advm-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

___________________________________________________________________

FORM 10-Q

___________________________________________________________________

(Mark One)


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

For the quarterly period ended September 30, 2024


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

For the transition period from to

Commission File Number: 001-36579

___________________________________________________________________

Adverum Biotechnologies, Inc.

(Exact name of registrant as specified in its charter)

___________________________________________________________________


Delaware						20-5258327
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

100 Cardinal Way

Redwood City, CA

(Address of principal executive offices)

94063

(Zip Code)

(650) 656-9323

(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, $0.0001 par value	ADVM	The NASDAQ Stock Market LLC (Nasdaq Capital Market)

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

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

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 definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

Smaller reporting company

Emerging growth company

☐

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

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

As of October 31, 2024, there were 20,802,463 shares of the registrant’s common stock, par value $0.0001 per share, outstanding.

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Adverum Biotechnologies, Inc.

TABLE OF CONTENTS


			Page

PART I—FINANCIAL INFORMATION			5

Item 1. Financial Statements			5
Condensed Consolidated Balance Sheets (unaudited)			5
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)			6
Condensed Consolidated Statements of Stockholders’ Equity (unaudited)			7
Condensed Consolidated Statements of Cash Flows (unaudited)			9
Notes to Condensed Consolidated Financial Statements (unaudited)			10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			17
Item 3. Quantitative and Qualitative Disclosures About Market Risk			24
Item 4. Controls and Procedures			25

PART II—OTHER INFORMATION			26

Item 1. Legal Proceedings			26
Item 1A. Risk Factors			26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			70
Item 3. Defaults Upon Senior Securities			70
Item 4. Mine Safety Disclosures			70
Item 5. Other Information			70
Item 6. Exhibits			71

SIGNATURES			72

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RISK FACTORS SUMMARY

Investing in common stock involves numerous risks, including the risks described in Part II, Item 1A. “Risk Factors” of this Quarterly Report on Form 10-Q. Below are some of these risks, any one of which could materially adversely affect our business, financial condition, results of operations, and prospects.

•We have incurred significant operating losses since inception, and we expect to incur significant losses for the foreseeable future. We may never become profitable or, if achieved, be able to sustain profitability.

•We expect that our cash, cash equivalents, and short-term investments will be sufficient to fund our planned operations into late 2025. If this expectation proves to be wrong, we may be forced to delay, limit or terminate certain of our development efforts before then.

•We will need to raise additional funding, which may not be available on acceptable terms, or at all. If we fail to obtain additional capital necessary to fund our operations, we will be unable to successfully develop and commercialize our product candidates.

•Our business will depend substantially on the success of one or more of our product candidates. If we are unable to develop, obtain regulatory approval for, or successfully commercialize, any or all of our product candidates, our business will be materially harmed.

•Drug development is a long, expensive and uncertain process, and delay or failure can occur at any stage of development, including after commencement of any of our clinical trials or any clinical trials using our proprietary viral vectors.

•The occurrence of serious complications or side effects that outweigh the therapeutic benefit in connection with or during use of our product candidates, whether in nonclinical studies or clinical trials or post-approval, could lead to discontinuation of our clinical development program, refusal of regulatory authorities to approve our product candidates or, post-approval, revocation of marketing authorizations or refusal to approve new indications, which could severely harm our business prospects, financial condition and results of operations.

•The results of nonclinical studies and early clinical trials are not always predictive of future results. Any product candidate we or any of our future development partners advance into clinical trials may not have favorable results in later clinical trials, if any, or receive regulatory approval.

•If we are unable to successfully develop and maintain robust and reliable manufacturing processes for our product candidates, we may be unable to advance clinical trials or licensure applications and may be forced to delay or terminate a program.

•Changes in methods of manufacturing or formulation of our product candidates may result in additional costs or delays.

•If we are unable to produce sufficient quantities of our product candidates at acceptable costs, we may be unable to meet clinical or potential commercial demand, lose potential revenue, have reduced margins, or be forced to terminate a program.

•We and our contractors are subject to significant regulation with respect to manufacturing and testing our product candidates. We have a limited number of vendors on which we rely, including, in some cases, single source vendors, and the contract vendors on which we rely may not continue to meet regulatory requirements, may have limited capacity, or may have other factors limiting their ability to comply with their contracts with us.

•We are subject to many manufacturing and distribution risks, any of which could substantially increase our costs and limit supply of our product candidates.

•We have relied, and expect to continue to rely, on third parties under contracts and partnerships to conduct some or all aspects of our research and development, including vector production, process development, assay development, product candidates and product manufacturing and testing, protocol development, clinical trials, product distribution, commercialization, nonclinical studies, research and related activities, and these third parties may not perform satisfactorily.

•We will rely on third parties to conduct some nonclinical testing and all of our planned clinical trials. If these third parties do not meet our deadlines or otherwise fail to conduct the trials as required, our clinical development programs could be delayed or unsuccessful and we may not be able to obtain regulatory approval for or commercialize our product candidates when expected or at all.

•Our success depends on our ability to protect our intellectual property and our proprietary technologies.

•Claims by third parties that we infringe their proprietary rights may result in liability for damages or prevent or delay our developmental and commercialization efforts.

•We may not be successful in obtaining or maintaining necessary rights to our product candidates through acquisitions and in-licenses.

•Our rights to develop and commercialize our product candidates are subject in part to the terms and conditions of licenses granted to us by other companies and universities.

•The patent protection and patent prosecution for some of our product candidates are dependent on third parties.

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•We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.

•Third party patent rights could delay or otherwise adversely affect our planned development and sale of product candidates of our programs.

•We may not be able to obtain intellectual property rights or protect our intellectual property rights throughout the world.

•Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates.

•If we do not obtain patent term extensions for patents covering our product candidates, our business may be materially harmed.

•Any suspension of, or delays in the commencement or completion of, clinical trials for our product candidates could result in increased costs to us, delay or limit our ability to generate revenue and adversely affect our commercial prospects.

•Final marketing approval for our product candidates by the FDA or other regulatory authorities outside the U.S. for commercial use may be delayed, limited or denied, any of which would adversely affect our ability to generate operating revenue.

•Even if we receive regulatory approval, we still may not be able to successfully commercialize any of our product candidates, and the revenue that we generate from its sales, if any, could be limited.

•If our competitors develop treatments for the target indications of our product candidates that are approved, marketed more successfully, or demonstrated to be safer or more effective or easier to administer than our product candidates, our commercial opportunity will be reduced or eliminated.

•Even if we obtain marketing approval for any of our product candidates, they could be subject to restrictions or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our product candidates, when and if any of them are approved.

•Coverage and reimbursement may be limited or unavailable in certain market segments for our product candidates, which could make it difficult for us to sell our product candidates profitably.

•Healthcare and other reform legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and, if approved, may affect the prices we may obtain.

•Negative public opinion and increased regulatory scrutiny of gene therapy and genetic research may damage public perception of our product candidates or adversely affect our ability to conduct our business or obtain marketing approvals for our product candidates.

•We are dependent on the services of our key executives and clinical and scientific staff, and if we are not able to retain these members of our management or recruit additional management, clinical and scientific personnel, our business will suffer.

•We may encounter difficulties in managing our growth and expanding our operations successfully.

•If our information technology systems or those of third parties upon which we rely, or our data, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; material disruption of our product development programs; and other adverse consequences.

•Failure or perceived failure to comply with existing or future laws, regulations, contracts, self-regulatory schemes, standards, and other obligations related to data privacy and security (including security incidents) could harm our business. Compliance or the actual or perceived failure to comply with such obligations could increase the costs of our services, limit their use or adoption, and otherwise negatively affect our operating results and business.

•The trading price of the shares of our common stock has been and could continue to be highly volatile, and purchasers of our common stock could incur substantial losses.

•If we sell shares of our common stock or securities convertible into or exercisable for shares of our common stock in future financings, pursuant to licensing, collaboration or other arrangements, stockholders may experience immediate dilution and, as a result, our stock price may decline.

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

Adverum Biotechnologies, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)


	September 30, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	92,851	$	75,000
Short-term investments	60,390		21,526

Prepaid expenses and other current assets	7,839		6,247
Total current assets	161,080		102,773
Operating lease right-of-use assets	50,695		52,266
Property and equipment, net	12,215		14,764

Deferred rent receivable	7,116		—
Restricted cash	1,976		1,976
Deposit and other long-term assets	1,293		1,231
Total assets	$	234,375	$	173,010
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	2,110	$	1,921
Accrued expenses and other current liabilities	14,886		12,584
Lease liability, current portion	10,661		10,409

Total current liabilities	27,657		24,914

Long-term liabilities:
Lease liability, net of current portion	62,602		64,627

Total liabilities	90,259		89,541
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred stock	—		—
Common stock	2		1
Additional paid-in capital	1,134,556		1,003,718
Accumulated other comprehensive loss	(268)		(473)
Accumulated deficit	(990,174)		(919,777)
Total stockholders’ equity	144,116		83,469
Total liabilities and stockholders’ equity	$	234,375	$	173,010

See accompanying notes to condensed consolidated financial statements

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Adverum Biotechnologies, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except per share data)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
License revenue	$	1,000	$	—	$	1,000	$	3,600

Operating expenses:
Research and development	20,439		20,740		52,946		62,398
General and administrative	9,782		13,789		24,996		39,035

Total operating expenses	30,221		34,529		77,942		101,433
Operating loss	(29,221)		(34,529)		(76,942)		(97,833)
Other income, net	2,087		1,661		6,545		4,437
Net loss before income taxes	(27,134)		(32,868)		(70,397)		(93,396)
Income tax provision	—		(17)		—		(55)
Net loss	(27,134)		(32,885)		(70,397)		(93,451)
Other comprehensive gain (loss):
Net unrealized gain on marketable securities	241		66		198		1,003
Foreign currency translation adjustment	16		(12)		7		(24)
Comprehensive loss	$	(26,877)	$	(32,831)	$	(70,192)	$	(92,472)
Net loss per share — basic and diluted	$	(1.30)	$	(3.26)	$	(3.63)	$	(9.28)
Weighted-average common shares used to compute net loss per share - basic and diluted	20,876		10,100		19,408		10,069

See accompanying notes to condensed consolidated financial statements

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Adverum Biotechnologies, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands)

(Unaudited)


	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2023	10,143	$	1	$	1,003,718	$	(473)	$	(919,777)	$	83,469
Stock-based compensation expense	—	—		4,166		—		—		4,166
Issuance of common stock and pre-funded warrants for cash in private placements, net of issuance costs of $8,449	10,573	1		119,360		—		—		119,361
Common stock issued upon exercise of stock options	14	—		139		—		—		139
Common stock issued upon release of restricted stock units	25	—		—		—		—		—


Foreign currency translation adjustments	—	—		—		(19)		—		(19)
Unrealized loss on marketable securities, net	—	—		—		(41)		—		(41)
Net loss	—	—		—		—		(24,787)		(24,787)
Balance at March 31, 2024	20,755	2		1,127,383		(533)		(944,564)		182,288
Stock-based compensation expense	—	—		3,945		—		—		3,945

Common stock issued upon release of restricted stock units	2	—		—		—		—		—

Common stock issued under employee stock purchase plan	44	—		264		—		—		264
Foreign currency translation adjustments	—	—		—		10		—		10
Unrealized loss on marketable securities, net	—	—		—		(2)		—		(2)
Net loss	—	—		—		—		(18,476)		(18,476)
Balance at June 30, 2024	20,801	2		1,131,592		(525)		(963,040)		168,029
Stock-based compensation expense	—	—		2,964		—		—		2,964




Foreign currency translation adjustments	—	—		—		16		—		16
Unrealized gain on marketable securities, net	—	—		—		241		—		241
Net loss	—	—		—		—		(27,134)		(27,134)
Balance at September 30, 2024	20,801	$	2	$	1,134,556	$	(268)	$	(990,174)	$	144,116

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Adverum Biotechnologies, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands)

(Unaudited)


	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive (Loss)/Income		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2022	10,012	$	1	$	985,660	$	(1,531)	$	(802,612)	$	181,518
Stock-based compensation expense	—	—		4,563		—		—		4,563

Common stock issued upon release of restricted stock units	45	—		—		—		—		—
Restricted stock surrendered for taxes	—	—		—		—		—		—
Foreign currency translation adjustments	—	—		—		(7)		—		(7)
Unrealized gain on marketable securities, net	—	—		—		739		—		739
Net loss	—	—		—		—		(29,056)		(29,056)
Balance at March 31, 2023	10,057	1		990,223		(799)		(831,668)		157,757
Stock-based compensation expense	—	—		4,469		—		—		4,469

Common stock issued under employee stock purchase plan	42	—		246		—		—		246
Foreign currency translation adjustments	—	—		—		(5)		—		(5)
Unrealized gain on marketable securities, net	—	—		—		198		—		198
Net loss	—	—		—		—		(31,510)		(31,510)
Balance at June 30, 2023	10,099	1		994,938		(606)		(863,178)		131,155
Stock-based compensation expense	—	—		4,389		—		—		4,389
Common stock issued upon exercise of stock options	—	—		1		—		—		1
Common stock issued upon release of restricted stock units	3	—		—		—		—		—
Foreign currency translation adjustments	—	—		—		(12)		—		(12)
Unrealized gain on marketable securities, net	—	—		—		66		—		66
Net loss	—	—		—		—		(32,885)		(32,885)
Balance at September 30, 2023	10,102	$	1	$	999,328	$	(552)	$	(896,063)	$	102,714

See accompanying notes to condensed consolidated financial statements.

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Adverum Biotechnologies, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Nine Months Ended September 30,
	2024		2023
Cash flows from operating activities:
Net loss	$	(70,397)	$	(93,451)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	2,843		4,635
Stock-based compensation expense	11,075		13,421
Net accretion of discount on marketable securities	(1,293)		(1,835)
Non-cash lease expense	1,571		12,466
Loss on disposal of property and equipment	2		85

Other	7		(257)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(1,592)		(923)

Deposit and other long-term assets and deferred rent receivable	(7,178)		143
Accounts payable	187		(62)
Accrued expenses and other liabilities	2,335		(1,452)

Lease liability	(1,773)		(2,344)

Net cash used in operating activities	(64,213)		(69,574)
Cash flows from investing activities:
Purchases of marketable securities	(82,773)		(20,232)
Maturities of marketable securities	45,400		127,601

Purchases of property and equipment	(327)		(616)
Net cash (used in) provided by investing activities	(37,700)		106,753
Cash flows from financing activities:

Proceeds from issuance of common stock and pre-funded warrants in private placements, net of issuance costs	119,361		—
Proceeds from issuance of common stock pursuant to option exercises	139		1

Payment of deferred offering costs	—		(344)
Proceeds from employee stock purchase plan	264		246

SEC Form 10-Q filed by Adverum Biotechnologies Inc.