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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 2021

For the transition period from to

Commission File Number 001-39231

PASSAGE BIO, INC.

(Exact Name of Registrant as Specified in Its Charter)

(State or other jurisdiction of (I.R.S. Employer

incorporation or organization) Identification No.)

One Commerce Square

2005 Market Street, 39th Floor

(Address of principal executive offices) (Zip Code)

(267) 866-0311

(Registrant’s telephone number, including area code)

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

Title of each class Trading Symbol Name of each exchange on which registered

Common stock PASG The Nasdaq Stock Market LLC (Nasdaq Global Select Market)

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

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒

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

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

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

Large accelerated filer ☐ Accelerated filer ☐

Non-accelerated filer ☒ Smaller reporting company ☒

Emerging growth company ☒

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

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

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

The aggregate market value of the common equity held by non-affiliates of the Registrant on June 30, 2021 (the last business day of the Registrant’s second fiscal quarter), based upon the closing price of $13.24 of the Registrant’s common stock as reported on The Nasdaq Global Market, was approximately $483.3 million.

The number of shares of the registrant’s common stock outstanding as of March 1, 2022, was 54,292,691.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s Definitive Proxy Statement (“Proxy Statement”) relating to the 2022 Annual Meeting of Stockholders will be filed with the Commission within 120 days after the end of the Registrant’s 2021 fiscal year and is incorporated by reference into Part III of this Report.

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Passage Bio, Inc.

ANNUAL REPORT ON FORM 10-K

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Page

PART I 6

ITEM 1. Business 6

ITEM 1A. Risk Factors 45

ITEM 1B. Unresolved Staff Comments 98

ITEM 2. Properties 99

ITEM 3. Legal Proceedings 100

ITEM 4. Mine Safety Disclosures 101

PART II 102

ITEM 6. [Reserved] 103

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 114

ITEM 8. Financial Statements and Supplementary Data 115

ITEM 9A. Controls and Procedures 138

ITEM 9B. Other Information 140

PART III 142

ITEM 11. Executive Compensation 143

ITEM 14. Principal Accounting Fees and Services 146

PART IV 147

ITEM 15. Exhibits and Financial Statement Schedules 147

Signatures 152

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements. All statements other than statements of historical facts contained in this Annual Report are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. All statements other than statements of historical fact contained in this Annual Report, including without limitation statements regarding our plans to develop and commercialize our product candidates, the timing of our ongoing or planned clinical trials, the timing of and our ability to obtain and maintain regulatory approvals, the clinical utility of our product candidates, our commercialization, marketing and manufacturing capabilities and strategy, our expectations about the willingness of healthcare professionals to use our product candidates, the sufficiency of our cash and cash equivalents, the expected impact of the COVID-19 pandemic on our operations, and the plans and objectives of management for future operations and capital expenditures are forward-looking statements.

The forward-looking statements in this Annual Report are only predictions and are based 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 Annual Report and are subject to a number of known and unknown risks, uncertainties and assumptions, including those described under the sections in this Annual Report entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Annual Report.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. 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. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. 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. We intend the forward-looking statements contained in this Annual Report to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act.

Trademarks and Tradenames

“PASSAGE BIO” is a registered trademark, and the PASSAGE BIO mark, the Passage Bio logo and all product names are our common law trademarks. All other service marks, trademarks and tradenames appearing in this prospectus are the property of their respective owners. Solely for convenience, the trademarks and tradenames referred to in this prospectus appear without the ® and TM symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights, or the right of the applicable licensor to these trademarks and tradenames.

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Summary of Risk Factors

Our business is subject to a number of risks and uncertainties, including those immediately following this summary. Some of these risks are:

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PART I

Item 1. Business

Overview

We are a clinical stage genetic medicines company focused on developing transformative therapies for central nervous system, or CNS, disorders with limited or no approved treatment options. Our vision is to finally fulfill the promise of gene therapy by developing groundbreaking therapies that transform the lives of patients with CNS diseases. The field of genetic medicine is rapidly expanding and we believe we have a differentiated approach to developing treatments for CNS disorders that enables us to select and advance product candidates with a higher probability of technical and regulatory success. We have entered into a strategic research collaboration with the Trustees of the University of Pennsylvania’s, or Penn’s, Gene Therapy Program, or GTP, headed by Dr. James Wilson, a leader in the genetic medicines field. We also leverage our close working relationship with Penn’s Orphan Disease Center, or ODC, to develop historical and prospective comparable natural history patient profiles for comparison to participants in interventional trials. Through this collaboration we have assembled a deep portfolio of genetic medicine product candidates, for which we retain global rights, including our three clinical product candidates: PBGM01 for the treatment of GM1 gangliosidosis, or GM1, PBFT02 for the treatment of frontotemporal dementia, or FTD, and PBKR03 for the treatment of Krabbe disease.We have six programs in the research stage: PBML04 for metachromatic leukodystrophy, or MLD, PBAL05 for amyotrophic lateral sclerosis, or ALS, PBCM06 for Charcot-Marie-Tooth Type 2A, or CMT2A, and unnamed programs for Canavan disease, Parkinson’s disease and Huntington’s disease. We also have exploratory research programs for Alzheimer’s disease, or AD, and Temporal Lobe Epilepsy, or TLE.

We founded Passage Bio with the intent to build a differentiated CNS genetic medicines company delivering transformative therapies to patients by combining our team’s experience in rare and neurological disease development, manufacturing and commercialization with the pioneering research expertise of GTP in gene therapy. We are purposefully focusing on rare, monogenic CNS disorders for which we believe our genetic medicine approach provides distinct technical advantages based on decades of research by GTP. GTP conducts rigorous preclinical studies to identify promising product candidates. Our collaboration provides us with access to cutting edge capabilities and innovation in the field of genetic medicine research, including in capsid engineering and next-generation capsid libraries, vector engineering, transgene design and gene therapy modalities, animal disease models and related studies for lead-optimization of product candidates. Further, we believe our team’s deep clinical development experience in rare and neurological diseases will enable well planned clinical trials with the potential for efficient advancement to regulatory approval. In addition, we are engaging with key opinion leaders, practitioners and patient advocacy groups in the field of rare, monogenic CNS disorders that provide strategic input and help inform our clinical development activities. We believe that our ability to execute on the above tenets provides us with product candidates that have an improved profile for clinical development and an enhanced probability of success.

We are focused on developing and commercializing disease-modifying therapies that can have a transformative impact on patients’ lives. Utilizing our rigorous selection process, we have assembled a deep portfolio of product candidates for rare, monogenic CNS disorders. Our first product candidate, PBGM01, utilizes a next-generation AAVhu68 capsid to deliver to the brain and peripheral tissues a functional GLB1 gene encoding lysosomal beta-galactosidase, or β-gal, for GM1. Our second product candidate, PBFT02, utilizes an AAV1 capsid to deliver to the brain a functional GRN gene encoding progranulin, or PGRN, for FTD caused by progranulin deficiency, or FTD-GRN. Our third product candidate, PBKR03, utilizes a next-generation AAVhu68 capsid to deliver to the brain and peripheral tissues a functional gene encoding the hydrolytic enzyme galactosylceramidase, or GALC, for Krabbe disease. There are currently no approved disease-modifying therapies for these diseases. We believe our clinical product candidates have the potential to provide patients with significantly improved outcomes, given our chosen route of intra cisterna magna, or ICM, administration, the potential for enhanced benefits due to cross-correction of neighboring cells by secreted gene products, and our rigorous capsid and transgene selection process.

Our research collaboration with GTP provides us with access to one of the premier research institutions in the world for the discovery and preclinical development of genetic medicine product candidates and exclusive rights to product candidates for certain CNS disorders. As part of this collaboration, we have exclusive rights to all

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discovery work and IND-enabling research for product candidates in up to seventeen CNS indications that we select. In addition to our three clinical product candidates, we have six ongoing research programs and eight remaining options available to us to license additional programs from GTP until May 2026. We also have exploratory research programs with GTP in non-rare, non-monogenic, or large, CNS indications, initially focused on AD and TLE, which can be expanded to other large, CNS diseases upon mutual agreement with GTP. Further, we have exclusive rights, subject to certain limitations, to technologies resulting from the discovery program for our products developed with GTP, such as novel capsids, toxicity reduction technologies, delivery, and formulation. We have global commercial rights to all of our current and future product candidates and believe that our approach to developing therapies for life-threatening diseases that are currently underserved presents an opportunity to efficiently advance our product candidates through clinical development, regulatory approval and ultimately to commercialization.

We are led by pioneers and experts with decades of collective experience in genetic medicines and rare disease drug development, manufacturing and commercialization. Dr. Wilson, one of our scientific founders, is recognized as a world leader in research and development in the fields of genetic medicines and rare disease.Dr. Wilson’s continuing relationship with our company and involvement in both academic research and clinical drug development allows us to gain early insight into emerging technologies that informs our business strategy. We have assembled a team whose members have extensive experience in successfully developing, manufacturing and commercializing genetic medicine and rare disease products.

Our pipeline

We have assembled a deep portfolio of genetic medicine product candidates for rare, monogenic CNS disorders characterized by high unmet medical needs. We intend to further expand our portfolio with genetic medicine product candidates for rare, monogenic and large CNS disorders, as well as other treatment approaches as technology advances in the field. Our development programs consist of:

PBGM01 for the treatment of GM1

We are currently developing PBGM01, which utilizes a proprietary, next-generation AAVhu68 capsid to deliver to the brain and peripheral tissues a functional GLB1 gene encoding β-gal for infantile GM1. Infantile GM1 is the most common and severe form of GM1, in which patients have mutations in the GLB1 gene that produce little or no residual β-gal enzyme activity. β-gal is an enzyme that catalyzes the first step in the natural degradation of GM1 ganglioside. Reduced β-gal activity results in the accumulation of toxic levels of GM1 ganglioside in neurons throughout the brain, causing rapidly progressive neurodegeneration, with a life expectancy of two to ten years. Currently, there are no disease-modifying therapies approved for the treatment of GM1. Early onset infantile GM1 is characterized by onset in

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the first 6 months of life, while late onset infantile GM1 is characterized by onset between 6 and 24 months. We believe PBGM01 could provide patients with significantly improved outcomes. In preclinical studies we observed meaningful transgene expression in both the CNS and in peripheral organs affected in GM1. We are conducting clinical trials using an ICM method of administration, which involves an injection at the craniocervical junction.

We have an active IND, or Investigational New Drug application, from the U.S. Food and Drug Administration, or FDA, and approved clinical trial authorizations, or CTAs, in multiple countries for PBGM01, and we are actively proceeding with our Imagine-1 Trial, an international, multi-center, open-label, single-arm Phase 1/2 clinical trial of PBGM01 in patients with a diagnosis of early and late infantile GM1.

In March 2021, we dosed the first patient in our Imagine-1 Trial. In the fourth quarter of 2021, we reported initial safety and 30-day biomarker data from the initial cohort of two early onset GM1 patients treated with the low dose of PBGM01. We also reported interim safety data for the initial cohort that showed PBGM01 was well tolerated with no series adverse events and no evidence of dorsal root ganglion toxicity. In February 2022, we reported meaningful developmental improvement in assessments, utilizing the Bayley III and Vineland II scales, performed by trained healthcare providers and caregivers, respectively, for both patients in the initial cohort. Additionally, in February 2022, we reported that we dosed our first patients in Cohort 2, for late onset infantile with high dose PBGM01, and Cohort 3, for early onset infantile GM1 with low dose PBGM01, with initial biomarker and safety data expected to be reported in the second half of 2022.

The FDA has granted Orphan Drug Designation, or ODD, Rare Pediatric Disease Designation, or RPDD, and Fast Track Designation, to PBGM01 for the treatment of GM1. The European Commission has granted Orphan designation for PBGM01.

PBFT02 for the treatment of FTD-GRN

We are currently developing PBFT02, which utilizes an AAV1 capsid to deliver a functional copy of the granulin gene, or GRN, encoding for human progranulin, or PGRN, for the treatment of frontotemporal dementia caused by progranulin deficiency, or FTD-GRN. FTD-GRN is an inheritable form of FTD in which patients have mutations in the GRN gene, causing a deficiency in PGRN. PGRN is a complex and highly conserved protein thought to have multiple roles in cell homeostasis, neurodevelopment, and inflammation. Emerging evidence suggests that PGRN deficiency in FTD and other neurodegenerative disorders may contribute to lysosomal dysfunction. Currently, there are no disease-modifying therapies approved for the treatment of FTD-GRN. Based on findings in preclinical studies, we believe that PBFT02 may provide FTD-GRN patients with significantly improved outcomes. We selected the AAV1 capsid and ICM administration for PBFT02 because this approach led to extensive and robust expression of human PGRN throughout the brain and spinal cord of NHPs, and due to the higher PGRN levels in CSF using AAV1 as compared with other serotypes tested. ICM administration of AAV1 to NHPs resulted in CSF levels of human PGRN in excess of 50-fold higher than those in healthy human subjects’ CSF, and in excess of 5-fold higher than levels achieved in NHPs with AAVhu68 or AAV5.

We have an active IND from the FDA and approved CTAs in multiple countries for PBFT02, which allows us to proceed with our upliFT-D Trial, an international, multi-center, open-label, single-arm Phase 1/2 clinical trial of PBFT02 in patients with a diagnosis of early symptomatic FTD-GRN.

We expect to dose the first patient in our initial cohort of our upliFT-D Trial in early 2022.

The FDA has granted ODD and Fast Track Designation to PBFT02 for the treatment of FTD-GRN and the European Commission granted Orphan designation for PBFT02.

PBKR03 for the treatment of Krabbe disease

We are currently developing PBKR03, which utilizes a proprietary, next-generation AAVhu68 capsid to deliver to the brain and peripheral tissues a functional GALC gene encoding the hydrolytic enzyme galactosylceramidase for Krabbe disease. Krabbe disease is an autosomal recessive lysosomal storage disease caused by mutations in the GALC gene, which provides instructions for making an enzyme called galactosylceramidase, which breaks down certain fats,

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including galactosylceramide and psychosine. This results in the accumulation of galactolipids such as psychosine, resulting in widespread death of myelin-producing cells in the CNS and in the peripheral nervous system, or PNS. Without myelin, nerves in the brain and other parts of the body cannot transmit signals properly, leading to the signs and symptoms of Krabbe disease. We believe PBKR03 may provide patients with significantly improved outcomes. In preclinical models, we have observed meaningful transduction of both the CNS and other critical peripheral organs for Krabbe disease patients using our ICM method of administration in combination with our next-generation AAVhu68 capsid.

We have an active IND from the FDA and approved CTAs in multiple countries for PBKR03, which allows us to proceed with our GALax-C Trial, an international, multi-center, open-label, single-arm Phase 1/2 clinical trial of PBKR03 in patients with a diagnosis of early infantile Krabbe disease.

We expect to dose the first patient in our initial cohort of our GALax-C Trial in early 2022.

The FDA has granted ODD, RPDD, and Fast Track Designation to PKBR03, and the European Commission granted Orphan designation for PBKR03.

Research Programs

We have six programs in preclinical research stages under our license agreement with Penn: PBML04 for MLD, PBAL05 for ALS, PBCM06 for CMT2A and unnamed programs for Canavan disease, Parkinson’s disease and Huntington’s disease. PBML04 is in preclinical development for MLD, which is caused by mutations in the ARSA gene. PBAL05 is targeting patients with ALS who have a gain-of-function mutation in the C9orf72 gene. PBCM06 is in development for CMT2A, which is caused by a mutation in the MFN2 gene. Our unnamed programs comprise of: a program to treat patients with an inherited form of Parkinson’s disease with PRKN mutations; a program for the treatment of Canavan’s disease, which is caused by mutations in the aspartyoacylase, or ASPA, gene; and a program for the treatment of Huntington’s disease, a repeat expansion disorder. Beyond this portfolio, through our research collaboration with GTP, we also have the option to license programs for eight additional new indications in CNS diseases along with rights and licenses to new gene therapy technologies developed by Penn, such as novel capsids, toxicity reduction technologies and delivery and formulation.

We also have exploratory research programs with GTP for large indications, initially focused on AD and TLE, which can be expanded to other large CNS diseases upon mutual agreement with GTP.

Our Strategy

We are a genetic medicines company focused on developing transformative therapies for CNS disorders with limited or no approved treatment options. Our vision is to fulfill the promise of gene therapy by developing groundbreaking therapies that transform the lives of patients with CNS diseases.

To achieve our vision, we have assembled a world-class team whose members have decades of collective experience in genetic medicines and rare disease drug development and commercialization. We leverage this experience, along with the decades of experience of Dr. Wilson, as well as the transformative potential of genetic medicine technology to develop treatments that improve outcomes for patients with serious, life-threatening CNS diseases. Patients are considered every step of the way, in every decision we make.

Key elements of our strategy include:

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Genetic Medicine Background

Each person’s genetic material, or genome, consists of deoxyribonucleic acid, or DNA, in sequences of genetic code called genes. The DNA in the human genome contains approximately three billion nucleotide base pairs, and small changes, or mutations, routinely occur in the base pairs. A mutation in a single gene can alter the amount or activity of the protein expressed by the gene, causing deformities and disease. Currently, there are estimated to be over 10,000 diseases caused by a genetic abnormality in a single gene. These are also known as monogenic

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diseases. Based on research commissioned by us, we believe there are at least 790 rare monogenic CNS diseases, with few currently approved disease modifying treatments for any rare monogenic CNS diseases.In addition, gene therapy can also be applied to correct biological pathways that are not necessarily inherited or associated with a defective gene. This approach aims to reduce the expression of pathological proteins or increase the production of corrective biological targets. This is the basis for the programs that target non-hereditary conditions such as sporadic AD and TLE.

The development of molecular therapeutics to modulate human gene expression and correct disease-causing genetic defects had its advent several decades ago, and with advances in science and a deeper understanding of human genetics it has expanded to include a broader range of genetic medicines with the potential to modulate gene expression through additional molecular mechanisms.

These transformative genetic medicines include gene therapy (delivery of an external gene to replace a defective gene), gene silencing (delivery of a DNA or ribonucleic acid, or RNA, based therapeutic that modulates the transcription or translation of an injurious gene product), gene editing (delivery of a DNA or RNA-based therapeutic that corrects the expression of targeted genes) and combinations of these therapeutic modalities. We believe that this expanded molecular biological tool-box will provide new therapeutics with the potential to deliver highly potent and safe interventions across a diverse set of CNS diseases, offering several advantages, including:

Genetic medicines can be designed to mitigate challenges faced by other approaches in the development of therapeutics for the CNS. CNS disorders are among the most devastating in their impact on patients and their families. These disorders are generally life-threatening to patients. There is a significant need for genetic medicines that can target these disorders. Our initial programs focus on rare, monogenic CNS disorders because they offer a compelling opportunity for the effective application of genetic medicines. In the year ended December 31, 2021, we exercised options under the Penn Agreement to include Canavan disease and Huntington's disease to our portfolio, and also amended the Penn Agreement to broaden the scope under the Penn Agreement to include large CNS disorders, and entered into exploratory research programs to identify gene targets and develop therapeutic AAVs for large CNS disorders, initially TLE and AD.

Our Approach

The field of genetic medicine is rapidly expanding and we believe we have developed a differentiated approach to developing treatments for CNS disorders that allows us to select and advance product candidates with a higher probability of technical and regulatory success. Our gene therapy product candidates use an AAV, a small, non-pathogenic virus that is genetically engineered to function as a delivery vehicle, or vector. In our current clinical programs, the AAV is administered to a patient to introduce a healthy copy of a mutated gene, or the transgene, to the cells in a process referred to as transduction. Our current approaches use AAVs to deliver either a (i) replacement non-mutant transgene, or (ii) a combination of a microRNA, known as miRNA, and replacement of a non-mutant transgene. The components of an AAV gene therapy vector include the therapeutic gene that makes up the DNA payload, or the transgene, the outer viral shell that encloses the DNA payload, or the capsid, and any promotors added to the vector to boost expression of the transgene. The AAV is often described by the serotype, or strain, of the vector. The core tenets of our approach include a rigorous process for selecting product candidates, mitigation

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of early development risk through relationships with leading researchers and academic institutions, and mitigation of clinical development risk through deep relationships with patient advocacy groups, key opinion leaders and practitioners. Together, these relationships allow us to directly benefit from decades of collective experience, the latest technologies and contemporary perspectives from patients and their experiences.

Rigorous Process for Selecting Product Candidates

In selecting our product candidates, we focus initially on optimizing transduction and expression of transgenes in the indication-specific target tissues. This involves prioritizing the following principles: selection of the route of administration to maximize transgene biodistribution; selection of capsid, transgene and promoter to optimize efficiency of transduction and expression; leveraging biological mechanisms such as cross-correction to maximize availability of transgene product to target cells; and the effective use of biomarkers to assess treatment effects on transduction, transgene expression and on disease pathophysiology.

Mitigation of Early Development Risk of Programs Prior to IND submission

We have a strategic research collaboration with GTP, which is led by our co-founder and Chief Scientific Advisor, Dr. Wilson, and which we believe positions us at the forefront of gene therapy research. This collaboration provides us with access to differentiated discovery technology and expertise that informs the basis of our product candidate selection and subsequent development.

Our strategic research collaboration with GTP provides us with access until August 2026 to one of the premier gene therapy research institutes in the world for the discovery and preclinical development of gene therapy product candidates and exclusive rights to certain CNS disorders, including next-generation AAV capsid technology and vector engineering, and state-of-the art preclinical animal studies, including NHP models. GTP

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currently employs approximately 300 staff with cutting edge expertise and capabilities in gene therapy research and preclinical development.

Our collaboration with GTP allows us to choose programs that have been or will be validated through extensive testing in preclinical disease models, and once selected, to collaborate with GTP on further preclinical optimization of our product candidate, such as vector choice, transgene construct and route of administration. We believe this collaboration improves our probability of technical and regulatory success in developing product candidates that provide transformative clinical benefits.

Once we select a particular CNS indication for further development, GTP, with our close involvement and oversight, embarks on a rational discovery and development program to design product candidates that may provide improved clinical benefit. We usually evaluate transduction efficiency and biodistribution using multiple different capsids in NHPs to select the capsid best suited for the targeted indication. GTP also works to optimize the delivery method used for each product candidate by balancing delivery, efficacy, safety, host immunity and ease of administration. We believe the translational preclinical characterization provided by GTP, including the use of NHP models for vector screening and toxicology, reduces the early-stage development risk of our product candidates.

Mitigation of Clinical Development Risk through Our Relationship with Penn’s ODC

We also have a strong relationship with Penn’s ODC. As part of our research collaboration with GTP, we have access to Penn’s ODC’s insights and capabilities in the study of rare diseases. We leverage our close working relationship with Penn’s ODC to develop historical and prospective external data for each disease for use in building comparable patient profiles of participants in interventional trials. In addition, we believe Penn’s ODC’s close ties to leading clinical centers for rare, monogenic CNS disorders will improve our ability to identify potential patients for trial enrollment, and enhance patient retention and data quality. Penn’s ODC is currently performing a natural history study for GM1 funded by us.

Our Product Candidates

GM1—PBGM01

Overview of GM1

GM1 is a rare and often life-threatening monogenic recessive lysosomal storage disease that results in progressive damage to both the CNS and the peripheral tissues. The infantile form of the disease is characterized by onset in the first two years of life with symptoms including hypotonia (reduced muscle tone), progressive CNS dysfunction leading to deafness, blindness, enlarged liver and spleen, rigidity and progressive skeletal dysplasia that leads to restrictive lung disease and aspiration pneumonia. Early onset infantile GM1, or Type I, is characterized by onset in the first six months of life, while late onset infantile GM1, or Type IIa, is characterized by onset between six and 24 months. The disease rapidly progresses, with a life expectancy of less than two years for early infantile GM1 and five to ten years for late infantile GM1.

GM1 is caused by recessive mutations in the GLB1 gene, which encodes lysosomal acid β-gal, an enzyme that catalyzes the first step in the natural degradation of GM1 ganglioside. Reduced β-gal activity results in the accumulation of toxic levels of GM1 ganglioside in neurons throughout the brain, causing rapidly progressing neurodegeneration. GM1 manifests as a continuum of clinical severity, ranging from infants with earlier onset and more severe and rapidly progressive disease to those with later juvenile or adult onset, slower progression and less severe manifestations.

The United States incidence of GM1 has been estimated to be approximately 1 in 100,000 live births, with infantile GM1 representing approximately 62.5% of such cases. No states include GM1 in mandatory infant screening. We engaged a third-party data-analytics firm to conduct an analysis of a variety of de-identified electronic medical records. Based on this analysis, we estimate the incidence of infantile GM1 to be approximately 1.4 in 100,000 live births. Currently, there are no approved disease-modifying therapies available. Supportive treatment options include the use of feeding tubes or ventilators for infants with GM1.

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Program selection

We chose GM1 as one of our initial lead programs because it met our criteria for rare, monogenic CNS disorders in which we believe we can develop product candidates with a higher probability of technical and regulatory success that will substantially impact on the lives of severely underserved patients. Several key factors supported the decision to focus on GM1 for AAV gene therapy, as described below.

Product Candidate Development Strategy

We have chosen the earliest and most severe form of GM1 for clinical development for several reasons. Within GM1, infantile GM1 represents the greatest medical need, as early onset GM1 infants often do not survive past two years, and thus are in immediate need of an effective therapy. We expect treatment-related efficacy to be measurable sooner after treatment in this more rapidly progressing form of GM1. Patients with onset forms of GM1 later than infantile, which we define as an onset later than 24 months, are caused by less severe reductions of β-gal enzyme activity, generally demonstrate slower progression and more variable clinical courses, likely requiring larger and longer clinical trials and a broader control group. If our initial clinical trials in infantile GM1 are successful, we intend to explore expansion of the indication with trials in later onset forms of GM1.

Our Product Candidate

We are developing PBGM01 to treat infantile GM1, with a single dose of PBGM01 by ICM administration. PBGM01 utilizes a next-generation AAVhu68 viral vector to deliver modified DNA encoding the β-gal enzyme to a patient’s cells. The goal of this vector and delivery approach is to increase levels of the β-gal enzyme in both the CNS and the peripheral tissues. We selected the AAVhu68 capsid and ICM route of administration due to the superior transduction observed in cells of the CNS and peripheral organs, which are both affected in GM1 disease patients. Based on prior capsid comparison studies, the AAVhu68 vector has the potential to provide corrective β-gal enzyme to both the CNS and peripheral tissues, which we believe gives us the potential to treat both the CNS pathologies and the peripheral manifestations observed in GM1 disease.

We believe gene replacement with PBGM01 and consequent wide brain distribution and uptake of the β-gal enzyme has the potential to greatly reduce the accumulation of GM1 gangliosides, reversing neuronal toxicity, thereby restoring developmental potential and improving the quality of life for treated patients. We will evaluate

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this clinically by assessing the prevention of further developmental regression and restoration of developmental trajectories, as measured by developmental milestones using accepted clinical scales, observer-reported outcomes and video recordings.

Preclinical studies

The potential for efficacy of PBGM01 is supported by preclinical findings in GLB1 knockout (GLB1-/-) mice. This mouse line develops several characteristics that are reminiscent of the neurological presentation of GM1, including a rapid accumulation of GM1 ganglioside in the brain shortly after birth followed by progressive motor abnormalities and a shortened survival. Intracerebroventricular, or ICV, injection of PBGM01 in GLB1-/- mice resulted in persistent dose-dependent elevations in β-gal activity in the brain, CSF, serum, and in peripheral organs. Increased β-gal activity was associated with phenotypic and histopathological benefits in the GLB1-/- mice including the resolution of pre-existing brain lysosomal storage lesions as assessed by lysosomal associated membrane protein 1, or LAMP-1, immunohistochemistry, improved neurological phenotypes in assays of clinical deficits and animals’ gait, and increased survival. Preclinical findings were published by GTP in 2020.

NHP Toxicology Study

A 120-day good laboratory practice, or GLP, compliant toxicology study conducted in NHPs assessed the safety, tolerability, biodistribution and excretion profile of PBGM01 following ICM administration of vehicle or one of three dose levels of PBGM01. There were no blood or CSF abnormalities related to PBGM01 administration except for asymptomatic, mild, and transient increases in CSF leukocytes in the majority of animals. PBGM01 was well-tolerated at all doses evaluated and no adverse effects were detected on body weight or clinical, neurological, or behavioral signs. Vector distributed to the CSF and high levels of gene transfer were detected in the brain, spinal cord and dorsal root ganglia, or DRG. PBGM01 also reached high levels in peripheral blood and liver. PBGM01vector DNA was detectable in urine and feces five days post-administration and was undetectable within 60 days.

Measurement of transgene expression by β-gal enzyme activity in CSF and serum of NHPs was limited by the nature of the assay, which could not distinguish human β-gal enzyme versus endogenous rhesus enzyme. Rapid loss of transgene product activity after Day 14, which was likely due to an antibody response to the human transgene product, was an additional limitation. Despite these caveats β-gal activity in the CSF and serum was detectable in animals from all dose groups 14 days after administration of PBGM01. In the CSF, animals receiving the two higher doses displayed β-gal activity levels that were approximately two- and four-times higher than vehicle-treated control levels. Pre-existing NAbs to the vector capsid were detected in the serum of some animals and did not appear to influence gene transfer to the brain and spinal cord, or transgene product levels in the CSF. This observation supports the potential to achieve therapeutic activity in the CNS in infantile and late infantile patients with GM1 regardless of NAb status. Pre-existing NAbs to the vector capsid correlated with reduced gene transfer in the liver, however.

PBGM01 administration resulted in asymptomatic degeneration of the DRG and the trigeminal ganglia, or TRG, sensory neurons and their associated central and peripheral axons. The severity of these lesions was typically minimal to mild. These findings were not clearly dose-dependent, although there was a trend of more severe lesions in the mid-dose and high dose cohorts. DRG and TRG lesions were less severe at Day 120 than Day 60, indicating they were not progressive. Two animals that exhibited the most severe axon loss and fibrosis of median nerves at necropsy on day 120 also exhibited impairments in nerve conduction in terms of reduced sensory nerve action potential, or SNAP, amplitudes in the median nerve. Reductions in SNAP amplitudes were evident by Day 28 with no subsequent progression. This observation was consistent with the findings of a retrospective analysis of DRG pathology in NHPs after AAV administration conducted by GTP. In an analysis of five preclinical studies, increased severity of axonopathy and fibrosis correlated with reduced SNAP amplitudes. In keeping with the findings of the retrospective analysis, the PBGM01-induced SNAP changes and sensory neuron degeneration were not associated with any clinical or neurological abnormalities in any animals up to 120 days post-dose.

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In summary, based on our preclinical studies we believe that CSF delivery of PBGM01 has the potential to sufficiently increase b-gal levels in both the CNS and in peripheral tissues to overcome intracellular b-gal deficiency in GM1.

Clinical development

Our clinical development plan is to start with trials in infantile GM1, and if successful, explore expansion of the indication with trials in later onset forms of GM1.

We initiated patient dosing in a multi-center, open-label, single-arm Phase 1/2 clinical trial of PBGM01 in patients with a diagnosis of early and late infantile GM1 in March 2021.

The study includes both early and late infantile patients in separate, smaller cohorts. We plan to enroll a total of four cohorts of two patients each, with separate dose-escalation cohorts for late onset infantile GM1 patients, defined as onset prior to 24 months in age and after 6 months in age, and early onset infantile GM1, defined as onset prior to 6 months of age. The study is assessingan initiallow dose (3.3x10˄10 genome copies/gm brain weight) that exceeds the minimum effective dose, or MED, as determined in our preclinical studies, and a 3-fold greater high dose (1.1x10˄11 genome copies/gm brain weight). The first cohort includes patients diagnosed with late infantile GM1. There is a 60-day interval between all subjects dosed within a cohort to allow review of biomarker and safety data before dosing the next subject.

Clinical development results

We completed enrollment of the first cohort of two patients with late infantile GM1 receiving the initial low dose of PBGM01 in the second half of 2021 and reported interim safety and biomarker data in December 2021. The interim assessment included safety and biomarker results covering six months for patient 1 and 60 days for patient 2. PBGM01 was well tolerated, with a positive safety profile, no serious adverse events, or SAEs, no complications related to ICM administration and no evidence of DRG toxicity. β-gal activity in CSF and serum increased in both patients. For patient 1, enzyme activity at 30 days was 1.5-fold over baseline and the increase was maintained at six months. For patient 2, enzyme activity at 30 days was 4.8-fold over baseline. In serum, enzyme activity for patient 1 was slightly above baseline at 30 days, 1.7-fold over baseline at three months, and maintained at six months. Serum enzyme activity for patient 2 at 30 days was 1.2-fold over baseline. CSF and serum β-gal activity for both patients rose above the enzyme concentrations documented in untreated infantile and juvenile GM1 participants in the ODC’s natural history study. Large differences were observed in GM1 gangliosides in CSF at baseline, with patient 2, who was more severely affected, showing baseline values four times higher than patient 1. In patient 1, CSF levels of GM1 ganglioside increased approximately 85 percent at 30 days and remained stable at that level at six months. In patient 2, levels decreased approximately 46 percent at 30 days.

GM1 Cohort 1 interim data

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Following the completion of this first cohort and review of safety outcomes, the Independent Data Monitoring Committee, or IDMC, recommended continuing the study with the recruitment for both the high dose late infantile GM1 and the initial dose early infantile GM1 cohorts. The first patient in each of those two cohorts was dosed in early 2022 and we anticipate reporting initial data from these cohorts in the second half of 2022. Upon completion of the initial low dose of the early infantile cohort, a high dose cohort is planned to be enrolled in that patient population. Following these dose-escalation cohorts, each patient population will be enrolled into a confirmatory cohort. Patients will be evaluated over two years for safety and efficacy, followed by an additional 36 months of long-term follow up.

We expect that pre-specified primary endpoints will include safety and efficacy. Efficacy will be evaluated by the assessment of developmental milestones using accepted clinical scales, observer-reported outcomes and video recordings. Secondary outcomes will include serum and CSF β-gal enzyme activity and disease progression endpoints including evaluations using EEG and MRI.

In February 2022, we reported meaningful developmental improvement in assessments, utilizing the Vineland-II and Bayley-III scales, for both patients in the initial cohort, as outlined below. These validated scales for assessing gross motor, fine motor, language and social development have been used previously in natural history studies. The Vineland-II determines developmental milestones through structured interviews with caregivers, while the Bayley-III assesses developmental milestones through direct observation of skills by a trained healthcare professional. Both assessments demonstrated progressive gains across all developmental areas which is not typical for children with GM1 late infantile. Notably, patient 2, more severely affected at baseline than patient 1, was also documented to have regained previously lost motor and language developmental milestones.

Interim Clinical Results: Vineland-II and Bayley-III: Patient 1

Interim Clinical Results: Vineland-II and Bayley-III: Patient 2

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Depending on the results from the dose escalation cohorts we plan to obtain input from regulatory agencies on the requirements to submit for regulatory approval for commercialization in the United States and internationally.

Natural History Data

We are currently funding a GM1 natural history study being conducted by Penn’s ODC to collect prospective data on clinical disease progression in infantile and juvenile GM1. This data will be used to construct natural history patient profiles for comparison to the profiles of treated participants in our planned Phase 1/2 clinical trial.

Regulatory Designations and Clinical Trial Approvals

We have an active IND from the FDA and approved CTAs in multiple countries for PBGM01, and we are actively proceeding with our Imagine-1 Trial, an international, multi-center, open-label, single-arm Phase 1/2 clinical trial of PBGM01 in patients with a diagnosis of early and late infantile GM1.

Through our manufacturing partners, we have manufactured the PBGM01 clinical supply and have established a clinical supply chain to support global clinical trials.

FTD—PBFT02

Overview of FTD-GRN

FTD is one of the more common causes of early-onset dementia, occurring with a median age of 55 years. FTD presents as a rapidly progressive clinical syndrome and causes impairment in behavior, language and executive function. Changes in personal and social conduct occur in early stages of the disease, including loss of inhibition, apathy, social withdrawal, hyperorality and ritualistic compulsive behaviors. These symptoms are severely disabling and may lead to misdiagnosis as a psychological or emotionally based problem, or, in the elderly, be mistaken for withdrawal or eccentricity. FTD progresses to immobility and loss of speech and expression. Survival averages eight years after onset of symptoms.

In approximately 5% to 10% of individuals with FTD, the disease is caused by mutations in the granulin, or GRN, gene, causing a deficiency of progranulin. PGRN is a complex and highly conserved protein thought to have multiple roles in cell biology, development and inflammation. Emerging evidence suggests that PGRN’s pathogenic contribution to FTD and other neurodegenerative disorders relates to a critical role in lysosomal function.

There are no disease modifying therapies approved for the treatment of FTD. Anti-depressants have been shown to manage some behavioral symptoms. We engaged a third-party data-analytics firm to conduct an analysis of a variety of de-identified electronic medical records. Based on this analysis, we estimate the prevalence of FTD in the United States to be approximately 62,000. The prevalence of FTD due to GRN mutation found in literature is 5% to 10%. Accordingly, we estimate the prevalence of FTD-GRN deficiency in the United States to be approximately 3,000 to 6,000.

Program selection

We chose FTD-GRN as one of our initial lead programs because it meets our criteria for rare, monogenic CNS disorders in which we believe we can develop product candidates with a higher probability of technical and regulatory success:

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Our Product Candidate

We are developing PBFT02 to treat patients affected with FTD-GRN with a single dose of PBFT02 by ICM administration. PBFT02 is a gene therapy that utilizes an AAV1 viral vector to deliver a modified DNA encoding the GRN gene to a patient’s cells. The goal of this vector and delivery approach is to provide higher than normal levels of PGRN to the CNS to overcome the progranulin deficiency in GRN mutation carriers, who have been observed to have reduced CSF PGRN levels ranging from 30% to 50% of the PGRN levels observed in normal, mutation non-carriers. We selected the AAV1 capsid and ICM administration route due to the widespread and robust expression of the human PGRN transgene observed throughout the brain and spinal cord in NHP studies, and because levels of human PGRN in the CSF exceeded those measured in healthy human CSF (greater than 50 times), and those in NHPs that received AAV5 or AAVhu68 serotypes (greater than 5 times).

Preclinical studies

PBFT02 was selected as our development candidate based on initial proof-of-concept studies utilizing AAVhu68 and follow-up studies comparing multiple vector constructs for ability to elevate PGRN. The initial proof-of-concept studies using an AAVhu68.hGRN construct in GRN knockout (GRN -/-) mice showed PGRN elevations and improved lysosomal function after vector doses that elevated CSF PGRN to approximately 10-fold over levels in healthy human controls and decreased deposits of lipofuscin, an electron dense marker of lysosomal dysfunction, broadly across the brain. The AAV1 capsid was selected for PBFT02 following a study that evaluated the expression of human PGRN protein in the CSF of adult NHPs after ICM administration of four different vector constructs. Proof of concept findings were published by GTP in 2020.

The comparison of AAVs in NHPs is shown in the figure below. NHPs received a single ICM administration of commensurate doses of AAV1, AAV5, or AAVhu68 expressing the human GRN transgene with a CAG promoter (n=2/group). A second tested AAVhu68 vector, or v2, utilized a different GRN coding sequence and a UBC promoter. We found that the production of PGRN protein in the CSF rapidly exceeded levels found in healthy human control samples (“normal” line) in all AAV-treated NHPs. AAV1 produced 50 times normal and greater than 5-10 times all other vectors tested.

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Comparison of Vector Serotypes:Production of Human PGRN-protein in CSF of NHPs following ICM-AAV administration.

Lower limit of quantitation, or LLOQ; Healthy human control level, or Normal

We believe PBFT02 has the potential to provide supra-physiological levels of progranulin available to neurons broadly throughout the brain, restoring lysosomal function and thereby slowing or stopping the progression of FTD pathogenesis. Further, ICM AAV1 did not strongly transduce the liver or significantly elevate levels of circulating PGRN, which may reduce the potential for unknown peripheral effects of PGRN.

The efficacy of the AAV1 vector was assayed in GRN -/- mice. PBFT02 was administered via ICV delivery to adult mice at an age when lipofuscin deposition, lysosomal enzyme abnormalities, and neuroinflammation were present in brain regions involved in FTD-GRN pathophysiology including the frontal cortex, hippocampus, and thalamus. This stage of disease progression was selected to be consistent with the developmental stage of the intended patient population of young to middle-aged adult. Dose-dependent increases in human PGRN expression in the CSF following PBFT02 administration led to the correction of histopathologic and enzymatic changes in the mice. Benefits included a reduction in the accumulation of lipofuscin, reduced neuroinflammation, and elevated lysosomal hexosaminidase activity in key brain regions.

NHP Toxicology Study

A 90-day GLP compliant toxicology study conducted in NHPs assessed the safety, tolerability, biodistribution and excretion profile of PBFT02 following ICM administration at three dose levels. There were no blood or CSF abnormalities related to PBFT02 administration except for asymptomatic, mild, and transient increases in CSF leukocytes in the majority of animals. PBFT02 was well-tolerated at all doses evaluated and no adverse effects were detected on body weight or clinical, neurological, or behavioral signs. Vector distributed to the CSF and high levels of gene transfer were detected in the brain, spinal cord and DRG at Day 90. PBFT02 also reached significant concentrations in the peripheral blood, liver and spleen. PBFT02 vector DNA was detectable in urine and feces 5 days post-administration and was undetectable within 60 days.

Human PGRN was detectable in CSF and serum in all animals by 7 to 14 days after PBFT02 administration, peaking between Days 14 to 28, and was generally dose dependent. Expression declined in all PBFT02-treated animals by Day 60, correlating with the appearance of antibodies against the human transgene product, which are

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not expected to develop in haploinsufficient patients with FTD-GRN. ICM PBFT02 administration to NHPs resulted in approximately 15-times higher PGRN levels in CSF than in CSF from healthy humans, while the low dose of PBFT02 resulted in approximately 7-times higher PGRN levels. Pre-existing NAbs to the vector capsid were detected in the serum of 2 of 9 AAV-treated animals at baseline but did not appear to influence gene transfer to the brain and spinal cord, although their presence correlated with reduced hepatic gene transfer. We believe that these data support the possibility of achieving supraphysiological PGRN levels in the CNS of FTD patients following ICM administration of PBFT02.

PBFT02 resulted in asymptomatic degeneration of DRG and TRG sensory neurons (8 of 9 AAV-treated animals), along with their associated central and peripheral axons (9 of 9 animals) at Day 90 post-administration. The severity of these lesions was typically minimal to mild, with a trend to more severe lesions in the mid-dose and high-dose groups. One PBFT02-treated animal exhibited a peripheral nerve conduction impairment in the median nerve, as detected by bilateral reductions in SNAP amplitudes on Day 28 and Day 90, that appeared to be treatment related as severe axon loss and endoneurial fibrosis were detected at necropsy. PBFT02-induced SNAP changes and sensory neuron degeneration were not associated with any clinical or neurological abnormalities in animals up to 90 days post-dose.

In summary, based on our preclinical studies we believe that CSF delivery of PBFT02 has the potential to sufficiently increase extracellular PGRN levels in the CNS to overcome intracellular PGRN deficiency, without greatly increasing peripheral PGRN levels.

Clinical development

Our clinical development plan is to treat FTD-GRN with a single dose of PBFT02 via ICM administration, with our initial clinical trial focused on early symptomatic FTD patients who have the GRN mutation.

We expect to dose the first patient in our initial cohort of our upliFT-D Trial in early 2022.

This trial is expected to be a two-cohort dose-escalation trial, with three subjects per cohort, and with a potential for a third higher-dose cohort, if considered necessary based on the results of the first two cohorts. The planned starting dose (3.3x10˄10 genome copies/gm brain weight) will exceed the MED in the GRN knockout mouse model, with planned escalation to a higher dose (1.1x10˄10 genome copies/gm brain weight). The primary endpoint of the trial is to assess safety and tolerability over 60 months. Secondary endpoints are to assess change from baseline to 24 months on biomarkers, including CSF and plasma progranulin levels, biomarkers of neurodegeneration and disease progression, and on clinical outcomes as measured by the Clinical Dementia Rating, or CDR®, for improving evaluation of patients with frontotemporal lobar degeneration, or FTLD, or CDR® plus NACC FTLD, and other neurocognitive assessments. Interim analyses are planned for certain biomarkers starting at one month post dosing and for clinical outcomes beginning at one year post dosing. The independent data monitoring committee, or IDMC, will review 30-day biomarker data and safety data for each subject in a cohort. All subjects will be followed for a total of five years to monitor safety and selected biomarker and efficacy measures. All subjects will be evaluated over two years for safety and efficacy, followed by an additional 36 months of long-term follow up.

A scientific advice meeting with MHRA was held in November 2020, providing feedback on our proposed protocol. Feedback was also obtained from other regulatory agencies outside the United States.

Depending on the results from the initial cohorts, we plan to obtain input from regulatory agencies on the requirements to submit for regulatory approval for commercialization in the United States and internationally.

Regulatory designations and Clinical Trial Approvals

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The FDA has granted ODD and Fast Track Designation to PBFT02 for the treatment of FTD-GRN and the European Commission granted Orphan designation for PBFT02.

Through our manufacturing partners, we have manufactured the PBFT02 clinical supply to support clinical trial initiation.

Krabbe disease—PBKR03

Overview of Krabbe disease

Krabbe disease is a rare and often life-threatening lysosomal storage disease that presents early in the patient’s life, resulting in progressive damage to both the brain and PNS. Infants may present with extreme irritability and excessive crying, feeding difficulties, fisted hands, poor head control, stiffness and arching. The early infantile form of Krabbe disease typically manifests before six months of age and is the most severe form, accounting for 60% to 70% of Krabbe disease diagnoses. In these patients the disease course is highly predictable and rapidly progresses to include loss of acquired milestones, staring episodes, apnea, peripheral neuropathy, severe weakness, unresponsiveness to stimuli, seizures, blindness, deafness and death by two years of age. Late infantile patients present symptoms that are similar to those of early infantile Krabbe disease, with a median survival of approximately five years from onset of symptoms. Late infantile Krabbe disease is defined by onset between seven to twelve months of age. It comprises approximately 10% to 30% of cases and exhibits greater variability in clinical presentation.

Krabbe disease is an autosomal recessive lysosomal storage disease caused by mutations in the GALC gene, which provides instructions for making an enzyme called galactosylceramidase, which breaks down certain fats, including galactosylceramide and psychosine. The myelin-producing cells in the CNS and PNS are particularly sensitive to the accumulation of psychosine, resulting in widespread death of these cell populations. Without myelin, nerves in both the brain and other parts of the body cannot transmit signals properly, leading to the signs and symptoms of Krabbe disease.

There are currently limited treatment options for patients with Krabbe disease. While human stem cell transplant, or HSCT, has become standard of care in many centers in the US for early infantile Krabbe patients who are pre-symptomatic or who have mild symptoms, it has limited use outside the US and is a treatment with limitations. Most HSCT-treated children still have progressive gross motor delays ranging from mild spasticity to inability to walk independently, and limited use of their upper extremities. There is also a narrow window of treatment and a donor must be identified. When performed after the onset of overt symptoms in these patients, HSCT provides only minimal neurologic improvement and does not substantially improve survival.

Currently, ten states conduct mandatory screening for Krabbe disease and an additional four states passed legislation to include Krabbe disease in mandatory screening, but such screening has not yet been added. We engaged a third-party data analytics firm to conduct an analysis of screening data from six states with screening history available to our third-party data analytics firm and based on this evaluation of screening data, we believe the incidence of Krabbe disease to be approximately 2.6 in 100,000 births.

Program Selection

We chose infantile Krabbe disease as one of our initial lead programs because we believe we can develop product candidates with a higher probability of technical and regulatory success. The indication presents cross-correction, biomarker data and preclinical validation that are supportive of advancing treatments for Krabbe disease into the clinic.

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Our Product Candidate

We are developing PBKR03 to treat infantile Krabbe disease, the most common and severe form of Krabbe disease. PBKR03 utilizes a next-generation AAVhu68 capsid to deliver DNA encoding the GALC enzyme to a patient’s cells. PBKR03 will be administered as a single dose by ICM administration into the CSF.

The AAVhu68 capsid and ICM route of administration were selected for PBKR03 due to observations in preclinical studies of robust transduction of targeted cells in the brain, and in DRG sensory neurons and spinal cord lower motor neurons. Consequently, we believe that ICM PBKR03 has the potential to improve both the CNS pathologies and the significant peripheral neuropathies observed in many Krabbe disease patients.

Preclinical studies

Our Krabbe clinical program for PBKR03 is supported by robust pre-clinical proof of concept and pharmacology data in a naturally occurring GALC mutant mouse line, or Twitcher mice, in dogs with spontaneous GALC mutations, and in wildtype NHPs. Preclinical data were presented by GTP in 2020 to the American Society of Gene & Cell Therapy’s, or ASGCT, 24th Annual Meeting and by us in 2021 at the 3rd Annual Gene Therapy for Neurological Disorders Congress.

To assess dose-dependent effects of PBKR03 in Twitcher mice, vector was administered via ICV delivery at the age of onset of peripheral demyelination. PBKR03 dose-dependently improved histopathological, biochemical, and clinical disease signs. The outcomes included increased GALC activity in the brain, serum, and in peripheral organs, which was associated with a significant reduction in histopathological markers of peripheral nerve damage including demyelination and globoid cell infiltration. Related functional improvements included reductions in clinical symptoms as assessed by scores of neurological decline and improvements in motor balance, coordination, and activity. PBKR03 administration to Twitcher mice also prevented the onset of lymphopenia, which often accompanies autonomic axon degeneration and significantly extended survival.

A preclinical study in Krabbe-affected dogs, or Krabbe dogs, evaluated treatment with an AAVhu68 vector containing a codon-optimized canine GALC cDNA, or vehicle, administered directly to the CSF using ICM administration. Krabbe dogs express naturally occurring autosomal recessive mutations in the GALC gene that result in residual enzymatic activity close to 0%, which is similar to GALC activity levels observed in patients with the infantile form of Krabbe disease.

Four Krabbe dogs received a single ICM administration of PBKR03 at two to three weeks of age, while two age-matched Krabbe dogs and one wildtype dog received vehicle by the same route and served as controls. AAV administration led to significant improvements in outcome measures in the Krabbe dogs. The two vehicle-treated Krabbe dogs reached the study’s pre-defined humane endpoint of severe hind limb weakness and inability to stand and walk on Study Day 35 or Day 66, consistent with the rapidly progressing natural history of the disease. In contrast, all of the four PBKR03-treated dogs maintained normal motor function for the duration of the study, and none reached the pre-defined humane endpoint associated with hindlimb weakness. Two of the AAV-treated

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dogs were euthanized at the scheduled necropsy timepoint of 28 weeks, and the remaining two were euthanized at 39 and 82 weeks of age, respectively. One treated dog was euthanized following a suspected seizure at 39 weeks. Prior to seizure, the animal exhibited normal phenotype including normal motor function. Another of the AAV-treated dogs was euthanized at 82 weeks of age due to body weight loss following recurrent vomiting and regurgitation.

AAV-treatment elevated CSF GALC enzyme activity to above baseline levels by 28 days post-treatment in all dogs and maintained activity above that in vehicle-treated wildtype dog levels for the duration of the study, including up to 82 weeks in the longest-lived animal. The pathological impact of GALC elevations was assessed by measuring the accumulation of the GALC substrate psychosine in CSF. In the absence of GALC in Krabbe disease the cytotoxic substrate psychosine accumulates in the nervous system affecting oligodendrocytes and Schwann cells, leading to progressive demyelination. Psychosine was undetectable in the CSF of vehicle-treated wildtype dogs from Day 0 through Day 180 post treatment. In the vehicle-treated Krabbe dogs, while psychosine was undetectable in the CSF at baseline (Day 0), levels were elevated in both animals by Day 28 and increased further prior to their humane endpoints. Elevations in psychosine correlated with the onset and progression of neurological symptoms in the vehicle-treated Krabbe dogs. In contrast, psychosine was undetectable at most time points for all four AAV-treated Krabbe dogs. In the histological analysis, both vehicle-treated Krabbe dogs showed demyelination and globoid cell infiltration in the brain, spinal cord and peripheral nerves at post-mortem. In contrast, all four AAV-treated Krabbe dogs showed no evidence of demyelination or globoid cell infiltration in the spinal cord, and reduced levels of each in the brain and in peripheral nerves.

AAV treatment also resulted in functional improvements in the Krabbe dogs. In vehicle-treated Krabbe dogs, NCV in sensory and motor nerves was markedly impaired at the earliest assessment age of 6 weeks. In contrast, in AAV-treated dogs, NCVs were similar to those in the wildtype control dog for the duration of the study, assessed up to 81 weeks of age in the longest-surviving dog. Since hearing loss is common during Krabbe disease progression, animals’ hearing thresholds were evaluated by the Brainstem Auditory Evoked Response, or BAER, test. One vehicle-treated Krabbe dog had a severe hearing impairment by 6 weeks of age with no determinable hearing threshold (> 90 dB), while the other vehicle-treated Krabbe dog was not hearing-impaired with a threshold similar to that in the wildtype dog. All the treated Krabbe dogs had hearing thresholds similar to the vehicle-treated wildtype dog for the duration of the study, up to 81 weeks of age in the oldest dog.

In clinical pathology assessments, three AAV-treated Krabbe dogs presented with a mild and transient lymphocytosis two weeks post-injection. This finding was considered possibly treatment-related as it was not observed in the vehicle-treated Krabbe or wildtype animals. It was not considered adverse due to the low grade of elevation and its transient nature. No vector-related modifications of coagulation parameters or serum clinical chemistry were detected. Two AAV-treated Krabbe dogs presented transient mild CSF mononuclear pleocytosis 4 weeks post-injection. This finding was vector-related and was not considered adverse as it resolved by 10 weeks post-injection and was not accompanied by any neurological signs.

NHP Toxicology Study

A 180-day GLP compliant toxicology study conducted in NHPs assessed the safety, tolerability, biodistribution and excretion profile of PBKR03 following ICM administration at three dose levels. There were no blood or CSF abnormalities related to PBKR03 administration except for asymptomatic, mild, and transient increases in CSF leukocytes in the majority of animals. PBKR03 was well-tolerated at all doses evaluated and no adverse effects were detected on body weight or clinical, neurological, or behavioral signs. PBKR03 vector DNA was detectable in urine and feces 5 days post-administration, and was undetectable in urine within 60 days and in feces within 90 days in the majority of animals.

Human GALC expression, as measured by enzyme activity, was evaluated in CNS tissues and major organs of the AAV-treated NHPs, however detection was limited by the inability of the assay to distinguish between human and rhesus GALC activity and the high endogenous activity in NHPs. Measurements were feasible in NHP CSF and serum, however, due to substantially lower endogenous GALC activities. GALC activity was elevated in CSF and serum by 7 days after PBKR03 administration. After the two higher doses, animals had CSF GALC activities

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about 2-times higher than vehicle-treated animals. In serum, GALC activity was increased approximately 2-times (low dose) to 6.6-times (high dose) over activity in vehicle-treated animals. A rapid decline in serum GALC activity was observed after Day 14, which correlated with the onset of anti-human GALC antibody expression around Days 14 to 21. The presence of pre-existing NAbs to the vector capsid in the serum of 11 of 18 AAV-treated animals did not appear to impact GALC activity in the serum or CSF, supporting the potential to achieve therapeutic transgene expression in Krabbe patients regardless of NAb status.

PBKR03 administration resulted in asymptomatic degeneration of primarily DRG sensory neurons along with their associated central and peripheral axons by Day 90 post-administration. The severity of the lesions was typically minimal to mild, with a trend to more severe lesions in the mid-dose and high-dose groups. DRG lesions did not progress between Day 90 and Day 180. One animal in the high dose group exhibited a unilateral nerve conduction impairment in a median nerve, as detected by reduced SNAP amplitude on Day 28 and Day 90, that appeared to be treatment related as median nerve axonopathy and endoneurial fibrosis were detected at necropsy. PBKR03-induced SNAP changes and sensory nerve degeneration were not associated with any clinical or neurological abnormalities in any animals up to 180 days post-dose.

In summary, based on our preclinical studies we believe that CSF delivery of PBKR03 has the potential to sufficiently increase GALC levels in both the CNS and in peripheral tissues to overcome intracellular GALC deficiency in Krabbe disease.

Clinical development

Our clinical development plan is to start with trials in early infantile Krabbe disease, and if successful, consider further exploration of expansion of the indication with trials in later onset forms of Krabbe disease.

We expect to dose the first patient in our initial cohort of our GALax-C Trial in early 2022.

We believe that gene replacement with PBKR03 has the potential to have meaningful clinical benefit to Krabbe patients by significantly reducing neuronal demyelination and damage in both the CNS and PNS that results from the accumulation of galactolipids, such as galactocerebroside and psychosine. We will measure clinical benefit by assessing developmental using accepted clinical scales, observer-reported outcomes and video recordings.

We intend this trial to have two independent dose escalation cohorts (three subjects per dose) based on age at enrolment: dosing initially in subjects > 4 and < 9 months of age, with dose escalation and initiation of dosing in subjects > 1 and < 4 months of age gated by safety in cohort 1. Planned starting doses for each cohort will exceed the MED in the twitcher mouse model, starting with an initial low dose of 1.5 x 10˄11 GC/g estimated brain weight with planned escalation to a high dose of 5.0 x 10˄11 GC/g estimated brain weight, followed by a third confirmatory cohort using a dose selected on the basis of results from previous cohorts.

The primary endpoint of the trial is to assess safety and tolerability over 60 months. Secondary endpoints are to assess change from baseline to 24 months on biomarkers, including CSF and plasma GALC activity and psychosine, and biomarkers of disease progression, and on clinical outcomes, as assessed using by the Bayley Scale of Infant and Toddler Development, and other developmental scales. Interim analyses are planned for certain biomarkers starting at one month post dosing. All subjects will be evaluated over two years for safety and efficacy, followed by an additional 36 months of long-term follow up.

In collaboration with Penn’s ODC, we are also currently planning to develop comparator data sets for our Krabbe clinical trial. Clinical understanding of Krabbe disease has been summarized in several case studies and natural history studies.

Based on the results from this Phase 1/2 trial, we plan to obtain input from regulatory agencies on the requirements to submit for regulatory approval for commercialization in the United States and internationally.

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Regulatory Designations and Clinical Trial Approvals

The FDA has granted ODD, RPDD, and Fast Track Designation to PKBR03, and the European Commission granted Orphan designation for PBKR03.

Through our manufacturing partners, we have manufactured PBKR03 clinical supply to support clinical trial initiation.

Trigeminal Ganglia and Dorsal Root Ganglia Toxicity

The primary finding of the NHP toxicology studies for each of PBGM01, PBFT02 and PBKR03 was TRG and DRG toxicity with consequent peripheral and spinal cord axonopathy. These findings have been previously reported as an AAV platform risk based on NHP studies in which minimal to mild DRG toxicity was observed within 14 to 30 days after dosing, without clinical manifestations. Chronic studies examining DRG toxicity have revealed no increase in severity and no clinical manifestations at four to six months or up to four years after administration. Similarly, no clinical manifestations were observed in any animals on detailed neurological examinations or daily observations in the PBGM01 and PBFT02 toxicology studies.

We believe the asymptomatic sensory neuron findings observed in NHPs treated with AAV vectors via the ICM administration route likely represent a universal DRG pathology in NHPs administered AAV gene therapy. Published data have shown that the administration of AAV vectors to NHPs via the blood or CSF can lead to damage of dorsal root ganglia and their associated axons. Similar findings were observed following IV administration of an engineered variant of AAV9. More recently, a meta-analysis of 33 non-clinical studies in 256 NHPs evaluated the severity of DRG pathology for five different capsids, five different promoters, and 20 different transgenes including an AAV9 vector expressing antibodies 170 days after ICM administration, while also comparing different ROAs, doses, time courses, study conduct, animal age, and sex. This meta-analysis showed that mostly minimal to moderate asymptomatic DRG pathology characterized by mononuclear cell infiltrates, neuronal degeneration, and secondary axonopathy of central and peripheral axons were observed for all capsids and promoters tested, including 83% of NHPs administered AAV intrathecally and 32% of NHPs administered AAV intravenously. DRG pathology was absent prior to 14 days post administration, was similar from 1-5 months post-injection, and was less severe after 6 months. The transgene appeared to have the greatest impact on the severity of the sensory neuron pathology, suggesting that transgene overexpression drives the early events leading to neuronal degeneration. Higher AAV doses correlated with increased severity. Infant and juvenile NHPs appeared to exhibit less severe pathology compared to adult NHPs. Animal sex and vector purification method had no impact. Sensory nerve conduction studies detected abnormalities in a minority of animals correlating with a greater severity of peripheral nerve axonopathy. For most studies, it was not possible to identify a no-observed-adverse-effect-level above the MED. To date, the NHP studies examining DRG toxicity have revealed no clinical manifestations at four to six months or up to four years after administration.

To better understand the clinical significance of these findings, we plan to implement clinical monitoring in our GM1, FTD and Krabbe disease interventional trials, consisting of both nerve conduction studies and neurological exams focused on sensory and peripheral nerve function.

GTP has recently published data on certain technology regarding microRNA-mediated inhibition of transgene expression reduces DRG toxicity by AAV vectors. We plan to work with GTP to evaluate the appropriateness of incorporating this technology into our research programs, but do not expect to incorporate this early-stage technology into our current three clinical programs for GM1, FTD or Krabbe. We have access to this technology as part of our collaboration with GTP, whereby we have access to novel capsids, toxicity reduction technologies and delivery and formulation improvements.

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MLD - PBML04

Overview of MLD – PBML04

MLD is a monogenic autosomal recessive sphingolipid storage disease caused by mutations in the ARSA gene encoding the lysosomal enzyme arylsulfatase A, or ARSA. Reduced ARSA activity leads to the progressive build-up of toxic sulfatides in neurons and glia in the central and peripheral nervous systems. Neuronal cell death ensues with subsequent loss of motor and cognitive function, which is more severe and progresses faster in patients with early disease. We are targeting infantile-onset MLD, which is characterized by progressive muscle weakness, rigidity and gait abnormalities, developmental delays, and is typically fatal by 5 years of age. Estimations of worldwide prevalence of infantile-onset MLD vary within the range of 1 in 40,000 to 1 in 160,000 live births.

Our Product Candidate

We are developing PBML04, an AAVhu68 capsid expressing codon-optimized human ARSA, for ICM administration to increase the expression of ARSA in the CNS and periphery. We expect to submit an IND application in mid-2022.

Preclinical Studies

PBML04 preclinical preliminary efficacy studies utilized a novel mouse strain developed using CRISPR/Cas9 gene deletion, by GTP in conjunction with Jackson Labs, which was presented at the 2021 ASGCT conference. ARSA -/- mice develop a phenotype that recapitulates aspects of MLD from 9-10 months of age, including clinical deficits such as weight, balance, coordination, and gait deficiencies, sulfatide accumulation in central and peripheral neurons, lysosomal abnormalities, and increased neuro-inflammation. In a preclinical study PBML04 treatment restored depleted ARSA activity in the brain and periphery. In a 15 month-long study comparing three doses of PBML04 administered via ICV, functional improvements were shown in ARSA -/-, mice including significant improvements in an assessment of clinical motor performance and health, or the Neuroscore assay. Further, while only 5 out of 10 of vehicle-treated ARSA -/- mice survived to the study endpoint 15 months post-treatment, all 30 PBML04-treated mice, which represents 10 per dose group, survived at the study end. We are in the process of completing analysis on additional endpoints.

ARSA-/- Mouse Neuroscore

As shown in the figure below, four to five-month-old ARSA -/- mice or wildtype control mice were enrolled and scored on five parameters of clinical health and performance at baseline and at monthly intervals thereafter for 15 months. The groups approximated to baseline age of five months for graphing. The Neuroscore assay reflected the cumulative extent of impairment, generated by summing deficit scores of none to severe in five different parameters, including, posture, tremor, hind-limb clasping, gait and mobility, and grooming. Maximum possible cumulative score was 17. On Day 0 mice received PBML04 at one of three doses, which were low, medium, or high, or a vehicle control (n = 10 per group). Data points show mean Neuroscores with standard error of the mean. Wildtype mice showed little decline in Neuroscore assay up to 20 months of age, while vehicle-treated ARSA-/- mice showed a progressive decline over the 15-month study. Onset and rate of decline in cumulative score was delayed and less severe in PBML04-treated ARSA-/- mice, and high dose-treated mice showed the least decline.

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*** p < 0.001, statistically significant difference compared with vehicle-treated ARSA-/- mice (mixed effect model).

Abbreviations: KO, ARSA-/- knockout mouse; WT, wildtype mouse; LD, low dose; MD, mid dose; HD, high dose.

Other Research Programs

We have five additional programs in candidate selection or discovery stages of preclinical research, in collaboration with GTP. These include PBAL05 for ALS, PBCM06 for CMT2A, and our unnamed programs for Canavan disease, Parkinson’s disease and Huntington’s disease.

Overview of C9orf72 ALS - PBAL05

C9orf72-mediated Amyotrophic Lateral Sclerosis, or C9orf72 ALS, is an adult-onset, rapidly progressing neurodegenerative disease characterized by dysfunction and death of upper and lower motor neurons leading to progressive weakness, loss of motor function, and death typically within three to five years of disease onset. Most cases of ALS are sporadic with an unknown etiology, but approximately 10% of patients have autosomal dominantly inherited forms. We are focusing on C9orf72-mediated ALS, since mutations in the C9orf72 gene are the most common mutation found in ALS patients including both familial (approximately 40% of familial ALS cases) and sporadic ALS cases (approximately 8% of sporadic ALS patients carry C9orf72 mutations), accounting for approximately 11% of all ALS cases. In 2020, prevalence of C9orf72 mutations were estimated to affect approximately 5,000 ALS patients worldwide. In these cases, the disease is caused by a hexanucleotide repeat expansion in the first intron of C9orf72. The pathogenic mechanism of C9orf72 mutations is not yet proven, but three potential mechanisms predominate, which are toxic gain of function arising from deposition of transcribed atypical dipepetide repeat proteins, and/or deposition of mutant ribonucleic acid, or RNA, and/or loss of function of endogenous proteins.

Our approach is to use a single AAV vector to deliver a miRNA and a codon-optimized miRNA-resistant C9orf72 transgene combination, to both deplete normal and mutant mRNA within cells with the miRNA and to replace with functional wildtype human transgene. Preclinical pilot data showed that AAV-C9miRNA normalized elevated

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toxic poly(GP) dipeptide repeat protein levels in mouse brains with a mutation in the C9-ALS gene. This program is currently at the discovery stage.

Overview of CMT2A - PBCM06

CMT2A is a sensory and motor neuropathy caused by mutations in the gene encoding the mitochondrial protein mitofusin-2, or MFN2. MFN2 is a GTPase that localizes to the outer mitochondrial membrane where it regulates mitochondrial fusion and mitochondrial binding to membranes of the endoplasmic reticulum. CMT2A may present in childhood or adulthood, with progressive distal limb weakness, muscle atrophy, and loss of sensation. Clinically, the classic form of CMT2A is characterized by physical weakness, foot deformities, difficulty in walking, and areflexia. After early childhood onset, however, loss of ambulation by adulthood is common. The worldwide prevalence is estimated to be approximately 1 in 100,000.

Our approach is to use a single AAV vector to deliver a miRNA and a codon-optimized miRNA-resistant MFN2 transgene combination, to both deplete normal and mutant mRNA within cells with the miRNA and to replace with a functional wildtype human transgene. Preclinical pilot data identified lead construct that ameliorates distal limb weakness (grip strength) after ICV delivery in mice with a mutation in the MFN2 gene. This program is currently at the discovery stage.

Unnamed Research Programs

With GTP we have three additional discovery stage preclinical programs, to develop genetic medicines for rare neurodegenerative disorders. One, initiated in 2021, is a pediatric program to treat children with the inherited leukodystrophy Canavan's disease. The other two programs address adult populations, one targeting a familial form of Parkinson's disease, and the other, which was also initiated in 2021, to treat Huntington's disease. Programs are currently in discovery stages.

Beyond this portfolio, through our research collaboration with GTP, we also have the option to license programs for eight additional indications.

Exploratory Research Programs

We also have an exploratory research program with GTP with the goal to develop genetic medicines for non-rare CNS disorders, initially focused on AD and treatment-resistant TLE, which can be expanded to other large CNS diseases upon mutual agreement with GTP.

Manufacturing

Gene therapy manufacturing is a critical factor in the successful development and commercialization of novel genetic medicines, and to that end, we have established a relationship with Catalent, a contract development and manufacturing organization, or CDMO, for our initial manufacturing needs.

Our gene therapy manufacturing strategy utilizes a production platform approach with HEK293 mammalian cells as the substrate, triple plasmid transient transfection and single-use fixed-bed iCELLis® bioreactor system for the manufacture of our AAV product candidates. We are using a well-characterized production platform that has been used for both commercial and clinical AAV products and product candidates. We believe our approach will enable rapid development, control of product quality and regulatory compliance. Catalent has extensive experience with the iCELLis® bioreactor platform and HEK293 transient transfection gene therapy manufacturing. As part of our research collaboration with GTP, we have access to broad and deep early-stage process science capabilities and experience to enable technology transfer of scalable processes to our CDMO, and state-of-the art analytical capabilities for product quality testing and analytical characterization. GTP currently provides us with the preclinical and toxicology research-grade vector supplies, while Catalent provides us with the cGMP AAV clinical supplies for our clinical trials. The production process for GM1, Krabbe, FTD and MLD has been scaled up to GMP standards at Catalent’s facility and clinical materials for these candidates have been or are being manufactured.

We have a collaboration agreement with Catalent, or the Collaboration Agreement, that gives us access to a dedicated manufacturing suite. We initiated cGMP manufacturing in the dedicated suite, giving us the ability to

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meet production requirements for our current clinical product candidates through clinical studies and early commercialization. We believe that our platform manufacturing approach along with the dedicated manufacturing capabilities and capacity provide a core strategic advantage and positions us to be a leading drug development company to address CNS disorders.

We also have a development services and clinical supply agreement, or the Manufacturing and Supply Agreement, with Catalent to secure clinical scale manufacturing capacity for batches of active pharmaceutical ingredients for our gene therapy product candidates.

We entered into a lease to support chemistry, manufacturing and controls laboratory operations for our gene therapy programs, which commenced in March 2021 in Princeton West Innovation Campus. In 2021, we completed our build out of this new laboratory that is initially focused on state-of-the-art analytical capabilities, assay development and validation, and clinical product testing to support both viral vector manufacturing and clinical development.

We believe that our manufacturing capabilities provide us with the advantages of better control of drug development timelines, improved control of vector supply for a portfolio of clinical assets and improved control of product quality through the improvements of the manufacturing platform.

We also expect to open a pilot plant manufacturing suite at the Princeton West Innovation Campus to provide scale-up capabilities in support of our product pipeline and future development plans by the end of 2022. We will continue to invest in developing our manufacturing capabilities and plan to establish our own manufacturing facility for long-term commercial supplies.

We also anticipate that we will continue to make significant investments to further optimize our manufacturing capabilities and platforms to produce high-quality, cost-effective AAV vectors and we will continue to make investments in process and analytical sciences, internally or with third parties, to evaluate and develop manufacturing process improvements that may increase the productivity and efficiency of our manufacturing platform processes.

Competition

The biotechnology and pharmaceutical industries, including the genetic medicines field, are characterized by rapidly changing technologies, competition and a strong emphasis on intellectual property. We are aware of several companies focused on developing gene therapies in various indications as well as several companies addressing methods for modifying genes and regulating gene expression. We may also face competition from large and specialty pharmaceutical and biotechnology companies, academic research institutions, government agencies and public and private research institutions with genetic medicine and other therapeutic approaches.

We consider our most direct competitors with respect to PBGM01 for the treatment of GM1 to be Sio Gene Therapies, Inc., or Sio, and Lysogene, S.A, or Lysogene. Sio is conducting its clinical trial for an IV gene therapy treatment for early and late infantile/juvenile GM1 and reported data from ten patients in October 2021. Lysogene, as of February 2022, reported having dosed three patients and enrolled a fourth patient in the safety cohort, after which Lysosgene will initiate treatment of twelve patients in the efficacy confirmatory cohort of its Phase 1/2 clinical trial for a gene therapy treatment administered via intracisternal magna for early and late infantile GM1.

We consider our most direct competitors with respect to PBFT02 for the treatment of FTD-GRN to be Alector, Inc. (partnered with GlaxoSmithKline), which is enrolling a Phase 3 clinical trial with a humanized anti-human sortilin monoclonal antibody for FTD-GRN, and Prevail Therapeutics Inc. (now part of Eli Lilly & Co), which has initiated a Phase 1/2 clinical trial for a gene therapy treatment for FTD-GRN, and is expected to continue enrolling through 2023. Several other companies, including Applied Genetic Technologies Corporation, Orchard Therapeutics plc, AcuraStem Inc. and Shape Therapeutics Inc., are conducting preclinical research using gene therapy approaches to treat FTD-GRN patients. Denali Therapeutics Inc. in partnership with Takeda Pharmaceutical Company Limited has a preclinical recombinant progranulin protein under evaluation in addition to their oral EIF2a modulator in a Phase 1 clinical trial. We are also aware of other therapeutic approaches in preclinical development that may target FTD-GRN patients.

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We consider our most direct competitor with respect to PBKR03 to be Forge Biologics Inc., which has an active clinical trial evaluating a Krabbe gene therapy candidate that combines bone marrow transplant and gene therapy. In addition, Neurogene Inc. has a gene therapy in pre-clinical development for Krabbe. We are also aware of other therapeutic approaches in preclinical development and an ongoing natural history study being conducted by the Children’s Hospital of Pittsburgh and certain academic studies for Krabbe disease.

Many of our potential competitors, alone or with their strategic partners, have substantially greater financial, technical and other resources than we do, such as larger research and development, clinical, marketing and manufacturing organizations. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated among a smaller number of competitors. Our commercial opportunity could be reduced or eliminated if competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any product candidates that we may develop. Competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market, if ever. Additionally, new or advanced technologies developed by our competitors may render our current or future product candidates uneconomical or obsolete, and we may not be successful in marketing our product candidates against competitors.

License Agreement

University of Pennsylvania

We have a research, collaboration and licensing agreement, as amended, or the Penn Agreement, with Penn, for research and development collaborations and exclusive license rights to patents for certain products and technologies. Under the Penn Agreement, we have the obligation to fund certain research relating to the preclinical development of selected rare, monogenic products in research programs as well as the new exploratory research program in non-rare and/or non-monogenic, or large, CNS indications, initially AD and TLE. We also fund discovery research conducted by Penn through August 2026, and will receive exclusive rights, subject to certain limitations, to technologies resulting from the discovery program for products developed with GTP, such as novel capsids, toxicity reduction technologies and delivery and formulation improvements. Our discovery research funding commitment is $5.0 million annually, paid in quarterly increments of $1.3 million through June 30, 2026. Under the Penn Agreement, we have eight remaining options available to us to commence additional licensed programs for CNS indications until May 2026. If we were to exercise any of these remaining options, we would owe Penn a non-refundable upfront fee of $1.0 million, with $0.5 million per product indication paid immediately and another $0.5 million fee owed upon achievement of a further developmental milestone.

The Penn Agreement requires that we make payments of up to (i) $16.5 million per product candidate for rare, monogenic disorders in the aggregate and (ii) $39.0 million per product candidate in the aggregate arising from the exploratory program for large CNS indications, initially AD and TLE and such other mutually agreed upon large CNS indications. Each payment will be due upon the achievement of specific development milestone events by such licensed product for a first indication, reduced development milestone payments for the second and third indications and no development milestone payments for subsequent indications. In addition, on a product-by-product basis, we are obligated to make up to $55.0 million in sales milestone payments on each licensed product based on annual sales of the licensed product in excess of defined thresholds.

Upon successful commercialization of a product using the licensed technology, we are obligated to pay to Penn, on a licensed-product-by-licensed product and country-by-country basis, tiered royalties (subject to customary reductions) in the mid-single digits on annual worldwide net sales of such licensed product. In addition, we are obligated to pay to Penn a percentage of sublicensing income, ranging from the mid-single digits to low double digits, for sublicenses under the Penn Agreement. The agreement will expire on a licensed product-by-licensed product and country-by-country basis upon the later of (i) the expiration of the last valid claim of the licensed patent rights that covers the exploitation of such licensed product in such country, and (ii) the expiration of the royalty period. At any time after August 2026, we may terminate the agreement in its entirety, or for a licensed product, for convenience upon 90 days’ prior written notice to Penn. Penn may terminate the agreement on an indication-by-indication basis if we fail to meet any diligence event and fail to timely cure such breach, or the

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agreement in its entirety if we fail to pay the research funding, fail to comply with applicable laws, grant a security interest in any of the licensed patent rights, fail to achieve certain financing obligations, or make certain challenges to the licensed patent rights. Either party may terminate the agreement for the other party’s insolvency or material breach that is not cured within a specified period of time.

We entered into an amendment, or the Amendment, to the Penn Agreement, on August 3, 2021. Under the Amendment, we expanded the scope of the collaboration to include certain non-rare and/or non-monogenic, or large, CNS indications, initially AD and TLE and such other mutually agreed upon large CNS indications; included an exploratory research collaboration to identify targets and early product candidates in such large CNS indications; and extended the term to August 3, 2026 by which product candidates for CNS indications may be selected for the entire agreement. The exploratory research program is focused on discovering targets and novel gene therapy candidates for large CNS diseases, initially focused on AD and TLE, and that can be expanded to other large CNS diseases upon mutual agreement. The initial term of the exploratory research program is 3 years, which term can be extended by mutual agreement. During such term we will have an exclusive right of first negotiation to include additional targets to the exploratory research program in the agreed upon large CNS indications. Under the exploratory research program, we will have the right to further develop and commercialize any gene therapy product candidates specific for those selected targets within AD and TLE (and any future large CNS indications that are mutually agreed upon) that arise from the exploratory research programs on substantially the same terms of the current Penn Agreement. The election of any option to any such product candidates will count against our remaining eight options and will trigger the aggregate $1.0 million option fee. As a result, we now will fund discovery research through August 3, 2026, and will now have until August 3, 2026 to exercise our remaining eight options. We made an upfront payment of $5.0 million; will reimburse Penn for expenses incurred in the exploratory research program; and will pay Penn a tiered transaction fee ranging from 1-2% of the net proceeds upon certain change of control events.

Penn will notify us of any patented manufacturing methods developed by GTP during the specified research term, and we have the option to obtain a non-exclusive license under those patent rights controlled by Penn for our licensed products.

On a CNS indication-by-indication basis, Penn has agreed that GTP will not collaborate with any commercial third party to develop another gene therapy product for the same indication during, or for one year following, its work for us on a given indication and licensed product. Under the licensed Penn patent rights, Penn retains the right to conduct (and to authorize non-commercial third parties to conduct) certain educational, research, clinical and patient care activities.

Under the Penn Agreement, we are obligated to use commercially reasonable efforts to develop, obtain regulatory approval for, and commercialize at least one licensed product for each of the licensed indications for prophylactic, diagnostic and therapeutic uses in humans. We may satisfy this obligation by achieving, for each licensed product, certain diligence events by a specified achievement date, which dates may be extended under certain circumstances. Pursuant to the agreement, Penn will be responsible for preclinical development activities, including all IND-enabling non-clinical studies and research grade manufacturing, and other collaborative activities set forth in the plan for the funded research, and we will be responsible for regulatory strategy and operations, clinical development, GMP manufacture and commercialization of all licensed products.

Intellectual Property

Our commercial success depends in part on our ability to obtain and maintain proprietary and/or intellectual property protection in the United States and other countries for our current product candidates and future products, as well as our core technologies, including our manufacturing know-how. We strive to protect and enhance the proprietary technology, inventions and improvements that are commercially important to the development of our business by seeking, maintaining and defending our intellectual property, whether developed internally or licensed from third parties. We also rely on trade secrets, know-how, continuing technological innovation and in-licensing opportunities to develop, strengthen and maintain our proprietary position in the field of gene therapy. Additionally, we intend to rely on regulatory protection afforded through rare drug designations, data exclusivity and market exclusivity as well as patent term extensions, where available.

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Currently, our patent protection consists of patent applications that we have in-licensed from Penn under the Penn Agreement for our product candidates in our licensed indications. The in-licensed patent applications are directed to new AAV capsids and certain defined variants, to recombinant AAV viruses, or rAAVs, capable of delivering certain genes into human cells to treat monogenic diseases of the CNS, to methods of treating those monogenic diseases with rAAV, as well as certain aspects of our manufacturing capabilities and related technologies. Our in-licensed patent portfolio currently includes:

We also have options under the Penn Agreement to add additional intellectual property to our existing license, as described in the section “License Agreement”. To date, we have exercised an option with respect to Charcot-Marie Tooth disease, or CMT, Canavan disease, Parkinson’s disease, and Huntington’s disease. At present, there are two patent families directed to these newly licensed indications:

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The term of individual patents may vary based on the countries in which they are obtained. Generally, patents issued from applications filed in the United States are effective for 20 years from the earliest effective non-provisional filing date. In addition, in certain instances, a patent term can be extended to recapture a portion of the term effectively lost as a result of FDA regulatory review period. The restoration period cannot be longer than five years and the total patent term, including the restoration period, must not exceed 14 years following FDA approval. The duration of patents outside of the United States varies in accordance with provisions of applicable local law, but typically is also 20 years from the earliest effective national filing date.

In addition to patents and patent applications that we license, we rely on trade secrets and know-how to develop and maintain our competitive position. For example, significant aspects of our AAV manufacturing capabilities and gene therapy technology are based upon trade secrets and know-how. However, trade secrets can be difficult to protect. We seek to protect our proprietary technology and processes, and obtain and maintain control and/or ownership of certain technologies, in part, through confidentiality agreements and invention assignment agreements with our employees, consultants, scientific advisors, contractors and commercial partners. We also seek to preserve the integrity and confidentiality of our data, trade secrets and know-how, including by implementing measures intended to maintain the physical security of our premises and the physical and electronic security of our information technology systems.

Our ability to stop third parties from making, using, selling, offering to sell or importing our products may depend on the extent to which we have rights under valid and enforceable patents or trade secrets that cover these activities. With respect to our licensed intellectual property, we cannot be sure that patents will issue with respect to any of the pending patent applications to which we license rights or with respect to any patent applications that we or our licensors may file in the future, nor can we be sure that any of our licensed patents or any patents that may be issued in the future to us or our licensors will be commercially useful in protecting our product candidates and methods of manufacturing the same. Moreover, we may be unable to obtain patent protection for certain of our product candidates generally, as well as with respect to certain indications. See the section entitled “Risk Factors—Risks Related to Our Intellectual Property” for a more comprehensive description of risks related to our intellectual property.

Government Regulation and Product Approval

Government authorities in the United States, at the federal, state and local level, and in other countries and jurisdictions, extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post-approval monitoring and reporting, and import and export of pharmaceutical products. The processes for obtaining regulatory approvals in the United States and in foreign countries and jurisdictions, along with subsequent compliance with applicable statutes and regulations and other regulatory authorities, require the expenditure of substantial time and financial resources.

FDA Approval Process

In the United States, pharmaceutical products are subject to extensive regulation by the FDA. The Federal Food, Drug, and Cosmetic Act, or the FDC Act, and other federal and state statutes and regulations, govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling, promotion and marketing, distribution, post-approval monitoring and reporting, sampling, and import and export of pharmaceutical products. Biological products used for the prevention, treatment, or cure of a disease or condition of a human being are subject to regulation under the FDC Act, except the section of the FDC Act which governs the approval of New Drug Applications, or NDAs. Biological products, such as gene therapy products, are approved for marketing under provisions of the Public Health Service Act, or PHSA, via a Biologics License Application, or BLA. However, the application process and requirements for approval of BLAs are very similar to those for NDAs. Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as clinical hold, FDA refusal to approve pending NDAs or BLAs,

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warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties, and criminal prosecution.

Biological product development for a new product or certain changes to an approved product in the United States typically involves preclinical laboratory and animal tests, the submission to the FDA of an IND which must become effective before clinical testing may commence, and adequate and well-controlled clinical trials to establish the safety and effectiveness of the drug for each indication for which FDA approval is sought. Satisfaction of FDA pre-market approval requirements typically takes many years and the actual time required may vary substantially based upon the type, complexity, and novelty of the product or disease.

Preclinical tests include laboratory evaluation of product chemistry, formulation, and toxicity, as well as animal trials to assess the characteristics and potential safety and efficacy of the product. The conduct of the preclinical tests must comply with federal regulations and requirements, including Good Laboratory Practices. The results of preclinical testing are submitted to the FDA as part of an IND along with other information, including information about product chemistry, manufacturing and controls, and a proposed clinical trial protocol. Long-term preclinical tests, such as tests of reproductive toxicity and carcinogenicity in animals, may continue after the IND is submitted. A 30-day waiting period after the submission of each IND is required prior to the commencement of clinical testing in humans. If the FDA has neither commented on nor questioned the IND within this 30-day period, the clinical trial proposed in the IND may begin. Clinical trials involve the administration of the investigational biologic to subjects, including healthy volunteers or patients under the supervision of a qualified investigator. Clinical trials must be conducted: (i) in compliance with federal regulations; (ii) in compliance with Good Clinical Practice, or GCP, an international standard meant to protect the rights and health of patients and to define the roles of clinical trial sponsors, administrators, and monitors; as well as (iii) under protocols detailing the objectives of the trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated. Each protocol involving testing on U.S. subjects and subsequent protocol amendments must be submitted to the FDA as part of the IND.

The FDA may order the temporary or permanent discontinuation of a clinical trial at any time, or impose other sanctions, if it believes that the clinical trial either is not being conducted in accordance with FDA regulations or presents an unacceptable risk to the clinical trial subjects. The trial protocol and informed consent information for subjects in clinical trials must also be submitted to an institutional review board, or IRB, for approval. An IRB may also require the clinical trial at the site to be halted, either temporarily or permanently, for failure to comply with the IRB’s requirements, or may impose other conditions if it believes that the subjects are subject to unacceptable risk.

Clinical trials to support BLAs for marketing approval are typically conducted in three sequential phases, but the phases may overlap. In Phase 1, the initial introduction of the biologic into subjects, the product is tested to assess safety, dosage tolerance, metabolism, pharmacokinetics, pharmacological actions, side effects associated with drug exposure, and to obtain early evidence of a treatment effect if possible. Phase 2 usually involves trials in a limited patient population to determine the effectiveness of the drug or biologic for a particular indication, determine optimal dose and regimen, and to identify common adverse effects and safety risks. If a compound demonstrates evidence of effectiveness and an acceptable safety profile in Phase 2 evaluations, Phase 3 trials are undertaken to obtain additional information about clinical effects and confirm efficacy and safety in a larger number of patients, typically at geographically dispersed clinical trial sites, to permit the FDA to evaluate the overall benefit-risk relationship of the drug or biologic and to provide adequate information for the labeling of the product. In most cases, the FDA requires two adequate and well-controlled Phase 3 clinical trials to demonstrate the safety and efficacy of the drug or biologic. In rare instances, including instances of gene therapies intended for rare diseases, a single Phase 3 trial may be sufficient when either (1) the trial is a large, multicenter trial demonstrating internal consistency and a statistically very persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity or prevention of a disease with a potentially serious outcome and confirmation of the result in a second trial would be practically or ethically impossible or (2) the single trial is supported by other confirmatory evidence.

In addition, the manufacturer of an investigational drug in a Phase 2 or Phase 3 clinical trial for a serious or life-threatening disease is required to make available, such as by posting on its website, its policy on evaluating and responding to requests for expanded access to such investigational drug.

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After completion of the required clinical testing, a BLA is prepared and submitted to the FDA. FDA approval of the BLA is required before marketing and distribution of the product may begin in the United States. The BLA must include the results of all preclinical, clinical, and other testing and a compilation of data relating to the product’s pharmacology, chemistry, manufacture, and controls. The cost of preparing and submitting a BLA is substantial. The submission of most BLAs is additionally subject to a substantial application user fee. Under an approved BLA, the applicant is also subject to an annual program fee. These fees typically increase annually. A BLA for a drug that has been designated as an orphan drug is not subject to an application fee, unless the BLA includes an indication for other than a rare disease or condition. The FDA has 60 days from its receipt of a BLA to determine whether the application will be accepted for filing based on the Agency’s determination that it is adequately organized and sufficiently complete to permit substantive review. Once the submission is accepted for filing, the FDA begins an in-depth review. The FDA has agreed to certain performance goals to complete the review of BLAs. Most applications are classified as Standard Review products that are reviewed within ten months of the date the FDA accepts the BLA for filing; applications classified as Priority Review are reviewed within six months of the date the FDA accepts the BLA for filing. A BLA can be classified for Priority Review when the FDA determines the biologic product has the potential to treat a serious or life-threatening condition and, if approved, would be a significant improvement in safety or effectiveness compared to available therapies. The review process for both standard and priority reviews may be extended by the FDA for three or more additional months to consider certain late-submitted information, or information intended to clarify information already provided in the BLA submission.

The FDA may also refer applications for novel biologic products, or biologic products that present difficult questions of safety or efficacy, to be reviewed by an advisory committee—typically a panel that includes clinicians, statisticians and other experts—for review, evaluation, and a recommendation as to whether the BLA should be approved. The FDA is not bound by the recommendation of an advisory committee, but generally follows such recommendations. Before approving a BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP. Additionally, the FDA will inspect the facility or the facilities at which the biologic product is manufactured. The FDA will not approve the product unless compliance with cGMPs is satisfactory and the BLA contains data that provide substantial evidence that the biologic is safe, pure, potent and effective in the claimed indication.

After the FDA evaluates the BLA and completes any clinical and manufacturing site inspections, it issues either an approval letter or a complete response letter. A complete response letter generally outlines the deficiencies in the BLA submission and may require substantial additional testing, or information, in order for the FDA to reconsider the application for approval. If, or when, those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the BLA, the FDA will issue an approval letter. The FDA has committed to reviewing such resubmissions in two or six months depending on the type of information included. An approval letter authorizes commercial marketing and distribution of the biologic with specific prescribing information for specific indications. As a condition of BLA approval, the FDA may require a risk evaluation and mitigation strategy, or REMS, to help ensure that the benefits of the biologic outweigh the potential risks to patients. A REMS can include medication guides, communication plans for healthcare professionals, and elements to assure a product’s safe use, or ETASU. An ETASU can include, but is not limited to, special training or certification for prescribing or dispensing the product, dispensing the product only under certain circumstances, special monitoring, and the use of patient-specific registries. The requirement for a REMS can materially affect the potential market and profitability of the product. Moreover, the FDA may require substantial post-approval testing and surveillance to monitor the product’s safety or efficacy.

Once granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained or problems are identified following initial marketing. Changes to some of the conditions established in an approved BLA, including changes in indications, product labeling, manufacturing processes or facilities, require submission and FDA approval of a new BLA or BLA supplement before the change can be implemented. A BLA supplement for a new indication typically requires clinical data similar to that in the original application, and the FDA uses the same procedures and actions in reviewing BLA supplements as it does in reviewing BLAs.

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Additional Standard for Gene Therapy Products

In addition to the regulations discussed above, there are a number of additional standards that apply to clinical trials involving the use of gene therapy. FDA has issued various guidance documents regarding gene therapies, which outline additional factors that FDA will consider at each of the above stages of development and relate to, among other things: the proper preclinical assessment of gene therapies; the CMC information that should be included in an IND application; the proper design of tests to measure product potency in support of an IND or BLA application; and measures to observe delayed adverse effects in subjects who have been exposed to investigational gene therapies when the risk of such effects is high. For instance, FDA usually recommends that sponsors observe all surviving subjects who receive treatment using gene therapies that are based on adeno-associated virus vectors in clinical trials for potential gene therapy-related delayed adverse events for a minimum 5-year period. FDA does not require the long-term tracking to be complete prior to its review of the BLA.

Orphan Drug Designation

Under the Orphan Drug Act, the FDA may grant orphan drug designation to biological products intended to treat a rare disease or condition—generally a disease or condition that affects fewer than 200,000 individuals in the United States, or if it affects more than 200,000 individuals in the United States, there is no reasonable expectation that the cost of developing and making a product available in the United States for such disease or condition will be recovered from sales of the product. Orphan drug designation must be requested before submitting a BLA. After the FDA grants orphan drug designation, the identity of the biological product and its potential orphan disease use are disclosed publicly by the FDA. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process. The first BLA applicant to receive FDA approval for a particular active moiety to treat a particular disease with FDA orphan drug designation is entitled to a seven-year exclusive marketing period in the United States for that product in the approved indication. For large molecule drugs, including gene therapies, sameness is determined based on the principal molecular structural features of a product. As applied to gene therapies, the FDA has recently issued final guidance in which it stated it generally intends to consider certain key features, such as the transgenes expressed by the gene therapy and the vectors used to deliver the transgene, to be principal molecular structural features. With regard to vectors, the FDA generally intends to consider whether two vectors from the same viral class are the same or different on a case-by-case basis. The FDA does not intend to consider minor differences between transgenes and vectors to be different principal molecular structural features. When two gene therapy products express the same transgene and have or use the same vector, determining whether two gene therapies are the same drug may also depend on additional features of the final gene therapy product, such as regulatory elements and the cell type that is transduced (for genetically modified cells). In such cases, the FDA generally intends to determine whether two gene therapy products are different on a case-by-case basis. During the seven-year marketing exclusivity period, the FDA may not approve any other applications to market a biological product containing the same principal molecular structural features for the same indication, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity. A product can be considered clinically superior if it is safer, more effective or makes a major contribution to patient care. Orphan drug exclusivity does not prevent the FDA from approving a different drug or biological product for the same disease or condition, or the same biological product for a different disease or condition. Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the BLA user fee.

Rare Pediatric Disease Priority Review Voucher Program

Under the Rare Pediatric Disease Priority Review Voucher program, the FDA may award a priority review voucher to the sponsor of an approved marketing application for a product that treats or prevents a rare pediatric disease. The voucher entitles the sponsor to priority review of one subsequent marketing application. A voucher may be awarded only for an approved rare pediatric disease product application. A rare pediatric disease product application is an NDA or BLA for a product that treats or prevents a serious or life-threatening disease in which the serious or life-threatening manifestations primarily affect individuals aged from birth to 18 years; in general, the disease must affect fewer than 200,000 such individuals in the U.S.; the NDA or BLA must be deemed eligible for priority review; the NDA or BLA must not seek approval for a different adult indication (i.e., for a different disease/condition); the product must not contain an active ingredient that has been previously approved by the FDA; and the NDA or BLA must rely on clinical data derived from studies examining a pediatric

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population such that the approved product can be adequately labeled for the pediatric population. Before NDA or BLA approval, the FDA may designate a product in development as a product for a rare pediatric disease.

To receive a rare pediatric disease priority review voucher, a sponsor must notify the FDA, upon submission of the NDA or BLA, of its intent to request a voucher. If the FDA determines that the NDA or BLA is a rare pediatric disease product application, and if the NDA or BLA is approved, the FDA will award the sponsor of the NDA or BLA a voucher upon approval of the NDA or BLA. The FDA may revoke a rare pediatric disease priority review voucher if the product for which it was awarded is not marketed in the U.S. within 365 days of the product’s approval. The voucher, which is transferable to another sponsor, may be submitted with a subsequent NDA or BLA and entitles the holder to priority review of the accompanying NDA or BLA. The sponsor submitting the priority review voucher must notify the FDA of its intent to submit the voucher with the NDA or BLA at least 90 days prior to submission of the NDA or BLA and must pay a priority review user fee in addition to any other required user fee. The FDA must take action on an NDA or BLA under priority review within six months of receipt of the NDA or BLA.

On December 27, 2020, the Rare Pediatric Disease Priority Review Voucher program was reauthorized as part of the Consolidated Appropriations Act, 2021 allowing a product that is designated as a product for a rare pediatric disease prior to September 30, 2024 to be eligible to receive a rare pediatric disease priority review voucher upon approval of a qualifying NDA or BLA prior to September 30, 2026. It is unclear whether this program will continue to be reauthorized beyond the current sunset date in September 2024.

Fast Track Designation and Priority Review

The FDA is required to facilitate the development, and expedite the review, of drugs that are intended for the treatment of a serious or life-threatening disease or condition for which there is no effective treatment and which demonstrate the potential to address unmet medical needs for the condition. Fast track designation may be granted for products that are intended to treat a serious or life-threatening disease or condition for which there is no effective treatment and preclinical or clinical data demonstrate the potential to address unmet medical needs for the condition. Fast track designation applies to both the product and the specific indication for which it is being studied. Any product submitted to the FDA for marketing, including under a fast track program, may be eligible for other types of FDA programs intended to expedite development and review, such as priority review.

Priority review may be granted for products that are intended to treat a serious or life-threatening condition and, if approved, would provide a significant improvement in safety and effectiveness compared to available therapies. The FDA will attempt to direct additional resources to the evaluation of an application designated for priority review in an effort to facilitate the review.

Breakthrough Therapy Designation

The FDA is also required to expedite the development and review of biological products that are intended to treat a serious or life-threatening disease or condition where preliminary clinical evidence indicates that the biologic product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints. The sponsor of a new biologic product candidate may request that the FDA designate the candidate for a specific indication as a Breakthrough Therapy concurrent with, or after, the filing of the IND for the biologic product candidate. The FDA must determine if the biological product qualifies for Breakthrough Therapy designation within 60 days of receipt of the sponsor’s request.

Regenerative Medicine Advanced Therapy (RMAT) Designation

The RMAT designation is an expedited program for the advancement and approval of regenerative medicine therapies that are intended to treat, modify, reverse, or cure a serious condition and where preliminary clinical evidence indicates the potential to address unmet medical needs for life-threatening diseases or conditions. Similar to Breakthrough Therapy designation, the RMAT allows companies developing regenerative medicine therapies to work earlier, more closely, and frequently with the FDA, and RMAT-designated products may be eligible for priority review and accelerated approval. Regenerative medicine therapies include cell therapies, therapeutic tissue engineering products, human cell and tissue products, and combination products using any such therapies or products, except for those regulated solely under section 361 of the PHS Act and Title 21 of the Code

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of Federal Regulations Part 1271. The FDA confirmed that gene therapies, including genetically modified cells, that lead to a sustained effect on cells or tissues may meet the definition of a regenerative medicine therapy. For product candidates that have received a RMAT designation, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. The timing of a sponsor’s request for designation and FDA response are the same as for the Breakthrough Therapy designation program.

Disclosure of Clinical Trial Information

Sponsors of clinical trials of FDA-regulated products, including biological products, are required to register and disclose certain clinical trial information on the website www.clinicaltrials.gov. Information related to the product, patient population, phase of investigation, trial sites and investigators, and other aspects of a clinical trial are then made public as part of the registration. Sponsors are also obligated to disclose the results of their clinical trials after completion. Disclosure of the results of clinical trials can be delayed in certain circumstances for up to two years after the date of completion of the trial. Competitors may use this publicly available information to gain knowledge regarding the progress of clinical development programs as well as clinical trial design.

Pediatric Information

Under the Pediatric Research Equity Act, or PREA, NDAs or BLAs or supplements to NDAs or BLAs must contain data to assess the safety and effectiveness of the biological product for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the biological product is safe and effective. The FDA may grant full or partial waivers, or deferrals, for submission of data. Unless otherwise required by regulation, PREA does not apply to any biological product with orphan product designation except a product with a new active ingredient that is a molecularly targeted cancer product intended for the treatment of an adult cancer and directed at a molecular target determined by FDA to be substantially relevant to the growth or progression of a pediatric cancer.

Additional Controls for Biologics

To help reduce the increased risk of the introduction of adventitious agents, the PHSA emphasizes the importance of manufacturing controls for products whose attributes cannot be precisely defined. The PHSA also provides authority to the FDA to immediately suspend biologics licenses in situations where there exists a danger to public health, to prepare or procure products in the event of shortages and critical public health needs, and to authorize the creation and enforcement of regulations to prevent the introduction or spread of communicable diseases within the United States.

After a BLA is approved, the product may also be subject to official lot release as a condition of approval. As part of the manufacturing process, the manufacturer is required to perform certain tests on each lot of the product before it is released for distribution. If the product is subject to official release by the FDA, the manufacturer submits samples of each lot of product to the FDA together with a release protocol showing a summary of the lot manufacturing history and the results of all of the manufacturer’s tests performed on the lot. The FDA may also perform certain confirmatory tests on lots of some products, such as viral vaccines, before allowing the manufacturer to release the lots for distribution. In addition, the FDA conducts laboratory research related to the regulatory standards on the safety, purity, potency, and effectiveness of biological products. As with drugs, after approval of a BLA, biologics manufacturers must address any safety issues that arise, are subject to recalls or a halt in manufacturing, and are subject to periodic inspection after approval.

Biosimilars

The Biologics Price Competition and Innovation Act of 2009, or BPCIA, creates an abbreviated approval pathway for biological products shown to be highly similar to or interchangeable with an FDA-licensed reference biological product. Biosimilarity sufficient to reference a prior FDA-approved product requires that there be no differences in conditions of use, route of administration, dosage form, and strength, and no clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency. Biosimilarity must be shown through analytical trials, animal trials, and a clinical trial or trials, unless the Secretary of Health and Human Services waives a required element. A biosimilar product may be deemed

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interchangeable with a previously approved product if it meets the higher hurdle of demonstrating that it can be expected to produce the same clinical results as the reference product and, for products administered multiple times, the biologic and the reference biologic may be switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic. The first biosimilar product was approved by the FDA in 2015, and the first interchangeable product was approved in 2021.

A reference biologic is granted 12 years of exclusivity from the time of first licensure, or BLA approval, of the reference product, and no application for a biosimilar can be submitted for four years from the date of licensure of the reference product. The first biologic product submitted under the biosimilar abbreviated approval pathway that is determined to be interchangeable with the reference product has exclusivity against a finding of interchangeability for other biologics for the same condition of use for the lesser of (i) one year after first commercial marketing of the first interchangeable biosimilar, (ii) 18 months after the first interchangeable biosimilar is approved if there is no patent challenge, (iii) eighteen months after resolution of a lawsuit over the patents of the reference biologic in favor of the first interchangeable biosimilar applicant, or (iv) 42 months after the first interchangeable biosimilar’s application has been approved if a patent lawsuit is ongoing within the 42-month period.

Post-Approval Requirements

Once a BLA is approved, a product will be subject to certain post-approval requirements. For instance, the FDA closely regulates the post-approval marketing and promotion of biologics, including standards and regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientific and educational activities and promotional activities involving the Internet. Biologics may be marketed only for the approved indications and in accordance with the provisions of the approved labeling.

Adverse event reporting and submission of periodic safety summary reports are required following FDA approval of a BLA. The FDA also may require post-marketing testing, known as Phase 4 testing, REMS, and surveillance to monitor the effects of an approved product, or the FDA may place conditions on an approval that could restrict the distribution or use of the product. In addition, quality control, biological product manufacture, packaging, and labeling procedures must continue to conform to cGMPs after approval. Biologic manufacturers and certain of their subcontractors are required to register their establishments with the FDA and certain state agencies. Registration with the FDA subjects entities to periodic unannounced inspections by the FDA, during which the agency inspects a biologic product’s manufacturing facilities to assess compliance with cGMPs. Accordingly, manufacturers must continue to expend time, money, and effort in the areas of production and quality-control to maintain compliance with cGMPs. Regulatory authorities may withdraw product approvals or request product recalls if a company fails to comply with required regulatory standards, if it encounters problems following initial marketing, or if previously unrecognized problems are subsequently discovered.

Other U.S. Healthcare Laws and Compliance Requirements

In the United States, biotechnology company activities are potentially subject to regulation by various federal, state and local authorities in addition to the FDA, including but not limited to, the Centers for Medicare & Medicaid Services, or CMS, other divisions of the U.S. Department of Health and Human Services (e.g., the Office of Inspector General and the Office for Civil Rights), the U.S. Department of Justice, or DOJ, and individual U.S. Attorney offices within the DOJ, and state and local governments. The laws biotechnology companies may have to comply with include the anti-fraud and abuse provisions of the Social Security Act, the federal false claims laws, the privacy and security provisions of the Health Insurance Portability and Accountability Act, or HIPAA, and similar state laws, each as amended, as applicable.

The federal Anti-Kickback Statute prohibits, among other things, any person or entity, from knowingly and willfully offering, paying, soliciting or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or in return for purchasing, leasing, ordering, recommending or arranging for the purchase, lease or order of any item or service reimbursable under Medicare, Medicaid or other federal healthcare programs. The term remuneration has been interpreted broadly to include anything of value. The Anti- Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on one hand and

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prescribers, purchasers, and/or formulary managers on the other. There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution. The exceptions and safe harbors are drawn narrowly and practices that involve remuneration that may be alleged to be intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exception or safe harbor. Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under the Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all of its facts and circumstances. Practices may not in all cases meet all of the criteria for protection under a statutory exception or regulatory safe harbor. In addition, the statutory exceptions and regulatory safe harbors are subject to change.

Additionally, the intent standard under the Anti-Kickback Statute was amended by the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively the ACA, to a stricter standard such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. In addition, the ACA codified case law that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act (discussed below).

The civil monetary penalties statute imposes penalties against any person or entity who, among other things, is determined to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent.

Federal false claims laws, including the federal civil False Claims Act, prohibit, among other things, any person or entity from knowingly presenting, or causing to be presented, a false claim for payment to, or approval by, the federal government or knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government. As a result of a modification made by the Fraud Enforcement and Recovery Act of 2009, a claim includes “any request or demand” for money or property presented to the U.S. government. In addition, manufacturers can be held liable under the civil False Claims Act even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims. Pharmaceutical and other healthcare companies have been prosecuted under these laws for, among other things, allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product. Other companies have been prosecuted for causing false claims to be submitted because of the companies’ marketing of the product for unapproved, and thus generally non-reimbursable, uses and purportedly concealing price concessions in the pricing information submitted to the government for government price reporting purposes.

HIPAA created additional federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud or to obtain, by means of false or fraudulent pretenses, representations or promises, any money or property owned by, or under the control or custody of, any healthcare benefit program, including private third-party payors and knowingly and willfully falsifying, concealing or covering up by trick, scheme or device, a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Similar to the Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

Also, many states have similar fraud and abuse statutes or regulations that apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor.

Data privacy and security regulations by both the federal government and the states in which business is conducted may also be applicable. HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and its implementing regulations, imposes requirements relating to the privacy, security and transmission of individually identifiable health information. HIPAA requires covered entities to limit the use and disclosure of protected health information to specifically authorized situations, and requires covered entities to implement security measures to protect health information that they maintain in electronic form. Among other things, HITECH made HIPAA’s security standards directly applicable to business associates, independent contractors or agents of covered entities that receive or obtain protected health information in connection with providing a service on behalf of a covered entity. HITECH also created four new tiers of civil

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monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions. In addition, state laws govern the privacy and security of health information in specified circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

Additionally, the federal Physician Payments Sunshine Act within the ACA, and its implementing regulations, require that certain manufacturers of drugs, devices, biological and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) report annually to CMS information related to certain payments or other transfers of value made or distributed to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), physician assistants, certain types of advanced practice nurses, and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, the physicians and teaching hospitals and to report annually certain ownership and investment interests held by physicians and their immediate family members.

PASG US Equity

PASG · 10-K · period ended 2021-12-31

Item 1. Business

PASG US Equity☆

PASG · 10-K · period ended 2021-12-31

Item 1. Business

PASG US Equity