
Common stock, $0.0001 par value; authorized shares – 400,000; issued and outstanding shares – 109,266 and 79,275 at June 30, 2024 and December 31, 2023, respectively
11 8 
Additional paid-in capital1,931,890 1,071,395 
Accumulated other comprehensive income (loss)(453)125 
Accumulated deficit(710,412)(570,764)
Total stockholders’ equity1,221,036 500,764 
Total liabilities and stockholders’ equity$1,347,425 $628,555 
See accompanying notes.
3
Avidity Biosciences, Inc.
Condensed Statements of Operations and Comprehensive Loss
(in thousands, except per share data)
(unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Collaboration revenue$2,045 $2,316 $5,588 $4,549 
Operating expenses:
Research and development63,940 42,672 130,772 90,437 
General and administrative20,731 12,278 34,629 24,342 
Total operating expenses84,671 54,950 165,401 114,779 
Loss from operations(82,626)(52,634)(159,813)(110,230)
Other income (expense):
Interest income11,949 5,771 20,382 11,287 
Other expense(116)(162)(217)(476)
Total other income11,833 5,609 20,165 10,811 
Net loss$(70,793)$(47,025)$(139,648)$(99,419)
Net loss per share, basic and diluted$(0.65)$(0.66)$(1.44)$(1.40)
Weighted-average shares outstanding, basic and diluted106,92871,39097,07070,914
Other comprehensive income (loss):
Net unrealized gains (losses) on marketable securities11 (1,137)(578)32 
Comprehensive loss$(70,782)$(48,162)$(140,226)$(99,387)
See accompanying notes.
4
Avidity Biosciences, Inc.
Condensed Statements of Stockholders' Equity
(in thousands)
(unaudited)
Common StockAdditional
Paid-in
Capital		Accumulated
Other
Comprehensive
Income (Loss)		Accumulated
Deficit		Total
Stockholders’
Equity
SharesAmount
Balance at December 31, 202379,275$8 $1,071,395 $125 $(570,764)$500,764 
Issuance of common stock upon exercise of stock options541— 3,896 — — 3,896 
Issuance of common stock in public offering, net of issuance costs of $143
418— 5,594 — — 5,594 
Issuance of common stock in a private placement, net of issuance costs of $12,821
15,2252 238,386 — — 238,388 
Issuance of pre-funded warrants in a private placement, net of issuance costs of $7,605
—— 141,395 — — 141,395 
Issuance of common stock in connection with vesting of restricted stock units135— — — — — 
Stock-based compensation—— 10,306 — — 10,306 
Net loss—— — — (68,855)(68,855)
Other comprehensive loss—— — (589)— (589)
Balance at March 31, 202495,594$10 $1,470,972 $(464)$(639,619)$830,899 
Issuance of common stock upon exercise of stock options1,201— 14,308 — — 14,308 
Issuance of common stock in public offering, net of issuance costs of $28,263
12,1331 432,771 — — 432,772 
Issuance of common stock under Employee Stock Purchase Plan138— 1,027 — — 1,027 
Issuance of common stock in connection with vesting of restricted stock units200— — — — — 
Stock-based compensation—— 12,812 — — 12,812 
Net loss—— — — (70,793)(70,793)
Other comprehensive income—— — 11 — 11 
Balance at June 30, 2024
109,266$11 $1,931,890 $(453)$(710,412)$1,221,036 
See accompanying notes.
5
Avidity Biosciences, Inc.
Condensed Statements of Stockholders' Equity
(in thousands)
(unaudited)
Common StockAdditional
Paid-in
Capital		Accumulated
Other
Comprehensive
Income (Loss)		Accumulated
Deficit		Total
Stockholders’
Equity
SharesAmount
Balance at December 31, 202269,768$7 $939,310 $(2,698)$(358,544)$578,075 
Issuance of common stock upon exercise of stock options102— 520 — — 520 
Issuance of common stock in public offering, net of issuance costs of $408
943— 22,441 — — 22,441 
Stock-based compensation—— 9,104 — — 9,104 
Net loss—— — — (52,394)(52,394)
Other comprehensive income—— — 1,169 — 1,169 
Balance at March 31, 202370,813$7 $971,375 $(1,529)$(410,938)$558,915 
Issuance of common stock upon exercise of stock options12— 7 — — 7 
Issuance of common stock in public offering, net of issuance costs of $977
3,164— 38,106 — — 38,106 
Issuance of common stock under employee stock purchase plan81— 859 — — 859 
Stock-based compensation—— 9,453 — — 9,453 
Net loss—— — — (47,025)(47,025)
Other comprehensive loss— — — (1,137)— (1,137)
Balance at June 30, 202374,070$7 $1,019,800 $(2,666)$(457,963)$559,178 
See accompanying notes.

6
Avidity Biosciences, Inc.
Condensed Statements of Cash Flows
(in thousands)
(unaudited)
Six Months Ended June 30,
20242023
Cash flows from operating activities
Net loss$(139,648)$(99,419)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation1,328 920 
Stock-based compensation expense23,118 18,557 
Amortization of premiums and discounts on marketable securities, net(7,435)(5,071)
Non-cash operating lease costs1,652 1,420 
Changes in operating assets and liabilities:
Prepaid and other assets(12,112)(5,642)
Accounts payable and accrued liabilities6,047 (816)
Accrued compensation(1,509)(4,663)
Operating lease liabilities(1,819)(1,594)
Deferred revenue(5,006)(2,466)
Net cash used in operating activities(135,384)(98,774)
Cash flows from investing activities
Maturities of marketable securities207,930 128,215 
Purchases of marketable securities(514,100)(275,404)
Purchases of property and equipment(1,446)(2,442)
Net cash used in investing activities(307,616)(149,631)
Cash flows from financing activities
Proceeds from issuance of common stock in public offerings, net of issuance costs438,902 60,547 
Proceeds from issuance of common stock under employee incentive equity plans17,484 1,386 
Proceeds from the issuance of common stock in a private placement, net of issuance costs238,388 — 
Proceeds from issuance of pre-funded warrants in a private placement, net of issuance costs141,395 — 
Net cash provided by financing activities836,169 61,933 
Net increase (decrease) in cash, cash equivalents and restricted cash393,169 (186,472)
Cash, cash equivalents and restricted cash at beginning of period185,377 340,647 
Cash, cash equivalents and restricted cash at end of period$578,546 $154,175 
Supplemental schedule of noncash investing and financing activities:
Costs incurred, but not paid, in connection with deferred financing costs included in accounts payable and accrued liabilities$536 $— 
Receivables from stock option exercises included in prepaid and other assets$1,747 $— 
See accompanying notes.
7
Avidity Biosciences, Inc.
Notes to Unaudited Condensed Financial Statements
1.    Description of Business and Basis of Presentation
Description of Business
Avidity Biosciences, Inc. (the Company or Avidity) is a biopharmaceutical company committed to delivering a new class of RNA therapeutics called Antibody Oligonucleotide Conjugates (AOCs). The Company’s proprietary AOC platform is designed to combine the specificity of monoclonal antibodies with the precision of RNA therapeutics to target the root cause of diseases previously untreatable with such therapeutics.
Liquidity
To date, the Company has devoted substantially all of its resources to organizing and staffing the Company, business planning, raising capital, developing its proprietary AOC platform, identifying potential product candidates, establishing its intellectual property portfolio, conducting research, preclinical and clinical studies, and providing other general and administrative support for these operations. In addition, the Company has a limited operating history, has incurred operating losses since inception and expects that it will continue to incur net losses into the foreseeable future as it continues the development of its product candidates and development programs. As of June 30, 2024, the Company had an accumulated deficit of $710.4 million and cash, cash equivalents and marketable securities of $1.3 billion.
The Company believes that existing cash, cash equivalents and marketable securities will be sufficient to fund the Company’s operations for at least 12 months from the date of the filing of this Form 10-Q. The Company plans to finance its future cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other arrangements. If the Company is not able to secure adequate additional funding, it may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, and/or delay or reduce the scope of its planned development programs. Any of these actions could materially harm the Company’s business, results of operations and future prospects.
Basis of Presentation
The accompanying unaudited interim condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and the rules and regulations of the Securities and Exchange Commission (SEC) related to a quarterly report on Form 10-Q. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations. The unaudited interim condensed financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results for the periods presented. All such adjustments are of a normal and recurring nature. The operating results presented in these unaudited interim condensed financial statements are not necessarily indicative of the results that may be expected for any future periods. These unaudited interim condensed financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 31, 2023 included in the Company’s annual report on Form 10-K filed with the SEC on February 28, 2024.
In December 2023, the Company formed Avidity Biosciences Ireland Limited, a wholly-owned subsidiary (the Subsidiary). There were no operations in, nor assets and liabilities held by, the Subsidiary in any of the periods presented.
8
2.    Summary of Significant Accounting Policies
Use of Estimates
The Company’s condensed financial statements are prepared in accordance with GAAP, which requires the Company to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the condensed financial statements and accompanying notes. The most significant estimates in the Company’s condensed financial statements relate to revenue recognition, stock-based compensation, and accrued research and development costs. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions.
Summary of Significant Accounting Policies
The Company’s significant accounting policies are discussed in “Note 2 – Summary of Significant Accounting Policies” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on February 28, 2024. There have been no significant changes to these policies during the six months ended June 30, 2024.
Net Loss Per Share
Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period, adjusted for the weighted-average number of common shares outstanding that are subject to repurchase or forfeiture. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and dilutive common stock equivalents outstanding for the period determined using the treasury-stock and if-converted methods. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding as inclusion of the common stock equivalent securities would be anti-dilutive. The pre-funded common stock warrants are included in the calculation of basic and diluted net loss per share as the exercise price of $0.001 per share is not substantive and the shares are issuable for little or no consideration.
Common stock equivalent securities not included in the calculation of diluted net loss per share for the three and six month periods ended June 30, because to do so would be anti-dilutive, are as follows (in thousands):
June 30,
20242023
Common stock options12,72810,978
Restricted stock units1,526635
Performance stock units562—
Employee Stock Purchase Plan shares pending issuance49
Total14,82011,622
Recently Issued Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which modifies the disclosure and presentation requirements of reportable segments. The amendments in the update require the disclosure of significant segment expenses that are regularly provided to the Chief Operating Decision Maker (CODM) and included within each reported measure of segment profit and loss. The amendments also require disclosure of all other segment items by reportable segment and a description of its composition. Additionally, the amendments require disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Lastly, the amendment requires that a public entity that has a single reportable segment provide all the disclosures required by ASU 2023-07 and all existing segment disclosures in Topic 280. This update is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. ASU 2023-07 will be applied retrospectively and early adoption is permitted. The Company is currently evaluating the impact that this guidance will have on the presentation of its financial statements and accompanying notes.
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In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances income tax disclosures, primarily through standardization and disaggregation of the income tax rate reconciliation and disaggregation of income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. ASU 2023-09 can be applied either prospectively or retrospectively and early adoption is permitted. The Company is currently evaluating the impact that this guidance will have on the presentation of its financial statements and accompanying notes.
3.    Fair Value Measurements
The following tables summarize the Company’s cash equivalents and marketable securities measured at fair value (in thousands):
Fair Value Measurements Using
As of June 30, 2024TotalQuoted Prices in
Active Markets
for Identical
Assets (Level 1)		Significant
Other
Observable
Inputs (Level 2)		Significant
Unobservable
Inputs
(Level 3)
Cash equivalents:
U.S. Treasury securities$10,962 $10,962 $— $— 
Marketable securities:
U.S. Treasury securities721,340 721,340 — — 
Negotiable certificates of deposit1,955 — 1,955 — 
Total$734,257 $732,302 $1,955 $— 
Fair Value Measurements Using
As of December 31, 2023TotalQuoted Prices in
Active Markets
for Identical
Assets (Level 1)		Significant
Other
Observable
Inputs (Level 2)		Significant
Unobservable
Inputs
(Level 3)
Marketable securities:
U.S. Treasury securities$399,890 $399,890 $— $— 
U.S. Government agency securities4,998 — 4,998 — 
Negotiable certificates of deposit5,381 — 5,381 — 
Total$410,269 $399,890 $10,379 $— 
4.    Marketable Securities
The Company’s marketable securities, which consist of highly liquid marketable debt securities, are classified as available-for-sale and are stated at fair value. The following tables summarize the Company’s marketable securities (in thousands):
As of June 30, 2024Maturity
(in years)		Amortized
Cost		Unrealized
Gains		Unrealized
Losses		Estimated
Fair Value
U.S. Treasury securities
1 or less
$613,201 $6 $(517)$612,690 
Negotiable certificates of deposit
1 or less
1,959 — (4)1,955 
U.S. Treasury securities
1 - 2
108,588 62 — 108,650 
Total$723,748 $68 $(521)$723,295 
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As of December 31, 2023Maturity
(in years)		Amortized
Cost		Unrealized
Gains		Unrealized
Losses		Estimated
Fair Value
U.S. Treasury securities
1 or less
$301,053 $102 $(530)$300,625 
U.S. Government agency securities
1 or less
5,000 — (2)4,998 
Negotiable certificates of deposit
1 or less
4,410 1 (4)4,407 
U.S. Treasury securities
1 - 2
98,701 600 (36)99,265 
Negotiable certificates of deposit
1 - 2
980 — (6)974 
Total$410,144 $703 $(578)$410,269 
The unrealized losses on the Company’s marketable securities were caused by interest rate increases and resulted in the decrease in market value of these securities. There were no allowances for credit losses at June 30, 2024 and December 31, 2023 because (i) the decline in fair value is attributable to changes in interest rates and not credit quality, (ii) the Company does not intend to sell the investments before maturity, and (iii) it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases.
The following table summarizes marketable securities in a continuous unrealized loss position for which an allowance for credit losses was not recorded (in thousands):
Less Than 12 Months
12 Months or Greater
Total
As of June 30, 2024
Fair Value
Unrealized Losses
Fair Value
Unrealized Losses
Fair Value
Unrealized Losses
U.S. Treasury securities$469,288 $(312)$74,471 $(205)$543,759 $(517)
Negotiable certificates of deposit734 — 1,221 (4)1,955 (4)
Total$470,022 $(312)$75,692 $(209)$545,714 $(521)
Less Than 12 Months
12 Months or Greater
Total
As of December 31, 2023
Fair Value
Unrealized Losses
Fair Value
Unrealized Losses
Fair Value
Unrealized Losses
U.S. Treasury securities$214,291 $(566)$— $— $214,291 $(566)
U.S. Government agency securities4,998 (2)— — 4,998 (2)
Negotiable certificates of deposit3,665 (10)— — 3,665 (10)
Total$222,954 $(578)$— $— $222,954 $(578)
Accrued interest receivable on available-for-sale securities was $4.1 million and $2.6 million at June 30, 2024 and December 31, 2023, respectively. The Company has not written off any accrued interest receivable for the six months ended June 30, 2024 and 2023.
5.    Collaboration, License and Research Agreements
Research Collaboration and License Agreement with Bristol Myers Squibb Company
In November 2023, the Company entered into a Research Collaboration and License Agreement (the BMS Collaboration Agreement) with Bristol Myers Squibb Company (BMS) to expand on its research with MyoKardia Inc. In connection with the BMS Collaboration Agreement, the Company recognized revenue of $2.0 million and $4.5 million for the three and six months ended June 30, 2024, respectively. There were no collaboration receivables related to the BMS Collaboration Agreement in any of the periods presented.
Research Collaboration and License Agreement with Eli Lilly and Company
In April 2019, the Company entered into a Research Collaboration and License Agreement (the Lilly Agreement) with Eli Lilly and Company (Lilly) for the discovery, development and commercialization of AOC
11
products directed against certain targets in immunology and other select indications on a worldwide basis. In connection with the Lilly Agreement, the Company recognized no revenue for the three months ended June 30, 2024 and $2.3 million for the three months ended June 30, 2023. The Company recognized revenue of $1.1 million and $4.5 million for the six months ended June 30, 2024 and 2023, respectively. There were no collaboration receivables related to the Lilly Agreement as of June 30, 2024 and $0.8 million collaboration receivables related to the Lilly Agreement as of December 31, 2023, which are included in prepaid and other assets on the condensed balance sheets. There was no deferred revenue related to the Lilly Agreement at June 30, 2024.
A reconciliation of the closing balance of deferred revenue related to the Company's research collaboration and license agreements for the six months ended June 30, 2024 and 2023 is as follows (in thousands):
Balance at December 31, 2023$69,263 
Revenue recognized that was included in the balance at the beginning of the period(2,961)
Balance at March 31, 2024$66,302 
Revenue recognized that was included in the balance at the beginning of the period(2,045)
Balance at June 30, 2024$64,257 
Balance at December 31, 2022$6,276 
Revenue recognized that was included in the balance at the beginning of the period(1,219)
Balance at March 31, 2023$5,057 
Revenue recognized that was included in the balance at the beginning of the period(1,247)
Balance at June 30, 2023$3,810 
6.    Composition of Certain Financial Statement Items
Prepaid and other assets (in thousands)
June 30,
2024		December 31, 2023
Accounts receivable$— $1,105 
Prepaid assets14,041 7,333
Interest receivable and other assets
15,714 7,518
Total prepaid and other assets$29,755 $15,956 
Property and equipment consist of the following (in thousands):
June 30,
2024		December 31,
2023
Laboratory equipment$12,502 $11,208 
Computers and software262 127 
Office furniture and equipment1,979 1,979 
Leasehold improvements288 288 
Construction in process16 — 
Property and equipment, gross15,047 13,602 
Less accumulated depreciation(6,549)(5,221)
Total property and equipment, net$8,498 $8,381 
Depreciation expense related to property and equipment was $0.7 million and $0.5 million for the three months ended June 30, 2024 and 2023, respectively, and $1.3 million and $0.9 million for the six months ended June 30, 2024 and 2023, respectively.
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Accounts payable and accrued liabilities (in thousands):
June 30,
2024		December 31,
2023
Accounts payable$8,889 $8,809 
Accrued non-clinical liabilities24,037 19,535
Accrued clinical liabilities7,998 5,997
Total accounts payable and accrued liabilities$40,924 $34,341 
7.    Commitments and Contingencies
Litigation
Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. There are no such matters currently outstanding for which liabilities have been accrued.
Operating Lease
In April 2024, the Company entered into a sublease agreement with Turning Point Therapeutics, Inc. to rent 105,000 square feet for office and laboratory space for the Company’s future corporate headquarters. The term of the sublease is approximately 9 years and 9 months with payments expected to begin in August 2025. Pursuant to the terms of the sublease agreement, the sublandlord will provide the Company with a tenant improvement allowance of up to $33.6 million. An additional tenant improvement allowance of up to $5.0 million is also available to be repaid in equal installments through monthly rent payments, subject to 8% interest per annum and annual increases of 3% per annum. The Company also has an option and a right of first refusal for an additional 80,000 square feet in an adjacent available building, which has not been exercised. Total aggregate future lease commitments under the sublease agreement are approximately $72.6 million, inclusive of 3% annual rent increases and various agreed upon rent abatement amounts. The sublease will be measured and recognized upon commencement of the sublease. As of June 30, 2024, the sublease had not commenced because construction of improvements to bring the facility to its intended use was not substantially complete.
In connection with the sublease agreement, the Company is required to maintain a letter of credit for the benefit of the sublandlord in the amount of $2.5 million, which was delivered in April 2024 and is included in restricted cash in the Company’s condensed balance sheet.
8.    Stockholders’ Equity
Common Stock
On November 8, 2022, the Company entered into a sales agreement (the 2022 Sales Agreement) with Cowen and Company, LLC (the 2022 Sales Agent). Under the 2022 Sales Agreement, the Company may, from time to time, sell shares of its common stock having an aggregate offering price of up to $200.0 million through the 2022 Sales Agent. Sales of the shares of common stock, if any, will be made at prevailing market prices at the time of sale, or as otherwise agreed with the 2022 Sales Agent. The Company is not obligated to sell, and the 2022 Sales Agent is not obligated to buy or sell, any shares of common stock under the 2022 Sales Agreement. During the six months ended June 30, 2024 and 2023, the Company sold 418,408 and 4,107,810 shares of its common stock, respectively, pursuant to the 2022 Sales Agreement and received net proceeds of $5.6 million and $60.5 million, respectively, after deducting offering-related transaction costs and commissions.
On March 4, 2024, the Company sold 15,224,773 unregistered shares of its common stock and pre-funded warrants in lieu of common stock to purchase up to an aggregate of 9,030,851 shares of its common stock to investors in a private placement at an offering price of $16.50 per share and $16.499 per pre-funded warrant, which represents the offering price per share of common stock less an exercise price of $0.001 per share. The Company valued the common stock at the offering price, concluding that the offering price approximated fair value. The net proceeds from the private placement were $379.8 million after deducting placement fees and offering costs of $20.4 million. The resale of the shares, including the shares issuable upon exercise of the pre-
13
funded warrants, were subsequently registered on an automatically effective Registration Statement on Form S-3 filed with the SEC on April 2, 2024.
The pre-funded warrants are a freestanding instrument that do not meet the definition of a liability pursuant to ASC 480 and do not meet the definition of a derivative pursuant to ASC 815. The Company valued the pre-funded warrants at the offering price, concluding that the offering price approximated fair value. The pre-funded warrants meet the equity classification criteria and were accounted for as a component of additional paid-in capital. The pre-funded warrants are immediately exercisable and do not expire.
One of the investors who participated in the private placement met the criteria of a related party as such investor was a principal owner of more than 10% of the voting interest in the Company (the Principal Owner). The Principal Owner purchased 2,121,213 shares of the Company's common stock for $35.0 million. The purchase of common stock under the private placement by the Principal Owner was carried out at arm's length as substantiated by the fact that the per share purchase price equaled the price paid by other participants. No amounts were due from the Principal Owner as of June 30, 2024.
On June 17, 2024, the Company completed a public offering of 12,132,500 shares of its common stock at a public offering price of $38.00 per share. Net proceeds from the offering were approximately $432.8 million, after deducting underwriting discounts and offering expenses of $28.3 million. The shares sold in the offering were registered pursuant to the Company's shelf registration statement on Form S-3, which became automatically effective upon filing on May 9, 2024.
Stock Options
Stock option activity for employee and non-employee awards and related information is as follows (in thousands, except per share data):
Number of
Options		Weighted-
Average
Exercise
Price Per
Share
Outstanding at December 31, 202312,495$14.91 
Granted2,27515.53 
Exercised(1,742)10.45 
Forfeited/expired(300)16.40 
Outstanding at June 30, 202412,728$15.60 
Restricted Stock Units and Performance Stock Units
The Company has granted restricted stock units (RSUs) and performance stock units (PSUs) to employees of the Company under the 2020 Incentive Award and the 2022 Employment Inducement Incentive Award Plans. RSUs and PSUs are valued at the market price of a share of the Company’s stock on the date of grant. RSUs vest ratably on an annual basis over a four-year service period and are payable in shares of common stock on the vesting date. Compensation expense for RSUs is recognized on a straight-line basis over the four-year service period. Compensation expense for PSUs is recognized over the service period when the performance conditions are met or considered probable of achievement, using management's best estimates. Forfeitures are recorded in the period in which they occur.
14
The following table summarizes the RSU activity for the six months ended June 30, 2024 (in thousands, except per share data):
Number of SharesWeighted-Average Grant Date Fair Value
Unvested at December 31, 2023758 $18.73 
Granted984 13.78 
Vested(147)21.70 
Forfeited(69)15.34 
Unvested at June 30, 2024
1,526 $15.41 
The total fair value of RSU shares vested during the six months ended June 30, 2024 was $1.8 million. No RSUs vested during the six months ended June 30, 2023.
The following table summarizes the PSU activity for the six months ended June 30, 2024 (in thousands, except per share data):
Number of SharesWeighted-Average Grant Date Fair Value
Unvested at December 31, 2023750 $6.57 
Granted— — 
Vested(188)6.57 
Forfeited— — 
Unvested at June 30, 2024
562 $6.57 
During the six months ended June 30, 2024, the performance conditions related to 375,000 units of outstanding PSUs were met or deemed probable resulting in (1) the immediate vesting of 187,500 shares and (2) the expected vesting of 187,500 shares in December 2024. As a result, the Company recognized $2.0 million of stock-based compensation expense during the six months ended June 30, 2024. No stock-based compensation expense has been recognized for the remaining 375,000 outstanding PSUs as the performance conditions were not deemed probable. The total fair value of PSU shares vested during the six months ended June 30, 2024 was $7.4 million. No PSUs vested during the six months ended June 30, 2023.
Employee Stock Purchase Plan
The Company issued 137,913 and 81,005 shares of common stock under the Employee Stock Purchase Plan (ESPP) during the six months ended June 30, 2024 and 2023, respectively. The Company had an outstanding liability of $0.1 million at June 30, 2024, which is included in accounts payable and accrued liabilities on the condensed balance sheet, for employee contributions to the ESPP for shares pending issuance at the end of the current offering period. As of June 30, 2024, 234,604 shares of common stock were available for issuance under the ESPP.
15
Stock-Based Compensation Expense
The assumptions used in the Black-Scholes-Merton model to determine the fair value of stock option grants were as follows:
Options
Six Months Ended June 30,
20242023
Risk-free interest rate
3.9% - 4.7%
3.5% - 4.0%
Expected volatility
79% - 82%
81% - 82%
Expected term (in years)
5.3 - 6.1
5.5 - 6.1
Expected dividend yield
—%
—%
Risk-Free Interest Rate. The Company bases the risk-free interest rate assumption for equity awards on the rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued.
Expected Volatility. The expected volatility of stock options is estimated based on the average historical volatilities of common stock of comparable publicly traded companies and the Company's own volatility. The comparable companies are chosen based on their size and stage in the life cycle. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available. Prior to 2023, the Company exclusively used peer group companies to determine expected volatility.
Expected Term. The Company's limited option exercise history does not provide a reasonable basis for estimating expected term, therefore the Company has estimated the expected life of its stock options using the simplified method, whereby the expected life equals the average of the vesting term and the original contractual term of the option. The expected life assumption for employee stock purchases under the ESPP is six months to conform with the six-month ESPP offering period.
Expected Dividend Yield. The Company’s expected dividend yield assumption is zero as it has never paid dividends and has no present intention to do so in the future.
The allocation of stock-based compensation expense for stock option, RSU awards, PSU awards, and shares purchasable under the ESPP was as follows (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Research and development expense$6,529 $5,442 $12,266 $10,714 
General and administrative expense6,283 4,011 10,852 7,843 
Total stock-based compensation expense$12,812 $9,453 $23,118 $18,557 
As of June 30, 2024, the unrecognized compensation cost related to outstanding time-based options and RSUs was $70.3 million and $21.0 million, respectively, which is expected to be recognized over a weighted-average period of 2.61 years and 3.30 years, respectively. Unrecognized compensation cost related to PSUs was $2.9 million. As of June 30, 2024, the unrecognized compensation cost related to stock purchase rights under the ESPP was $0.6 million, which is expected to be recognized over a weighted-average period of 0.46 years.
9.    Subsequent Events
On August 9, 2024, the Company entered into a sales agreement (the 2024 Sales Agreement) with TD Securities (USA), LLC (the 2024 Sales Agent) with substantially similar terms as the 2022 Sales Agreement described in Note 8 "Stockholders' Equity". Under the 2024 Sales Agreement, the Company may, from time to time, sell shares of its common stock having an aggregate offering price of up to $400 million through the 2024 Sales Agent. Sales of the shares of common stock, if any, will be made at prevailing market prices at the time of sale, or as otherwise agreed with the 2024 Sales Agent. The Company is not obligated to sell, and the 2024
16
Sales Agent is not obligated to buy or sell, any shares of common stock under the 2024 Sales Agreement. The 2024 Sales Agent will be entitled to a commission of up to 3.0% of the gross sales price of the ATM Shares sold through it pursuant to the 2024 Sales Agreement.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed financial statements and related notes thereto included elsewhere in this quarterly report on Form 10-Q and with our audited financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations, both of which are contained in our annual report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission, or SEC, on February 28, 2024.
Cautionary Note Regarding Forward-Looking Statements
This quarterly report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical fact contained in this quarterly report, including statements regarding our future results of operations and financial position, business strategies and plans, research and development plans, the timing and likelihood of resolution of the partial clinical hold on del-desiran, the anticipated timing, costs, design and conduct of our ongoing and planned preclinical studies and clinical trials for our product candidates, the timing and likelihood of regulatory filings and approvals for our product candidates, the timing and likelihood of success, plans and objectives of management for future operations and future results of anticipated product development efforts, inflationary pressures, and the ongoing hostilities outside the United States on our business, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” or the negative of these terms or other comparable terminology. These forward-looking statements are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this quarterly report and are subject to a number of risks, uncertainties and assumptions, including those described in Part II, Item 1A, “Risk Factors.” The events and circumstances reflected in our forward-looking statements may not be achieved or occur, and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.
Overview
We are a biopharmaceutical company committed to delivering a new class of RNA therapeutics called Antibody Oligonucleotide Conjugates, or AOCs. Our proprietary AOC platform is designed to combine the specificity of monoclonal antibodies, or mAbs, with the precision of RNA therapeutics to target the root cause of diseases previously untreatable with such therapeutics. Our advancing and expanding pipeline currently has three programs in clinical development. Delpacibart etedesiran, abbreviated as del-desiran (formerly AOC 1001), is designed to treat people with myotonic dystrophy type 1, or DM1, and is currently in Phase 3 development with the global HARBOR™ trial, which we initiated in June 2024. Delpacibart braxlosiran or del-brax (formerly AOC 1020) is designed to treat people living with facioscapulohumeral muscular dystrophy, or FSHD, and is currently in Phase 1/2 development with the FORTITUDE™ trial. Delpacibart zotadirsen, or del-zota (formerly AOC 1044), is designed for people with Duchenne muscular dystrophy, or DMD, and is currently in Phase 1/2 development with the EXPLORE44™ trial. Del-zota is specifically designed for people with mutations amenable to exon 44 skipping, or DMD44, and is the first of multiple AOCs we are developing for DMD. Del-desiran, del-brax and del-zota have all been granted Orphan Designation by the FDA and the European Medicines Agency, or EMA, and Fast Track Designation by the FDA. In addition, in May 2024, the FDA granted del-desiran Breakthrough Therapy designation for the treatment of DM1, and in February 2024, the FDA granted del-zota Rare Pediatric Disease designation.
We have reported data from each of our three clinical trials of AOC product candidates in 2024. In August 2024, we reported initial data from the 5 mg/kg cohort of our EXPLORE44 trial in people living with DMD44. These data demonstrated consistent delivery of PMO in skeletal muscle, an increase of dystrophin production of 25% of normal and an increase of 37% in exon 44 skipping. In addition, del-zota showed greater than 80% reduction of creatine kinase compared to baseline in people living with DMD44. The initial assessment from the randomized, double-blind, placebo-controlled EXPLORE44 trial assessed the safety and tolerability for 25 participants across two dose levels (5 mg/kg and 10 mg/kg). Del-zota demonstrated favorable safety and
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tolerability, with most treatment emergent adverse events (AEs) mild or moderate in participants with DMD44. Two participants discontinued from the study: one due to a serious adverse event of anaphylaxis which fully resolved and one due to moderate infusion related reaction. For the 5 mg/kg cohort, participants received three doses of 5 mg/kg of del-zota, or placebo, every six weeks. Avidity plans to enroll additional patients in the EXPLORE44 Open-Label Extension (OLE) for del-zota.
In June 2024, we shared initial del-brax data from our FORTITUDE™ trial in people living with FSHD which demonstrated consistent reductions of greater than 50% in double homeobox 4, or DUX4 regulated genes, trends of functional improvement, and favorable safety and tolerability in people living with FSHD as of the May 2024 data cutoff. The initial assessment from the randomized, double-blind, placebo-controlled FORTITUDE™ trial of del-brax provided a four-month look at the safety and tolerability for all 39 participants across two dose levels (2 mg/kg and 4 mg/kg). We plan to accelerate initiation of registrational cohorts in the FORTITUDE™ study, with the biomarker cohort planned in the second half of 2024 and the functional cohort planned in the first half of 2025.
We also initiated and began administration of del-desiran in people living with DM1 in our global Phase 3 HARBOR™ trial in June 2024. In March 2024, we shared new long-term del-desiran data from our ongoing MARINA-OLE™ trial in people living with DM1 showing reversal of disease progression across multiple endpoints including myotonia, muscle strength and patient reported activities of daily living over one year compared to a matched population from the END-DM1 natural history study. With over 265 infusions totaling 61.1 patient-years of exposure as of the January 2024 data cutoff, del-desiran has demonstrated favorable long-term safety and tolerability.
In the fourth quarter of 2024, we plan to announce our lead precision cardiology program target.
We continue to advance and expand our internal discovery pipeline with the addition of new research and development candidates to treat conditions in skeletal muscle and precision cardiology. We are well positioned as we build an integrated global biopharmaceutical company and continue to deliver on the RNA revolution. In addition to our own internal research programs, we continue to explore the full potential of our AOC platform through collaborations and partnerships, including programs in immunology, cardiology and other select indications outside of muscle.
Since our inception in 2012, we have devoted substantially all of our resources to organizing and staffing our company, business planning, raising capital, developing our proprietary AOC platform, identifying potential product candidates, establishing our intellectual property portfolio, conducting research, preclinical and clinical studies, and providing other general and administrative support for these operations. We have not generated any revenue from product sales. In June 2020, we completed our initial public offering, or IPO, and have since raised capital through additional public offerings, private placements, sales agreements, and under collaboration and research service agreements. Refer to “Liquidity and Capital Resources” for further information on the capital raised since inception and our future capital requirements.
We have incurred operating losses in each year since inception. Our net losses were $212.2 million and $174.0 million for the years ended December 31, 2023 and 2022, respectively, and $139.6 million for the six months ended June 30, 2024. As of June 30, 2024, we had an accumulated deficit of $710.4 million. We expect our expenses and operating losses will increase substantially as we conduct our ongoing and planned preclinical studies and clinical trials, continue our research and development activities, utilize third parties to manufacture our product candidates and related raw materials, hire additional personnel and protect our intellectual property. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our preclinical studies and clinical trials and our expenditures on other research and development activities, as well as the generation of any collaboration and services revenue.
Based upon our current operating plans, we believe that our existing cash, cash equivalents and marketable securities of $1.3 billion (as of June 30, 2024) will be sufficient to fund our operations for at least 12 months from the date of the filing of this Form 10-Q. While we may generate revenue under our current and/or future collaboration agreements, we do not expect to generate any revenues from product sales until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which we expect will take a number of years and may never occur. If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. Accordingly, until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed, on
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favorable terms or at all. Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
Research Collaboration with Bristol Myers Squibb
In November 2023, we entered into (i) a Research Collaboration and License Agreement, or the BMS Collaboration Agreement, with Bristol Myers Squibb Company, or BMS, to expand on our research with MyoKardia for up to five targets utilizing our proprietary AOC platform technology and (ii) a Securities Purchase Agreement with BMS, or the BMS Purchase Agreement, for the purchase by BMS in a private placement of 5,075,304 shares of our common stock at a purchase price of $7.8813 per share, for an aggregate purchase price of approximately $40 million. We refer to the BMS Collaboration Agreement and the BMS Purchase Agreement together as the "BMS Agreements." Under the terms of the BMS Agreements, we received approximately $100 million upfront, which includes a $60 million cash payment under the terms of the BMS Collaboration Agreement, and approximately $40 million for the purchase of our common stock under the terms of the BMS Purchase Agreement. We are also eligible to receive up to approximately $1.35 billion in research and development milestone payments, up to approximately $825 million in commercial milestone payments, and tiered royalties from high single digits to low double-digits on net sales. We are responsible for our own research collaboration costs incurred under the agreement, subject to a cumulative spending limit of $40 million. BMS will fund all future clinical development, regulatory and commercialization activities coming from this collaboration.
Research Collaboration and License Agreement with Eli Lilly and Company
In April 2019, we entered into a Research Collaboration and License Agreement, or the Lilly Agreement, with Eli Lilly and Company, or Lilly, for the discovery, development and commercialization of AOC products in immunology and other select indications on a worldwide basis. Under the Lilly Agreement, we and Lilly will collaborate on preclinical research and discovery activities for such products, with Lilly being responsible for funding the cost of such activities by both parties. Lilly will also lead the clinical development, regulatory approval and commercialization of all such products, at its sole cost. We granted Lilly an exclusive, worldwide, royalty-bearing license, with the right to sublicense, under our technology to research, develop, manufacture, and sell products containing AOCs that are directed to up to six mRNA targets. We retain the right to use our technology to perform our obligations under the agreement and for all purposes not granted to Lilly. Lilly paid us an upfront license fee of $20.0 million in 2019, and we are eligible to receive up to $60.0 million in development milestone payments per target, up to $140.0 million in regulatory milestone payments per target and up to $205.0 million in commercialization milestone payments per target. We are eligible to receive a tiered royalty ranging from the mid-single to low-double digits from Lilly on worldwide annual net sales of licensed products, subject to specified and capped reductions for the market entry of biosimilar products, loss of patent coverage of licensed products and for payments owed to third parties for additional rights necessary to commercialize licensed products in the territory.
Components of Results of Operations
Revenue
Our revenue to date has been derived from payments received under research collaboration and license agreements. For the foreseeable future, we may generate revenue from a combination of upfront payments, milestone payments and reimbursement of services under our current and/or future collaboration agreements. We do not expect to generate any revenue from the sale of products unless and until such time that our product candidates have advanced through clinical development and regulatory approval, if ever. We expect that any revenue we generate, if at all, will fluctuate from quarter-to-quarter as a result of the timing and amount of payments relating to such services and milestones and the extent to which any of our products are approved and successfully commercialized. If we fail to complete preclinical and clinical development of product candidates or obtain regulatory approval for them, our ability to generate future revenues and our results of operations and financial position would be adversely affected.
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Operating Expenses
Research and Development
Research and development expenses consist of external and internal costs associated with our research and development activities, including our discovery and research efforts, and the preclinical and clinical development of our product candidates. Our research and development expenses include:
•external costs, including expenses incurred under arrangements with third parties, such as contract research organizations, contract manufacturers, consultants and our scientific advisors; and
•internal costs, including;
◦employee-related expenses, including salaries, benefits and stock-based compensation;
◦the costs of laboratory supplies and acquiring, developing and manufacturing preclinical study materials; and
◦facilities, information technology and depreciation, which include direct and allocated expenses for rent and maintenance of facilities and depreciation of leasehold improvements and equipment.
Research and development costs, including costs reimbursed under the Lilly Agreement, are expensed as incurred, with reimbursements of such amounts being recognized as revenue. We account for nonrefundable advance payments for goods and services that will be used in future research and development activities as expenses when the service has been performed or when the goods have been received.
At any one time, we are working on multiple programs. Our internal resources, employees and infrastructure are not directly tied to any one research or drug discovery program and are typically deployed across multiple programs.
We expect our research and development expenses to increase for the foreseeable future as we continue to conduct our ongoing research and development activities, advance our preclinical research programs toward clinical development, including conducting IND-enabling studies, and conduct clinical trials. The process of conducting preclinical studies and clinical trials necessary to obtain regulatory approval is costly and time consuming. We may never succeed in achieving marketing approval for any of our product candidates.
The timelines and costs associated with research and development activities are uncertain, can vary significantly for each product candidate and development program, and are difficult to predict. We anticipate we will make determinations as to which programs to pursue and how much funding to direct to each program on an ongoing basis in response to preclinical and clinical results, regulatory developments, ongoing assessments as to each program’s commercial potential, and our ability to maintain or enter into new collaborations, to the extent we determine the resources or expertise of a collaborator would be beneficial for a given program. We will need to raise substantial additional capital in the future. In addition, we cannot forecast which development programs may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.
Our development costs may vary significantly based on factors such as:
•the number and scope of clinical, preclinical and IND-enabling studies;
•the timing and likelihood of resolution of the partial clinical hold on del-desiran;
•per patient trial costs;
•the number of trials required for approval;
•the number of sites included in the trials;
•the countries in which the trials are conducted;
•the length of time required to enroll eligible patients;
•the number of patients that participate in the trials;
•the number of doses that patients receive;
•the drop-out or discontinuation rates of patients;
•potential additional safety monitoring requested by regulatory agencies;
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•the duration of patient participation in the trials and follow-up;
•the cost and timing of manufacturing our product candidates;
•the phase of development of our product candidates; and
•the efficacy and safety profile of our product candidates.
General and Administrative
General and administrative expenses consist primarily of employee-related expenses, including salaries, benefits and stock-based compensation, for employees in our executive, finance, accounting, legal, business development and support functions. Other general and administrative expenses include allocated facility, information technology and depreciation related costs not otherwise included in research and development expenses, and professional fees for auditing, tax, intellectual property, and legal services. Costs related to filing and pursuing patent applications are recognized as general and administrative expenses as incurred since recoverability of such expenditures is uncertain.
We expect our general and administrative expenses will increase for the foreseeable future to support our increased research and development activities and other corporate activities.
Other Income (Expense)
Other income (expense) consists primarily of interest earned on our cash, cash equivalents, and marketable securities.
Results of Operations
Comparison of the Three and Six Months Ended June 30, 2024 and 2023
The following table summarizes our results of operations for the periods presented (in thousands):
Three Months Ended June 30,ChangeSix Months Ended June 30,Change
2024202320242023
Revenue$2,045 $2,316 $(271)$5,588 $4,549 $1,039 
Research and development expenses63,940 42,672 21,268 130,772 90,437 40,335 
General and administrative expenses20,731 12,278 8,453 34,629 24,342 10,287 
Other income11,833 5,609 6,224 20,165 10,811 9,354 
Revenue
Revenue decreased by $0.3 million for the three months ended June 30, 2024 and 2023, primarily due to the recognition of revenues under the Lilly agreement in the prior year for which there were no revenues recognized in the current year comparative period, offset by an increase in revenues recognized under the BMS Agreement in the current year for which there were no revenues recognized in the prior year comparative period. Revenue increased by $1.0 million for the six months ended June 30, 2024 and 2023, primarily due to the recognition of revenues under the BMS agreement in the current year for which there were no revenues recognized in the prior year comparative period.
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Research and Development Expenses
The following tables illustrate the components of our research and development expenses for the periods presented (in thousands):
Three Months Ended June 30,ChangeSix Months Ended June 30,Change
2024202320242023
External costs:
Del-desiran$9,045 $4,216 $4,829 $18,141 $11,176 $6,965 
Del-brax7,768 1,501 6,267 13,931 9,117 4,814 
Del-zota5,081 5,156 (75)10,921 7,692 3,229 
Other programs986 1,511 (525)2,423 4,988 (2,565)
Unallocated13,860 8,360 5,500 33,565 14,991 18,574 
Total external costs36,740 20,744 15,996 78,981 47,964 31,017 
Internal costs:
Employee-related expenses21,554 16,996 4,558 40,890 32,974 7,916 
Facilities, lab supplies and other5,646 4,932 714 10,901 9,499 1,402 
Total internal costs
27,200 21,928 5,272 51,791 42,473 9,318 
Total research and development expenses$63,940 $42,672 $21,268 $130,772 $90,437 $40,335 
Research and development expenses increased by $21.3 million for the three months ended June 30, 2024 as compared to the same period in 2023, primarily due to increased external costs associated with the progression of clinical trials and preclinical studies, including $5.3 million in higher manufacturing costs related to drug product and a $6.8 million out of period adjustment which decreased external research and development expenses in the prior year period, as well as higher internal costs including $4.6 million in higher personnel costs. Similarly, research and development costs increased by $40.3 million for the six months ended June 30, 2024 as compared to the same period in 2023, due to increased external costs associated with the progression of clinical trials and preclinical studies, including $20.8 million in higher manufacturing cost related to drug product and a $3.6 million out of period adjustment which decreased external research and development expenses in the prior year period for costs incurred prior to 2023, as well as higher internal costs including an increase of $7.9 million in personnel costs.
General and Administrative Expenses
General and administrative expenses increased by $8.5 million for the three months ended June 30, 2024 as compared to the same period in 2023, primarily due to $5.1 million in higher personnel costs and $1.5 million in higher professional fees to support our expanded operations. Similarly, general and administrative expenses increased by $10.3 million for the six months ended June 30, 2024 as compared to the same period in 2023, primarily due to $7.6 million in higher personnel costs and $0.7 million in higher professional fees to support our expanded operations.
Other Income
Other income increased by $6.2 million and $9.4 million for the three and six months ended June 30, 2024 and 2023 respectively, due to higher interest income earned on marketable securities investments and cash and cash equivalent balances.
Liquidity and Capital Resources
Sources of Liquidity
On November 8, 2022, we entered into a sales agreement, or the 2022 Sales Agreement, with Cowen and Company, LLC, or the 2022 Sales Agent, which has since been terminated, as discussed below. Under the
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2022 Sales Agreement, we could, from time to time, sell shares of our common stock having an aggregate offering price of up to $200.0 million through the 2022 Sales Agent. Sales of the shares of common stock, if any, would be made at prevailing market prices at the time of sale, or as otherwise agreed with the 2022 Sales Agent. We were not obligated to sell, and the 2022 Sales Agent was not obligated to buy or sell, any shares of common stock under the 2022 Sales Agreement. During the six months ended June 30, 2024 and 2023, we sold 418,408 and 4,107,810 shares of our common stock, respectively, pursuant to the 2022 Sales Agreement and received net proceeds of $5.6 million and $60.5 million, respectively, after deducting offering-related transaction costs and commissions.
On March 4, 2024, we completed a private placement of 15,224,773 shares of our common stock at a price of $16.50 per share and pre-funded warrants to purchase an aggregate 9,030,851 shares of our common stock at a price of $16.499 per pre-funded warrant. The net proceeds from the private placement were $379.8 million after deducting placement fees and offering costs of $20.4 million. Each pre-funded warrant has an exercise price of $0.001 per share of common stock, is immediately exercisable, and does not expire.
On June 17, 2024, the Company completed a public offering of 12,132,500 shares of its common stock at a public offering price of $38.00 per share. Net proceeds from the offering were approximately $432.8 million, after deducting underwriting discounts and offering expenses of $28.3 million. The shares sold in the offering were registered pursuant to the Company's shelf registration statement on Form S-3, which became automatically effective upon filing on May 9, 2024.
On August 9, 2024, we entered into a new sales agreement, or the 2024 Sales Agreement, with TD Securities (USA) LLC, (the 2024 Sales Agent), with substantially similar terms as the 2022 Sales Agreement described above. Under the 2024 Sales Agreement, we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $400 million through the 2024 Sales Agent. We are not obligated to sell, and the 2024 Sales Agent is not obligated to buy or sell, any shares of common stock under the 2024 Sales Agreement. Upon entry into the 2024 Sales Agreement, the 2022 Sales Agreement was terminated.
Since our inception through June 30, 2024, other significant sources of capital raised to fund our operations were comprised of $274.1 million from our IPO, $378.9 million from follow-on public offerings, $140.6 million of net proceeds under a previous sales agreement, aggregate gross proceeds of $131.6 million from the sale and issuance of convertible preferred stock and convertible notes, and $144.6 million from funding under collaboration and research services agreements, including approximately $40.0 million related to the sale of shares of common stock in November 2023 to BMS in a private placement.
Future Capital Requirements
As of June 30, 2024, we had cash, cash equivalents and marketable securities of $1.3 billion. Based upon our current operating plans, we believe that our existing cash, cash equivalents, and marketable securities will be sufficient to fund our operations for at least 12 months from the date of the filing of this Form 10-Q. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. Additionally, the process of conducting preclinical studies and testing product candidates in clinical trials is costly, and the timing of progress and expenses in these studies and trials is uncertain.
Our future capital requirements are difficult to forecast and will depend on many factors, including but not limited to:
•the type, number, scope, progress, expansions, results, costs, and timing of discovery, preclinical studies, and clinical trials of our product candidates that we are pursuing or may choose to pursue in the future;
•the costs and timing of manufacturing for our product candidates and preparation for possible commercial operations if any product candidate is approved;
•the costs, timing, and outcome of regulatory review of our product candidates;
•the terms and timing of establishing and maintaining collaborations, licenses and other arrangements;
•the costs of obtaining, maintaining, and enforcing our patents and other intellectual property rights;
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•the costs associated with hiring additional personnel and consultants as our preclinical and clinical activities, and preparation for future commercial activities, if any, increase;
•the timing and amount of the milestone or other payments made to us under our existing and any future collaboration agreements;
•the costs and timing of establishing or securing sales and marketing capabilities if any product candidate is approved;
•our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; and
•costs associated with any products or technologies that we may in-license or acquire.
While we may generate revenue under our current and/or future collaboration agreements, we do not expect to generate any revenues from product sales until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which we expect will take a number of years and may never occur. If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing, and distribution. Accordingly, until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our cash needs through equity offerings, debt financings, or other capital sources, including current and potential future collaborations, licenses and other arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed, on favorable terms or at all. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and could force us to delay, limit, reduce, or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
Cash Flows
The following table summarizes our cash flows for the periods presented (in thousands):
Six Months Ended June 30,Change
20242023
Net cash provided by (used in):
Operating activities$(135,384)$(98,774)$(36,610)
Investing activities(307,616)(149,631)(157,985)
Financing activities836,16961,933774,236 
Net increase (decrease) in cash, cash equivalents and restricted cash
$393,169 $(186,472)$579,641 
Operating Activities
Net cash used in operating activities of $135.4 million and $98.8 million for the six months ended June 30, 2024 and 2023, respectively, consisted primarily of cash used to fund our operations related to the development of clinical trials, preclinical studies, and other programs. The increase is due to increased research and development costs as well as general and administrative expenses as described under “Results of Operations” above.
Investing Activities
Net cash used in investing activities of $307.6 million for the six months ended June 30, 2024 consisted primarily of $514.1 million for purchases of marketable securities and reinvestment of proceeds from matured marketable securities as well as $1.4 million in purchases of property and equipment, offset by $207.9 million of proceeds from maturities of marketable securities. Net cash used in investing activities of $149.6 million for the six months ended June 30, 2023 consisted of $275.4 million for purchases of marketable securities due to investing the proceeds from the sale of common stock of $223.8 million in December 2022 and reinvestment of
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proceeds from matured marketable securities, and $2.4 million in purchases of property and equipment, partially offset by $128.2 million of proceeds from maturities of marketable securities.
Financing Activities
Net cash provided by financing activities of $836.2 million for the six months ended June 30, 2024 consisted primarily of $677.3 million in net proceeds from sales of our common stock, $141.4 million in net proceeds from the sale of pre-funded warrants in a private placement, and $17.5 million in proceeds from the issuance of common stock under employee incentive equity plans. Net cash provided by financing activities of $61.9 million for the six months ended June 30, 2023 consisted primarily of net proceeds from sales of our common stock made pursuant to the 2022 Sales Agreement.
Critical Accounting Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of these condensed financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses. On an ongoing basis, we evaluate these estimates and judgments. We base our estimates on historical experience and on various assumptions that we believe to be reasonable under the circumstances. These estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenue and expenses that are not readily apparent from other sources. Actual results may differ materially from these estimates. As of June 30, 2024, there have been no material changes to our critical accounting estimates from those disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates,” included in our annual report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 28, 2024.
Contractual Obligations and Commitments
In April 2024, the Company entered into a sublease agreement to rent office and laboratory space for the Company's future corporate headquarters. Total aggregate future lease commitments under the sublease agreement are approximately $72.6 million. Refer to Note 7, "Commitments and Contingencies" to our condensed financial statements included elsewhere in this quarterly report on Form 10-Q for further details. Except for the sublease agreement, as of June 30, 2024, there have been no material changes outside the ordinary course of our business to the contractual obligations we reported in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Contractual Obligations and Commitments,” included in our annual report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 28, 2024.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As of June 30, 2024, there have been no material changes in our market risk from that described in “Quantitative and Qualitative Disclosures About Market Risk,” included in our annual report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 28, 2024.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic and current reports that we file with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives. In reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. In addition, the design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Our management, with the participation of our principal executive officer and principal financial officer, has evaluated, as of the end of the period covered by this quarterly report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on such evaluation, our principal executive officer and principal financial officer have concluded that, as of June 30, 2024, our disclosure controls and procedures were not effective at the reasonable assurance level due to a material weakness in internal control over financial reporting described below.
As disclosed in Item 9A, “Controls and Procedures” of our annual report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 28, 2024, we previously identified a material weakness in our internal control over financial reporting with respect to segregation of duties over certain information technology general controls (ITGCs) related to a module within our enterprise resource planning (ERP) system. These ITGCs were not operating effectively to (i) restrict access to certain data and the ability to make changes thereto, and (ii) to monitor changes to such data. While the control deficiency identified did not result in any misstatements, a reasonable possibility exists that a material misstatement to the annual or interim financial statements and disclosures would not have been prevented or detected on a timely basis. Notwithstanding the identified material weakness, our management believes the unaudited Condensed Financial Statements included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial condition, results of operations and cash flows as of and for the periods presented in accordance with GAAP.
Remediation
Our management is committed to maintaining a strong internal control environment. As discussed above and disclosed in Item 9A, “Controls and Procedures” of our annual report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 28, 2024, we have changed the relevant access to address the known segregation of duties issues and will update our access review controls to include additional procedures. While we believe the actions taken thus far are substantive in addressing this control issue, we will consider this remediated once applicable controls operate for a sufficient period of time and management has
27
concluded, through testing, that these controls are operating effectively. We will continue to monitor through testing the effectiveness of these actions to ensure these controls continue to operate effectively.
Changes in Internal Control Over Financial Reporting
Except as described above, there have been no changes in our internal control over financial reporting during the quarter ended June 30, 2024 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 are not currently subject to any material legal proceedings. From time to time, we may be involved in legal proceedings or subject to claims incident to the ordinary course of business. Regardless of the outcome, such proceedings or claims can have an adverse impact on us because of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be obtained.
ITEM 1A. RISK FACTORS
We do not believe that there have been any material changes to the risk factors set forth in Part I, Item 1A of our annual report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 28, 2024. The risk factors described in such reports are not the only risks we face. Factors that are not currently known to us, factors that we currently consider immaterial or factors that are not specific to us, such as general economic conditions, may also materially adversely affect our business or financial condition.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Unregistered Sales of Equity Securities
None.
Issuer Repurchases of Equity Securities
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Rule 10b5-1 Trading Arrangements
From time to time, our officers (as defined in Rule 16a–1(f)) and directors may enter into Rule 10b5-1 or non-Rule 10b5-1 trading arrangements (as each such term is defined in Item 408 of Regulation S-K). During the
29
three months ended June 30, 2024, our officers and directors took the following actions with respect to such trading arrangements:
ActionDateTrading ArrangementTotal Shares to be SoldExpiration Date
Rule 10b5-1*Non-Rule 10b5-1**
Michael MacLean (Chief Financial and Chief Business Officer)
Adopt4/2/2024X124,4236/30/2025
W. Michael Flanagan (Chief Scientific and Technical Officer)
Adopt6/12/2024X
271,958(1)
6/12/2026
Teresa McCarthy (Chief Human Resources Officer)
Adopt6/12/2024X200,00012/31/2025
____________________
* Intended to satisfy the affirmative defense of Rule 10b5-1(c)
** Not intended to satisfy the affirmative defense of Rule 10b5-1(c)
(1)Subject to increase based on a future award of our common stock covered by this 10b5-1 plan, the number of such securities is not able to be determined as of the date hereof.
2022 ATM Offering
On November 8, 2022, we entered into a sales agreement, or the 2022 Sales Agreement, with Cowen and Company, LLC, or the 2022 Sales Agent, pursuant to which we could, from time to time, sell shares of our common stock having an aggregate offering price of up to $200.0 million through the 2022 Sales Agent, as our agent, or the 2022 ATM Offering. In connection with the 2022 ATM Offering, we filed a prospectus supplement, dated November 8, 2022, or the 2022 ATM Prospectus, to the prospectus, dated July 2, 2021, filed with a registration statement on Form S-3 (File No. 333-257691), which became automatically effective upon filing with the SEC on July 2, 2021. In connection with the 2024 Sales Agreement, effective August 9, 2024, we terminated the 2022 Sales Agreement, and we have discontinued all offers and sales of shares of our common stock under the 2022 Sales Agreement and the 2022 ATM Prospectus. Between November 8, 2022 and August 9, 2024, we sold an aggregate of 4,526,218 shares of common stock pursuant to the 2022 Sales Agreement for aggregate gross proceeds of approximately $67.7 million.
2024 ATM Offering
On August 9, 2024, we entered into a sales agreement, or the 2024 Sales Agreement, with TD Securities (USA) LLC, or the 2024 Sales Agent, pursuant to which we may, from time to time, sell shares of our common stock, or the ATM Shares, having an aggregate offering price of up to $400 million through the 2024 Sales Agent, as our agent.
Subject to the terms and conditions of the 2024 Sales Agreement, the 2024 Sales Agent will use its commercially reasonable efforts to sell the ATM Shares from time to time, based upon our instructions. We have provided the 2024 Sales Agent with customary indemnification rights, and the 2024 Sales Agent will be entitled to a commission of up to 3.0% of the gross sales price of the ATM Shares sold through it pursuant to the 2024 Sales Agreement.
We will offer and sell the ATM Shares pursuant to an automatic shelf registration statement on Form S-3 (File No. 333-279264), which became automatically effective upon filing with the Securities and Exchange Commission, or SEC, on May 9, 2024. We will file a prospectus supplement with the SEC in connection with the offer and sale of up to $400 million of ATM Shares pursuant to the 2024 Sales Agreement on August 9, 2024.
The ATM Shares may be offered only by means of a prospectus forming a part of the effective registration statement. Sales of the ATM Shares, if any, under the 2024 Sales Agreement may be made in transactions that are deemed to be an "at the market offering" as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended, including sales made by means of ordinary brokers' transactions, including on The Nasdaq Global Market, at market prices, or as otherwise agreed with the 2024 Sales Agent. We have no obligation to sell any of the ATM Shares, and may at any time suspend offers under the 2024 Sales Agreement or terminate the 2024 Sales Agreement.
The foregoing description of the 2024 Sales Agreement does not purport to be complete and is qualified in its entirety by reference to the full 2024 Sales Agreement, a copy of which is filed herewith as Exhibit 10.2 and is incorporated by reference herein.
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A copy of the opinion of Latham & Watkins LLP relating to the validity of the securities to be issued pursuant to the 2024 Sales Agreement is filed hereto as Exhibit 5.1.
This Quarterly Report on Form 10-Q does not constitute an offer to sell the ATM Shares or a solicitation of an offer to buy the ATM Shares, nor shall there be any sale of the ATM Shares in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Amended and Restated Employment Agreements
Effective August 6, 2024, the Human Capital Management Committee of our Board of Directors approved, and we entered into, amended and restated employment agreements with each of our executive officers, including Sarah Boyce, W. Michael Flanagan, Ph.D., Michael MacLean, John Moriarty, and Teresa McCarthy. The amended and restated employment agreements set forth, for each executive officer, his or her annual base salary and eligibility to receive an annual performance bonus.
Regardless of the manner in which the executive officers employment terminates, he or she is entitled to receive amounts previously earned during the executive officer’s employment. Additionally, in the event that the executive officer’s termination occurs after the occurrence of a change of control and after the conclusion of a calendar year in respect of which no annual bonus has yet been paid, the executive officer will be entitled to his or her annual bonus for such completed calendar year based on actual performance, paid when annual bonuses are paid to our employees generally.
In addition, the executive officers are each entitled to certain severance benefits under their respective amended and restated employment agreements, subject to their execution of a release of claims and compliance with post-termination obligations.
Under the amended and restated employment agreements, upon a termination without cause or resignation for good reason (as such terms are defined in the amended and restated employment agreements) outside of the Change of Control Period (as defined below), the executive officer is entitled to: (i) his or her base salary for a period of 12 months (or 18 months in the case of Ms. Boyce), and (ii) payment of the COBRA premiums for the applicable severance period. The cash severance benefits will be paid in a lump sum (other than in the case of Ms. Boyce, whose severance will be paid in the form of salary continuation during the severance period).
Upon a termination without cause or resignation for good reason within 59 days prior to or 24 months after a change of control (as defined in our 2020 Incentive Award Plan), or the Change of Control Period, an executive officer is entitled to: (i) his or her base salary for 18 months (or 24 months in the case of Ms. Boyce), (ii) an amount equal to 150% (or 200% in the case of Ms. Boyce) of his or her target annual bonus for the year in which such termination occurs, (iii) an amount equal to his or her target annual bonus for the calendar year in which such termination occurs, prorated for the portion of the year that elapsed through the date of termination, (iv) payment of the COBRA premiums for the applicable severance period, and (v) accelerated vesting of any unvested time-based vesting equity awards (with the vesting of any performance-based equity awards to be governed by the applicable award agreement). The cash severance benefits will be paid in a lump sum (other than in the case of Ms. Boyce, who will receive 18 months of her base salary severance in the form of salary continuation during such 18 month period).
The foregoing description of the amended and restated employment agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the amended and restated employment agreements, copies of which will be filed as exhibits to our Quarterly Report on 10-Q for the quarter ending September 30, 2024.
31
Table of Contents
Item 6. Exhibits
Exhibit
Number		Exhibit DescriptionIncorporated by ReferenceFiled
Herewith
FormDateNumber
3.18-K6/16/20203.1
3.28-K12/13/20233.1
4.1S-15/22/20204.1
4.2
8-K
2/29/20244.1
5.1
X
10.1
8-K
6/12/202410.1
10.2
X
23.1
X
31.1X
31.2X
32.1*X
32.2*X
101.INSInline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.X
101.SCHInline XBRL Taxonomy Extension Schema DocumentX
101.CALInline XBRL Taxonomy Extension Calculation Linkbase DocumentX
101.DEFInline XBRL Taxonomy Extension Definition Linkbase DocumentX
101.LABInline XBRL Taxonomy Extension Label Linkbase DocumentX
101.PREInline XBRL Taxonomy Extension Presentation Linkbase DocumentX
104Cover Page Interactive Data File (embedded within the Inline XBRL document)X
*This certification is deemed not filed for purpose of section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Avidity Biosciences, Inc.
Date: August 9, 2024
By:/s/ Sarah Boyce
Sarah Boyce
President, Chief Executive Officer and Director
(Principal Executive Officer)

Date: August 9, 2024
By:/s/ Michael F. MacLean
Michael F. MacLean
Chief Financial and Chief Business Officer
(Principal Financial and Accounting Officer)
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