Viridian Therapeutics Inc.
11/05/2025 | Press release | Distributed by Public on 11/05/2025 06:58
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read together with our unaudited condensed consolidated financial statements and the related notes thereto included in Part I, Item 1 of this Quarterly Report and our consolidated financial statements and related notes thereto for the year ended December 31, 2024 included in our Annual Report on Form 10-K filed with the SEC on March 3, 2025 ("2024 Annual Report on Form 10-K"). This discussion and other parts of this report contain forward-looking statements reflecting our current expectations that involve risks and uncertainties, such as our plans, objectives, expectations, intentions, and beliefs. See "Forward-Looking Statements" for a discussion of the uncertainties, risks, and assumptions associated with these statements. Actual results and the timing of events could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section entitled "Risk Factors" included elsewhere in this Quarterly Report.
Overview and Recent Developments
We are a biopharmaceutical company focused on discovering, developing and commercializing potential best-in-class medicines for serious and rare diseases. We target disease areas where marketed therapies often leave room for improvements in efficacy, safety, and/or dosing convenience. We believe that first-generation medicines rarely represent optimal solutions, especially in rare disease areas, and that there is potential to develop differentiated, best-in-class medicines that could lead to improved patient outcomes, reduced side effects, improved quality of life, expanded market access, and augmented market competition. Our business model is designed to identify and evaluate product opportunities in disease areas where trial data establishes proof-of-concept for a drug target in the clinic, but the competitive evolution of the product life cycle management and number of entrants appears incomplete. We intend to prioritize indications where a fast-follower and a potentially differentiated drug candidate, or overall product profile, could create significant medical benefit for patients. We are engineering product candidates to address unmet medical needs for patients and further advance drug innovation.
Our goal is to identify and evaluate product concepts leveraging clinically validated molecular targets using established therapeutic modalities. We prioritize product concepts that are aligned with clinical and commercial hypotheses, which we expect will provide an attractive balance of risk and opportunity, thereby representing a compelling allocation of our resources. We focus on advancing therapeutic proteins that we either in-license or discover internally, incorporating proprietary therapeutic protein and antibody discovery and optimization platforms to advance clinical candidates with unique characteristics. We have built relevant expertise in protein and antibody discovery and engineering, biologics manufacturing, nonclinical and clinical development, commercialization in TED, and development of FcRn therapies.
Our approach to rapidly discovering and developing novel therapeutics relies on our scientific expertise in evaluating pre-existing clinical proof-of-concept data for the drug targets we are pursuing, and opportunities to improve upon existing investigational and/or approved therapies. This approach informs how we design, select, and develop our product candidates, including in critical areas such as pharmacokinetics, pharmacodynamics, clinical trial design, trial endpoints, and the selection and recruitment of patients. We believe this strategy reduces the risks associated with discovering and developing novel therapeutics.
We are developing therapies for the treatment of TED, a serious and debilitating rare autoimmune disease that causes inflammation within the orbit of the eye that can cause bulging of the eyes, redness and swelling, double vision, pain, and potential blindness. TED significantly impacts quality of life, imposing a high burden on activities of daily living and mental health for patients suffering from the disease. TED is a progressive disease consisting of an initial active phase, followed by a transition to a secondary chronic phase. The only medicine approved by the FDA for TED is Tepezza® (teprotumumab), which is an intravenously administered monoclonal antibody that targets IGF-1R. Tepezza is marketed in the United States by Amgen Inc. ("Amgen").
The results from clinical trials of teprotumumab provide strong clinical validation linking the targeting of IGF-1R to clinical benefit in patients with TED. However, clinical trials evaluating teprotumumab in patients with TED reported to date used a single dosing regimen, providing little guidance as to the optimal dosing required for clinical activity in TED. We believe that there are multiple opportunities to develop fast-follower therapeutics that improve on teprotumumab's features, including dosing schedule, route of administration, and safety profile.
Development of Therapies to Treat Thyroid Eye Disease (TED)
We are developing two product candidates, veligrotug for intravenous and VRDN-003 for subcutaneous administration, to treat patients who suffer from TED. Our most advanced program, veligrotug, is a differentiated humanized monoclonal antibody targeting IGF-1R intravenously administered for the treatment of TED. In previously presented in vitro nonclinical data, we showed that veligrotug is a potentially differentiated full antagonist of IGF-1R, compared to teprotumumab's incomplete antagonism of IGF-1R. VRDN-003 has the same binding domain as veligrotug, and was engineered to have a longer half-life. VRDN-003 is designed to be a low-volume, infrequently-dosed subcutaneous IGF-1R for TED, which we plan to launch commercially with an auto-injector to enable at-home patient self-administration. We believe VRDN-003 has the potential to be the best-in-class subcutaneous anti-IGF-1R product candidate by preserving the efficacy of anti-IGF-1Rs in TED, improving safety and maximizing convenience for patients.
We conducted phase 1/2 clinical trials of veligrotug in patients with active or chronic TED. In the active TED portion of the phase 1/2 clinical trials, data reported from all three dose cohorts of veligrotug (n=21) showed significant and rapid improvement in both the signs and symptoms of TED after two infusions of veligrotug compared to placebo. Across all veligrotug treated patients in the active TED trial, 71% were proptosis responders, 67% were overall responders, 62% achieved a clinical activity score ("CAS") of 0 or 1, and 54% had complete resolution of their diplopia. In the chronic TED portion of the phase 1/2 clinical trials, data reported from both dose cohorts of veligrotug (n=12) showed significant and rapid improvement in the signs and symptoms of TED after two infusions of veligrotug compared to placebo. Across all veligrotug treated patients in the chronic TED trial, 42% were proptosis responders, 40% achieved a CAS of 0 or 1, and no patients had complete resolution of their diplopia. In the phase 1/2 clinical trials of both active and chronic TED, veligrotug had a favorable safety profile and was well-tolerated by all patients treated in all dose cohorts.
We are conducting a global pivotal program for veligrotug, including evaluating its efficacy and safety in two global well-controlled phase 3 clinical trials, THRIVE and THRIVE-2, for the treatment of active and chronic TED, respectively. THRIVE and THRIVE-2 are each designed to compare a five-dose IV treatment arm of veligrotug at 10 mg/kg, dosed three weeks apart, to placebo. This five-dose veligrotug regimen features fewer infusions and a shorter time per infusion compared to teprotumumab, the currently marketed IGF-1R inhibitor. On September 10, 2024, we announced topline data from the THRIVE study, which enrolled 113 patients, randomized to veligrotug (n=75) and placebo (n=38). THRIVE achieved all primary and secondary endpoints with a high level of statistical significance (p < 0.0001) and was generally well-tolerated, with no treatment-related serious adverse events ("SAEs"). Veligrotug additionally showed a rapid onset of treatment effect, with the majority (53%) of veligrotug-treated patients achieving a proptosis response as early as three weeks. On December 16, 2024, we announced topline data from the THRIVE-2 study, which enrolled 188 patients, randomized to veligrotug (n=125) and placebo (n=63). THRIVE-2 achieved all primary and secondary endpoints with statistical significance and was generally well-tolerated. Veligrotug continued to demonstrate a rapid onset of treatment effect, with a statistically significant proptosis response as early as three weeks and a statistically significant reduction and resolution of diplopia as early as six weeks. THRIVE-2 is the first global phase 3 study in patients with chronic TED to demonstrate a statistically significant and clinically meaningful diplopia responder rate and rate of diplopia complete resolution. Veligrotug demonstrated positive durability at 52 weeks in THRIVE, showing that 70% of patients who were proptosis responders at week 15 maintained their response at week 52. To meet the 300 patient standard safety database requirements for the veligrotug BLA, we are conducting our STRIVE clinical trial (safety database inclusive of patients from the THRIVE and THRIVE-2 trials). STRIVE is a global study of veligrotug in TED patients that utilizes broad inclusion criteria (e.g., any severity or duration of disease) and is randomized 3:1 (10 mg/kg IV with an active control of 3 mg/kg IV). In January 2025, we completed enrollment in STRIVE with a total of 231 patients, exceeding the enrollment target of 212 due to patient demand. We have also completed enrollment of the open label extension study for non-responding patients in THRIVE and THRIVE-2. In May 2025, the U.S. FDA granted Breakthrough Therapy designation to veligrotug. We submitted a BLA for veligrotug in October 2025 and anticipate submitting an MAA to the EMA in the first quarter of 2026.
In addition to our intravenous veligrotug program, VRDN-003 is our subcutaneous product candidate currently in pivotal clinical studies in TED, which we selected in December 2023 following positive data in a phase 1 clinical trial in healthy volunteers.
The VRDN-003 phase 1 clinical study showed VRDN-003 to have a prolonged half-life of 40 to 50 days, which is four to five times that of veligrotug. Because of the healthy volunteer data and the similarities between the veligrotug and VRDN-003 antibodies, we selected doses of VRDN-003 that are likely to have similar clinical responses at the exposure levels of veligrotug that demonstrated robust clinical activity in its phase 2 clinical trials in TED, which tested two doses of veligrotug at 3 mg/kg and 10 mg/kg, once every three weeks.
We are conducting a global pivotal program for VRDN-003, including evaluating its efficacy and safety in two global well-controlled phase 3 clinical trials, REVEAL-1 and REVEAL-2, for the treatment of active and chronic TED, respectively. Both studies are evaluating subcutaneous VRDN-003 administered every four weeks or every eight weeks and will assess outcomes versus placebo. In September 2025, we announced that REVEAL-1 and REVEAL-2 completed enrollment, enrolling 132 and 204 patients, respectively, each exceeding its target enrollments of 117 and 195 patients, respectively, due to demand. 67% of REVEAL-1 patients were enrolled from the U.S., and 56% of REVEAL-2 patients were enrolled from the U.S. In addition, to enable BLA submission for VRDN-003, we are conducting a safety study to meet the 300 patient standard safety database requirement (to also include patients from the REVEAL-1 and REVEAL-2 trials) for which we completed enrollment in October 2025, enrolling 321 patients, exceeding its target enrollment of 284 patients due to demand, and an auto-injector study to enable launching VRDN-003 in an auto-injector device, if approved. We anticipate topline data for REVEAL-1 in the first quarter of 2026 and REVEAL-2 in the second quarter of 2026, and we anticipate submitting a BLA for VRDN-003 for the treatment of TED by the end of 2026.
Development of FcRn Inhibitors
In addition to developing therapies for TED, we are also developing a portfolio of engineered FcRn inhibitors, including VRDN-006 and VRDN-008. FcRn inhibitors have the potential to treat a broad array of autoimmune diseases, representing a possible significant commercial market opportunity. Our multi-pronged engineering approach has resulted in a portfolio of FcRn-targeting molecules that leverage the clinically and commercially validated mechanism of FcRn inhibition while potentially addressing the limitations of current agents such as incomplete IgG suppression, safety, and inconvenience of dosing.
VRDN-006 is a highly selective Fc fragment that inhibits FcRn and is designed to be a convenient subcutaneous and self-administered option for patients. In non-human primate ("NHP") studies, VRDN-006 demonstrated specificity for blocking FcRn-IgG interactions while not showing decreases in albumin or increases in low-density lipoprotein ("LDL") levels, which are known potential side effects associated with certain full-length anti-FcRn monoclonal antibodies. In our head-to-head NHP studies, VRDN-006 demonstrated comparable potency and IgG reductions to efgartigimod, which is the current standard of care in FcRn inhibition, as well as a similar safety profile. We submitted an IND for VRDN-006 in December 2024, which cleared in January 2025. In September 2025, we announced that data from an ongoing phase 1 clinical trial in healthy volunteers showed that VRDN-006 led to IgG reductions that are consistent with the FcRn inhibitor class, and that VRDN-006 was sparing of albumin and LDL and was generally well-tolerated to date with no dose-limiting toxicities or serious adverse events.
VRDN-008 is a half-life extended bispecific FcRn inhibitor comprising an Fc fragment and an albumin-binding domain designed to prolong IgG suppression and provide a potentially best-in-class subcutaneous option for patients. In a single, high-dose, head-to-head study in NHPs, VRDN-008 demonstrated three times the half-life of efgartigimod. Additionally, VRDN-008 showed a deeper and more sustained IgG reduction with peak IgG reductions that were 20% deeper than efgartigimod, and IgG levels returned to baseline 35 days after VRDN-008 dosing, more than twice as long as efgartigimod, which returned to baseline 14 days after dosing. VRDN-008 spared albumin and LDL, consistent with efgartigimod. We anticipate submitting an IND for VRDN-008 by the end of 2025 with healthy volunteer data available in 2026.
Global Economic Considerations
The global macroeconomic environment is uncertain, and could be negatively affected by, among other things, increased U.S. trade tariffs and trade disputes with other countries, instability in the global capital and credit markets, supply chain weaknesses, and instability in the geopolitical environment, including as a result of the Russian invasion of Ukraine, the rising tensions between China and Taiwan, the conflict in Israel and surrounding area and other political tensions. Such challenges have caused, and may continue to cause, recession fears, concerns regarding potential sanctions, high interest rates, foreign exchange volatility and inflationary pressures. At this time, we are unable to quantify the potential effects of this economic instability on our future operations.
Financial Operations Overview
Revenue
Our revenue has historically consisted primarily of up-front payments for licenses, milestone payments, and payments for other research and development services earned under license and collaboration agreements as well as for amounts earned under certain grants we have been awarded.
In October 2020, we became party to a license agreement with Zenas BioPharma. Since February 2021, we have entered into several letter agreements with Zenas BioPharma in which we agreed to provide assistance to Zenas BioPharma with certain development activities, including manufacturing (collectively with the license agreement, the "Zenas Agreements"). Under the Zenas Agreements, we granted Zenas BioPharma an exclusive license to develop, manufacture, and commercialize certain IGF-1R directed antibody products for non-oncology indications in the greater area of China in exchange for upfront non-cash consideration and non-refundable milestone payments upon achieving specific milestone events during the contract term. Zenas BioPharma announced that it had obtained IND approval in China in July 2022. Under the license agreement, we received a $1.0 million milestone payment from Zenas BioPharma. Additionally, we are eligible to receive royalty payments based on a percentage of the annual net sales of any licensed products sold on a country-by-country basis in the greater area of China. The royalty percentage may vary based on different tiers of annual net sales of the licensed products made. Zenas BioPharma is obligated to make royalty payments to us for the royalty term in the Zenas Agreements. In May 2022, we entered into a Manufacturing Development and Supply Agreement with Zenas BioPharma to manufacture and supply, or have manufactured and supplied, clinical drug product for development purposes. In January 2025, Zenas BioPharma sublicensed their rights under the license agreement to Zai Lab (Hong Kong) Limited ("Zai Lab") and assigned the Manufacturing Development and Supply Agreement to Zai Lab in connection with the sublicense transaction. In July 2025, the Company entered into a side agreement with Zai Lab (the "Side Agreement"), with Zenas BioPharma as countersigner, pursuant to which the Company agreed to provide certain services directly to Zai Lab to support development and commercialization activities. In August 2025, the Company entered into a Material Transfer Agreement ("MTA") with Zai Lab, to supply certain materials for clinical trial use.
In July 2025, we entered into a Collaboration and License Agreement pursuant to which we granted to Kissei an exclusive license to develop and commercialize products containing veligrotug and VRDN-003 including for the treatment of TED, in Japan, and, under certain circumstances, a non-exclusive license to manufacture such licensed products worldwide for use in Japan. As consideration for the Kissei Agreement, the transaction price included an upfront cash payment of $70.0 million, which was recognized as revenue during the three months ended September 30, 2025. Additionally, we are eligible to receive up to an additional $315.0 million of non-refundable milestone payments upon achieving specific milestone events during the contract term, as well as tiered royalty payments ranging from percentages in the twenties to the mid-thirties based on the annual net sales of any licensed products sold in Japan.
In the future, we expect to continue to generate revenue from a combination of license fees and other up-front payments, payments for research and development services, milestone payments, product sales, and royalties in connection with strategic alliances and from customers. We expect that any revenue we generate could fluctuate from quarter to quarter as a result of the timing of our achievement of development and commercial milestones, the timing and amount of payments relating to such milestones, and the extent to which any of our product candidates are approved and successfully commercialized by us or our strategic alliance collaborators, if any. If we or our strategic alliance collaborators, if any, fail to develop product candidates in a timely manner or to obtain regulatory approval for them, then our ability to generate future revenue, and our results of operations and financial position would be adversely affected.
Research and Development Expenses
Research and development expenses consist of costs incurred for the research and development of our therapeutic programs and product candidates, which include:
•employee-related expenses, including salaries, severance, retention, benefits, insurance, and share-based compensation expense;
•expenses incurred under agreements with clinical research organizations ("CROs"), investigative sites that conduct our clinical trials, and other clinical trial-related vendors, and consultants;
•the costs of acquiring, developing, and manufacturing and testing clinical and nonclinical materials, including costs incurred under agreements with contract development and manufacturing organizations ("CDMOs");
•costs associated with nonclinical activities and regulatory operations;
•license fees and milestone payments related to the acquisition and retention of certain licensed technology and intellectual property rights; and
•facilities, depreciation, market research, and other expenses, which include allocated expenses for rent and maintenance of facilities, depreciation of leasehold improvements and equipment, and laboratory supplies.
We make non-refundable advance payments for goods and services that will be used in future research and development activities. These payments are recorded as expense in the period in which we receive or take ownership of the goods or when the services are performed.
We record up-front and milestone payments to acquire and retain contractual rights to in-licensed technology and intellectual property rights as research and development expenses when incurred if there is uncertainty in our receiving future economic benefit from the acquired contractual rights. We consider future economic benefits from acquired contractual rights to licensed technology to be uncertain until such a drug candidate is approved by the FDA or other regulatory authorities, or when other significant risk factors are abated.
We expect that our research and development expenses will increase as we expand our clinical development programs and initiate new clinical trials. The process of conducting clinical trials and nonclinical studies necessary to obtain regulatory approval is costly and time consuming. We, or our strategic alliance collaborators, if any, may never succeed in achieving marketing approval for any of our product candidates. The probability of success for each product candidate may be affected by numerous factors, including clinical data, nonclinical data, competition, manufacturability, and commercial viability of our product candidates.
Successful development of future product candidates is highly uncertain and may not result in approved products. Completion dates and completion costs can vary significantly for each future product candidate and are difficult to predict. We anticipate we will make determinations as to which programs to pursue and how much funding to direct to each program on an ongoing basis in response to our ability to maintain or enter into new strategic alliances with respect to each program or potential product candidate, the scientific and clinical success of each future product candidate, and ongoing assessments as to each future product candidate's commercial potential. We may need to secure additional capital and could seek additional strategic alliances in the future in order to advance the various clinical trials that are part of our clinical development program described above.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and related benefits, including share-based compensation, and severance and retention benefits related to our finance, accounting, human resources, legal, business development, and other support functions, professional fees for auditing, tax, and legal services, market research and other professional and consulting fees to prepare for commercial activities, as well as insurance, board of director compensation, consulting, and other administrative expenses.
Other Income, net
Other income, net consists primarily of interest income and various income items of a non-recurring nature. We earn interest income from interest-bearing accounts, money market funds, and short-term investments. Interest expense consists of cash and non-cash interest expense on our long-term debt.
Critical Accounting Policies and Estimates
Our significant accounting policies are disclosed in Note 2. Summary of Significant Accounting Policiesto our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report.
Results of Operations
Comparison of the Three Months Ended September 30, 2025 and 2024
| Three Months Ended September 30, | Increase (Decrease) | ||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| (in thousands) | |||||||||||||||||
| License revenue | $ | 70,000 | $ | - | $ | 70,000 | |||||||||||
| Collaboration revenue - related party | 570 | 86 | 484 | ||||||||||||||
| Research and development expenses | 86,261 | 69,158 | 17,103 | ||||||||||||||
| General and administrative expenses | 24,322 | 14,408 | 9,914 | ||||||||||||||
| Other income, net | 5,414 | 6,791 | (1,377) | ||||||||||||||
Revenue
License revenue for the three months ended September 30, 2025 was attributable to the collaboration and license agreement with Kissei. Collaboration revenue for both the three months ended September 30, 2025 and 2024 was attributable to our collaboration agreement with Zenas BioPharma and the Side Agreement and MTA with Zai Lab.
Research and Development Expenses
| Three Months Ended September 30, | Increase (Decrease) | ||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| (in thousands) | |||||||||||||||||
| Direct research and development expenses | |||||||||||||||||
| TED portfolio | $ | 55,191 | $ | 37,859 | $ | 17,332 | |||||||||||
| FcRn inhibitor portfolio | 11,121 | 16,414 | (5,293) | ||||||||||||||
| Other nonclinical and research and development costs | 1,247 | 750 | 497 | ||||||||||||||
| Unallocated expenses | |||||||||||||||||
| Personnel related expense (including share-based compensation) | 16,528 | 12,539 | 3,989 | ||||||||||||||
| Facility and other operating costs | 2,174 | 1,596 | 578 | ||||||||||||||
| Total research and development expenses | $ | 86,261 | $ | 69,158 | $ | 17,103 | |||||||||||
Direct costs related to the TED portfolio increased by $17.3 million during the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily attributable to:
•$11.6 million increase in clinical trial costs and $4.3 million increase in chemistry, manufacturing and controls costs to support the ongoing global phase 3 clinical trials for veligrotug and VRDN-003.
Direct costs related to the FcRn inhibitor portfolio decreased by $5.3 million during the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily attributable to:
•$3.9 million decrease in milestone, license and option fees, primarily due to a $4.0 million milestone payment to Paragon for an exclusive license agreement during the three months ended September 30, 2024; and
•$1.8 million decrease in chemistry, manufacturing, and controls costs for FcRn inhibitor portfolio assets.
Personnel-related costs increased by $4.0 million during the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily attributable to increased headcount to support our ongoing research and development efforts, including share-based compensation and other employee compensation and recruiting costs.
Facility and other operating costs increased $0.6 million during the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily attributable to an increase in professional services fees for consultants and
contractors to support the planned BLA submission for veligrotug, which occurred in October 2025, and to advance clinical trials for VRDN-003.
We expect our research and development expenses to remain consistent as we continue to advance our clinical and nonclinical programs.
General and Administrative Expenses
General and administrative expenses were $24.3 million during the three months ended September 30, 2025, compared to $14.4 million during the three months ended September 30, 2024. The $9.9 million increase in general and administrative expenses is primarily attributable to the following:
•$4.9 million increase in personnel related costs, due primarily to increased headcount to support the growing organization;
•$3.4 million increase in market research and related costs to prepare for the potential commercialization of veligrotug; and
•$1.7 million increase in legal, accounting and other professional service fees to support the growing organization.
Other Income, net
Other income, net was $5.4 million during the three months ended September 30, 2025 compared to $6.8 million during the three months ended September 30, 2024 primarily comprised of interest income earned on short-term investments.
Comparison of the Nine Months Ended September 30, 2025 and 2024
| Nine Months Ended September 30, | Increase (Decrease) | ||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| (in thousands) | |||||||||||||||||
| License revenue | $ | 70,000 | $ | - | $ | 70,000 | |||||||||||
| Collaboration revenue - related party | 717 | 230 | 487 | ||||||||||||||
| Research and development expenses | 249,721 | 166,294 | 83,427 | ||||||||||||||
| General and administrative expenses | 61,642 | 45,499 | 16,143 | ||||||||||||||
| Other income, net | 18,400 | 21,339 | (2,939) | ||||||||||||||
Revenue
License revenue for the nine months ended September 30, 2025 was attributable to the collaboration and license agreement with Kissei. Collaboration revenue for both the nine months ended September 30, 2025 and 2024 was attributable to our collaboration agreement with Zenas BioPharma and the Side Agreement and MTA with Zai Lab.
Research and Development Expenses
| Nine Months Ended September 30, | Increase (Decrease) | ||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| (in thousands) | |||||||||||||||||
| Direct research and development expenses | |||||||||||||||||
| TED portfolio | $ | 151,640 | $ | 91,239 | $ | 60,401 | |||||||||||
| FcRn inhibitor portfolio | 41,498 | 27,276 | 14,222 | ||||||||||||||
| Other nonclinical and research and development costs | 2,402 | 1,599 | 803 | ||||||||||||||
| Unallocated expenses | |||||||||||||||||
| Personnel related expense (including share-based compensation) | 49,352 | 40,841 | 8,511 | ||||||||||||||
| Facility and other operating costs | 4,829 | 5,339 | (510) | ||||||||||||||
| Total research and development expenses | $ | 249,721 | $ | 166,294 | $ | 83,427 | |||||||||||
Direct costs related to the TED portfolio increased by $60.4 million during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily attributable to:
•$52.2 million increase in clinical trial costs and $10.5 million increase in chemistry, manufacturing and controls costs to support the ongoing global phase 3 clinical trials for veligrotug and VRDN-003.
Direct costs related to the FcRn inhibitor portfolio increased by $14.2 million during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily attributable to:
•$8.4 million increase in chemistry, manufacturing, and controls costs to support IND-enabling activities for assets across the FcRn inhibitor portfolio; and
•$5.1 million increase in nonclinical research and clinical study activity to advance the FcRn inhibitor portfolio.
Personnel-related costs increased by $8.5 million during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily attributable to:
•$11.4 million increase due primarily to increased headcount to support our ongoing research and development efforts, including share-based compensation, travel costs, and other employee compensation and recruiting costs; partially offset by,
•$2.9 million decrease in severance costs primarily related to separation agreements with former executive officers, including a $1.6 million decrease in share-based compensation due to the acceleration of stock option vesting during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.
Facility and other operating costs decreased $0.5 million during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily attributable to a decrease in professional services fees for consultants and contractors.
We expect our research and development expenses to remain consistent as we continue to advance our clinical and nonclinical programs.
General and Administrative Expenses
General and administrative expenses were $61.6 million during the nine months ended September 30, 2025, compared to $45.5 million during the nine months ended September 30, 2024. The $16.1 million increase in general and administrative expenses is primarily attributable to the following:
•$9.0 million increase in personnel related costs, due primarily to increased headcount to support the growing organization and to prepare for the potential commercialization of veligrotug; and
•$6.7 million increase in market research and related costs to prepare for the potential commercialization of veligrotug.
Other Income, net
Other income, net was $18.4 million during the nine months ended September 30, 2025 compared to $21.3 million during the nine months ended September 30, 2024, primarily comprised of interest income earned on short-term investments.
Additional Capital Resources
We have funded our operations to date principally through proceeds received from the sale of our common stock, our Series A convertible preferred stock, our Series B convertible preferred stock and other equity securities, debt financings, license fees, and reimbursements received under collaboration agreements. We have no products approved for commercial sale and have not generated any revenue from product sales. Since our inception and through September 30, 2025, we have generated an accumulated deficit of $1,218.1 million. Substantially all of our operating losses resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations.
In addition, we may continue to incur additional operating losses as a result of planned expenditures for research and development activities, our drug development programs, including clinical trial and manufacturing costs, and the continued build-out of clinical, manufacturing, commercial, and compliance capabilities. Our ability to generate revenues from sales of veligrotug and VRDN-003 in the U.S., if regulatory approval is granted, depends on us being able to establish sales and marketing capabilities and gain acceptance in the marketplace, which we may be unable to do in a timely manner or at all. In addition, we cannot predict with any certainty whether and to what extent the timing or availability of additional funds under the DRI Purchase and Sale Agreement or the Hercules Second Amendment, if at all. Our ability to achieve milestones under the DRI Purchase and Sale Agreement or drawdown on the remaining tranches under the Hercules Second Amendment are subject to our achievement of certain regulatory and commercial milestones on or before certain dates or, for certain milestones, on mutual agreement of the applicable party.
The Company expects that its existing cash, cash equivalents and short-term investments as of September 30, 2025 of $490.9 million will enable the Company to fund its planned operations for at least twelve months from the date of issuance of these unaudited condensed consolidated financial statements. Based on our current business plans, we believe that the $272.4 million in net proceeds from the October 2025 Public Offering, together with our existing current cash, cash equivalents, short-term investments, the $70.0 million upfront payment receivable from Kissei, which was paid in the fourth quarter 2025, the $55.0 million upfront payment that we received in connection with our entry into the DRI Purchase and Sale Agreement and the $115.0 million in potential near-term milestones anticipated under the DRI Purchase and Sale Agreement, the $30.0 million received by the Company from the Hercules Second Amendment, and anticipated revenue from veligrotug and VRDN-003 sales, if each is approved on our anticipated timelines, will be sufficient to fund our planned operations to break even where our anticipated revenues fund our anticipated operating expenses.
Due to numerous factors described in more detail under the caption Part II, Item 1A, "Risk Factors" of this Quarterly Report on Form 10-Q, we may require significant additional capital earlier than we currently expect under our present business plans.
Loan and Security Agreement with Hercules Capital, Inc.
On April 1, 2022, we entered into the Hercules Loan and Security Agreement among the Company, certain of our subsidiaries from time to time party thereto (together with the Company, collectively, the "Borrower"), Hercules and certain other lenders party thereto (the "Lenders"). Under the Hercules Loan and Security Agreement, the Lenders provided us with access to a term loan with an aggregate principal amount of up to $75.0 million, in four tranches (collectively the "Term Loan"), including an initial tranche of $25.0 million, which was available to us through June 15, 2023. Upon signing, we drew an initial principal
amount of $5.0 million. Per the terms of the Hercules Loan and Security Agreement, we were originally obligated to make interest-only payments through April 1, 2024, which was extended to October 1, 2024 upon the achievement of a development milestone in August 2022.
In August 2023, we executed an amendment to the Hercules Loan and Security Agreement (the "Hercules Amendment").The Hercules Amendment was determined to substantially alter the Hercules Loan and Security Agreement and therefore was accounted for as a debt extinguishment.
Under the Hercules Amendment, the Lenders provided the Company access to an increased term loan with an aggregate principal amount of up to $150 million, in four tranches (collectively the "Amended Term Loan"), consisting of (1) an initial tranche of $50.0 million, $5.0 million of which was drawn at closing of the Hercules Loan and Security Agreement in April 2022, $15.0 million of which was drawn at closing of the Hercules Amendment in August 2023, $5.0 million of which was available through December 15, 2023, and $25.0 million of which was available from July 1, 2024 through December 15, 2024; (2) a second tranche of $20.0 million, subject to achievement of certain regulatory milestones, which was available through February 15, 2025; (3) a third tranche of $20.0 million, subject to achievement of certain regulatory milestones, which was available through March 31, 2025; and (4) a fourth tranche of $60.0 million subject to approval by the Lenders' investment committee(s), which was available through June 15, 2025. The obligations of the Borrower under the Hercules Amendment agreement are secured by substantially all of the assets of the Borrower, excluding the Borrower's intellectual property. The Amended Term Loan has a maturity date of October 1, 2026.
The Amended Term Loan bears interest at a floating per annum rate equal to the greater of (i) 7.45% and (ii) 4.2% above the Prime Rate (as defined therein), provided that the Amended Term Loan interest rate shall not exceed a per annum rate of 8.95%. Interest is payable monthly in arrears on the first day of each month. The interest rate as of September 30, 2025 was 8.95%.
Per the terms of the Hercules Amendment, we were originally obligated to make interest-only payments through April 1, 2025. Upon achievement of certain development milestones related to our topline results for our phase 3 THRIVE trial in September 2024, the interest-only period was extended to October 1, 2025. Upon achievement of certain development milestones related to topline results for our phase 3 THRIVE-2 trial in December 2024, the interest-only period was further extended to April 1, 2026. The Borrower is required to repay the Amended Term Loan amount in equal monthly installments of the principal amount and interest between the end of the interest-only period and the maturity date of October 1, 2026. In addition, the Borrower is required to pay an end-of-term fee equal to 6% of the principal amount of funded Amended Term Loan advances at maturity, which are being accreted as additional interest expense over the term of the loan.
As a subsequent event, in October 2025, we executed a second amendment to our Hercules Loan and Security Agreement extending the maturity date to October 17, 2030 and increasing the aggregate principal amount of up to $300.0 million, see Note 13 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.
Purchase and Sale Agreement with DRI
As a subsequent event, in October 2025, we entered into a Purchase and Sale Agreement with DRI, pursuant to which DRI purchased rights to certain revenue streams in the U.S. from the Company in exchange for up to $300.0 million in consideration, see Note 13 to our unaudited condensed consolidated financial statements included elsewhere in this report.
Public Offerings
In January 2024, we entered into an underwriting agreement with Jefferies and Leerink Partners LLC relating to the offer and sale (the "January 2024 Public Offering") of 7,142,858 shares of our common stock at a public offering price of $21.00 per share. The aggregate gross proceeds to us from the January 2024 Public Offering were approximately $150.0 million, before deducting underwriting discounts and commissions and other offering expenses payable by us.
As a subsequent event, in October 2025, we sold 11,425,000 shares of our common stock in a public offering at a price of $22.00 per share and granted the underwriters a 30-day over-allotment option to purchase up to an additional 1,713,750 shares of our common stock on the same terms and conditions as the common stock sold in the offering, which option was exercised in full in October 2025, see Note 13 to our unaudited condensed consolidated financial statements included elsewhere in this report.
ATM Agreement
In September 2022, we entered into an Open Market Sale AgreementSM(the "September 2022 ATM Agreement") with Jefferies pursuant to which we could offer and sell shares of our common stock having an aggregate offering price of up to $175.0 million from time to time at prices and on terms to be determined by market conditions at the time of offering, with Jefferies acting as the sales agent. Jefferies received a commission of up to 3.0% of the gross proceeds of any shares of common stock sold under the September 2022 ATM Agreement. During the year ended December 31, 2024, we sold 3,058,751 shares under the September 2022 ATM Agreement at a weighted average price of $22.86 per share, for aggregate net proceeds of approximately $67.7 million, including commissions to Jefferies as a sales agent. During the nine months ended September 30, 2025, we sold 245,388 shares under the September 2022 ATM Agreement at a weighted average price of $20.14 per share, for aggregate net proceeds of approximately $4.8 million, including commissions to Jefferies as a sales agent. During the three months ended September 30, 2025, there were no sales under the September 2022 ATM Agreement. The September 2022 ATM Agreement was terminated in March 2025 and no further offerings or sales of common stock will be conducted under the September 2022 ATM Agreement.
In March 2025, we entered into an Open Market Sale AgreementSM(the "March 2025 ATM Agreement") with Jefferies, pursuant to which we may offer and sell shares of our common stock having an aggregate offering price of up to $300.0 million from time to time at prices and on terms to be determined by market conditions at the time of offering, with Jefferies acting as its sales agent. Jefferies will receive a commission of up to 3.0% of the gross proceeds of any shares of common stock sold under the March 2025 ATM Agreement. During the three and nine months ended September 30, 2025, we sold 500,000 shares under the March 2025 ATM Agreement at a weighted average price of $19.92 per share, for aggregate net proceeds of approximately $9.8 million, including commissions to Jefferies as a sales agent.
Summarized cash flows for the nine months ended September 30, 2025 and 2024 are as follows:
| Nine Months Ended September 30, | Increase (Decrease) | ||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| (in thousands) | |||||||||||||||||
| Net cash provided by (used in): | |||||||||||||||||
| Operating activities | $ | (252,637) | $ | (158,987) | $ | (93,650) | |||||||||||
| Investing activities | 301,857 | (165,736) | 467,593 | ||||||||||||||
| Financing activities | 20,833 | 422,213 | (401,380) | ||||||||||||||
| Net increase in cash and cash equivalents | $ | 70,053 | $ | 97,490 | $ | (27,437) | |||||||||||
Operating Activities
Net cash used in operating activities was $252.6 million for the nine months ended September 30, 2025, and primarily consisted of our net loss of $222.2 million, adjusted for non-cash items of $27.9 million (primarily share-based compensation of $32.3 million, offset by the accretion and amortization of premiums and discounts on available-for-sale securities of $5.0 million), and changes in working capital of $58.3 million. The change in working capital was primarily related to an increase of $70.0 million in unbilled revenue due to timing of upfront fee under the Kissei Agreement, partially offset by a decrease of $8.9 million in prepaid expenses and other current assets and a net increase of $2.8 million in accounts payable and accrued and other liabilities due to the timing of payments to vendors for ongoing clinical trial and manufacturing activities.
Net cash used in operating activities was $159.0 million for the nine months ended September 30, 2024, and primarily consisted of a net loss of $190.2 million, adjusted for non-cash items of $22.1 million (primarily share-based compensation of $33.2 million, partially offset by accretion and amortization of premiums and discounts on available-for-sale securities of $12.4 million) and changes in working capital of $9.1 million. The change in working capital was primarily related to a net increase of $14.6 million in accounts payable and accrued and other liabilities, partially offset by an increase of $5.3 million in prepaid expenses and other current assets due to the timing of payments to vendors for ongoing clinical trial and manufacturing activities.
Investing Activities
Net cash provided by investing activities was $301.9 million during the nine months ended September 30, 2025, and consisted primarily of $302.1 million in net maturities of short-term investments.
Net cash used in investing activities was $165.7 million during the nine months ended September 30, 2024, and consisted primarily of $165.3 million in net purchases of short-term investments.
Financing Activities
Net cash provided by financing activities was $20.8 million during the nine months ended September 30, 2025, and consisted of primarily of net proceeds of $14.5 million from the March 2025 ATM Agreement and the September 2022 ATM Agreement, as well as $3.6 million in proceeds from the exercise of stock options.
Net cash provided by financing activities was $422.2 million during the nine months ended September 30, 2024, and consisted primarily of net proceeds of $419.4 million from the January 2024 Public Offering, September 2024 Public Offering and the September 2022 ATM Agreement, as well as $2.2 million in proceeds from the exercise of stock options.
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